Tag Archives: Solar

Utility-Scale Solar in North Carolina

The number 2 state for new solar installations last year was North Carolina with 397 Megawatts of capacity. Nearly all of that new capacity was from utility-scale installations.

2014 Photovoltaic Installations by State

http://dqbasmyouzti2.cloudfront.net/assets/content/cache/made/content/images/articles/q42014_smiPR_graphic3_570_325.png

Strata Solar  is one big player, having installed 500 MW already and 1,000 MW more under development. Duke Energy is another.

There are a number of reasons for the growth of utility-scale solar in North Carolina with rules that favor the big corporations. Tax credits and guaranteed income are the keys.

The federal government offers a 30% tax credit on new solar installations that is due to drop to 10% after 2016. The state of North Carolina offers another 35% tax credit on top of this. So anyone trying to install new solar facilities can qualify for 65% in tax rebates pushing down their costs down to just 35 cents on the dollar. The cost to install a megawatt of solar cells, normally around $3 million, drops to about $1 million. That’s good news if you have access to millions of dollars. However, the state does not allow solar leases, so if a homeowner wants to have a $20,000 rooftop solar system on his house, he has to pay out the whole $20,000 and then claim the $13,000 credit on his taxes. That’s more than the average homeowner can swing.

The guaranteed income comes in the form of a 15-year contract with the utility company. The state has streamlined the process to becoming a “qualifying facility.” Qualifying Facilities under 5 MW can get 15-year contracts with the local utility company (Duke Energy) at the utility’s “avoided cost.” Do the math, and it’s a guaranteed way to make money that you can take to the bank.

For three more reasons for the growth in North Carolina solar, see blog.rmi.org.

Political Tide Turning Toward Solar

In the latest political wrangling over rooftop solar power, it’s the career politicians and the utility companies on one hand and environmentalists joined by tea party conservatives on the other. The current struggles in Indiana and Florida highlight a rising solar movement asserting itself against political backroom deals.

Map of Indiana solar potentialIn Indiana, the traditional electric utility companies want to raise “tariffs, rates and charges” on customers who generate their own electricity. The lobbying group for the utility companies, the Indiana Energy Association, has gotten Republican Rep. Eric Koch to sponsor their legislation to allow them to charge customers who generate their own electricity these tariffs, rates and charges not imposed on other customers. Mr. Koch is a big player in Indiana politics, being the Assistant Majority Caucus Chair. Mr. Koch has been in the Indiana legislature since 2002 and currently serves as the Chair of the Energy, Utilities and Telecommunications Committee. Needless to say, raising the fees charged to customers with their own solar systems would discourage those customers from installing more solar power.

Opposing the legislation is the state chapter of the NAACP, the Citizens Action Coalition, the Center for American Progress, the Alliance for Solar Choice, and the Sierra Club. Conservatives arrayed against the bill include the Christian Coalition for America, and Barry Goldwater Jr’s Tell Utilities Solar Won’t Be Killed (TUSK)  . Churches against the bill include the seven congregations of Indianapolis’s Eastside Creation Care Network.

The Energy, Utilities and Telecommunications Committee has approved the bill and passed it on to the whole House after denying 34 of the 42 people signed up to speak against the bill an opportunity to give their testimony. It was a straight Republican party-line vote, but clearly some Republicans aren’t happy. Indy Star

Welcome to Florida sign, the Sunshine State

Meanwhile, Republicans in Florida have organized a ballot initiative to allow homeowners to enter into solar power purchase agreements. Under a typical solar power purchase agreement, the homeowner allows a company such as SolarCity to install solar panels on their roof and agrees to buy the power from those panels at a rate lower than that offered by the local electrical utility.  It’s an attractive arrangement – no money down, lower your monthly payments and help the environment. But Florida law prohibits the sale of electricity to consumers by anyone other than a regulated public utility. Each utility company has their designated service area and operates as a monopoly within that service area.

