1. Economics of Photovoltaic Systems Original Presentation by J. M. Pearce, 2006 Updated in 2010 by J.M. Pearce and M. Pathak Email: profpearce@gmail.com

2. PV Economics Basics Solar Photovoltaic Cells convert sunlight directly into electricity They are sold on a $/Wp basis or $/power Wp is the power in Watts for Peak sun hours -- the equivalent number of hours per day, with solar irradiance equaling 1,000 W/m 2, that gives the same energy received from sunrise to sundown. To convert power to energy simply multiply by the amount of time that the cell is illuminated – W * hr = 1 W-hr Electricity (energy) is normally billed $/kW-hr

3. PV Economics Terms kW = kilowatt = 1 000 Watts MW = Megawatt = 1 000 000 Watts kW-h/kW/ * –* year or month or day –Amount of power predicted to be produced from a 1 kW solar panel in the desired location Payback = minimum time it takes to recover investment costs.

4. Economics of a Solar Electric Home A typical American uses ~11,000 kW-hrs/year A well-designed U.S. home needs 4kW-5kW of PV to provide for its energy needs averaged throughout the year –Depends on location (solar flux) –Energy use of home –Because calculating on /Wp basis you do not need to worry about efficiency

5. How much for a Solar Electric House? The 2 nd presentation discussed the components of a grid-tied solar home system The price tag for the complete installed system including all labor as of 2010 is between $5/Wp to $10/Wp For a 4kW system: –4000Wp x $5/Wp = $20,000 –4000Wp x $10/Wp = $40,000

6. Financing PV For new homes a PV system can be folded into the mortgage – long term low interest loan For retrofits of existing homes PV can be economic with: –Financial assistance through grants, subsidies, or other incentives –High costs of electricity in your area –Green power purchase agreements –Off-grid Applications

7. PV Incentives One stop shop for financial incentives is www.dsireusa.org/www.dsireusa.org/ The Database of State Incentives for Renewable Energy (DSIRE) is a comprehensive source of information on state, local, utility, and federal incentives that promote renewable energy. Lists includes: –Corporate Tax Incentives –Direct Equipment Sales –Grant Programs –Leasing/Lease Purchase Programs –Loan Programs –Personal Income Tax Incentives –Production Incentives –Property Tax Incentives –Rebate Programs –Sales Tax Incentives

8. Feed-In Tariff Solar FIT rates for Ontario: Rooftop –Less than 10 kW - 80.2 ¢/kWh –10 - 100 kW - 71.2 ¢/kWh –100-500 kW - 63.5 ¢/kWh –Greater than 500 kW - 53.9 ¢/kWh Ground Systems –Less than 10 MW - 44.2 ¢/kWh You are guaranteed these rates for 20 years.

9. Where PV makes Economic Sense Now Remote sites that are too far from power Or where the power is too unreliable for a given application (e.g. internet server) –Costs for power lines range from $8000 to $75,000 per mile. –As a general rule, if you are more than ½ mile from a line, solar is probably the best alternative.

10. PV : Cheap Electricity for Road Work In areas that have grid power, where the cost of tearing up the streets and/or other construction are expensive.

11. Portable Radio Station

12. The Developing World

13. Stand Alone Systems

14. Coast Guard Stations and Aircraft

15. Bus Stops and Emergency Phones

16. Solar in Space

17. Parking Lights

18. Running Trails and Lighthouses

19. Solar powered monasteries !

20. When will PV make economic sense for me?

21. Economy of Scale 0 subsidies Grid-tied Market $3.12/Wp to $3.56/Wp

22. Module Costs

23. Component Costs

24. Industry-Developed PV Roadmap

25. World PV Module Production (MW) Increases Source: PV News, March 2003 World PV installations in 2004 rose to 930MW -- growth of 62 % Consolidated world production of PV now 1.15 GW+

26. World PV Module Production (MW) Increases

27. World PV Module Installation (MW) Increases

28. So Why Can’t We Do It?

29. PV System vs. Electricity Costs

30. New Technology Could Play a Role Heterojunction with Intrinsic Thin-layer Sanyo 18.5% SANYO, plans to continue to grow its unique solar business, aiming to reach a production scale of approximately 2GW for HIT solar cells by 2020.

31. New Technology Could Play a Role

32. Built-in Incentives $/W Value Material avoided by BIPV Installation Material Credit $1/sq-ft $5/sq-ft $10/sq-ft $20/sq-ft Asphalt Shingle roof, monolithic glazing Laminated glass w/coatings metal roofing/cladding Roofing slates, clay tile, high performance coatings Stainless steel, photochromic glass $0.10/W $0.50/W $1/W $2/W Building Material Replacement Value

33. Utilizing Financial Incentives

34. Subsidies for Fossil Fuel Fossil fuels and nuclear energy receive 90% of the government money, (with PV receiving <3%). Hidden costs that we all subsidize for the energy industry which include: –Air pollution leads to the death of 120,000 Americans every year and costs $40 billion in health care annually. / –Hidden Subsidies – pollution, global climate change, war Military (U.S. military spends billions/yr just defending the oil supplies in the Persian Gulf).

35. The Question of Energy Unemployment If we switch to solar what about all the fossil fuel jobs? It is estimated that solar on average creates 26 total jobs per MW in the US –Coal only produces 8.7 total jobs per MW in the US. Ontario predicts 31.6 jobs/MW for solar PV

36. PV: Net Job Producer! Jobs created with every million dollars spent on: –oil and gas exploration: 1.5 –on coal mining: 4.4 –on producing solar water heaters: 14 –on photovoltaic panels: 17

37. Jobs Coal vs. Solar –Coal only employs 80,000 –As of 2009 there are 46,000 jobs. From 2009 to 2010, approximately 17, 000 new jobs were created as a result of the increased demand through the installation of solar systems.

38. People Want Solar The Program on International Policy Attitudes found that the American public wants the federal budget for renewable energy research like solar PV to increase by 1090 %.

39. Solar Photovoltaics is the Future

40. Acknowledgements This is the fourth in a series of presentations created for the solar energy community to assist in the dissemination of information about solar photovoltaic cells. This work was supported from a grant from the Pennsylvania State System of Higher Education. The author would like to acknowledge assistance in collecting information for this presentation from Heather Zielonka and Michael Pathak.