PV Solar Panels: Clean, Affordable, Profitable Power

Lavoro-fotovoltaico-a

image courtesy of Energia No Problem

Locally installed PV solar panels can be triple winners:

• Emit no CO2.
• Obtain electricity at the lowest cost.
• Make a secure, profitable investment with a payback period in the range of from 5 to 20 years.

Experience the satisfaction! Use Photovoltaic (PV) solar panels to power your home. PV solar panels convert sunlight directly into electricity[1].

 

 

 

No CO2

Unlike fossil fuels that emit CO2 and other pollutants into the atmosphere and environment, PV panels operate without emitting pollution. Per unit of energy that they generate, PV panels can also bluesky-992x300be manufactured, transported, installed and discarded using substantially less pollution than fossil fuel energy systems.[4]

image courtesy of Solareeze

Lowest Cost

Trends_Graph_A

graph Reprinted with permission. © 2013 Home Power Inc., www.homepower.com.

PV solar has already become the cheapest source of home electricity in many geographic regions. Costs are expected to continue to decline as a result of improvements in the technology, and as a result of more standardized installation practices.

In many locations, solar panels are installed with a “net meter” that tracks the amount of electricity that the home contributes to the energy utility’s power grid. A good installation contractor can forecast how much your utility bill will go down, or if your system will generate more electricity than you need over a period of time, resulting in revenue for you as a seller of electricity to the grid.

Some neighborhoods and contractors offer membership to neighborhood buying groups that use their purchasing power and economies of scale to reduce the cost of PV systems.[2]

A PV installation requires a significant modification to your home. As such, you will need to check the accuracy of projections and promises by obtaining proposals and estimates from several contractors.




Profit

Photovoltaic solar panels can more than pay for themselves over their 15 to 30+ year expected lifespan. Representative payback period ranges from 10 to 15 years.[16] Depending on your location, benefits can include installation credits, utility bill savings, increased property value, revenue from power sold back to a utility provider, a reduction in annual taxes and revenue from the sale of Renewable Energy Certificates (see Carbon Tax and Renewable Energy Certificates sections).

If your home has air conditioning, the advantage of solar panels will be even greater: air conditioning operates mostly during the daytime in summer, during periods of peak power use. That’s when PV solar panels can produce the most electricity, and when electricity from your utility company could be the most expensive.

In some localities you can be guaranteed a set payment rate for power that is sold back to the utility grid. The German feed-in tariff is a leading example of a payment guarantee for renewable power.

When you’re ready to sell your home, buyers may be prepared to pay more for the home and will be more likely to buy it if the residence incorporates a well-designed PV solar power system. One study reported that the average sales price premium of homes in California that incorporate a relatively new PV system is approximately $17,000.[3]

charts2dYour investment is secure because PV panels can provide a proven, low cost, low maintenance, reliable energy source over a long period of time. Furthermore, system performance and life is backed by installer and lender agreements. It’s highly likely that fossil fuel costs will continue to rise over the long term. Your solar energy source will not be subject to market volatility and therefore you will remain immune to surprise price hikes.[4]

Perhaps the only imaginable risk – and it’s just barely imaginable – would be reduced PV output due to an extremely rare atmospheric dimming event, such as a large volcanic eruption or catastrophic meteor strike.

Various mechanisms are available to avoid initial outlay when obtaining a PV solar panel system. These include loans,[5] leases,[6] property tax assessments,[7] power purchase agreements,[8] and electric bill offsets.[9] Installation contractors can provide information about available incentives and financing plans.

pv-returncalculation technique courtesy of TheEnergySage; for details of Bottom Line calculations, see note [15]

.

why-pv-solar

.

animation courtesy of PV Education

technical animation courtesy of PV Education

 

Does your home have good roof exposure?

Even if your home is in a relatively cloudy climate you may find that solar panels are a viable option. You will need a location that is free of shade from trees or structures during at least some of the midday hours. In a few circumstances, you may be able to productively install PV panels near to, rather than on, the roof itself. Installation contractors can assess your home’s location and exposure.

 

When to install?

