Solar photovoltaic annuity literature review
This is a graduate classroom project at Michigan Tech, I am working on Solar Annuity with Dr. Joshua M. Pearce under the course titled MY5970, my primary focus is to evaluate current annuity proposals focusing on mostly government retirement programs, military programs, etc to justify that the capital can be invested on solar power plant projects and annuity in this case will far exceed the current value. As a result, it will be beneficial for all parties involved. Anyone interested or having experience or able to contribute on this project is always welcomed with highest appreciation.
Literature Reviews[edit | edit source]
Cost and Lifespan study[edit | edit source]
The Results of Performance Measurements of Field-aged Crystalline Silicon Photovoltaic Modules Artur Skoczek, Tony Sample and Ewan D. Dunlop, Progress in Photovoltaics: Research and Applications, Volume 17 Issue 4, 2009, Pages 227 - 240
Abstract:This paper presents the results of electrical performance measurements of 204 crystalline silicon-wafer based photovoltaic modules following long-term continuous outdoor exposure. The modules comprise a set of 53 module types originating from 20 different producers, all of which were originally characterized at the European Solar Test Installation (ESTI), over the period 1982-1986. The modules represent diverse generations of PV technologies, different encapsulation and substrate materials. The modules electrical performance was determined according to the standards IEC 60891 and the IEC 60904 series, electrical insulation tests were performed according to the recent IEC 61215 edition 2. Many manufacturers currently give a double power warranty for their products, typically 90% of the initial maximum power after 10 years and 80% of the original maximum power after 25 years. Applying the same criteria (taking into account modules electrical performance only and assuming 2•5% measurement uncertainty of a testing lab) only 17•6% of modules failed (35 modules out of 204 tested). Remarkably even if we consider the initial warranty period i.e. 10% of Pmax after 10 years, more than 65•7% of modules exposed for 20 years exceed this criteria. The definition of life time is a difficult task as there does not yet appear to be a fixed catastrophic failure point in module ageing but more of a gradual degradation. Therefore, if a system continues to produce energy which satisfies the user need it has not yet reached its end of life. If we consider this level arbitrarily to be the 80% of initial power then all indications from the measurements and observations made in this paper are that the useful lifetime of solar modules is not limited to the commonly assumed 20 year. Copyright © 2008 John Wiley & Sons, Ltd.
Accelerated Life Testing and Service Lifetime Prediction for PV Technologies in the Twenty-First Century Czanderna and Jorgensen, A.W. Czanderna, G.J. Jorgensen, National Renewable Energy Laboratory, Golden, CO. (1999) July, NREL/CP-520-26710
Abstract:The purposes of this paper are to (1) discuss the necessity for conducting accelerated life testing (ALT) in the early stages of developing new photovoltaic (PV) technologies, (2) elucidate the crucial importance for combining ALT with real-time testing (RTT) in terrestrial environments for promising PV technologies for the 21st century, and (3) outline the essential steps for making a service lifetime prediction (SLP) for any PV technology. The specific objectives are to (a) illustrate the essential need for ALT of complete, encapsulated multilayer PV devices, (b) indicate the typical causes of degradation in PV stacks, (c) elucidate the complexity associated with quantifying the durability of the devices, (d) explain the major elements that constitute a generic SLP methodology, (e) show how the introduction of the SLP methodology in the early stages of new device development can reduce the cost of technology development, and (f) outline the procedure for combining the results of ALT and RTT, establishing degradation mechanisms, using sufficient numbers of samples, and applying the SLP methodology to produce a SLP for existing or new PV technologies.
Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost?, Ken Zweibel, Energy Policy, Volume 38, Issue 11, November 2010, Pages 7519–7530 
Abstract: Governments subsidize the deployment of solar photovoltaics (PV) because PV is deployed for societal purposes. About seven thousand megawatts were deployed in 2009 and over 10,000 are expected in 2010. Yet this is too slow to strongly affect energy and environmental challenges. Faster societal deployment is slowed because PV is perceived to be too costly. Classic economic evaluations would put PV electricity in the range of 15–50 c/kWh, depending on local sunlight and system size. But PV has an unusual, overlooked value: systems can last for a very long time with almost no operating costs, much like, e.g., the Hoover Dam. This long life is rarely taken into account. The private sector cannot use it because far-future cash flow does not add to asset value. But we should not be evaluating PV by business metrics. Governments already make up the difference in return on investment needed to deploy PV. PV deployment is government infrastructure development or direct purchases. Thus the question is: Does the usually unevaluated aspect of long life at predictably low operating costs further motivate governments to deploy more PV, sooner?
NARUC 7-Member Consortium for PV Resource Characterization1 December 21, 2009, Report on national PV cost values, NREL-National Renewable Energy Laboratory 
Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions, Scott Hempling, Carolyn Elefant, Karlynn Cory, Kevin Porter, Technical Report, NREL/TP-6A2-47408, January 2010
Executive Summary: State legislatures and state utility commissions seeking to attract renewable energy projects are considering arrangements called “feed-in tariffs.” These tariffs would obligate retail utilities to purchase electricity from renewable producers under standard arrangements specifying prices, terms and conditions. This standardization simplifies the purchase process, provides revenue certainty to generators, and reduces the cost of financing generating projects. States decision makers have encountered arguments that state-level feed-in tariffs are preempted by federal law. These arguments arise because the transaction resulting from a feed-in tariff is a wholesale sale of electricity, from renewable seller to retail utility. A wholesale sale of electricity triggers one of two federal statutes—the Public Utility Regulatory Policies Act of 1978 (PURPA) or the Federal Power Act of 1935 (FPA). Each of these statutes does in fact limit the discretion of state-level tariff designers.
Realistic generation cost of solar photovoltaic electricity, Parm Pal Singh, Sukhmeet Singh, Renewable Energy, Volume 35, Issue 3, March 2010, Pages 563–569.
