PHOTOVOLTAICS

Truth is like the sun. You can shut it out for a time, but it ain't goin' away.--Elvis Presley

Photovoltaics, commonly called PV for short, is a solar energy technology that utilizes certain properties of semiconductors to turn solar radiation into electricity. Photovoltaic systems are typically composed of wafers made of crystalline silicon. These solar cells are then combined to form a module or solar panel. These panels are then combined to form an array of panels to complete the system. Photons, the fundamental particles of light, strike the solar cells and initiate a process that causes a small electrical direct current (DC) to form. When the current of each cell in the whole array is combined an

appreciable amount of electrical power is produced with no moving parts, noise, or pollutants. Electrical components such as inverters and charge controllers then condition the DC power from the array and either direct it to DC loads (appliances and lights) as found in some off grid applications or convert it to AC power for AC loads, the most common application.

Advantages. PV electricity typically displaces some form of fossil fuel power generation. If the latter is very expensive, such as to a rancher's well pump or a home in a remote location, then a PV system could save a lot of money. There is also the "green" energy aspect. Photovoltaics is environmentally friendly, producing energy without noise or pollutants. For many, a PV system makes a statement about protecting the environment and conserving our nonrenewable resources. Also, since PV systems have no moving parts, they are very reliable and estimated to last at least 30 years. This means very little maintenance will be needed. There is also the matter of energy independence. Because of power outages, a few who supplement their grid-tie electricity with PV opt for a hybrid small battery system where critical appliances such as refrigerators continue to run; and, of course, any stand-alone systems or off grid homes have no vulnerability to power outages whatsoever. Photovoltaic produced energy is also a hedge against rising utility rates. The DOE states that Colorado electricity rates increased 24% over the last 4 years, about 5% compounded annually.

Disadvantages. Currently the most significant disadvantage is the high initial cost. PV systems also require a fairly large area to produce significant quantities of power. If its an off-grid home battery maintenance is a chore.

Applications.

1) Remote well pumping where the cost of bringing in a power line is prohibitive. There are also landscaping and drip-feeding irrigation water pumping applications.

2) Off grid homes typically in remote locations. Again the cost of bringing in a power line is prohibitive. In the past most solar PV was of this sort. Obviously battery banks for energy storage are required and perhaps a generator for those unusual times when it is cloudy for several days in a row.

3) Grid tie homes and businesses. This is PV's wave of the future and now the most common application. This is where a building is tied to the utility grid but also has a PV array to offset the utility energy costs in part or in whole depending on the size of the array. When the PV array is producing electricity the home or business consumes that power and what it doesn't use goes onto the utility grid. The utility company then credits back the difference for what is called net metering.

4) Grid tie hybrid systems where some of the photovoltaic energy is stored in batteries to back up critical appliances during power outages. This is not commonly done since it adds to the cost, but if your home or business is prone to long utility outages you might want to price it. Otherwise, UPS devices (uninteruptible power supplies) and/or a generator might be a solution.

Types of PV arrays. There are basically three with examples pictured below.

ROOF MOUNT

POLE MOUNT

GROUND ARRAY

How big a system should I buy? Of course one's budget and available space for the array will be limiting factors, but it is better to approach the subject conceptually, that is, with the concept of zeroing out your utility bill. This is a worthy goal, but one that some will not achieve immediately, and because of space considerations it may not even be possible for some.

To start we need to understand what is meant by a kilowatt hour (1000 watts per hour), abbreviated KWH on your electric utility bill. It is a basic unit of energy either consumed or produced. If you imagine 10 table lamps each with a single 100 watt bulb that are all turned on and left on for one hour, the energy consumed simultaneously by the 10 lamps is one kilowatt hour or 1 KWH. All your appliances and lights have their own individual wattage ratings. How long each of them is turned on and running collectively add up to the total KWHs consumed over a month's time and that is what you are billed for by LPEA at the current (2010) rate of 10.4¢ per kwh. On the other hand, if you have a grid-tie home or business you are producing energy with your PV system at the rate of 10.4¢ per kwh. If what you produce is equal to what you consume over the period of a year then you have zeroed out your utility bill.

So, do we just take the monthly average of kwhs on our utility bill and then install a PV system that will produce that much on average? No, we want to look at three other things first: 1) Is our house well insulated and air tight? If not, money spent here first will be more effective than anything else upon our utility bills. 2) Do we have all Energy Star rated appliances? These have the lowest energy consumption. Front loading washers use less water, therefore less energy is consumed heating the water. Electric dryers are the big hogs, but if you buy a model with sensors it will shut the dryer off when the clothers are actually dry. Also many of the newer model washers do a better job of spinning the water out of the clothes so that they need less time in the dryer. Are we replacing our incandescent light bulbs with CFK bulbs or maybe even LED lights? What are our personal habits regarding energy use? Are we in the habit of turning out the lights when we leave a room? 3)Solar is far more efficient at heating water than producing electricity, maybe be a factor of four. Consider a solar hot water system.

