Solar Power Scavenger Hunt – Best of

October 20, 2011 § 2 Comments

A big thank you goes out to all participants in this year’s Solar Power Scavenger Hunt and our partners who made this fun activity possible. Special thanks go out to Kaco newenergy, Trina Solar and Schletter Mounting Systems for providing the grand prize: a 1,380Wp residential PV System. Additionally a big thanks goes out to Joint Forces For Solar and EUPD Research for donating the Solar Installer Monitor Research Report. We are going to announce the winners shortly.

Here’s a quick selection of great pictures taken at our booth.

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Thinking about PV Solar for your Home or Business?

September 26, 2011 § Leave a comment

Photovoltaic solar panels on the roof of a hou...

Image via Wikipedia

Good idea … now, consider these additional ticklers.

If you have been following this industry you know that solar PV component prices are down 60% in the last two years.  Never has there been a more compelling time to consider a grid-tied PV system for your home or business.

PV systems are an affordable and economic investment now — yes now!  In addition to perfect timing, consider these additional benefits for grid-tied PV systems:

Avoided costs . . . a tax benefit for homeowners.  As a homeowner with a grid-tied PV system, you will purchase less electricity from your utility.  You will avoid that additional cost.  OK.  Since you pay for electricity with after tax income, your PV benefit, for investment comparison purposes, is properly measured in before tax income.

For instance, if you save $30 a month with your PV system and you are in a 28% marginal tax bracket, your before tax equivalent savings is $30/(1-.28) or $41.66.  It takes $41.6 of before tax income to pay $30 to an electric utility.  This is the proper monetary measure of the PV benefit for a homeowner.  Caution: this does not apply if your lease your PV system.

No increase is property taxes.  In most jurisdictions, the capital investment of a PV system for your house will not increase the assessed value of your home or you annual property taxes.  Quite the opposite for a kitchen remodel or swimming pool!

Grid-tied PV systems are scalable.  2kW is as efficient as 5kW or 20kW.  So start small.  You can always add to your PV system at a later date.  A PV system equal to 15% to 20% of your electricity consumption is perfect and costs well less than $10k.  You do not need 25 panels or a $25k investment.  For home or business . . . go small.

A grid-tied PV system will increase the value of your home or business.  Of course it will; your PV system is virtually maintenance free and lowers the cost of operation.

For a home, a recent Lawrence Berkeley National Laboratory report affirms a 20:1 value ratio: that is, the value of your home increases 20 times the first year savings.  Spend $6,000 to save $300 a year: 20 x $300 = $6,000.  Payback?  It’s done!  Caution: this does not apply if your lease your PV system.

For a business, reduced operating expenses equal increased NOI.  Business are valued at a multiple of NOI . . . the increase in value is automatic.

PV systems are a very long term investment!  Most PV panels are warranted to 80% of rated power performance after 25 years, but these panels can last for 40 years or more!  Think about it.  2051 and you still are producing a lot of electricity.  Can you imagine?  A grid-tied PV system of any size is a terrific hedge against rising electricity costs.

Environmental attributes . . . Light from light.  PV systems are sustainable and renewable . . . no fuels, no water, no emissions, and no noise.  How do you measure the value of clean air over 40 years or more?  Ask your children, not your politicians!

Chet Boortz, CEO

SES 21 USA

[The comments, positions, and opinions stated above are my own and may or may not represent those of SES 21 USA and its affiliate companies.]


Texas grid operator ERCOT ‘at war’ with hot temperatures. Really . . . it’s a Texas summer!

August 10, 2011 § Leave a comment

Deregulated utilities open the door for distributive solar PV generation.

OK, it’s very hot in July & August, but why is Texas always on the cusp of rolling blackouts? Can it be that our deregulated utilities respond to profit better than public signals? Should we rename the Public Utility Commission of Texas (PUCT) the Profit Utility Commission of Texas ($$UCT)?

Electricity demand and high temperature in Texas, August 2011

Electricity demand and high temperature in Texas, August 2011 - Greentech media - EIA

Remember the three R’s of regulated utilities: Resilient, Reliable, and Redundant. When an electric utility needed more generation, it simply built a new power plant with state of the art technology. The cost was included in the utility’s rate base, the return on capital was set by authentic public utility commissioners, and capital was abundant. Perfect.

But, not good enough for Texas. Now, the lobbyists and politicians have dismembered our proud electric utilities and chunked the pieces to the ‘competitive’ markets and private equity guys in the case of Dallas’ Energy Future Holdings (EFH).

Now it’s not so simple to build a power plant. Who is going to purchase the electricity and at what price? The retail bone has been disconnected from the power generation bone. Without assurance of a steady source of repayment, who is going to provide the capital for a free-standing power plant? Apparently, no one.

