Photovoltaics and thermal solar are powering solar projects — from deserts to rooftops — that are rivaling fossil-fuel generation.
If one trait characterizes the relationship between the solar portion of the renewable energy market and the electric industry, it is change. The change is in technologies, in rules and regulations, in philosophies and in the roles developers, utilities and regulators play in the process.
Utilities have recognized the potential in developing and owning solar facilities. Developers have seen the benefits of partnering with utilities rather than just considering them customers. Governing authorities acknowledge the payback in working with both utilities and developers to make renewable energy goals achievable.
Not long ago, solar evoked images of using Rube Goldberg devices to heat water in someone's garage. That has changed, too. Now utilities are coming to grips with sophisticated solar technologies and their applications on the grid.
Two basic solar technologies are used to make electricity, photovoltaics (PV) and solar thermal. Interestingly, PV has taken the lead in the global cumulative megawatt capacity. It has proven quick and easy for distributive generation applications. Solar thermal (troughs, towers and Stirling engines) — more commonly called concentrating solar power (CSP) — has also gained ground with recent approvals for large solar-power farms.
CSP relies on solar collectors (mirrors and lens) to produce high-temperature heat, which is transferred to a thermal fluid such as oil or molten salt. The heated fluid can be stored and used as a heat source to make steam long after the sun sets, so CSP can have the advantage of built-in energy storage. The steam powers a conventional steam turbine to generate electricity.
PV converts sunlight directly into electricity (DC) using semiconductor materials fabricated in the form of wafers, also known as solar cells. The cells are connected electrically to each other and mounted in a support structure, called a PV module or panel.
PV panels are connected together to form arrays that feed DC to a centralized inverter. The inverter converts the DC to AC that is synchronized with the power grid. The arrays consist of solar panels wired in series to form a string, then the strings are combined in parallel at a combiner box before inputting to the inverter.
“There are electrical collector systems for large PV solar farms that are similar to wind farm collector systems,” said Kurt Westermann, Black & Veatch Energy. “We are seeing more requests from interconnecting utilities for utility-scale PV plant owners to provide reactive power support. There have also been some growing pains for some inverter manufacturers as they scale up their production and inverter power capacity.”
Even the shape of a PV site can have an impact on the design of a facility. “Geometrically, if the site is irregular in shape due to the available land or areas that can't be built on, then the result can be a more complex design because of the number of unique 1-MW block designs that are needed to optimize the land usefulness,” said Westermann.
PV Sees Strong Growth
The PV Power Plants 2010 Industry Guide, published by Renewables Insight, reported that 2008 was the year PV power plants took a giant step forward, globally, into the realm of utility-scale projects, with an annual output of 2.9 GW. Reuters published an article stating that in 2009 the installation of PV globally increased 44% by adding more than 6 GW of new capacity. The industry ended 2009 with more than 20 GW of total solar capacity.
According to SolarBuzz, a research and consulting company, the demand for PV globally grew 196%, to 10.6 GW, in the first nine months of 2010.
The Solar Energy Industry Association (SEIA) released a report in November 2010 on utility-scale solar projects in the United States. SEIA listed 603 MW (170 MW of which was PV) of utility-scale projects in operation. SEIA further listed 608 MW (137 MW of which was PV) under construction. An additional 23,619 MW (13,350 MW of which was PV) was listed as under development. That is a total of 24,829 MW of utility-scale solar projects.
This is not surprising considering that roughly 75% of the world's population lives in what is referred to as the Sunbelt, the region of the world between 35 degrees north and south of the Equator). According to a report from the European Photovoltaic Industry Association (EPIA), energy demand in this area is expected to grow 150% by 2020.
Timing is Everything
Additions to installed capacity for PV have steadily risen by an average of 60% every year for the past 10 years. The trend reflects solid growth and investment in solar technologies. The price of PV technology has been progressively dropping at a time when fossil fuels are rising. The EPIA reported that solar is competitive with diesel today and will be competitive with gas by 2020 and coal by 2030.
Dr. Sammy Germany, renewable energy market director at Henkels & McCoy, said, “There are two improvements that are coming together, cost and efficiency. Installed costs for solar panel projects have been dropping in recent years. Developers are seeing prices ranging from $3.50 to $4 per watt for utility-scale applications. Residential applications have improved, too, with pricing ranging from $5.50 to $6.50 per watt.”
Efficiencies also are improving as solar cell manufacturers experiment with new materials. In February 2010, Kyocera announced record-setting 17.0% laboratory efficiency for its solar cell. A few months later, in June 2010, SunPower announced it had set the world record for solar cell efficiency at 24.2% within a controlled laboratory setting. That record lasted until September 2010, when Sharp announced it had a new solar cell with a laboratory testing efficiency of 42.1%.
“The solar market is maturing. It has a long way to go to catch up with wind, but it is moving in that direction,” said Germany.
Government policy and regulations have had a tremendous impact on the growth of renewable energy. More than 100 countries have enacted some form of policy targeting goals for renewable energy.
“The global financial crisis caused a decline in PV panel prices,” stated Shayle Kann, GTM Research's managing director of solar research. “This, coupled with government incentive plans, provided the stimulus needed to push solar projects forward. The utility PV market in the U.S. was about $1 billion in 2010. Over the next five years, the market potential will approach an estimated $8 billion.”
Renewable portfolio standards (RPS) have flourished at the state level in the United States. The Federal Energy Regulatory Commission (FERC) reports there are 29 states plus the District of Columbia that have enacted binding RPS targets. The target is a specific percentage of electricity generated using renewable energy. Of the 30, only 16 have provisions for solar and distributed generation.