Abstract Solar photovoltaic (SPV) power plants have long working life with zero fuel cost and negligible maintenance cost but requires huge initial investment. The generation cost of the solar electricity is mainly the cost of financing the initial investment. Therefore, the generation cost of solar electricity in different years depends on the method of returning the loan. Currently levelized cost based on equated payment loan is being used. The static levelized generation cost of solar electricity is compared with the current value of variable generation cost of grid electricity. This improper cost comparison is inhibiting the growth of SPV electricity by creating wrong perception that solar electricity is very expensive. In this paper a new method of loan repayment has been developed resulting in generation cost of SPV electricity that increases with time like that of grid electricity. A generalized capital recovery factor has been developed for graduated payment loan in which capital and interest payment in each installment are calculated by treating each loan installment as an independent loan for the relevant years.
Rate Calculation[edit | edit source]
A review of solar photovoltaic levelized cost of electricity, K. Brankera, M.J.M. Pathaka, J.M. Pearce, Renewable and Sustainable Energy Reviews, Volume 15, Issue 9, December 2011, Pages 4470–4482 
Abstract As the solar photovoltaic (PV) matures, the economic feasibility of PV projects is increasingly being evaluated using the levelized cost of electricity (LCOE) generation in order to be compared to other electricity generation technologies. Unfortunately, there is lack of clarity of reporting assumptions, justifications and degree of completeness in LCOE calculations, which produces widely varying and contradictory results. This paper reviews the methodology of properly calculating the LCOE for solar PV, correcting the misconceptions made in the assumptions found throughout the literature. Then a template is provided for better reporting of LCOE results for PV needed to influence policy mandates or make invest decisions. A numerical example is provided with variable ranges to test sensitivity, allowing for conclusions to be drawn on the most important variables. Grid parity is considered when the LCOE of solar PV is comparable with grid electrical prices of conventional technologies and is the industry target for cost-effectiveness. Given the state of the art in the technology and favourable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.
The impact of retail rate structures on the economics of commercial photovoltaic systems in California, A. Mills, R. Wiser, G. Barbose, W. Golove, Energy Policy, 36 (9) (2008), pp. 3266–3277 
Abstract:This article examines the impact of retail electricity rate design on the economic value of grid-connected photovoltaic (PV) systems, focusing on commercial customers in California. Using 15-min interval building load and PV production data from a sample of 24 actual commercial PV installations, we compare the value of the bill savings across 20 commercial-customer retail electricity rates currently offered in the state. Across all combinations of customers and rates, we find that the annual bill savings from PV, per kWh generated, ranges from $0.05 to $0.24/kWh. This sizable range in rate-reduction value reflects differences in rate structures, revenue requirements, the size of the PV system relative to building load, and customer load shape. The most significant rate design issue for the value of commercial PV is found to be the percentage of total utility bills recovered through demand charges, though a variety of other factors are also found to be of importance. The value of net metering is found to be substantial, but only when energy from commercial PV systems represents a sizable portion of annual customer load. Though the analysis presented here is specific to California, our general results demonstrate the fundamental importance of retail rate design for the customer-economics of grid-connected, customer-sited PV.
MINIMIZING UTILITY-SCALE PV POWER PLANT LCOE THROUGH THE USE OF HIGH CAPACITY FACTOR CONFIGURATIONS, Matthew Campbell, Julie Blunden, Ed Smeloff, Peter Aschenbrenner - SunPower Corporation, 2009 IEEE.
Abstract: PV power plants have emerged in recent years as a viable means of large-scale renewable energy power generation. A critical question facing these PV plants at the utilityscale is the competitiveness of their energy generation cost with that of other sources. A common means of comparing the relative cost of electricity from a generating source is through a levelized cost of energy (LCOE) calculation. The LCOE equation allows alternative technologies to be compared when different scales of operation, investment or operating time periods exist. This paper reviews the LCOE drivers for a PV power plant and the impact of a plant’s capacity factor on the system LCOE. The impact of solar tracking to a plant’s capacity factor is reviewed as well as well as the economic tradeoffs between fixed and tracking systems.
The technical, geographical, and economic feasibility for solar energy to supply the energy needs of the US, Vasilis Fthenakis, James E.Mason, KenZweibel, 11 August 2008, Energy Policy.
Carbon Emission[edit | edit source]
The Solar Photovoltaics Wedge: Pathways for Growth and Potential Carbon Mitigation in the US, P. Denholhm, E. Drury, R. Margolis, National Renewable Energy Laboratory, Golden, CO (2009) 24 July 
Abstract: The challenge of stabilizing global carbon emissions over the next 50 years has been framed in the context of finding seven 1.0 Gton C/year carbon reduction wedges. Solar photovoltaics (PV) could provide at least one carbon wedge, but will require significant growth in PV manufacturing capacity. The actual amount of installed PV capacity required to reach wedge-level carbon reductions will vary greatly depending on the mix of avoided fuels and the additional emissions from manufacturing PV capacity. In this work, we find that the US could reduce its carbon emissions by 0.25 Gton C/year, equal to the fraction of a global carbon wedge proportional to its current domestic electricity use, by installing 792–811 GW of PV capacity. We evaluate a series of PV growth scenarios and find that wedge-level reductions could be met by increasing PV manufacturing capacity and annual installations by 0.95 GW/year/year each year from 2009 to 2050 or by increasing up to 4 GW/year/year for a period of 4–17 years for early and late growth scenarios. This challenge of increasing PV manufacturing capacity and market demand is significant but not out of line with the recent rapid growth in both the global and US PV industry. We find that the rapid growth in PV manufacturing capacity leads to a short term increase in carbon emissions from the US electric sector. However, this increase is small, contributing less than an additional 0.3% to electric sector emissions for less than 4.5 years, alleviating recent concern regarding carbon emissions from rapid PV growth scenarios.