So, with temperatures soaring and the inadequacies of our deregulated and stand alone T&D grid in full view; what do you think will happen next? Electricity rates going down . . . probably not! This is a perfect time to invest in distributive solar PV electricity as a partial solution to this country’s unabated electricity demand. Electricity from light energy . . . how cool is that!

Grid-tied solar PV is an ideal energy resource to offset peak electricity demand on the grid. If you are a business or homeowner consider just 20% of your electrical load from solar PV. PV system prices are down 40% since 2009. It’s a long-term economic investment that will add to the value of your home or business now!

A PV system may produce power for 40 years or more. It uses no water, uses no fuel, no moving parts, no emissions, no noise, it does not eat anything, it does not need a college fund . . . it just sits there generating electricity day in and day out. When it’s over someday . . . just recycle.

AMERICA . . . it’s time to take some positive and independent steps. Do not wait on your politicians for anything. They are busy with lobbyists. They have work to do.

Distributive PV generation is a ground swell, bottom up movement; get onboard and make a difference for yourself and your community. It’s time.

Chet Boortz, CEO

SES 21 USA, LLC

[The comments, positions, and opinions stated above are my own and may or may not represent those of

SES21USA, LLC and its affiliate companies.]

PV economics . . . Let’s do the math!

April 16, 2011 § Leave a comment

The purpose of this Economic Series is to demonstrate with real numbers and basic analysis that an investment in a grid-tied PV system for home or business is a very economic proposition.  Now!  Yes now; not someday in the future but at the present.

In these writings, I have discussed important variables in determining a present value rate of return:

  • PV as an avoided cost
  • PV and residual value
  • Payback is the wrong metric
  • Determining electricity production from your PV system
  • Calculating the value of your electricity production
  • Performing the present value rate of return calculation
  • Grid parity is here!

None of this analysis is based on local incentives, rebates, feed-in or performance tariffs, REC’s, and certainly not on any social cost/benefit analysis . . . just simple numbers.  There is one exception; I do consider the beneficial 30% federal PTC or ITC for residential and commercial PV installations.

I hope in the process, I have made PV economics more approachable.  You should not simply rely on canned PV calculators to make your decision; understand the basics, and think through the analysis yourself.

Here are my assumptions and economic results for a 1.84kW (8 Schott 230W modules) residential installation in Fort Worth, Texas:

Assume*

  • A 1.84kW grid-tied PV system
  • Fort Worth, Texas location
  • 180°  azimuth, and 32.9° tilt
  • PV Watts power calculation (77% derate factor)
  • $5.00/W installed costs
  • 30% personal tax credit for installed costs
  • Inverter replacement allowance at year 15
  • 12.02¢ kWh electricity costs (average U.S. residential rate, EIA, 08. 2010)
  • Efficiency loss based on module warranty (20% after 25 yrs.)
  • After FIT (avoided cost) calculation (28% marginal tax rate)
  • Residual value at 25 years: 10X annual savings
  • All cash; no leverage
  • Twenty-five years present value rate of return
  • NO REBATE !!

IRR calculation table

IRR calculations graph
*These are the primary variables for determining a present value rate of return for your PV system.  Your actual return will be more or less depending on site characteristics and your actual system performance.  Remember, Quality Counts!

I recently attended a North Dallas Chamber of Commerce Energy Forum with a panel comprised of local utility executives.  The Chairman of Atmos Gas, a large Texas-based natural gas utility, while expounding the virtues of producing natural gas by fracking tight shale rock formations from South Texas to the Adirondacks Mountains of New York, assured the audience of a 100 year supply of natural gas for electricity generation.  Really, 100 years?  In the Q & A, when asked about renewable energy, the notion was summarily dismissed with an authoritative response that renewable energy was ‘5 or 6 times’ more expensive than conventional resources.  Really?  Mr. Chairman, do the math please.

Chet Boortz, CEO

SES21 USA

[The comments, positions, and opinions stated above are my own and may or may not represent those of SES21 USA and its affiliate companies.]

PV economics . . . Step one to calculating your return . . . how much electricity will your PV system produce?

April 9, 2011 § 1 Comment

Calculating the rate of return for you PV system does not need to be so mysterious.  Forget the calculators, let’s do some simple math.

We need to determine the benefit or income stream from the PV system over a certain period of time (25 to 40 years) and then calculate a present value rate of return (Internal Rate of Return) which includes the initial capital investment.  This is the way investment decisions are made, so why not do the same for your PV system?

Remember, payback is a misplaced metric!  What if your PV system has a payback of 7 years but an economic life of only 8 years?  Oops . . . not good thinking!  PV is a long term investment, and so is the economic return.

