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 particle 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. Over the long run PV can save money (more on this below).

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. Additionally, there is a general lack of knowledge on the part of some consumers. They do not know what is available or that a PV system could be worthwhile for their application.

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) 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 most 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 (2008) rate of 10.1 cents 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 10.1 cents 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 have the most powerful effect upon our utility bills. 2) Do we have all Energy Star rated appliances? These have the lowest wattages and therefore 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 flourescent bulbs? What are our personal habits regarding energy use? Are we in the habit of turning out the lights when we leave a room? 3) Heating your hot water with a solar hot water system will go farther faster at reducing your utility bills than PV will. Consider a solar hot water system first.

Most people who buy solar have an energy epiphany, but it is better to have the epiphany before 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. 800 KWH 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 installer as there are design considerations.

If you obtain more than one bid, often solar bidding, unlike with other trades, will tend to be apples to oranges. This is because each solar retailer/installer will be partnered up with different distributors who, in turn, sell different products by different manufacturers. Consequently the specified PV panels will have different wattage ratings, perhaps different physical sizes and thus different configurations on the roof, and finally different inverters, the other key component to a PV grid tie system. So how do you, the consumer, make sense of this? The only way is to take the cost of the PV system and divide it by the watt size of the PV system. For example, if a 4.5 KW system costs $31,500 ($26,500 after rebates and tax credits) you would divide $31,500 by 4500 watts to arrive at $7 per watt ($5.89 after incentives). The per watt cost determines the true low and high bid. Of course we all know that the low bid is not necessarily the best bid. Also, pole and ground mounts cost more than roof mounts because of trenching and posts set in concrete. Off grid and grid-tie hybrid systems cost more because of battery storage and the latter has more wiring to a sub-panel. Roof mount grid-tie is usually the most economical, but is not always possible for the lack of roofing facing the right direction. It does not have to be straight south, however.

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 the planet is laudable, 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 for 624 KWH per month. You would need a 4.5 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 $7 per watt for a total cost of $31,500 (4500 x 7). After the federal tax credit of $2000 and the LPEA rebate of $2 per watt, capped at $3000, we now have a cost of $26,500 (31,500-5000). 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 $26,500 to arrive at the 30 year cost of $30,500. Now if we take our 624 KWH monthly average energy consumption and multiply that by the 10.1 cents per KWH rate this is equal to $756 per year. If we divide $30,500 by $756 per year we get slightly over 40 years for a very simplified calculation of "payback". Many of us don't even know if we'll be around in 40 years and the PV system was pegged at 30+ years for life expectancy! Fortunately for PV, this is way too simplified. According to the Journal of Appraisal every dollar saved per year in utility costs is $20 added to your home equity. (For more detail on this see the Hot Water Heating page.) We are saving $756 per year in electricity costs multiplied by 20 for an increase in home equity of $15,120. Think of it this way: you have created your own little utility company, your own power plant. The infrastructure of your power plant has value because it is producing something that has value. Now if we subtract our increase in home equity of $15,120 from the PV system cost over 30 years of $30,500 we now have a 30 year cost of $15,380. When we divide that number by $756 per year we arrive at 20 years, instead of 40 years, for the "payback" period. This is closer to the true cost, but it is still too simplified. It is very reasonable to expect grid utility costs to increase at a rate of 5% compounded annually which has been the rate for the last 4 years in Colorado. When this is taken into account "payback" is in 14.5 years. If you are thinking that inflation utility prices are being unfairly measured against the 30 year cost of $15,380 in today's uninflated money, keep in mind that your home equity at the 20/1 ratio has also grown at a matching inflation rate. The 14.5 year payback period is realistic. Counting after 14.5 years to the end of the PV array's life of 30+ years is all free money, $11,718 to be exact (15.5 years x $756) in today's money. You have saved the planet and netted $11,718! Not bad.

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% with no cap and MACR 5 year depreciation potentially worth another 20% + the LPEA $3000 rebate. Payback in the above example is 2 years!

Hopefully this has answered many of your questions. If not, have a look at the FAQ page, and feel free to contact us with any questions and/or a request for a solar site analysis.