An Introduction to Solar Electricity

The world is in the midst of a global renewable energy revolution. With installations of new solar and wind energy systems climbing rapidly, nearly 50 countries have pledged to be 100% dependent on renewable energy by 2050. That’s no pipe dream. It’s highly doable. In fact, researchers at Stanford University project that the world could be 100% reliant on renewables in 20 to 40 years. The technologies and know-how are here, and in many parts of the world, so is the commitment.

Although the United States and Canada are not leading the race to a renewable energy future, significant progress is being made in both countries. In the US, for instance, solar, wind, biomass, hydroelectricity, and geothermal now produce about 17% of the nation’s electricity—up from 7 to 8 percent at the beginning of the millennium.

One reason why renewable energy production has increased in recent years in the US is declining cost. Because of this, solar electric systems now consistently generate electricity at or below the cost of power from conventional sources like nuclear power and coal. With federal tax credits that have been in place for over a decade, solar electric systems on homes and businesses consistently produce electricity much cheaper than utilities. Declining costs and rising popularity have led many utilities to install solar and wind farms.

How Solar Cells and Modules Are Wired

Inside a solar module, solar cells are “wired” together in series. The modules in an array are then also wired in series. What does all this mean? Series wiring is a technique commonly used in electrical devices. Batteries in a flashlight, for instance, are placed so that the positive end of one battery contacts the negative end of the next one. That’s series wiring. It’s done to increase the voltage. When you place two 1.5-volt batteries in series in a flashlight, you increase the voltage to 3 volts. Place four 1.5-volt batteries in series, and the voltage is 6.

Conservation and Efficiency First!

Before you invest in a solar electric system, I highly recommend making your home—and your family—as energy efficient as possible. Even if you’re an energy miser, you may be able to make significant cuts in energy use. Waste can be slashed many ways. Interestingly, though, the ideas that first come to mind for most homeowners tend to be the most costly: new windows and energy-efficient washing machines, dishwashers, furnaces, or air conditioners (Figure 4.3). While vital to creating a more energy-efficient way of life or business, they’re the highest fruit on the energy-efficiency tree—and the most expensive. Before you spend a ton of money on windows or new appliances, I strongly recommend that you start with the lowest-hanging fruit. These are the simplest and cheapest improvements, and will yield the greatest energy savings at the lowest cost. Huge savings can be achieved by changes in behavior, too. You’ve heard the list a million times: Turn off lights, stereos, computers, and TVs when not in use. Turn your thermostat down a few degrees in the winter. Wear sweaters and insulated underwear. Turn the thermostat up in the summer and run ceiling fans. Open windows to cool a home naturally, especially at night, in the spring and summer, and then close windows in the morning to keep heat out during the day. Draw the shades or blinds on the south, east, and west side of your house in the summer to reduce cooling costs. All these changes cost nothing, except a little of your time, but they can reap enormous savings—not just in your monthly energy bill, but also in the cost of a PV system. Figure 4.3. Energy-efficient Washing Machine. Spending a little extra for an energy-efficient front- loading washing machine like this(bottom unit) will reduce the size of yoursolarsystem. To dry clothes, though, consider using a solar clothes dryer (commonly called a clothesline). Credit: Frigidaire. Other low-hanging, high-yield fruit include tightening up our homes and workplaces, that is, making them more airtight. Weather-stripping around doors and caulking leaks in the building envelope can reap huge benefits. Once a building is better sealed, beef up the insulation. Install insulated window shades. Insulate attics, walls, and floors above crawl spaces or garages. For advice on insulation, be sure to hire an energy consultant. If they’re good, they can help you figure out the best ways to seal and insulate your home. Once you’ve made these changes, it’s time to examine bigger-ticket items. For example, your refrigerator. In many homes, refrigerators are responsible for a staggering 25% of total electrical consumption. If your refrigerator is old and in need of replacement, unplug the energy hog, recycle it, and replace it with a more energy-efficient model. Thanks to dramatic improvements in design, refrigerators on the market today use significantly less energy than refrigerators manufactured 20 years ago. (And please, do not plug in the old one in the basement or out in the garage. That would defeat the entire enterprise!) Electrical energy use can also be reduced by replacing energy- inefficient electrical devices with newer, more efficient Energy Star models (Figure 4.4). Before you go shopping, log on to the Energy Star website. Click on the appliance or electronic device you’re interested in. Look for models that meet your criteria. Consumer Reports also has an excellent website that lists energy-efficient appliances. Their site also rates appliances on reliability. Canadian readers can log on to oee.nrcan.gc.ca for a list of international Energy Star appliances. When shopping for appliances both online and in stores, you can compare the energy efficiency of refrigerators, freezers, and other devices by checking out the yellow Energy Guide on or inside the device. It will tell you how much electricity a particular appliance will typically use in a year’s time and how the model you are looking at compares to other models in that category. Figure 4.5 shows an example of an Energy Guide. In