Floridian Tea Party members have now organized the Conservatives for Energy Freedom which is aiming for more than 700,000 signatures on a petition for a 2016 ballot initiative which would make it possible for businesses and property owners to produce up to 2 megawatts of solar power and sell it directly to consumers.  The group Floridians for Solar Choice has gathered endorsements from conservative groups including the Christian Coalition of America, Florida Alliance for Renewable Energy, Florida Retail Federation, Florida Solar Energy Industries Association, Libertarian Party of Florida, Republican Liberty Caucus of Florida, Republican Liberty Caucus of Tampa Bay, Southern Alliance for Clean Energy, WTEC  and support from groups across the political spectrum including Clean Water Action, Environment Florida, Evangelical Environmental Network, Greenpeace USA, IDEAS for Us, Physicians for Social Responsibility, ReThink Energy Florida, Sierra Club Florida, and The Tea Party Network. They’re also getting support from the conservative Heartland Institute and constitutionalist Hillsdale College.

Fresh Water from the Sun and Waves

Clean water is still hard to get for many of the poorest people of the world living in underdeveloped countries. Bangladesh now has more people than Russia, and most of its people suffer from water that either leads to dysentery and disease or contains dangerous levels of arsenic. Millions of others live along the seacoast where water is all around, yet not fit to drink. Desalinization is expensive and energy intensive. But two research projects have the potential to bring clean fresh water to millions using solar or wave power.

A British company has produced now 4 prototype solar powered desalinization units they call the Desolenator. http://www.bbc.co.uk/programmes/p02dgdhf#playt=0h07m35s The family-sized unit has a single insulated solar panel measuring about 3 feet by 5 feet and produces about 4 gallons per day of distilled water. Desolenator unit

The company is still in the development stage optimizing the product and plans to produce 100 units in the first half of 2015, scaling up to 1000 units in the second half. They are currently raising $150,000 for refining the process on Indiegogo.  https://www.indiegogo.com/projects/desolenator-transforming-sunshine-into-water The unit produces about 4 gallons per day and costs under $500.

In Quebec, students at Sherbrooke University are working on using wave power to desalinate sea water by reverse osmosis. The students are designing a second prototype unit designed with a buoy on top and an anchor below to desalinate 925 gallons per day. The wave motion drives a hydraulic cylinder pump that pushes the seawater through a reverse-osmosis membrane and pumps the fresh water to shore.Odyssee desalinator

http://www.gizmag.com/odysse-desalinator-power-ocean-clean/35276/

The students are now raising $8,600 on Kickstarter to fund construction and testing of the second prototype. https://www.kickstarter.com/projects/1489787892/lets-make-fresh-water-with-the-power-of-waves

China Tries to Clear the Air

China’s rapidly growing manufacturing economy requires lots of electricity. Historically China has met their electrical requirements by building coal-burning power plants. China does have some nuclear power, but coal has been the mainstay.

Graph of China's coal usage compared to the U.S.

http://ccentralassets.s3.amazonaws.com/

In 1994, China began construction on the world’s largest hydroelectric dam across the Yangtze River. The Three Gorges Dam project took eight years to become operational and displaced 1.3 million people.

Polluted air at Tianamin SquareHydropower was a nice idea, but it couldn’t keep up with China’s rapidly growing economy. So many coal-burning power plants were built that by the time the Three Gorges Dam was up and operating, the air in Beijing was thick with smoke.

Graph of wind power installed capacity in leading countries
So China has aggressively pursued wind and solar power. The nation is already number 1 when it comes to wind power. http://www.earth-policy.org/

In fact, China has been building wind towers faster than the can connect them to the grid.

Graph of installed solar power capacity in leading countriesNow they’re doing the same with solar power. http://www.earth-policy.org/

Swanson’s Law states that every doubling of photovoltaic (PV) solar capacity results in a 20 percent reduction in unit cost. China aims to make solar power cheaper than coal by brute force. China plans on adding another 13,000 megawatts this year hitting 35 gigawatts in early 2015 and targeting 100 gigawatts by 2020. http://cleantechnica.com/2014/10/17/china-phase-financial-support-solar-power-sector-2020/ Last year China also added 13,000 megawatts of solar power. However last year 94% of that came from large utility-scale solar farms. This year China is trying to get over half of the new solar power from small projects. http://www.bloomberg.com/news/2014-11-12/china-hunger-for-clean-energy-to-leave-no-rooftop-behind.html Michael Sankowski estimates that solar in China will become cheaper than coal by about 2018. http://monetaryrealism.com/china-asks-how-much-will-it-cost-us-to-make-solar-cheaper-than-coal/ That cost reduction will not only benefit China, but solar installations all around the world.