Although the installation price per unit of PV electricity is forecast to keep falling over the long term, it’s already low in many locations. With an existing home, you need to decide whether to install PV panels now or wait until a future time. For many homes, the best time to install is when the roof needs resurfacing, since construction access for the roof and for roof-mounted PV panels go hand in hand. Once roof solar panels have been installed, the roof surface underneath can last longer because properly installed panels will protect it from the elements.

 

Installation

You may be able to benefit from government sponsored tax credits and rebates. Many installation contractors can find and process credits and rebates on your behalf.

To find a good installation contractor ask neighbors, hardware stores and building supply stores for recommendations. Then check on the internet to be sure there are relatively few complaints against a company. For example, perform a Google search for “ABC Solar Inc. complaint.” You can also do an internet search for “user reviews” of the installers that operate in your area.

 

Design

Most currently available residential PV panels last about 15 to 30 years and are able to convert about 15% of the sunlight to electricity. Some of the generated energy is subsequently lost in the form of heat as it is processed through various circuit components in the home or building.

The conversion percentage declines slightly as panels age. Conversion also declines if panels are not kept clean.

Conversion efficiency is likely to increase with future designs. Experimental systems are now capable of achieving efficiencies in excess of 40%.

Conventional residential solar panels are constructed from smaller flat sections that are called modules. Each module measures about 2 ft x 4 ft. A large area is covered using many modules that are mounted together on a rack, to form an array.

Visually Pleasing Alternatives

Color Choice for PV Panels image courtesy of Colored Solar LLC

Color Choice for PV Panels
images courtesy of Colored Solar LLC

Someday, there may be access to a greater variety of more pleasing residential designs for PV solar, breaking away from the basic slate black modules that are currently used. An aesthetic alternative is offered by Colored Solar LLC, in the form of PV panels that are available in several colors other than slate black (texture-patterned surfaces in 11 different color choices including a pleasing terracotta red, polished marble and polished slate). The manufacturer states: “Colored Solar panels are not a commodity like standard black solar panels” but are “cost competitive to standard solar panels.”

Dow Chemical offers a Powerhouse shingle with a PV surface, which is available in slate gray/blue coloring.

Another aesthetic alternative has been suggested: individual blue Spanish tiles, each with a PV coating. This concept was put forward in 2008 but does not yet seem to have become feasible for mass-market distribution.

Curved Blue Solar Tiles image courtesy of Living Labs

Curved Blue Solar Tiles
image courtesy of Living Labs

 

Curved Solar Tiles Insert image courtesy of Solar Energy- Green Lifestyle for You

Curved Solar Tiles Insert
image courtesy of Solar Energy- Green Lifestyle for You

 

System Components

In the conventional design, a number of modules are typically connected together electrically to form a string. The lengths of strings vary. A rectangular array of modules can be large enough to include more than one string, or a string can be large enough to bridge more than one array. Longer strings are more economical to build. However, they collect less electricity on average because having just a part of a string in too much shade can prevent the entire string from generating electricity.

PV-generated electric current is sent through an inverter, that converts it from direct current (where energy is transmitted by electrons moving in one direction) to the alternating current that is currently used in homes (where energy is transmitted by electrons moving back and forth). The alternating current goes through a master on-off switch (so you can turn it off for maintenance).

There’s a connection to the home’s fuse box (often called electric panel) where the current can separate into sub-circuits that serve various rooms and appliances.

The circuit includes a meter that connects with the utility grid and measures power use. In many locations the meter can consist of a single “net” meter for the home or building. The net meter keeps track of when more power is originating from, or going to, the grid. Generally speaking, when it’s bright outside, more power goes to the grid and at night it’s the other way around.

You can also add a battery bank and charge controller in your circuit, which will give you electric independence if the utility grid goes down or if you’re located where there is no utility grid.

