Solar photovoltaic annuity literature review/Connecting To the Grid

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^[1]

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-Interstate Renewable Energy Council web program^[2]

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.

Solar Energy Technologies Program^[3]

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.^[4]

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.^[5]

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.^[6]

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.^[7]

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.^[8]

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.^[9]

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^[10]

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,^[11] 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]

Photovoltaics - A Path to Sustainable Futures, Joshua M. Pearce, Futures 34 (7), 663-674, 2002^[12] open access

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.^[13]

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.^[14]

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]

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.^[15]

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.

Solar Power Plant Design and Interconnection, E.H. Camm, S.E. Williams, S&C Electric Company.^[16]

Presentation

Annuity and Investment analysis[edit | edit source]

BDPANELS: Solar, a 12 Yr Annuity^[17]

• 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

Holding Solar Financing Companies Accountable, Brian Farhi, SolarNexus^[18]

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.^[19]

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.^[20]

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.<ref>[http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=