Economics of Home Solar Energy

When people first think about solar energy they automatically think that it is much better in sunny locations like Arizona or Nevada and is useless in places which are usually much cloudier, like some of the North Eastern states or Washington.

To be sure, the amount of sunshine is a factor in any potential solar energy installation, but it’s not the only one. There are many economic factors that make solar energy an attractive proposition or not, depending exactly on the variables involved.

The main economic factors are the local state or federal subsidies and the price that you normally pay for electricity from your utility. Federal subsidies come in the form of tax credits for solar installations and do not vary anywhere in the country. State or city subsidies may also be in the form of tax credits, but there are also rebates and the utility you are hooked up to may or may not be forced to take into account any surplus power that you generate yourself and supply to the grid.

One economic factor that is often neglected is the rising cost of electricity generated by non solar means and the average cost per unit of this electricity. This affects the amount of savings that can be made by using solar generated electricity rather than continuing to use grid supplied electricity.

When all the economic factors are taken into consideration, some interesting facts are revealed. For instance, one of the cloudiest and coldest states – New York – is actually a better place to install a home based solar energy system than many sunnier locations. This is mainly because of more generous credits given by state and city governments in what has become a much more forward thinking, in solar terms, than many other states. Also, normal electricity is more expensive in New York than states like Louisiana or Texas, for instance.

The best states or places to install solar can be measured most easily by calculating the time it takes to make a solar installation pay for itself. This can be as low as 5 years in some states and much longer – 10 to 15 years in others. Solar panels tend to have a rated 25 year life expectancy, although in fact this is hard to measure because many of the most modern panels have not yet reached the point that they are not generating enough power, so it is hard to say how long they are going o last. If we take the 25year period as average, because this is the normal warranty period, then a 5 year pay-back period will mean that there are 20 more years in which the solar home is going to make a profit.

It is economics like this which helps to explain the explosion in home solar energy installations over the last decade – a phenomenon which shows no sign of decelerating.

Now for some more specific detail about some of those factors, economic and non economic that can determine how profitable your solar installation will turn out to be.

Location, location

The average yearly sunshine figures will certainly affect how much power that can be generated by an average solar installation of say 5 kW. States like California, Nevada, Arizona, New Mexico, Utah and Colorado all win hands down in the sunshine stakes although the potential advantage that some of these states seem to have is offset by state attitudes towards renewables in general and solar energy in particular which are less than progressive.

 

Solar Panels Across the US

 

It’s not just having a home in a sunny state or part of a state that matters, but having a roof that faces towards the sun and is not obscured by shading. A south facing roof is better than a north facing roof and being able to trim your own shade creators like trees is better than having shade caused by nearby buildings which you can’t do anything about.

Most solar installations are retro fitted onto existing homes and obviously factors such as those described above will help to determine who is better off in a community because of the exact orientation of the building. Newly built homes that are built with the intention of installing solar energy can be designed to maximise the orientation of the panels to the south.

Federal incentives for home solar installers

It is federal government policy to support renewable energy as part of a response to concerns about climate change and the effect of burning fossil fuels for industrial, commercial and residential consumption. The federal government provides a 30% rebate on all new solar installations but this is not a hand-out as such. It is available through federal tax credits. That means that if you purchase a solar installation for $12,000, you should be able to claim 30%, i.e. $3,600 off your annual tax bill, assuming you have one. That brings the effective cost of the installation down to $8,400.

State incentives for home solar installers

These vary considerably from one state to another and the situation is a volatile one as the state government in power at the time may or may not be inclined to support solar energy in the state.

In some, but not all states, state sales tax is waived on new solar panel purchases.

In some, but not all states, the state may provide a tax credit similar to the federal one, so if you pay state taxes, you can claim the credit when you pay your taxes. It’s hard to be specific about these credits because of the variation across the country.

Progressive (in solar terms) states are those that impose compulsory conditions on their utility companies. This is known as the renewable portfolio standard (RPS). It is a measure of how much renewable power utilities in that state must generate by a certain date. Oregon, for instance has a RPS of 25% by 2025. California’s is higher, while that of Texas is much lower. Utilities will pay homeowners a rebate to help achieve their RPS requirements. This rebate can be quite substantial and is obviously going to be higher in states with a high RPS. The rebate is a cut in the cost of the purchase locally and can be of the order of several thousand dollars.

The effect of the unit cost of electricity

States vary in the cost of power and the differences can be considerable. California, for instance and New York are substantially more expensive than Louisiana or Arkansas. This makes installing solar power in the first two states especially attractive because as soon as you are generating your own electricity, the savings will be higher and this will influence how long it takes to recoup the cost of your installation. The other factor is the annual increase in utility costs per unit. The cost of electricity from non solar sources is not going to remain the same or decrease. It always goes up. The cost of solar electricity by contrast is always the same: it’s basically free! That means that the longer your installation provides clean, free energy for you, the greater the annual savings you will make.

It’s not just about economics

Finally, one has to remember that installing solar power is not just about economics. It’s also a matter of helping to make life on this shrinking planet a little more sustainable and reducing the pollution caused by burning fossil fuels.