China’s commitment to reducing its carbon emissions announced during President Obama’s visit last month requires some massive spending by the Chinese government. Bloomberg news estimated that it would require “either 67 times more nuclear energy than the country is forecast to have at the end of 2014, 30 times more solar or nine times more wind power.” http://www.bloomberg.com/news/2014-11-21/latest-china-revolution-seeks-great-leap-for-clean-energy.html

But with China it is not either/or. Besides solar and wind, the nation also plans to almost quintuple its nuclear power in the next 5 years. Currently with 18 gigawatts of nuclear power, China plans to add 58 gigawatts of nuclear power by 2020 and have another 30 plants under construction. http://www.bloomberg.com/news/2014-11-19/china-plans-to-slow-energy-consumption-increase-to-28-by-2020.html

Stacking up the Solar Energy Credits in Massachusetts

Massachusetts may not be the first place you think about when it comes to solar power, but due to a series of government incentives it can be a very profitable place to build a residential solar power system.

graph of Massachusetts electric rates since 2001As I discussed in Solar About to Go Mainstream,  one of the principal factors in deciding to build solar facilities is the cost of the regular power from the utility company. Because of the island’s dependence on oil for power generation, Hawaii has the nation’s highest electric rates and has been a leader in residential solar power. In Massachusetts, the electric rates are skyrocketing. One of their utility companies, National Grid, has raised winter residential rates this month to 24.2 cents per kilowatt hour. That’s over twice the national average.

Western Massachusetts Electric Company has asked for a rate increase of 29%. http://www.berkshireeagle.com/local/ci_26942074/western-massachusetts-electric-eyes-rate-hike

California’s solar growth can be attributed to the state’s aggressive Renewable Portfolio Standard requiring 33% of power from renewable sources by 2020. As discussed in California Solar Power and the “Duck Curve” 30 states have adopted Renewable Portfolio Standards. The Renewable Portfolio Standard in Massachusetts is 9% this year and scheduled to increase by 1% per year. Massachusetts also has a solar “carve out” designed to support up to 1,600 megawatts of solar power in the state by 2020. That’s equivalent to 320,000 homes at 5 kilowatts per house. The state is already almost halfway there. Graph of Installed solar capacity in Massachusetts

Connecting a residential solar power system to the grid allows power to flow both ways. At night, when the sun isn’t shining, the homeowner draws power from the grid. During the day, if the amount of solar power generated exceeds what is being used in the house, the power flows out into the electric system, feeding the needs of the neighbors. map of states with net metering policiesUtility billing practices that give the homeowner credit for the excess power generated and fed into the grid are called “Net Metering Policies.” Currently 43 states have mandatory net metering policies and three states have voluntary net metering.

So faced with high and rising electric bills and living in a “solar friendly” state, what can a homeowner in Massachusetts do?

One option is called a “solar lease.” If your house has a south-facing roof and little shade, companies like Solar City will install solar panels on your roof for free. Then they will sell you the power generated at a rate lower than the utility company locked in for the next 20 years. Solar City handles all of the permits, installation and maintenance. http://www.solarcity.com/residential/how-much-do-solar-panels-cost Under the lease agreement, Solar City owns the panels on your roof and you get the power at a discount.

But I’ll show you a better way.

