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]

Report by the Australian Academy of Technological Sciences and Engineering(ATSE), March 2011

America's Energy Future: Technology and Transformation: Summary Edition

AEO2012 Early Release Overview

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[1]

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[2]

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[3]

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[4]

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[5]

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.[6]

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[7]

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.

GEAA FITs Presentation, Mike Brigham, May 2009[8]

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[9]

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.[10]

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.[11]

Solar Grid Parity, Dan Lewis, IEEE Power Solar. Engineering & Technology 23 May - 5 June 2009 www.theiet.org/magazine.[12]

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[13]

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.

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  1. 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
  2. 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
  3. 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
  4. Report on national PV cost values: NARUC 7-Member Consortium for PV Resource Characterization1 December 21, 2009, NREL-National Renewable Energy Laboratory
  5. 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
  6. Realistic generation cost of solar photovoltaic electricity, Parm Pal Singh, Sukhmeet Singh, Renewable Energy, Volume 35, Issue 3, March 2010, Pages 563–569.
  7. 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
  8. Mike Brigham,GEAA FITs Presentation, May 2009
  9. 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
  10. 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
  11. 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.
  12. Solar Grid Parity, Dan Lewis, IEEE Power Solar. Engineering & Technology 23 May - 5 June 2009 www.theiet.org/magazine
  13. 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