Most people who buy solar have an energy epiphany, but it is better to have the epiphany before the PV installation than after. Some or all of the above three items, when implemented, will lower the average number of kwhs on your electric bill so that you do not need as big a PV system to zero out your utility bill. Different sources give different numbers as to the national average for monthly household KWHs, but typically between 650 and 800 KWH per month. LPEA's average is in the low 600's. 800 kwhs requires about a 6KW PV system which is very large, such as the above pictured rooftop; and, needless to say, is quite expensive. After you have done everything you reasonably can to get your KWH number down (and maybe you are already there), your solar company can tell you what would be the PV system's matching size. You may not have room for it all, but you can offset part of your bill with a smaller system. On the other hand, you may have sufficient space, but not enough money for a PV system large enough to offset your entire electric bill. Often it is possible to install some PV now and more later as the money becomes available. Be sure to discuss this with your solar designer as there are design considerations.

Financial analysis. In the solar industry it is said that the decision to buy solar is ultimately emotional. Nonetheless, we all need to believe that we are spending our money wisely, that we are not throwing it away. Saving our planet is all important, but we would rather do it with money well spent, thus the need for cost analysis. Unfortunately just about everything the solar industry provides on this subject seems obtuse and onerous to master. It is enough to bring any CPA to tears, but whether in pain or to the thrill of it I couldn't say. For the rest of us who are not so perspicacious about accounting consider the following simplified version with a sample PV system. Let's say that your average utility bill is 625 kwh per month. You would need about a 4.0 KW system to zero out your electric bill. (We'll take a pass on the math that connects these two numbers as it is solar technician/design math, not difficult, but long to explain.)

Your solar company chooses to bid it at $6 per watt for a total cost of $24,000 (4000 watts x $6 per watt). After the LPEA rebate of 50¢ per watt (years 2011 and 2012) and the federal tax credit of 30% we now have a cost of $15,400. It is believed that the system will last more than 30 years, but the inverter that converts the DC to AC is expected to last 15 years so we will add a replacement cost of $4000 to the $15,400 to arrive at the 30 year cost of $19,400.

Now if we take our 625 kwh monthly average energy consumption and multiply that by the 10.4¢ rate this is equal to $780 per year. If we divide the 30 year cost of $19,400 by $780 per year we get about 25 years for a very simplified calculation of "payback". Some of us don't even know if we'll be around in 25 years! Fortunately for PV, this is way too simplified. It is very reasonable to expect grid utility costs to increase at a rate of 5% compounded annually which was the rate before the recession. Two % has been the amount of general inflation leaving 3% exclusive to energy, so if we use 3% as our yearly compounded price increase the new "payback" figure will be in today's money. When this is taken into account "payback" is in 19 years instead of 25. Counting after 19 years to the end of the PV array's "defined" (probably longer) life of 30 years is all free money, $17,709 in today's money. You have done your part to save the planet and netted $17,709 in the process! Also there is no capital gains tax on this profit, worth another 15% as opposed to investing the same money in something that produces taxable earnings. In this case your ROI the first year is the equivalent of 5.8%, better than most CDs.

Of course this was all based on cash up front. Some of us will have to borrow the money, perhaps in a home equity loan or a new home mortgage. Surprisingly, the PV system tends to be cash positive from day one since we do not have the big initial cash outlay. The borrowed money payment (principal + interest) is generally less than the money saved on the electric utility bill, albeit small at first. Then with the utility cost inflating annually and our monthly payment staying the same, our savings gets better every year. Then if, for example, the term of our loan is 20 years, our savings really jumps after that.

If you own a commercial building the tax credit is 30% and MACR 5 year depreciation potentially worth another 20% + the LPEA rebate. Payback in the above example is 12 years and the 30 year savings is $26,109. Your first year ROI is 8.2%.

The above ROIs not withstanding, many people just can't get past investing in something that takes 19 years (in our example) to break even. Nonetheless many are doing it. What is different about them? They see that the real reason for buying a PV system is not about money, but about quality of life. Consider an analogy. It is said that a kitchen remodel will increase one's home equity by about 75%. A new PV system will have about the same equity increase, but it, unlike the kitchen remodel, will earn you money as well. Since the kitchen remodel doesn't earn you any money it is justified by saying that it is a "quality of life" improvement. The PV array, however, is up there on the roof with no affect on day to day activities and seemingly not a quality of life improvement, but is that really so? What about the health of our planet? Isn't that quality of life? Yes, the feelings that go with that are somewhat nebulous compared to the kitchen remodel, but just as real, and the people who buy PV systems know this and justifiably feel good about themselves and the example they are setting for others. They see the big picture and that is what photovoltaics is really all about.