The average home in Massachusetts uses 627 kilowatt hours of electricity per month. Installing a 5,000 watt solar system will produce 2/3 of that amount on average. If you’re efficient, that might be enough, but for our example, let’s be generous and figure a 7,500 watt system to provide for all of your needs.
Average cost of residential solar systems 2014
According to the Solar Energy Industries Association, the latest average cost for a residential rooftop power system is $3.74 per watt. http://www.seia.org/research-resources/solar-market-insight-report-2014-q2 A 7,500 watt system would cost about $28,000. That sounds like a lot, and it is.

Now let’s consider the credits. For starters, there’s a 30% federal Residential Renewable Tax Credit. So take off $8,400 to bring the price down to $19,600. Then the state of Massachusetts offers a base incentive of 25 cents per watt for the first 5,000 watts which comes to $1,250. If your household income is less than 120% of the median household income, Massachusetts kicks in another 40 cents per watt or another $2,000. Subtracting the $3,250 from the state brings the system cost down to $16,350. That’s still a large chunk.

Once the system is up and running, however, you’ll save about 625 kilowatt hours per month that would otherwise be paid to the power company. At 24.2 cents per kilowatt hour, those savings amount to $151 per month or $1,812 per year. With that, the system will pay for itself in 9 years.

But there’s more. Your system generates an estimated 7,500 kilowatt hours per year. Each 1,000 kilowatt hours earns you one Solar Renewable Energy Credit (SREC). These are separate from the power you already used in your home. Let’s round that down to 7 SRECs. These SRECs can be sold at auction and the utility companies are required to buy them to meet the state’s Renewable Portfolio Standard. At the latest auction, Massachusetts SRECs sold for $274 each. Your 7 SRECs would be worth $1,918.

When you consider the $1,812 per year in savings from your electric bill and $1,918 in Solar Renewable Energy Credits, the system pays for itself in less than 4 ½ years, and thereafter you not only have free electricity, but the system pays you. Even if you have to take out a home equity loan to pay the upfront costs, unless you plan on moving in the next 5 years, it’s a deal too good to pass up.

Disclaimer: this is not investment advice. The values here are for illustration only and your results will vary. This is not an endorsement of Solar City or any other solar supplier or installer. Electric rates and the value of Solar Renewable Energy Credits may go up or down. The 30% Residential Renewable Tax Credit is scheduled to be reduced to 10% after 2016 and may be changed at any time by an act of Congress. Do your own research before investing.

California solar power and the “duck curve”

Last week as I wrote in Solar about to go mainstream,  I told you about one state where solar has already gone mainstream with over 10% of homes already having solar panels on their roofs. That state, Hawaii, not only has abundant sunshine, it also has the highest regular electric rates in the country. This week the discussion moves to the continental United States and the one state with more solar power facilities than all the others put together, California.

Map of states with a renewable portfolio standardCalifornia, Hawaii, 35 other states and the District of Columbia have created Renewable Portfolio Standards specifying a minimum level of renewable fuel sources for their electric utilities. In seven of the states the Renewable Portfolio Standards are voluntary, rendering them merely symbolic.
http://www.eia.gov/todayinenergy/detail.cfm?id=4850

In 30 states, however, the standards are mandatory. The Illinois standard, adopted in 2007 is for 25% of electricity from renewable sources by 2025, sometimes known as a 25 x 25 standard. In Michigan, the standard is 10% from renewable sources by 2015. California has probably the nation’s most aggressive Renewable Portfolio Standard requiring 20% of all electric power from renewable sources in 2010 and 33% in 2020.

Cummulative California Photovoltaic Installed Capacity
Solar power installations in California more than doubled last year. http://en.wikipedia.org/wiki/Solar_power_in_California

Of course, solar cells can only generate power when the sun shines. There’s little power in the early morning hours or late afternoon, and none at all after the sun goes down. Coal burning power plants typically have capacity factors greater than 80%, with only short shutdowns for maintenance. Wind turbines have capacity factors of about 40% depending on location. Solar cells are rated for direct sunlight on a clear day at noon and generate less all other times of the day, when it’s cloudy or even when the panels are dusty. A capacity factor of only 12% to 13% is typical.

California ISO Solar Power Duck GraphModels of the effects of future solar power generation in California have resulted in the California “duck graph.”