How Do Rooftop Solar Panels Work?

Solar power in action

Image courtesy of Gray Watson at Wikimedia Commons.

The radiation from the sun is an inexhaustible source of energy. Fortunately, scientists have already developed a means of harnessing the power of the sun to convert it to useful, vast, and clean energy. It is the best alternative to fossil fuels given its abundance, renewability, and benefits thus it plays a very important role in the future of the energy industry all over the world.

Contrary to what most people think, harnessing the power of the sun does not require large solar farms. In fact, people can harness the power of the sun and turn it into electricity by using rooftop solar panels. When the photons–energy from sunlight–hits the rooftop solar panel, the solar panel converts the photons to electrons of direct current (DC) electricity. Direct current electricity can flow out to electricity safety devices. Rooftop solar panels also come with inverters that convert direct current electricity into alternating current (AC) which is used by many devices and home appliances like computer, televisions and even washing machines.

Solar Power Harnessing System

Rooftop solar panels rely on the ability of the solar cells to harness the energy of the sun and convert it to electricity. It is a small, square-shaped semiconductor that is made from conductive materials such as silicon. When sunlight strikes the solar cells, it induces chemical reactions that release the electrons, thus generating electric current. Most rooftop solar panel cells are called photovoltaic cells which are also found in tiny appliances like calculators.

The most important components of a photovoltaic cell are the layers of the semiconductor materials that are made of doped silicon crystals. The bottom layer of the photovoltaic cells is laden with boron that bonds with the silicon in order to create a positive charge. The top layer is doped with phosphorus to create the negative charge. The surface between the two layers is called the P-N junction and the movement of this surface produces the electric field.

Once sunlight hits the cells, photons knock the electrons loose on both layers. Since the two layers come with opposite charges, it results in the flow of electron. However, the electric field at the P-N junction prevents the flow of the energy elsewhere; thus an external circuit is necessary to provide a path for the electrons to travel.

Types of Photovoltaic Cells

Most photovoltaic cell systems contain small square cells that have an average size of four inches. Individual cells generate very little power, thus rooftop solar panels usually come in groups of PV cells called modules which are then encased in plastic or glass to protect them against weather elements. Below are the three basic types of solar cells used in rooftop solar panels.

 

Image courtesy of Andrew Glaser at Wikimedia Commons.

 

Single-crystal cells: These types of solar cells are made in long cylinders and are cut into hexagonal or round wafers. This type of solar cell produces high efficiency cells, making them more expensive than the other types of photovoltaic cells. Installing them can increase the efficiency of your homes for as much as 30%. This type of solar cell comprises 29% of the global market.

 

Polycrystalline cells: These are made from molten silicon that are casted into ingots then sliced into small squares. The cost of producing this solar cell is lower, but the efficiency is also lower than single-crystal cells by as much as 15%. Since the squares are small, they can be packed closely together quite easily to increase energy production

 

Amorphous silicon: With this type of solar cell, silicon is sprayed on the glass or metal surface in thin films, thus the production of such solar cells are the least expensive of all three. Then again, it results to a very low efficiency of about 5%.

Requirements of Rooftop Solar Panels

Rooftop solar panels are not affected by weather elements such as air temperature and snow cover.  However, there are two requirements that PV cells need in order to efficiently harness the energy from the sun. A rooftop solar panel needs to have an unobstructed access to the rays of the sun in order to harness the sun’s energy effectively. So, any presence of shade can reduce the output of the solar panel cells. Make sure that you position it on the east side of your roof. It shouldn’t be near any tall structures that might produce shadows as the sun moves throughout the day.

Another requirement when installing rooftop solar panels is the size. The size of the PV system depends on the size of your roof, the amount of energy that you want to generate and how much you are willing to spend.

Generally, solar energy supports all life on Earth. It is what makes plants grow, what drives the winds and basically what warms us. It is therefore a natural, renewable, and a perpetual source of energy to power our homes.

References:

How Solar Works

How Solar Energy Works

 

 

 

 

Emerging Energy Technologies

It almost seems an impossible task to tear the world away from its over dependence on burning fossil fuels with the resulting effects this has had on the global climate. If it wasn’t for the wake-up call about climate change, then the very fact that at sometime in the future the supply of fossil fuels will no longer be able to satisfy demand is a certainty, even if the time scale is less definite. So what might be the next series of earth shattering technologies that might shape the world’s energy future over the coming decades? Here are three possibilities that are more than just ideas and their practical application is actively being researched at the moment.

Space Age Solar Power

Solar installations have increasingly become popular here on Earth. In some cities, it appears that almost every roof is covered by at least a solar water heater and in other locations solar electricity generation setups have sprung up like wildfire. But one idea is to move large scale power generation out into space where there is plenty of room and little limitation on the supply of solar energy.

The basic concept sounds workable. A giant power station in orbit around the earth traps ever present sunlight with the help of thousands of photovoltaic (PV) panels. 24 hour sunshine is guaranteed because of the orbit. The light is converted into electricity and then a technological breakthrough is required to transfer the power down to Earth. Obviously the idea of having a huge, dangling transmission wire connecting he space based power station and a collection point on Earth is totally impractical, in part because of the relative movement of the power station and the planet.