Sizing a Grid-Connected System

Most systems installed these days are grid-connected. They do not require batteries. These systems produce electricity rain or shine. The electricity is consumed in the home. If there’s a surplus, it is backfed onto the electrical grid. The utility keeps track of the surpluses fed onto the grid. At night, the utility supplies electricity to the home, but there’s no charge for it if there’s been a surplus fed onto the grid. Sizing a grid-connected system is the easiest of all. To meet 100% of your needs, determine how much electricity you consume in a year, then divide that by 365 to find the average daily electrical demand (in kilowatt- hours). This number is then divided by the average peak sun hours per day for your area. As noted in Chapter 2, peak sun hours can be determined from solar maps and from various websites and tables. As an example, let’s suppose that you and your family consume 12,000 kWh of electricity per year (or 1,000 kWh per month). This is about 34 kWh per day. Next, divide 34 kWh per day by peak sun hours. Let’s suppose you live in Lexington, Kentucky, where the average peak sun hours per day is 4.5. Dividing 34 by 4.5 gives you the array size (capacity): 7.6 kilowatts. But don’t run out and order a system quite yet. To calculate the size, you need to increase it by 22%. This accounts for a number of factors that lower the production of a PV system in the field such as high temperatures, dust on modules, losses due to voltage drop as electricity flows through wires, and inefficiencies of various components (inverters, controllers, etc.). To calculate the array size using the 22% adjustment factor, you simply divide 7.6 kW by 0.78. In our example, then, we’d need to install a 22% larger PV array, one rated at 9.74 kW. A 9.74 kW array would require thirty-four 285-watt modules. If your site is shaded, the system may need to be larger because shading lowers the output of a PV system. To determine the amount of shading on a PV system, professional solar site assessors and solar installers often use a Sun path analysis tool like the Solar Pathfinder shown in Figure 4.6. The Solar Pathfinder and similar devices determine the percentage of solar radiation blocked by local features in the landscape such as trees, hills, and buildings. If the device indicates 10% shading, the array would need to be 10% larger. Alternatively, trees or branches could be trimmed to eliminate shading. If shading is severe, an alternative location would be required. For optimum performance, PV systems generally require a site where an array is unshaded 90% to 95% of the time. Figure 4.6. Solar Path nder. This device allowssolarsite assessors and installersto assessshading at potentialsitesfor PV systems, helping them select the best possible site to install an array. Credit: Shawn Schreiner. Figure 4.7. Solar Path nder Dome Showing Shading. The dome of the Solar Path nder (notshown here) re ects all obstructionsthat willshade a solar array. A photograph of the dome isthen entered into a computer program that allowsthe operator to trace the shading. The computer then calculates the amount ofshading that occursin each month and determines how much electricity an array could produce with that amount ofshade. Credit: Solar Path nder. Sizing an Off-Grid System Off-grid solar electric systems are sized according to the month of the year with the highest demand. In the Canada and northern-tier states in the US, that month is typically January—it’s the coldest month and the month that offers the least sunshine. In southern states, peak demand often occurs in the summer when air conditioning is working overtime to keep us cool. After determining the month with the highest demand, calculate the average daily demand for that month. Then look up the average peak sun hours for the month. (This is available on various websites.) Next divide the average daily consumption by the average peak sun hours to determine the size of the array. Don’t forget to adjust for efficiency and shading. For battery-based systems, a 30% efficiency factor is a good idea. In other words, you should increase the array size by 30%. As an example, let’s suppose that a superefficient off-grid home requires 200 kWh of electricity during the month of January. That’s 6.5 kWh per day. If the average daily peak sun for January is 2.9, you divide 6.5 kWh per day by 2.9. The result is a 2.5 kW system. Now adjust by 30%. To do so, divide 2.5 by 0.70. The result is 3.6 kW. That’s the size of the solar electric system you’d need to install. Once you know the size of your array, you must size the battery bank. Although I’ll discuss battery bank sizing in detail in Chapter 7, it’s important to note that battery banks are sized to provide sufficient electricity to meet a family’s or business’ needs during cloudy periods. We call these “battery days.” Most battery banks are based on a three-to-five- day reserve so they’ll provide enough electricity for three to five days of cloudy weather. In sunny Colorado, New Mexico, or Utah, I’d size the battery bank for three battery days. In cloudier Ohio, Indiana, or Illinois, I’d size a system for five battery days.