Grounding image courtesy of ART TEC

Grounding
image courtesy of ART TEC

Inverter image courtesy of Alibaba.com Hong Kong Limited

Inverter
image courtesy of Alibaba.com Hong Kong Limited

Charge Controller image courtesy of Marsol Industries

Charge Controller
image courtesy of Marsol Industries

Battery Bank image courtesy of Brothers Electric & Solar

Battery Bank
image courtesy of Brothers Electric & Solar

 

—————————————————————————————————————————

Do-It-Yourself Products

image courtesy of OneStopGreen

Westinghouse Solar Kit
image courtesy of OneStopGreen

Installation costs can be reduced by doing the work yourself if you are trained, willing and able to safely do rooftop and high voltage electrical tasks. Sub-assemblies and parts are available at home supply stores for use in do-it-yourself or contractor projects. The Westinghouse brand, for example, offers low-cost PV system assemblies that can work well for do-it-yourself installers.[10]

 

 

 

 

 

 

Alternatives

If you rent your home or live in a managed complex, ask your property manager, home owners’ association or landlord about their planning for a PV solar installation. In many locations, tax credits or other incentives are available for multi-family residential PV installations.

Locations without electric utility grids can benefit from stand-alone and village PV solar installations as well as PV power for individual lanterns, pumps, mobile device chargers and other items.[11]

image courtesy of Southern California Edison

Utility Solar
image courtesy of Southern California Edison

Even if you do not use home PV solar power, you’ll possibly benefit from a utility electric rate that’s lower than it would otherwise be, due to PV solar installations that are used by your utility company. Over the long term, the number of large utility-style PV installations is expected to increase. These systems are generally positioned on open land or on the roofs of large commercial buildings. The utility will need to recover hookup costs, and line loss costs for transmission over distances.

Some utilities and electricity marketers may allow you to make payments that will go toward solar generation or other green activities. Your contributions can be used to purchase and hold Renewable Energy Certificates, to help finance renewable energy installations and to implicitly force utilities to supply more power from renewable or non-polluting sources (see Renewable Energy Certificates section).

Installation Planning Costs

Marketing and installation planning costs for residential PV have been much higher in the US than they have been in Germany. Future PV solar installation costs in the US may come down due in part to standardized marketing and standardized installation planning. Over the past few years, the cost of a residential PV installation in the US has averaged perhaps 80% more than in Germany.[12] The cost of the PV modules themselves has generally been similar in both countries.

Life Cycle Pollution

PV solar panels are estimated to produce significantly less CO2 and overall pollution than fossil fuels per unit of electricity generated over the product life cycle including production, transportation, installation and disposal.[4] It’s been estimated that PV systems generate enough energy over their lifetimes to reproduce themselves many times (6-31 reproductions), depending on the type of PV cell material used, the system design, and the geographic location of the system.

In the future, use of renewable energy sources in manufacturing and transportation of PV systems could further drop carbon emissions. In one example, BP Solar owns two factories that were built by Solarex, one in Maryland, the other in Virginia, in which all of the energy used to manufacture solar panels is produced by the solar panels themselves.

Carbon Tax

A carbon tax is a tax concept that taxes fossil fuels, based on their carbon content. When an electric utility supplies electricity generated from fossil fuels (which emit carbon dioxide, CO2, when burned), the utility’s electric rates will tend to be higher, reflecting the added cost of the carbon tax. A carbon tax seeks to recognize the costs of pollution while allowing a free market system to find the most efficient ways to serve our needs.

If your locality implements a carbon tax, there will be some added indirect monetary benefit when you use home PV solar power. That’s because your utility’s electric rate will be even higher since it will reflect the cost of atmospheric carbon emissions.

Your overall taxes may also be slightly lower with a revenue neutral carbon tax program. With this approach, companies that produce energy using fossil fuels pay added taxes (the carbon tax), while other tax payers see a reduction in their taxes, with the total of all taxes remaining the same. US government representatives have tended to opt for this kind of system, if the US eventually implements a carbon tax.

 

Renewable Energy Certificates

When you produce, use, or sell PV solar power in some localities, you can receive a form of Renewable Energy Certificates (RECs) that have monetary value.

These Renewable Energy Certificates are paper or electronic documents that can potentially be sold to a power company. Once the power company owns a certificate, the certificate contributes toward fulfillment of its target for use of renewable technologies. Effectively, this gives the power company a paid-for right to generate a set amount of energy using older, more polluting, technologies while still meeting its renewables requirement.