Solar power reduces the amount that needs to be generated from other sources during the day, but drops off rapidly after 4 pm and does nothing to help meet peak power requirements between 6 and 10 pm. As more solar power is installed, the belly of the duck gets deeper and the utility must bring up other sources of power quicker after 4 pm. Coal power plants can’t start and stop quickly and nuclear power is steady all day long. Winds tend to pick up in the hours around dusk and dawn as the temperatures change, but wind is unpredictable. That leaves natural gas (and hydro power to some extent) to make the quick transition.

Aerial photo of Ivanpah thermal solar power facilityOne potential solution is thermal solar power. California built the world’s largest thermal solar power generating facility in the Mojave Desert last year. Thousands of mirrors reflect sunlight to water tanks at the top of tall towers, turning the water to steam which drives turbines to generate electricity. One of the advantages is that the steam stays hot for hours after the sun goes down and the facility continues to generate power into the evening hours.

However, more facilities like the one pictured above at Ivanpah, California are unlikely to be built for several reasons:

  1. The facility is killing approximately 2,000 birds per month, heating them to 800 degrees as the fly through the air.
  2. Pilots flying overhead are complaining about the blinding glare.
  3. The cost of regular silicon solar cells continues to come down. While thermal solar was expected to be cheaper than regular solar panels when it was built, that is no longer the case.
  4. The project is only generating ¼ of the amount of power that was expected. The project investors, including Google, who got a $1.6 billion federal loan to build the facility are now asking for $539 million federal grant to help pay off the loan. http://www.foxnews.com/politics/2014/11/08/world-largest-solar-plant-applying-for-federal-grant-to-pay-off-its-federal/

Solar vs grid power costRemember this graph from last week?

The price of large utility-scale solar power facilities has come down much faster than smaller residential rooftop setups. The major difference is the cost of inverters which turn the direct-current from the solar panels into alternating current and synchronize it to the grid. For a residential system, these electronics can be more expensive than the silicon panels themselves. The inverters are a much smaller portion of the cost for large systems. As a result, most solar power installations in the US last year were utility-scale systems.

Solar power installed in 2013 by state

http://www.seia.org/research-resources/solar-market-insight-report-2013-year-review

Many environmentalists talk about the “distributed generation” of rooftop solar systems and the end of the grid as we know it. With a distributed generation model, the grid becomes less and less important as power is generated in the same neighborhood (or even the same building) as it is needed. But even as solar power escalates around the country, the reality is very different. Three out of four homes are not well suited for solar, either due to roof geometry, shade, or other issues. And solar power installations are increasingly large-scale facilities far from populated areas where land is cheap, feeding directly into the grid. Wind power too, is mostly located in rural areas, thousands of feet from the nearest home. We will need the current electrical grid for a long time to come. In fact, due to the variability of renewable power sources like wind and solar, the grid will need to be even more robust than it is today.

Solar about to go mainstream

If you are like most Americans, your experience with solar power has been pretty limited. You may own a solar-powered calculator. You may have noticed the solar panel powering the flashing road construction message sign. You’ve probably seen a house with solar panels on the roof, but you don’t know anyone who lives there. That is about to change.

Solar power provides only one third of one percent of all the electricity in the United States, yet last year the Edison Electrical Institute called distributed generation an “existential threat.” By that they mean that rooftop solar panels threaten the very existence of electrical utilities as we know them today.

Think about mobile telephones and telephone utilities. When Motorola developed the first cellular telephone system, AT&T hesitated. Who would need to be able to carry a telephone so that they could be reached wherever they were? Perhaps a few doctors and CEOs would. McKinsey & Company noted that the handsets were heavy, batteries didn’t last long, coverage was patchy, and the cost per minute was exorbitant. It predicted that in 20 years the total market size would be about 900,000 units, and advised AT&T to pull out. Yet people by the millions got mobile phones in addition to their wired phones. And eventually the mobile phones got so reliable they began cancelling their home phone service. Your phone company is no longer a monopoly with captive customers who must buy their service.