Sizing a Grid-Connected System with Battery Backup

PV arrays in grid-connected systems with battery backup are sized much like grid-connected systems. That is, the size of the array is based on average daily demand. In these systems, however, you’ll also need to size a battery bank. Battery banks are sized according to the electrical requirements during a power outage. However, to save money, most homeowners opt only to power critical loads during these periods. Critical loads are devices you must have such as pumps and fans of heating and cooling systems, well pumps, sump pumps, refrigerators, freezers, and a few lights in critical areas, such as kitchens. Because these loads require less energy than the entire home, battery banks in these systems are typically much smaller than in off-grid systems. In fact, they are about one-third of the size. Does a Solar Electric System Make Economic Sense? At least three options are available to analyze the economic cost and benefits of a solar electric system: (1) a comparison of the cost of electricity from the solar electric system vs. conventional power; (2) simple return on investment; and (3) a more sophisticated economic analysis tool known as discounting. Cost of Electricity Comparison One of the simplest ways of analyzing the economic performance of a solar system is to compare the cost of electricity produced by a PV system to the cost of electricity from your utility. Once you know the size of your system, how much it will produce each year, and the cost to install it, you first calculate the system’s output over a 30-year period—the expected life of a PV system. Next, you calculate the cost per kilowatt-hour. You do this by dividing the cost of the PV system by the total output in kWh over 30 years. Suppose you live in sunny western Colorado and are interested in installing a grid-connected solar electric system that will meet 100% of your electric needs. Your superefficient home requires, on average, 500 kWh of electricity per month, or 6,000 kWh per year. That’s 16.4 kWh per day. Peak sun hours in your area is 6. To size the system, divide the electrical demand (16.4 kWh per day) by the peak sun hours. The result is 2.7 kW. Adjusting for 78% efficiency, the system should be 3.46 kWh. Let’s round up to 3.5 kW. Let’s assume that the system is not shaded at all during the year. Your local solar installer says she can install the system for $3.14 per watt (the national average in January 2019). The system will therefore cost $10,990 (3,500 watts x $3.14 per watt). Next, subtract the 26% tax credit (available in 2020) from the federal government from the cost of the system. (The credit is scheduled to drop to 20% in 2021 and 10% in 2022.) The federal tax credit is based on the cost of the system, including installation ($10,990), minus state or utility rebates (if any). In this case, let’s assume there are no state or utility rebates. Twenty-six percent of $10,990 equals $2,857. Total system cost after subtracting this incentive is $8,133. According to your calculations or the calculations provided by the solar installer, this system will produce, on average, 6,000 kWh per year. If the system lasts for 30 years, it would produce 180,000 kWh over this period. To calculate the cost per kilowatt-hour, divide the system cost ($8,133) by the output (180,000 kWh). In this case, your electricity will cost 4.5 cents per kWh. Considering that the going rate in Colorado is currently over 11 cents per kWh, the PV system represents an excellent investment. Bear in mind, too, that utility costs will continue to increase over the next 30 years. Note, too, that even without the federal tax credit, the cost of electricity from a solar electric system would be still be low—about 6.1 cents per kilowatt-hour over its 30-year lifespan. If you’d like to learn more about the ins and outs of this calculation, you might want to check out my book, Power from the Sun, now out in its second edition. Calculating Simple Return on Investment Another method used to determine the cost-effectiveness of a PV system is simple return on investment (ROI). Simple return on investment is, as its name implies, the savings generated by installing a PV system, expressed as a percentage. Simple ROI is calculated by dividing the annual dollar value of the energy generated by a PV system by its cost. A solar electric system that produces 6,000 kWh of electricity per year that would cost you 11 cents per kilowatt-hour when purchased from the utility generates $660 worth of electricity each year. If the system costs $8,133, after rebates, the simple return on investment is $660 divided