Insurance[edit | edit source]
Insuring Solar Photovoltaics: Challenges and Possible Solutions, Bethany Speer, Michael Mendelsohn, and Karlynn Cory, Technical Report NREL/TP-6A2-46932, Revised February 2010 
Executive Summary: Although the market for insurance products that cover photovoltaic (PV) systems is evolving rapidly, PV developers in the United States are concerned about the cost and availability of insurance. Annual insurance premiums can be a significant cost component, and can affect the price of power and competition in the market. Moreover, the market for certain types of insurance products is thin or non-existent, and insurers’ knowledge about PV systems and the PV industry is uneven. PV project developers, insurance brokers, underwriters, and other parties interviewed for this research identified specific problems with the current insurance market for PV systems in the United States and suggested government actions that could facilitate the development of this market through better testing, data collection, and communication.
Connecting To the Grid[edit | edit source]
IREC's Connecting to the Grid program provides services and resources to facilitate the development of interconnection procedures and net metering rules for renewable-energy systems and other forms of distributed generation (DG). This page of the IREC web site serves as an information clearinghouse on interconnection and net-metering issues.
Systems Integration for Solar Technologies: As solar technologies provide a larger part of the U.S. electricity supply, it is becoming increasingly important that they be integrated seamlessly into the nation's electric power grid. This will require new ways of thinking about how the country generates and distributes electricity and new technologies that make it simple, safe, and reliable for solar electricity to feed into the grid. The Systems Integration subprogram focuses on understanding and removing the regulatory, technical, and economic barriers to integrate high penetration of solar electricity into the electric grid. To accomplish this, Systems Integration efforts encompass the following R&D and outreach activities: Solar System Technology Development, Grid Integration of Solar Technologies, System Testing and Demonstrations, Hardware Testing, Evaluation, and Reliability, Modeling and Analysis for Grid Integration, Solar Resource Assessment and Forecasting, Codes, Standards and Regulatory Implementation.
Power Electronics Needs for Achieving Grid-Parity Solar Energy Costs, Trishan Esram, Philip T. Krein, Brian T. Kuhn, Robert S. Balog, Patrick L. Chapman, IEEE Energy2O3O, Atlanta, Georgia, USA, 17-18 November 2008. 
Abstract: Grid parity in the context of solar energy that photovoltaic resources become competitive with more conventional electrical resources. The paper explores various concepts of grid parity, with emphasis on power electronics aspects. The published Department of Energy goal of grid parity by 2015 implies large-scale shifts to solar energy by 2030. It shown that the power electronics subsystems of solar energy systems require substantial cost and reliability improvements support grid parity. Inverters need to match the typical 25-year life of solar panels, support major simplifications to installation, and achieve lower manufacturing costs.
Evaluating the limits of solar photovoltaics (PV) in traditional electric power systems, Paul Denholma, Robert M. Margolis, Energy Policy, Volume 35, Issue 5, May 2007, Pages 2852–2861.
Abstract: In this work, we examine some of the limits to large-scale deployment of solar photovoltaics (PV) in traditional electric power systems. Specifically, we evaluate the ability of PV to provide a large fraction (up to 50%) of a utility system's energy by comparing hourly output of a simulated large PV system to the amount of electricity actually usable. The simulations use hourly recorded solar insolation and load data for Texas in the year 2000 and consider the constraints of traditional electricity generation plants to reduce output and accommodate intermittent PV generation. We find that under high penetration levels and existing grid-operation procedures and rules, the system will have excess PV generation during certain periods of the year. Several metrics are developed to examine this excess PV generation and resulting costs as a function of PV penetration at different levels of system flexibility. The limited flexibility of base load generators produces increasingly large amounts of unusable PV generation when PV provides perhaps 10–20% of a system's energy. Measures to increase PV penetration beyond this range will be discussed and quantified in a follow-up analysis.
Policies[edit | edit source]
Green Energy Rising The economic stimulus package of U.S. President Barack Obama, R. Frick, Kiplinger's Personal Finance; Jun2009, Vol. 63 Issue 6, p23-28, 6p.
The article considers the increase in renewable-energy stocks in the U.S. It cites the lack of capital, which was exacerbated by the financial crises, as a key factor in the slowdown of renewable-energy businesses. The benefits of the economic stimulus package of U.S. President Barack Obama to the renewable-energy industry are discussed.
Green electricity policies in the United States: case study, Fredric C. Menz, Energy Policy, 33 (18) (2005), pp. 2398–2410.
Abstract: While there has been interest in promoting the use of renewable energy in electricity production for a number of years in the United States, the market share of non-hydro renewable energy sources in electricity production has remained at about 2 percent over the past decade. The paper reviews the principal energy resources used for electricity production, considers the changing regulatory environment for the electricity industry, and describes government policies that have been used to promote green electricity in the United States, with an emphasis on measures adopted by state governments. Factors influencing the development of green power markets are also discussed, including underlying economic issues, public policy measures, the regulatory environment, external costs, and subsidies. Without significant increases in fossil fuel prices, much more stringent environmental regulations, or significant changes in electricity customer preferences, green electricity markets are likely to develop slowly in the United States.
Solar Photovoltaic Financing: Deployment on Public Property by State and Local Governments, Karlynn Cory, Jason Coughlin, and Charles Coggeshall, Technical Report, NREL/TP-670-43115, May 2008. 
Executive Summary: State and local governments have grown increasingly aware of the economic, environmental, and societal benefits of taking a lead role in U.S. implementation of renewable energy, particularly distributed photovoltaic (PV) installations. Recently, solar energy's cost premium has declined as a result of technology improvements and an increase in the cost of traditional energy generation. At the same time, a nationwide public policy focus on carbon-free, renewable energy has created a wide range of financial incentives to lower the costs of deploying PV even further. These changes have led to exponential increases in the availability of capital for solar projects, and tremendous creativity in the development of third-party ownership structures. As significant users of electricity, state and local governments can be an excellent example for solar PV system deployment on a national scale. Many public entities are not only considering deployment on public building rooftops, but also large-scale applications on available public lands. The changing marketplace requires that state and local governments be financially sophisticated to capture as much of the economic potential of a PV system as possible. Therefore, a key issue facing policy makers at the state and local level is how to most efficiently allocate public dollars and leverage incentives to develop a significant amount of energy generation from public-sector PV. This report examines ways that state and local governments can optimize the financial structure of deploying solar PV for public uses.