Because power companies must pay for purchased Renewable Energy Certificates, the companies are to some extent discouraged from using polluting technologies – but the certificates allow them to meet government requirements while they are transitioning to cleaner technologies.

You can sell your Renewable Energy Certificates indirectly on a carbon exchange market. If a government wants Renewable Energy Certificates to directly increase the portion of energy production that comes from renewables in its jurisdiction, that government needs to legislate or encourage basic production amount targets for specific energy technologies.

Some states in the US offer Renewable Energy Certificates that are specifically for solar energy. These credits are generally called Solar Renewable Energy Certificates (SRECs).

As a consumer, you can choose to buy Renewable Energy Certificates as an alternative to installing PV solar panels. If you buy and hold these credits or certificates, you keep them away from power companies that might otherwise use them to allow added production from polluting sources (see Alternatives section).

The concept of solar Renewable Energy Certificates can be seen as part of the broader Cap & Trade methodology for flexibly recognizing pollution costs.[13] Renewable Energy Certificates, if carefully implemented, can allow a free market system to operate with inherent efficiencies.

 

Recent US Energy Flow

In 2011, solar panels were still just a promising newcomer in the USA.

Of the total of all energy supplied to the US economy in 2011, 40% was used by electric plants to generate electricity. Of this share, about 46% came from coal burning, 21% from nuclear plants, 20% from burning natural gas, 3% from wind turbines, and 10% from other sources. An insignificant amount of energy (about 0.2% of total US energy use) came from solar panels and devices, mostly locally installed.

Per unit of energy produced, coal burning releases the most CO2, natural gas releases some CO2 (about half as much as coal), while solar panels release no CO2.

68% of all the energy used to run electric plants in 2011 was either wasted during fuel burning and transmission, or released as heat from lamps, motors, and other devices within the electricity generation and delivery system. Very little of the electricity generated by locally installed solar panels was wasted.[17]

 

Thermal Solar Panels

Solar Thermal Panels image courtesy of EveryoneSolar LLC

Solar Thermal Panels
image courtesy of EveryoneSolar LLC

People sometimes confuse thermal solar panels and PV solar panels. Thermal panels, which are also called solar thermal systems or medium temperature collectors, usually work by circulating a fluid through tubes or a blanket within a panel, using the heated liquid to heat water for home use or the swimming pool. In some systems, the circulated fluid may simply come from the faucet or pool water. Thermal panels tend to be more efficient than PV as alternatives for the natural gas, oil, coal, wood, or grid-supplied electricity that is used to heat water or rooms – but thermal panels are relatively less efficient than PV panels when it comes to generating electricity to power appliances.[14]

 

How do you get started?


You can begin planning your home’s PV installation on the web:

Try searching for “Is PV solar right for you in <your locality>?”

If you are in the US, Europe or Canada, try searching for “PV solar help in <your locality>”

Try searching for “PV solar user reviews in <your locality>”

 

 

Solar Impulse Airplane image © Solar Impulse/ Revillard/ Rezo.ch

image © Solar Impulse/ Revillard/ Rezo.ch

 