Electric utilities are worried that they could be next. The market for voice and data transmission is skyrocketing, but the market for electricity is steady or declining. Electrical generation in US peaked in 2007. In the past 7 years it has not increased. In fact, due to improvements in efficiency, they amount of electricity consumed in the US is down slightly.

Graph of US Solar Electricity Generation since 1985Meanwhile, the amount of electricity generated from wind and solar power has been rising. Solar power generation has been rising exponentially.

The electric utilities have responded by lobbying the state legislatures seeking to tax or limit distributed solar power systems. In response, both environmentalists and conservatives are pushing back. In Arizona, Republican Barry Goldwater, Jr. has started TUSK (Tell Utilities Solar Won’t Be Killed) to fight against grid-connection fees for solar power. http://dontkillsolar.com/tusk/ In Georgia, Tea Party activists have aligned with environmentalists to form the Green Tea Coalition. https://www.facebook.com/thegreenteacoalition The movements are spreading to Florida, North and South Carolina, Wisconsin, Louisiana, Oklahoma and Utah.

In Iowa, Alliant Energy and the Iowa Utility Board took on Eagle Point Solar which had installed solar panels on the roof of a City of Dubuque municipal services building. Under a power purchase agreement, Eagle Point Solar installed the panels on the building and then agreed to sell the power to the City. The Utility Board argued that this arrangement violated Alliant’s monopoly utility status and took the case all the way to the Iowa Supreme Court. The court decided against the utility and in favor of Eagle Point. http://www.thonline.com/news/breaking/article_d0604f26-0901-11e4-a002-0017a43b2370.html

One problem for utilities is that once the solar panels are installed, the fuel (sunshine) is free. The main cost is installation, and that installation cost is coming down fast. Solar cells are made out of silicon wafers, similar to computer processor chips. The price of the solar panels has come down 75% in the past 5 years. Other elements of the solar installation (mounting hardware, inverters, labor) have not come down in price so rapidly, but when you spread out the installation cost over the life of the system, the cost is approaching what the consumer would otherwise pay for electricity. Solar Cost vs the Grid

For massive ground-mounted utility scale, the levelized cost of electricity is nearly the same.

As costs come down, solar power installations have risen.

US Photovoltaic Installations since 2000
Solar power facilities are now being built faster in the US than any other fuel source except natural gas.

US Power Plant Capacity Additions first half 2014
For individuals, deciding to go with solar power often boils down to cost. It all depends on how much sun you get, what rebates or incentives are offered by the government, and what the cost of the alternative is. In one state, solar power has been the cheapest source of electricity since 2010. See if you can figure out which one that is.

For three out of four families solar is not an option. They may be renters. They may not have a roof with a large southern exposure. Or that roof may be shaded by trees. If you are lucky enough to own your own building with lots of direct sunlight, consider how much light you actually get.

Map of sunlight in the US
Obviously it helps to live in an area to the south without many cloudy days.
The other factor is the regular retail cost of electricity. This can vary widely depending on where you live.
Map of State Average Electricity Prices
In fact, unless you live in Alaska, the local cost of power is a bigger factor than how much sunlight you get.

If you haven’t yet guessed the state where solar power is cheaper than the local utility company, I’ll give you another clue. This state has no local source of coal, oil or natural gas. All of its energy is imported on ships.

That state is Hawaii. Hawaiian Electric charges residential customers 34.6 cents/kwh on the island of Oahu; on Maui its 37.8 cents/kwh; and on the rest of the islands it’s over 40 cents/kwh. A rooftop solar system can pay for itself in 4 or 5 years. So it’s no surprise that solar power installations in Hawaii grew last year by almost 80%. Ten percent of Hawaiian homes now have rooftop solar power systems providing a statewide average of up to 255 watts per person. During daylight hours on weekends, solar can provide 50% or more of the islands’ needs.

In the continental US, the decision to install a solar system depends much more on tax credits, rebates and other incentives that vary from state to state. As solar installation costs continue to come down, there are some sweet deals to be had in the right location. I’ll discuss what that means for the future in another installment.