An Analysis of the Choice Facing Renewable Power Projects in the United States, Mark Bolinger and Ryan Wiser, Karlynn Cory and Ted James, LBNL-1642E, NREL/TP-6A2-45359. 
Introduction: Renewable power technologies are inherently capital-intensive, often (but not always) with relatively high construction costs and low operating costs. For this reason, renewable power technologies are typically more sensitive to the availability and cost of financing than are natural gas power plants, for example. In the United States, the bulk of renewable project finance in recent years has been provided by “tax equity investors” (typically large investment banks and insurance companies) who partner with project developers through highly specialized financing structures (Bolinger, 2009; Cory et al., 2008; Harper et al., 2007). These structures have been designed primarily to capitalize on federal support for renewable power technologies, which has historically come in the form of tax credits and accelerated depreciation deductions.
Financing Non-Residential Photovoltaic Projects:Options and Implications, Mark Bolinger, LBNL-1410E, January 2009, Lawrence Berkeley National Laboratory 
Introduction: Installations of grid-connected photovoltaic(PV) systems in the United States have increased dramatically in recent years, growing from less than 20 MW in 2000 to nearly 500 MW at the end of 2007, a compound average annual growth rate of 59%. Of particular note is the increasing contribution of “non-residential” grid-connected PV systems – defined here as those systems installed on the customer (rather than utility) side of the meter at commercial, institutional, non-profit, or governmental properties – to the overall growth trend. Although there is some uncertainty in the numbers, non-residential PV capacity grew from less than half of aggregate annual capacity installations in 2000-2002 to nearly two-thirds in 2007. This relative growth trend is expected to have continued through 2008. The non-residential sector’s commanding lead in terms of installed capacity in recent years primarily reflects two important differences between the non-residential and residential markets: (1) the greater federal “Tax Benefits” – including the 30% investment tax credit (ITC) and accelerated tax depreciation – provided to commercial (relative to residential) PV systems, at least historically (this relative tax advantage has largely disappeared starting in 2009) and (2) larger non-residential project size. These two attributes have attracted to the market a number of institutional investors (referred to in this report as “Tax Investors”) seeking to invest in PV projects primarily to capture their Tax Benefits. The presence of these Tax Investors, in turn, has fostered a variety of innovative approaches to financing non-residential PV systems.
Solar Powering Your Community: A Guide for Local Governments (Book), January 2011, DOE designed this guide to assist local government officials and stakeholders in designing and implementing strategic local solar plans.
Executive Summary: As demand for energy increases, many communities are seeking ways to meet this demand with clean, safe, reliable energy from renewable sources such as sun and wind. Fortunately, many of the key technologies that can unlock the power of these renewable resources are available on the market today. While the U.S. Department of Energy (DOE) continues to fund research and development (R&D) to improve solar technologies, DOE is also focusing on accelerating a robust nationwide market for the currently available technologies. Development of a nationwide market requires overcoming barriers to widespread adoption of solar energy technologies. These barriers include complicated procedures for permitting and connecting systems to the grid, financing challenges, a lack of awareness of solar energy solutions among key decision makers, and a lack of trained installation contractors. Local governments are uniquely positioned to remove many of these barriers, clearing the way for solar markets to thrive in their locales. Representatives of local governments who understand and prepare for policy and market changes can optimally position their communities in the emerging renewable energy economy.
Compare: Fuel driven Vs. PV[edit | edit source]
As both population and energy use per capita increase, modern society is approaching physical limits to its continued fossil fuel consumption. The immediate limits are set by the planet's ability to adapt to a changing atmospheric chemical composition, not the availability of resources. In order for a future society to be sustainable while operating at or above our current standard of living a shift away from carbon based energy sources must occur. An overview of the current state of active solar (photovoltaic, PV) energy technology is provided here to outline a partial solution for the environmental problems caused by accelerating global energy expenditure. The technical, social, and economic benefits and limitations of PV technologies to provide electricity in both off-grid and on-grid applications is critically analyzed in the context of this shift in energy sources. It is shown that PV electrical production is a technologically feasible, economically viable, environmentally benign, sustainable, and socially equitable solution to society's future energy requirements.
FUEL-PARITY: IMPACT OF PHOTOVOLTAICS ON GLOBAL FOSSIL FUEL FIRED POWER PLANT BUSINESS, Ch. Breyer, M. Görig, J. Schmid, Symposium Photovoltaische Solarenergie, Bad Staffelstein, March 2-4, 2011.
Abstract: Over the last 15 years global photovoltaic (PV) installations have shown an average annual growth rate of 45%. Combined with a constant learning rate of about 20% this leads to an ongoing and fast reduction of PV installation costs. While PV has been highly competitive for decades in powering space satellites and off-grid applications for rural electrification, commercial on-grid PV markets for end-users are currently about to establish as reflected by first grid-parity events. In parallel, the fast decrease in levelized cost of electricity (LCOE) of PV power plants creates an additional and sustainable large-scale market segment for PV, which is best described by the fuel-parity concept. LCOE of oil and natural gas fired power plants are converging with those of PV in sunny regions, but in contrast to PV are mainly driven by fuel cost. As a consequence of cost trends this analysis estimates an enormous worldwide market potential for PV power plants by end of this decade in the order of at least 900 GWp installed capacity without any electricity grid constraints. PV electricity is very likely to become the least electricity cost option for most regions in the world.
Fuel-Parity: New Very Large and Sustainable Market Segments for PV Systems, Christian Breyer, Alexander Gerlach1, Daniel Schäfer1, Jürgen Schmid, 2010, IEEE Energy Conference.