—–
[1] Photovoltaic means “Relating to the production of electric current at the junction of two substances exposed to light” (from Google define). To see how popular photovoltaic devices work, look at the above animation: Light Generated Current.
[2] For an example, see gosolar.la website, http://gosolar.la/about/communities
[3] An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California, Ernest Orlando Lawrence Berkeley National Laboratory
[4] Solar power, Wikipedia, http://en.wikipedia.org/wiki/Solar_power
[5] Solar PV funding can come from a home improvement loan or line of credit.
[6] Your solar PV installation can be leased with an agreement that guarantees your monthly lease payment will be less than your utility bill savings. See http://www.solarcity.com/residential/solar-panels-cost.aspx and http://www.sunrunhome.com
[7] In the US, a growing number of city governments are offering financing in the form of property tax assessments. A property assessment program can also help assure that your installation will be provided by one of the most competent contractors, and that your project will include associated energy saving work (e.g., as needed, seal air gaps, upgrade insulation, install double pane windows, etc.). A property tax assessment arrangement may have less impact on your credit score, compared to other forms of financing. However, when you sell your home, it may be harder for the new buyer to obtain financing if the home has an energy improvement tax assessment. Similarly, it may be harder for you to refinance your home. See PACE financing, Wikipedia, http://en.wikipedia.org/wiki/PACE_financing and http://pacenow.org/
[8] A Power Purchase Agreement (PPA) can be set up between a homeowner and a solar power company. The PPA allows the solar power company to install the company’s own solar PV system on the home’s roof or property. The solar power company operates and maintains the system and can sell the system’s output to the homeowner and possibly (if there’s a surplus) to the grid power company. The homeowner can be given a guaranteed rate or rate schedule over the expected life of the system. See www.sunrunhome.com and http://www.solarcity.com/residential/solar-panels-cost.aspx
[9] Green Deal: energy saving for your home or business, https://www.gov.uk/green-deal-energy-saving-measures/how-the-green-deal-works
[10] Are Home Solar Kits Worth the Cost?, CalFinder, http://solar.calfinder.com/blog/solar-information/home-solar-kits-worth-costs/
[11] For some examples and resources, see CalFinder http://solar.calfinder.com/blog/solar-politics/one-sun-three-worlds-how-solar-power-can-help-the-developing-world/ , http://solar.calfinder.com/blog/solar-funding/solar-electric-light-fund-helping-the-third-world-get-on-its-feet/ ; Solar Aid http://www.solar-aid.org/
[12] See Page 9 in Why Are Residential PV Prices in Germany So Much Lower Than in the United States?, Lawrence Berkeley National Laboratory website, http://eetd.lbl.gov/ea/emp/reports/german-us-pv-price-ppt.pdf#page=9
[13] Emissions trading, Wikipedia, http://en.wikipedia.org/wiki/Cap_%26_trade
[14] “What’s the Most Efficient?” Geo VS Solar Thermal VS Solar PV, http://blog.heatspring.com/whats-the-most-efficient-geo-vs-solar-thermal-vs-solar-pv/
[15] Bottom Line calculation notes:
Example Bottom Line
<Solar Leasing & PPA>
calculation technique courtesy of TheEnergySage, http://www.youtube.com/watch?v=BFk9T0aY6nk
Example data for a PV Solar installation in Sep2012 for a single family home in Massachusetts
Example data for a PV Solar installation in 2013 for a single family home in California; California data shown when it is substantially different than Massachusetts
*** Investment Option ***
Annual Electric Utility Cost (for this example, for a single family home in Massachusetts, an average of $80 per month): $960 per year
Electric Utility Rate (an approximate example for Massachusetts): $0.16 per kWh
Annual Consumption: 6,000 kWh
Nameplate Capacity of Solar PV System to be Installed: 5 kW
Total Cost of Installing a 5 kW System: $25,000 in MA, $26,200 in CA
Local Government Incentive Rebate (an approximate example for Massachusetts; a different locality will likely have a website where you can look up the currently available rebate): $2,000 in MA, $500 in CA
Net Cost After Rebate: $23,000 in MA, $25,700 in CA
National Government Tax Credit (for this example, approximate calculation using a United States Investment Tax Credit of 30%): $7,000 in MA, $7,700 in CA
Local Government Tax Credit (for this example, an approximate calculation of Massachusetts Tax Credit): $1,000 in MA, $0 in most of CA
Net Cost After Rebate and Tax Credits: $15,000 in MA, $18,000 in CA
Annual Utility Bill Saving: $960 in MA, $986 in CA