Cash is Good
The American Recovery and Reinvestment Act of 2009 included a Treasury grant program. The Treasury's 1603 program, also known as the cash grant, gives cash back in lieu of an investment tax credit to renewable energy developers. The investment tax credit is good, but there is nothing like cold cash as an incentive. The grant allows 30% of the property that is part of a qualified facility (fuel cell, solar or small wind) to be claimed for cash. This grant has been very successful in stimulating this segment of the renewable marketplace; however, it was only authorized through 2010.
Late in December 2010, the lame-duck Congress extended the grant, but it was only extended through 2011, so it will have to be dealt with again in 2011. Does this remind anyone of the yearly tax credit extensions that so negatively impacted the wind industry in the early 2000s? There were several times Congress dropped the ball and let the tax credit lapse.
Feed-in Tariffs Are a Huge Incentive
Feed-in tariffs (FITs) are designed to encourage developers, businesses and homeowners to deploy renewable energy. The U.S. National Renewable Energy Laboratory (NREL) estimated that more than 40 countries, mostly in Europe, have used FITs to promote renewable energy development. FITs also are known as electricity feed laws, advanced renewable tariffs, renewable tariffs and renewable energy payments.
Whatever they are called, they have made many countries in the European Union powerhouses for solar. Germany, not exactly the first place that comes to mind for sun-drenched landscapes, leads the world in solar capacity. According to NREL's study, FITs are responsible for 75% of the solar deployment (PV) and 45% of wind power around the world.
The introduction of FITs in the United States, similar to those in Europe, has been hampered by the Federal Power Act, the Public Utility Regulatory Policies Act and the fact that jurisdiction over electric power is divided between the FERC and the states, but times are changing, and the United States is seeing the results with all the recent FIT announcements.
Developers, Owners and Operators
Another key factor in the solar trend is the changing roles utilities are playing.
“The utilities know their systems better than anyone else,” said John Olander, associate vice president, Burns & McDonnell. “They understand the process (studies, permitting, regulations) and the impacts to the system. Developers are more risk tolerant, and they often act quicker.
“Building the facility in a year or less is normal for a developer, and speed is the biggest challenge,” Olander added. “The most successful fast-track projects will require a combination of the utility's understanding and the developer's risk-taking ability to produce quick action on partial information.”
What has encouraged utilities to take the lead in renewable projects? Subtle changes to the tax codes now allow utilities to get tax credits for solar investments. Changes made by state regulators allow utilities back into the generation business as long as it is solar. Massachusetts' Green Communities Act is a good example. It allows Massachusetts utilities to own up to 50 MW of solar generation.
Protection is another key issue. States have mandated high renewable targets for their utilities. Many times, a utility signs a contract with an independent power producer (IPP) for hundreds of megawatts of renewable generation only to find later the IPP cannot meet the contract. As a result, several utilities have found it better to take charge themselves.
Southern California Edison (SCE) is a good example. SCE plans to install a total 500 MW on roughly 250 warehouse roofs within its service territory (T&D World, June 2009). SCE has installed solar panels on three warehouse rooftops for a combined capacity of 4 MW. SCE was able to permit the first installation in two months and built it in two months. Compare that to large solar farms in California's desert, which can take many years to permit and build.
Public Service Electric and Gas Co. (PSE&G) of New Jersey has been innovative, too (T&D World, December 2010). New Jersey is a very congested state and land is at a premium, so finding space to install 40 MW of solar generation was a problem. PSE&G was able to solve the problem by identifying roughly 200,000 utility poles in its service territory that would be ideal for PV panel attachment.
San Diego Gas & Electric (SDG&E) received approval from the California Public Utilities Commission (CPUC) for its 100-MW local solar energy initiative. The program calls for SDG&E to install 28 MW of PV on its property and buy the remaining 72 MW from IPPs, which will also be PV. In addition to PV, SDG&E is planning on 900 MW of solar generation using Stirling engines located in the desert east of San Diego.
The Winds of Change
Today, solar power meets a very small fraction of the world's electricity needs, about 1% in the United States. That is changing. Many experts predict the figure will rise to at least 25% by 2050. Solar projects have grown from small kilowatt-size systems to megawatt-size systems. That is changing, too. There are many gigawatt-size projects in the planning and design stages.
Also changing are government roles. The Chinese government has established a renewable energy fee for all electricity users to pay the difference between electricity produced by fossil-fuel and renewable technologies to its utilities. In the United States, the 1000-MW Blythe Solar Power Project will be built on federal-supplied land. The CPUC authorized PG&E, SDG&E and SCE to own and operate solar PV facilities. And in Canada, Ontario's FIT has led to a surge of PV solar projects.
When it comes to solar power, it appears change is the constant.
|Abengoa Mojave Solar 1 Project||Solar trough||250 MW||Sept. 8, 2010||Mojave Solar, LLC|
|Beacon Solar Energy Project||Solar trough||250 MW||Aug. 25, 2010||Beacon Solar, LLC|
|Blythe Solar Power Project||Solar trough||1,000 MW||Sept. 15, 2010||Solar Millennium, LLC|
|Calico Solar Project||Stirling engine||663.5 MW||Oct. 28, 2010||Calico Solar, LLC|
|Genesis Solar Energy Project||Solar trough||250 MW||Sept. 29, 2010||Genesis Solar, LLC|
|Imperial Valley Solar Project||Stirling engine||709 MW||Sept. 29, 2010||Imperial Valley Solar, LLC|
|Ivanpah Solar Electric Generating System||Solar tower||370 MW||Sept. 22, 2010||BrightSource Energy Inc.|
|Palen Solar Power Project||Solar trough||500 MW||Dec. 15, 2010||Solar Millennium, LLC|
|Rice Solar Energy Project||Central tower||150 MW||Dec. 15, 2010||SolarReserve, LLC|