Abstract: Global power plant capacity largely depends on burning fossil fuels. Increasing global demand and degrading and diminishing fossil fuel resources are fundamental drivers for constant fossil price escalations. Price trend for solar PV electricity is vice versa. Fuel-parity concept, i.e. PV systems lower in cost per energy than fuel-only cost of fossil fired generators and power plants, well describes the fast growing economic benefit of PV systems. Fuel-parity is already reached in first markets and first applications and will establish very large markets in the 2010s. Solar PV electricity will become a very competitive energy option for most regions in the world.
Plant Design[edit | edit source]
Abstract: The development of newer technologies in concentrating solar power (CSP) plants, particularly plants using dish Stirling systems, as well as changes in the design of photovoltaic (PV) inverters is creating new challenges in the design of low- and medium-voltage collector systems for large solar power plants. Furthermore, interconnect requirements for reactive power, voltage, and ramp rate control and the characteristics of solar power require unique solutions for optimal plant design. To ensure large solar plants can be connected successfully to the grid without impacting grid stability or reliability, the design process must include the development of suitable models of these plants for transient and dynamic simulation. Simulation tools and models can then be used to determine special requirements to deal with issues such as daily plant energization, low voltage ride-through, temporary overvoltage and feeder grounding, etc. The provision of dynamic and static reactive power and the optimization thereof for application at either low, medium, or high voltage and the control issues associated with plant-wide reactive power and voltage control are also key issues in the design. The presentation will focus on the key technical issues and design optimization of large solar power plants.
Power Plants: Characteristics and Costs, Stan Kaplan, CRS Report for Congress, November 13, 2008.
Annuity and Investment analysis[edit | edit source]
- As the price of power increases with inflation, so does the value of investment.
- Solar panel installation is already as profitable, or more so, than some bonds and is surely safer.
- A complete investment example analysis for 1kW system
Photovoltaic power plants in terms of investment costs and payback in the Czech Republic, Ing. Tomáš Novák, Ph.D.,Ing. Jaroslav Šnobl, prof. Ing. Karel Sokanský, CSc., Environment and Electrical Engineering (EEEIC), 2011 10th International Conference, Issue Date: 8-11 May 2011.
Abstract: This paper focuses on the analysis of the economic costs of the photovoltaic power plants. There are given real investment costs and the prices of photovoltaic panels, prices of individual items of plant investment costs and returns of individual systems in 2010 and in this year 2011.
Large-Scale Solar PV Investment Models, Tools, and Analysis: The Ontario Case, Wajid Muneer, Kankar Bhattacharya, Claudio A. Cañizares, IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 26, NO. 4, NOVEMBER 2011.
Abstract: In this paper, an optimization model and techniques to facilitate a prospective investor to arrive at an optimal plan for investment in large-scale solar photovoltaic (PV) generation projects are proposed and discussed. The optimal set of decisions includes the location, sizing, and time of investment that yields the highest profit. The mathematical model considers various relevant issues associated with PV projects such as location-specific solar radiation levels, detailed investment costs representation, and an approximate representation of the transmission system. A detailed case study considering the investment in PV projects in Ontario, Canada, is presented and discussed, demonstrating the practical application and usefulness of the proposed methodology and tools.
Coordination of Investor-Owned DG Capacity Growth in Distribution Systems, Steven Wong, Kankar Bhattacharya, J. David Fuller, IEEE Transactions on Power Systems, Issue Date: Aug. 2010.
Abstract: This paper proposes a novel schematic approach for coordinating the selection of distributed generation unit investment proposals submitted by multiple, competing, private investors to achieve maximum investor participation while complying with the technical operational limits of the local distribution company. The concept of domains and commons has been used to identify the largest transgressors to system function, and forms the basis for revisions to the investor proposals.
Selection of Photovoltaic Solar Power Plant Investment Projects - An ANP Approach, P. Aragonés-Beltrán, F. Chaparro-González, J. P. Pastor Ferrando, and M. García-Melón, World Academy of Science, Engineering and Technology 44 2008. 
Abstract: In this paper the Analytic Network Process (ANP) is applied to the selection of photovoltaic (PV) solar power projects. These projects follow a long management and execution process from plant site selection to plant start-up. As a consequence, there are many risks of time delays and even of project stoppage. In the case study presented in this paper a top manager of an important Spanish company that operates in the power market has to decide on the best PV project (from four alternative projects) to invest based on risk minimization. The manager identified 50 project execution delay and/or stoppage risks. The influences among elements of the network (groups of risks and alternatives) were identified and analyzed using the ANP multi criteria decision analysis method. After analyzing the results the main conclusion is that the network model can manage all the information of the real-world problem and thus it is a decision analysis model recommended by the authors. The strengths and weaknesses ANP as a multicriteria decision analysis tool are also described in the paper.
A Research Report on Solar Power Investment: The Dawn of Solar Power By Russell Hasan, Alternative Energy News Source (Altenews.com)
Introduction: Solar power is one of the hottest areas in energy investment right now, but there is much debate about the future of solar technology and solar energy markets. This research report is written with the purpose of analyzing extenstive data to predict solar investment opportunities. Alternative Energy News Source (Altenews.com) has long asserted that there are fortunes to be made from smart investments in renewable energy, and this report examines various ways in which solar power is precisely such an opportunity.
Intro: Solar grid business offers good opportunities for SMEs as well as large enterprises. The government should ensure that SMEs benefit from this business as much as big corporate enterprises. However, to enter and explore this field, players need to understand and focus on some key requirements.
Annuity (US financial products), From Wikipedia. In the U.S. Internal Revenue Code, the growth of the annuity value during the accumulation phase is tax-deferred, that is, not subject to current income tax, for annuities owned by individuals.
401(K), From Wikipedia.
- In 2011, about 60% of American households nearing retirement age have 401(k)-type accounts. According to a Feb 19, 2011 article in the Wall Street Journal, "the median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement." This according to a study commissioned by the Journal, and conducted by the Center for Retirement Research at Boston College.