by $8,133 × 100 which equals 8.1%. If the utility charges 15 cents per kWh, the 6,000 kWh of electricity would be worth $900, and the simple ROI would be 11%. Both of these represent very decent rates of return. Consider what your money would be doing otherwise. In the States, the average interest on savings accounts in banks was 0.09% in 2019. The top online savings accounts offer a whopping 2.1 to 2.3% at this writing, but you might need a balance of $20,000 to receive this rate! WEAKNESSES OF ECONOMIC ANALYSIS TOOLS Comparing the cost of electricity and return on investment are both simple tools. However, both fail to take into account a number of economic factors. For example, both techniques fail to account for interest payments on loans that may be required to purchase a PV system. Interest payments will add to the cost of electricity produced by the system. For those who self-finance, for example, by taking money out of savings, both tools fail to take into account opportunity costs—lost income from interest-bearing accounts raided to pay for the system. These calculations also don’t take into account possible maintenance, possible increases in property tax, possible increases in insurance premiums, and inverter replacement. All these costs will decrease the economic benefits of a solar electric system. That said, these simple economic tools also leave the rising cost of electricity out of the equation. Nationwide, electric rates have increased on average about 4.4% per year over the past 35 years. In recent years, the rate of increase has been double that in some areas. These methods also don’t give credit for the large increase in home values produced by the presence of a solar electric system and/or much lower utility bills. All in all, the two sets of factors—those that raise the system costs and those that make it more profitable—very likely offset each another, so the cost of electricity comparison and the simple return on investment turn out to be fairly valuable tools for analyzing the economic sensibility of a PV system. They’re infinitely better than the old standby, payback (also known as simple payback). Payback is a term that gained popularity in the 1970s first in relation to energy-efficiency measures, then to solar systems. Payback is the number of years it takes a renewable energy system or energy-efficiency measure to pay back its cost through the savings it generates. Payback is calculated by dividing the cost of a system by the anticipated annual savings. If the $8,133 PV system we’ve been looking at produces 6,000 kWh per year, and grid power costs you 11 cents per kWh, the annual savings of $660 yields a payback of 12.3. years. From that point on, the system produces free electricity. While the payback of 12.3 years seems ridiculously long, don’t forget that this is the system that yielded a very respectable 8.1% return on investment, which looked pretty good. While payback is popular concept among buyers, this example shows that it has very serious drawbacks. The most important is that what appears to be a relatively long payback actually represents a pretty good ROI.

Net Present Value: Comparing Discounted Costs

For those who want a more sophisticated tool to determine whether an investment like a PV system makes sense, economists have devised an ingenious method that allows us to compare the value of a solar electric system to the cost of buying electricity from a utility for the next 30 years. It allows us to make this rather tricky comparison based on the value of today’s dollar—or whatever currency your country uses. They call the value of something in today’s dollar present value. Unlike the previous methods, this method takes into account numerous additional economic factors besides the cost of the system. These can include maintenance costs, insurance, inflation, and the rising cost of grid power. As all readers know, inflation decreases the value of money over time. Economists refer to this as the time value of money. The time value of money takes into account the fact that a dollar a year from now will be worth less than a dollar today. Economists refer to the rate at which the value of money declines as the discount factor. To make life easier, this economic analysis can be performed by using a spreadsheet. The details of this method are beyond the scope of this book, but let me say just one thing: In most cases, this technique illustrates that an investment in a PV system is far better than continuing to pay your electric

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Dan Chiras

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