So, the very first step is to determine how much electricity your PV system is likely to produce.

Your best resource is PV Watts

PV Watts logo

PV Watts is a performance database developed by the National Renewable Energy Laboratory (NREL) to provide performance estimates for grid-tied PV systems.  It is incredibility easy to use:

  • Click on your state
  • Click on a nearby city with similar topography
  • Under PV System Specifications . . .
    • Enter the system size (DC Rating), and
    • Enter variables for the AC to DC Derate Factor, Array Tilt, and Array Azimuth Factor only if different than the default settings
  • If you like, enter your Cost of Electricity
  • Click Calculate!

In one second, you will have a first year monthly calculation of estimated AC energy produced by your system and its corresponding Energy Value.  How easy is that?  Do not be concerned if the site location is not an exact address.  This is an estimate, and if your location is close to the chosen city the difference is not material.

OK, now you have a very credible estimate of your first year’s electricity generation from your PV System.  Let’s convert this into a 40 years projection.

The place to start is your module warranty.  Reduce your power production in accordance with the warranty specifications.

I will use Schott as my example.  The Schott warranty specifies 97% of rated power at the end of the first year, and for years 2 through 25 the power will degrade no more than .7% per annum of the original rated output.  Actual field data has been considerably better.

 

Estimated power output of a high quality PV system over 40 years

Estimated power output of a high quality PV system over 40 years

Your PV system will not disappear after 25 years.  A high quality system will keep on keeping on!  For my calculation, I apply the .7% power derate factor until year 40.  At that time, the system output is approximately 70% of the original rated power.  Now I have a 40 year projection of power produced.

 

Year Annual power reduction
1 3%
2 – 25 .7%

 

 

 

Next, how do I convert this 40 year power projection to a monetary income stream?

Chet Boortz, CEO

Total Solar Direct

[The comments, positions, and opinions stated above are my own and may or may not represent those of Total Solar Direct and its affiliate companies.]

Texas Cracks the Top Ten in PV Installations . . . Finally!

March 15, 2011 § 1 Comment

. . . Can Top Five Status be Far Away?

The SEIA and GTM have released their annual report, U.S. Solar Insight 2010TM Year in Review, and it’s official, Texas finally is ranked among the top ten states in annual PV installations at 23MW or a 2.6% U.S. market share.  This is a five times jump from 4.5MW in 2009.  About 70% of the Texas PV total is utility-scale.2010 US PV Installations MWdc

Thank you San Antonio and Austin (MOU’s) for local RPS’s and demand incentives and Oncore for a one time rebate program and TARP and ARRA (SECO in Texas) for opening PV markets with stimulus funding.  2010 . . . it was a good year in Texas.

OK you Texas bashers; I can hear your snicker: 2.6% market share … wow.  Well, what makes this a remarkable achievement for Texas is that there is virtually no help at the state policy level, the Texas environmental commission (TCEQ) is suing the EPA to dumb down air quality, the state’s two largest markets (Houston & Dallas/Fort Worth) are essentially non players with deregulated IOU’s, net metering regulations are contrived to be ineffective, HOA issues, interconnections and more.  This is an oil and gas and lignite coal state thank you.

Even so, consider this:

  • Texas is ranked 2 in state population
  • Texas is ranks 2 in state GDP
  • Texas produces an consumes more electricity than any other state
  • Texas electricity rates and utility bills are among the highest in the nation
  • Texas leads the nation in wind powered generation
  • Texas has enormous solar power potential

So with its 2.6% market share in hand, what’s next for Texas?  Based on the current utility-scale PV project pipeline in Central Texas, I predict Texas will rank 5 or 6 by 2012; and based on the attributes listed above . . . Texas will rank 1 or 2 by 2016.

How does Texas advance from number 10 to number 1 in PV installations . . .  one house, one business, one commercial building, one industrial facility, and one municipal building at a time! The momentum comes from users, the economic, social, and health beneficiaries of PV generation, it will not come from the state capitol or electric utilities.

Texas has a ferocious mindset of independence, and this coincides perfectly with distributive PV generation.  The industry lobbyists (policy makers) in Austin may not be enthralled by PV, but they cannot prevent it . . . it’s your home or business; it’s your electricity bill; it’s your choice; and it’s your distributive generation PV system . . . it’s a ground swell movement.

In Texas, distributive PV generation provides an attractive economic return today.  It’s scalable and affordable, and it only will get better as the cost of conventional electricity increases year after year after year.

It’s time.  Go Solar.  Go Texas . . . the Lone Star State!

Chet Boortz, CEO

SES 21 USA

[The comments, positions, and opinions stated above are my own and may or may not represent those of SES 21 USA and its affiliate companies.]

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