- The 401(k) account is typically administered by the employer, while in the usual "participant-directed" plan, the employee may select from different kinds of investment options. Employees choose where their savings will be invested, usually, between a selection of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. In the less common trustee-directed 401(k) plans, the employer appoints trustees who decide how the plan's assets will be invested.
Multi-MW Solar PV Plants: More Problem Than Solution, By Prabhu Deodhar, Life Fellow IEEE (USA).
THE ECONOMICS OF GRID-CONNECTED ELECTRICITY PRODUCTION FROM SOLAR PHOTOVOLTAIC SYSTEMS, Jean-Baptiste LESOURD, Conference Paper, Thursday, March 17, 2005 .Abstract This paper analyses the economics of grid-connected photovoltaic systems. With the 2003 costs of photovoltaic systems, under prevailing capital market conditions, with a system lifetime of 30 years, and under the best climatic conditions, it appears that the cost of production of grid-connected electricity could be of 0.28 US $/kWh. Similar values hold for other regions (US locations under medium climatic conditions, European locations, Switzerland and Japan with, in these countries, low costs of capital). If the lifetime of the system goes up, due to future technological improvements, to a very large value such as 50 years, these costs can be lowered by a significant amount, leading to estimates of of 0.24 US $/kWh. Competitiveness of grid-connected photovoltaic electricity, while it still cannot be taken for granted, is a possibility, especially if major technological advances further lowers the costs of photocells and increases their lifetimes.
Comparative economic analysis of supporting policies for residential solar PV in the United States: Solar Renewable Energy Credit (SREC) potential, John Edward Burns, Jin-Su Kang, Energy Policy, Available online 9 February 2012, In Press.
Abstract Numerous studies and market reports suggest that the solar photovoltaic markets rely heavily, if not entirely, upon governmental support policies at present. Unlike in other countries where these policies are enacted at a national level, the 50 states in the US pursue different policies in an attempt to foster the growth of renewable energy, and specifically solar photovoltaics. This paper provides an economic and financial analysis of the US federal and state level policies in states with solar-targeted policies that have Solar Renewable Energy Credits (SREC) markets. After putting a value on SRECs, this study further compares solar carve-outs with other incentives including the federal tax credit, net metering, and state personal tax credits. Our findings show that SREC markets can certainly be strong, with New Jersey, Delaware, and Massachusetts having the most potential. Despite their strong potential as effective renewable policies, the lack of a guaranteed minimum and the uncertainty attached are major drawbacks of SREC markets. However, the leveraging of this high value offers hope that the policies will indeed stimulate residential solar photovoltaic markets.
Solar power in the United States, From wikipedia.
Related studies[edit | edit source]
PV Power Plants 2011 Industry Guide Falling technology prices and the rising costs of fossil fuels are making large solar parks increasingly attractive for investors. Plants in the three-digit megawatt peak range are being planned, and gigawatt peak plants are already being evaluated. "PV Power Plants" is the first industry guide to focus exclusively on utility-scale solar power plants, and targets system integrators, distributors, project developers, top planners and investors. Besides corporate portraits, it includes an overview of market conditions and developments in technology, and depicts crucial issues related to planning and financing.
Executive Summary: Solar markets are booming in the United States due to strong consumer demand and financial incentives from the federal government, states and utilities. Over 124,000 new solar heating, cooling, and solar electric installations were completed in 2010, an increase of 22% compared to the number of systems installed in 2009. The capacity of these installations is 981 MWDC for electricity production and 814 MWTH for thermal heating. The majority of the market share for each solar technology is concentrated in a few states. However, the number of states with a significant number of installations is growing.
An Examination of the Regional Supply and Demand Balance for Renewable Electricity in the United States through 2015,Lori Bird, David Hurlbut, Pearl Donohoo, Karlynn Cory, and Claire Kreycik, Technical Report, NREL/TP-6A2-45041, March 2009 
Executive Summary: This report examines the balance between the demand and supply of new renewable electricity in the United States on a regional basis through 2015. It expands on a 2007 NREL study (Swezey et al. 2007) that assessed the supply national basis. As with the earlier study, this analysis relies on estimates of renewable energy supplies compared to demand for renewable energy generation needed to meet existing state renewable portfolio standard (RPS) policies in 28 states, as well as demand by consumers who voluntarily purchase renewable energy.
A Comparative Review of a Dozen National Energy Plans: Focus on Renewable and Efficient Energy, Jeffrey Logan and Ted L. James, Technical Report, NREL/TP-6A2-45046, March 2009 
Executive Summary: Dozens of groups have submitted energy, environmental, and economic recovery plans for consideration by the Obama administration and the 111th Congress. This report provides a comparative analysis of 12 national proposals, focusing especially on energy efficiency (EE) and renewable energy (RE) market and policy issues. Many of the plans considered here call for transformative change, citing decades of inconsistent, inattentive, or otherwise failed national energy policy. Almost universally, plans call for an expansion of clean energy research and development, EE and RE deployment, and climate change preparedness. But sharp differences also exist regarding domestic drilling, nuclear power, carbon mitigation, and the role of government.
Solar cell efficiency tables (version 39), Martin A. Green1, Keith Emery, Yoshihiro Hishikawa, Wilhelm Warta and Ewan D. Dunlop, Progress in Photovoltaics: Research and Applications Volume 20, Issue 1.
First Solar: For current news and corporate data collection.
Related[edit | edit source]
- “ In the end, SunEdison offered the best price per kWh and the best overall cost profile for the design, installation and maintenance of a large solar system.” Tom Blair, Deputy Environmental Services Director, City of San Diego Energy Division
- Government wants a guaranteed output, owned and operated by the vendor, in which they would agree to purchase all of the energy provided.
- The Alvarado solar system was implemented under a Solar Power Services Agreement (SPSA) with SunEdison. Under the agreement, SunEdison builds, owns and maintains the solar system, selling the power to San Diego under a 20-year term.
- System Type: 6,128 photovoltaic solar panel arrays located atop the concrete roofs of three water storage reservoirs; additional implementations in design phase.