(This calculation very conservatively assumes that the average electric utility rate of about $0.16 per kWh, similar in MA and CA, will not increase. However, there could actually be rate increases of perhaps 5% per year.)
Additional Annual Property Tax: $0 for both states, which both have exclusions for residential Solar PV
(The annual cost of maintaining this PV system is likely to be minimal and is partly covered by a 25-year or so warranty that’s included in the system price. The electric output of a maintained system may still decline some with age, but this example’s sizing using a 5 kW system provides an allowance for performance degradation.)
Value of a Solar Renewable Energy Certificate (SREC) (for this example in Massachusetts): $300 per certificate in MA, $0 in CA
(One SREC is issued for each 1,000 kWh of electricity)
SRECs Issued per Year (for this home): 6
Cash Benefit from Selling SRECs Received (6 times $300; for purposes of doing a rough calculation, assumes value will remain at about this level, on average, for several decades): $1,800 per year in MA, $0 per year in CA
Total Annual Benefit of Utility Bill Savings and SREC Sales: $2,760 in MA, $986 in CA
Payback Period $15,000/$2,760 = 5.4 years in MA, $18,000/$986 = 18.3 years in CA
Annual Return on Investment (total annual benefit as a percentage of the investment): 18.4% in MA, 5.5% in CA
(California does not seem to have an operational SREC program as of the time of this calculation.)
Approximate Annual Return on Investment in US Stock Market, averaged over many decades: 10%
By Comparison, Return from the Best Available Savings Account (for this example, for insured 5-yr savings CDs purchased in 2012): 2%
When you sell your home, it’s market value is likely to reflect the value of the installed PV system.
*** Zero Money Down Option ***
Annual Lease Payments for Solar PV System Installed on Home (approximate, for this example home in Massachusetts): $600 per year in MA, $720 per year in CA
Annual Lease Rate Increase (for this example): 3%
Annual Utility Rate Increase (for this example): 5%
(Conservatively, the lease rate increase is offset by the utility rate increase.)
Net Annual Savings ($960 per year electric bill savings, less $600 per year lease): $360
Lease Term (for this example, which seems representative for most leases): 20 years
Total Net Savings Over Life of Lease: (20 times $360): $7,200
With this option, you need a good credit score (for this example maybe a 600 or 650.)
*** Prepaid Lease Option ***
Full Initial Prepayment of Lease (20 times $600): $12,000
(Since you are not the owner of the system, you do not receive the rebates and tax credits, nor do you indefinitely own the system. However, the company that’s leasing you the system gets the rebates and tax credits, indefinite ownership, and depreciation write-offs, which is why that company can afford to provide the system for only $12,000. For this Massachusetts example, you do get the SRECs, because you are operating the system that produces renewable energy.)
Total Annual Benefit of Utility Bill Savings and SREC Sales: $2,760
Annual Return on Investment (total annual benefit as a percentage of the investment): 23%
(This is higher than the 18.4% return from direct system purchase, with reduced risk and zero end-of-system-life disposal costs as well. However, if you purchase the system you’ll continue to own it after 20 years. The expected operating life is between 25 and 40 years, so there’s a likely future benefit from ownership of at least $13,800, roughly speaking, equal to $2,760 annual benefit times 5 more years. If the system lasts a full 40 years, utility rates go up as they likely will and you do not need to do major maintenance, the added future benefit could be much greater.)
When you sell your home, it’s market value is likely to reflect the value of the installed PV system.
If the leasing company goes bankrupt and liquidates, you might have to assume costs of maintenance – but it’s unlikely that those costs will be high. In some cases when a leasing company goes bust it is taken over by another company that honors the terms of the lease.
*** Key Supporting Data Sources for Bottom Line Calculations ***
http://www.youtube.com/watch?v=BFk9T0aY6nk
http://emp.lbl.gov/sites/all/files/LBNL-5919e.pdf
http://realgoodssolar.com/solar-near-you/california-solar/california-solar-energy-rebates-incentives/
http://www.getrichslowly.org/blog/2008/12/16/how-much-does-the-stock-market-actually-return/
http://www.moneychimp.com/features/market_cagr.htm
[16] For a representative 2013 system’s financial projection, listen to a portion of the Successful Solar Business webinar given by Quick Mount PV, starting at about the 1 hour and 28 minute point, at http://www.youtube.com/watch?v=4wS192d-MKM
[17] Energy and CO2 data developed by Lawrence Livermore National Laboratory and the US Department of Energy. https://flowcharts.llnl.gov/
Categories: Big Changes

Leave a Reply