- System Size: 1.135 MW (expanding to 5 MW)
- Annual Savings: Estimated $40,000 annual energy cost savings per MW with no capital outlay or maintenance expenses
- Blair says, “We avoided $6.5 million in capital costs and created a stable power source.
- “Construction began in the fall of 2006 and the system was operational on February 1st of 2007,” recalls Blair.
- “6,128 solar panels were installed across 4.3 acres of water tank roof top... It starts between 9 and 10 am in the morning and peaks around 1 pm and then trails off by 4 to 5 pm in the evening. The systems have two meters that are set up to be around 500 kW each, and they normally run pretty close to system capacity at 480 or 490 kW. The system is actually generating more power than we anticipated. We had targeted 1.6 million kWh per year and we received almost 1.9 million kW hours last year.”
DSIRE-Database of State Intensives for Renewables & Efficiency CANT ACCESS????????????????
Sources[edit | edit source]
- DOE-Depertment of Energy
- NREL-National Renewable Energy Laboratory
- EIA-U.S. Energy Information Administration
- IREC-Interstate Renewable Energy Council, Inc.
- EETD-Environmental Energy Technology Division
- Energy Policy The International Journal of the Political, Economic, Planning, Environmental and Social Aspects of Energy
Appropedia Links[edit | edit source]
- Levelised Cost of Electricity Literature Review
- Life cycle analyses of energy technologies Literature review
- Lifespan and Reliability of Solar Photovoltaics - Literature Review
- Banking for Solar Investment - Lit. Review
- PV system design optimization
- Carbon pricing
- Deployment of Renewable Energy Technologies to Mitigate Climate Change Literature Review
- Levelised Cost of Electricity Literature Review
Useful software[edit | edit source]
- Photovoltaic systems engineering simulation software listing at APPROPEDIA
- Software shortlist: SAM(Syatem Advisor Model), RETScreen, Sustainability Calculator
Random Notes(Needs further work)[edit | edit source]
Possible involved parties
- Buyer (annuitant), the individual who will invest money(by monthly payment from salary for certain period)
- Seller (issuer), here the Government itself through Department of Energy. Will analyze and validate the project in each step by ensuring:
- Annuity contract, a guaranteed distribution of income over time
- Securitization, it is the process of combining the PPAs(Power Purchase Agreement) into a financial instrument that can be bought and sold
- Quality of equipment: bankable equipments can be selected via consulting
- Quality of installation: Commissioning the plant to its rated value
- Long term performance and maintenance
- Monitoring, auditing and validating the project's accuracy
- Owner/ leaser of the location where the plant will be commissioned. Aspects for choosing location??
- Solar Contractor, who will provide all the equipments. May be the cost will be met through installments
- Equipments cost
- Maintenance, spare parts
- Depreciation cost, the reduction in the value of a product arising from the passage of time due to use or abuse, wear and tear
- salaries of and...
- Interest to be paid by the Govt. to the annuitant, while returning the investment
- MwHr, earning by selling the power generated
- Salvage Value, the estimated value that an asset will realize upon its sale at the end of its useful life
Interest rate calculation: hypothetical
Current annuity policy and rate study
- Annuity policy
- Interest rate calculation
Reference[edit | edit source]
- Artur Skoczek, Tony Sample and Ewan D. Dunlop, The Results of Performance Measurements of Field-aged Crystalline Silicon Photovoltaic Modules, Progress in Photovoltaics: Research and Applications, Volume 17 Issue 4, 2009, Pages 227 - 240
- Czanderna and Jorgensen, A.W. Czanderna, G.J. Jorgensen, Accelerated Life Testing and Service Lifetime Prediction for PV Technologies in the Twenty-First Century, National Renewable Energy Laboratory, Golden, CO. (1999) July, NREL/CP-520-26710
- Ken Zweibel, Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost?, Energy Policy, Volume 38, Issue 11, November 2010, Pages 7519–7530
- Report on national PV cost values: NARUC 7-Member Consortium for PV Resource Characterization1 December 21, 2009, NREL-National Renewable Energy Laboratory
- Scott Hempling, Carolyn Elefant, Karlynn Cory, Kevin Porter, Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions, Technical Report, NREL/TP-6A2-47408, January 2010
- Realistic generation cost of solar photovoltaic electricity, Parm Pal Singh, Sukhmeet Singh, Renewable Energy, Volume 35, Issue 3, March 2010, Pages 563–569.
- K. Brankera, M.J.M. Pathaka, J.M. Pearce A review of solar photovoltaic levelized cost of electricity, Renewable and Sustainable Energy Reviews, Volume 15, Issue 9, December 2011, Pages 4470–4482
- Mike Brigham,GEAA FITs Presentation, May 2009
- A. Mills, R. Wiser, G. Barbose, W. Golove, The impact of retail rate structures on the economics of commercial photovoltaic systems in California, Energy Policy, 36 (9) (2008), pp. 3266–3277
- MINIMIZING UTILITY-SCALE PV POWER PLANT LCOE THROUGH THE USE OF HIGH CAPACITY FACTOR CONFIGURATIONS, Matthew Campbell, Julie Blunden, Ed Smeloff, Peter Aschenbrenner - SunPower Corporation, 2009 IEEE
- The technical, geographical, and economic feasibility for solar energy to supply the energy needs of the US, Vasilis Fthenakis, James E.Mason, KenZweibel, 11 August 2008, Energy Policy.
- Solar Grid Parity, Dan Lewis, IEEE Power Solar. Engineering & Technology 23 May - 5 June 2009 www.theiet.org/magazine
- P. Denholhm, E. Drury, R. Margolis, The Solar Photovoltaics Wedge: Pathways for Growth and Potential Carbon Mitigation in the US, National Renewable Energy Laboratory, Golden, CO (2009) 24 July
- Bethany Speer, Michael Mendelsohn, and Karlynn Cory, Insuring Solar Photovoltaics: Challenges and Possible Solutions, Technical Report NREL/TP-6A2-46932, Revised February 2010
- IREC-Interstate Renewable Energy Council web program
- Solar Energy Technologies Program
- Power Electronics Needs for Achieving Grid-Parity Solar Energy Costs, Trishan Esram, Philip T. Krein, Brian T. Kuhn, Robert S. Balog, Patrick L. Chapman, IEEE Energy2O3O, Atlanta, Georgia, USA, 17-18 November 2008
- Evaluating the limits of solar photovoltaics (PV) in traditional electric power systems, Paul Denholma, Robert M. Margolis, Energy Policy, Volume 35, Issue 5, May 2007, Pages 2852–2861.
- R. Frick, Green Energy Rising The economic stimulus package of U.S. President Barack ObamaKiplinger's Personal Finance; Jun2009, Vol. 63 Issue 6, p23-28, 6p
- Fredric C. Menz, Green electricity policies in the United States: case study, Energy Policy, 33 (18) (2005), pp. 2398–2410.
- Karlynn Cory, Jason Coughlin, and Charles Coggeshall, Solar Photovoltaic Financing: Deployment on Public Property by State and Local Governments, Technical Report, NREL/TP-670-43115, May 2008.
- Mark Bolinger and Ryan Wiser, Karlynn Cory and Ted James, An Analysis of the Choice Facing Renewable Power Projects in the United States, LBNL-1642E, NREL/TP-6A2-45359.
- Mark Bolinger, Financing Non-Residential Photovoltaic Projects:Options and Implications, LBNL-1410E, January 2009, Lawrence Berkeley National Laboratory
- Solar Powering Your Community: A Guide for Local Governments (Book), January 2011
- Joshua M. Pearce, Photovoltaics - A Path to Sustainable Futures, Futures 34 (7), 663-674, 2002
- FUEL-PARITY: IMPACT OF PHOTOVOLTAICS ON GLOBAL FOSSIL FUEL FIRED POWER PLANT BUSINESS, Ch. Breyer, M. Görig, J. Schmid, Symposium Photovoltaische Solarenergie, Bad Staffelstein, March 2-4, 2011
- Fuel-Parity: New Very Large and Sustainable Market Segments for PV Systems, Christian Breyer, Alexander Gerlach1, Daniel Schäfer1, Jürgen Schmid, 2010, IEEE Energy Conference.
- Solar power plant design and interconnection, Camm, E.H., Williams, S.E., Power and Energy Society General Meeting, 2011 IEEE, Issue Date: 24-29 July 2011.
- Solar Power Plant Design and Interconnection, E.H. Camm, S.E. Williams, S&C Electric Company.
- BDPANELS: Solar, a 12 Yr Annuity
- 'Holding Solar Financing Companies Accountable' By Brian Farhi, SolarNexus
- Photovoltaic power plants in terms of investment costs and payback in the Czech Republic, Ing. Tomáš Novák, Ph.D.,Ing. Jaroslav Šnobl, prof. Ing. Karel Sokanský, CSc., Environment and Electrical Engineering (EEEIC), 2011 10th International Conference, Issue Date: 8-11 May 2011.
- Large-Scale Solar PV Investment Models, Tools, and Analysis: The Ontario Case, Wajid Muneer, Kankar Bhattacharya, Claudio A. Cañizares, IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 26, NO. 4, NOVEMBER 2011.
- Coordination of Investor-Owned DG Capacity Growth in Distribution Systems, Steven Wong, Kankar Bhattacharya, J. David Fuller, IEEE Transactions on Power Systems, Issue Date: Aug. 2010.
- Selection of Photovoltaic Solar Power Plant Investment Projects - An ANP Approach, P. Aragonés-Beltrán, F. Chaparro-González, J. P. Pastor Ferrando, and M. García-Melón, World Academy of Science, Engineering and Technology 44 2008.
- How to enter solar grid business, By Richa Chakravarty, IEEEPower News.
- Boomers Find 401(k) Plans Come Up Short - WSJ.com
- Multi-MW Solar PV Plants: More Problem Than Solution, By Prabhu Deodhar, Life Fellow IEEE (USA)
- Annuitizing Your 401(k) By KELLY G at Wall Street Journal
- THE ECONOMICS OF GRID-CONNECTED ELECTRICITY PRODUCTION FROM SOLAR PHOTOVOLTAIC SYSTEMS, Jean-Baptiste LESOURD, Conference Paper, Thursday, March 17, 2005.
- Comparative economic analysis of supporting policies for residential solar PV in the United States: Solar Renewable Energy Credit (SREC) potential, John Edward Burns, Jin-Su Kang, Energy Policy, Available online 9 February 2012, In Press.
- PV Power Plants 2011 Industry Guide
- Larry Sherwood, U.S. Solar Market Trends - Interstate Renewable Energy Council
- Lori Bird, David Hurlbut, Pearl Donohoo, Karlynn Cory, and Claire Kreycik, An Examination of the Regional Supply and Demand Balance for Renewable Electricity in the United States through 2015 Technical Report, NREL/TP-6A2-45041, March 2009
- Jeffrey Logan and Ted L. James, A Comparative Review of a Dozen National Energy Plans: Focus on Renewable and Efficient Energy, Technical Report, NREL/TP-6A2-45046, March 2009
- Solar cell efficiency tables (version 39), Martin A. Green1, Keith Emery, Yoshihiro Hishikawa, Wilhelm Warta and Ewan D. Dunlop, Progress in Photovoltaics: Research and Applications Volume 20, Issue 1.
- Annual Energy Outlook 2011 with Projections to 2035
- EIA - Annual Energy Outlook 2012 Early Release
- US EIA(Energy Information Administration)
- First Solar: For current news and corporate data collection. First Solar Corporate Overview Q2 2011
- Electricity Prices by State - National Electric Rate Information
- Competition in Electricity Markets
- Loan offers for Solar projects, 10 Solar Lending Programs in 10 Locations, 2009 (Solar Blog)
- DSIRE-Database of State Intensives for Renewables & Efficiency