The breakthrough would be to beam the power down in the form of microwaves, almost like giant versions of what is used every day for communication by satellite. The power stations would be about 20,000 miles up in space which is around the same distance that orbiting satellites are located. This would entail huge antennas on Earth to capture the energy carried by the microwaves and convert it back into usable electricity. From there, the distribution to transformers and utility grids would be taken care of by existing technology.

Public suspicion of what the health issues are with microwaves emanating from space of the size envisaged should be countered by the fact that the energy levels of the microwave beams would actually be quite low.

The main obstacle that would need to be surmounted is more of a financial one. The cost of putting solar power stations would be very high and the only way to make space solar economic would be to cut down the weight of the equipment much more than it is at the moment.

Several companies are working on solar space power stations and think that the first commercially viable one may be ready for operation in around a decade.

Technologically Advanced Batteries
Solar energy systems are almost useless without good batteries. They are used to store energy when it is produced in surplus and then the stored energy is released when it is needed at other times. Typically, in a solar energy system, surplus power is generated in the day time, especially in the middle of the day when it is sunniest and then there is no energy generated at night. Surplus energy stored in the batteries during the day is available at night or on cloudy days. In most household systems, the battery power is converted into alternating current at the right voltage and oscillation by an inverter.

 

Home Fuel Cell graphic

 

One of the main research objectives over the last few years is to find a battery type that can store charge more efficiently for longer. This is no just important for solar energy systems and other renewable energy applications such as wind power, but it is critical for such things as electric or hybrid cars. Existing technology means that these sorts of cars may only be able to be used for a maximum of 40 miles on a single charge. Car designers are aiming to have a 400 mile range for an electric car if battery design can be improved.

The best batteries available commercially at the moment are Lithium ion batteries, but there is a possibility of an even better battery being developed called a Lithium air battery.

Lithium air batteries use oxygen extracted from the air for charging and may increase he storage capacity of a battery ten times greater than the equivalent lithium ion battery. This is particularly critical in a vehicle such as an electric car because of the weight of the battery component in the car. Batteries that can hold more charge mean that the car can be designed to travel further with a single full charge or the number of batteries used can be reduced so that the weight of the car itself is lighter.

For solar energy systems, whether they are rooftop systems designed to serve a household or a power station in space, the type of battery is also important. A more efficient battery like the lithium air battery means that much more surplus electricity can be stored from the same generating capacity. For solar space power plants where weight is such a premium, especially getting the equipment up into space, lighter batteries as well as more efficient batteries would certainly be a technological improvement.

Green Oil?

Biofuels have been around for some time now and there may be some revolutionary breakthroughs in the near future that really make this source of fuel stand out.

Biofuels are basically fuels that are manufactured by biological processes such as converting crops like corn, crop waste, timber and even grass into alcohol or another fuel that can be added to gasoline or diesel to help reduce dependence on fossil fuels. One of the environmental problems with these fuels that it means using good agricultural land to produce biofuel plants rather than using it to produce food at a time when there is a looming food shortage worldwide.

One possibility that is exciting biofuel researchers is oil produced by algae. It seems that certain algae can produce oil in quantities which are far greater than ethanol produced by corn, for instance. The algae could theoretically be grown in places where there is no competition for agricultural land i.e. they could be grown in waste land as long as there is a supply of nutrients and water.

Another benefit of using algae to produce biofuel is that they are prodigious consumers of carbon dioxide and anything that can help to reduce the quantities of this gas in the atmosphere is to be welcomed.

 

 

Photovoltaic Systems

Photovoltaic systems, or PV for short, are probably the fastest growing energy provider worldwide which relies on an almost infinitely available source of renewable energy – light from the sun. The sun is predicted to keep shining for at least another 4,000 million years and provides something like 10,000 times as much freely available energy from sunlight as is used by the whole of humanity every year. This makes any system of converting sunlight into electricity both environmentally friendly as well as economically sensible.

The word “photovoltaic” combines the Greek root word for a packet of light energy (photon) with the Latin for electricity (volta). PV systems use a variety of light sensitive materials to convert light energy into usable electrical energy. The majority of PV systems use a very pure form of silicon as the light sensitive material, although research into materials that can convert light more efficiently is ongoing. The greater the uptake of PV systems for energy production, the cheaper the systems are likely to be, the more competitive they are going to be compared to traditional sources of electrical energy such as fossil fuel combustion as well as the faster research is going to come up with even better ways of fabricating efficient PV systems.

PV solar cells and panels were first developed for situations where electricity was needed in remote places, such as space craft and lighthouses or light beacons at sea. Soon, it became popular for houses and buildings such as farmhouses or barns that were far away from the grid or where it was prohibitively expensive to connect to the grid.

 

Solar Cells

 

The use of solar arrays has now mushroomed and they can be seen in many locations which are no longer remote, such as in towns and cities. Whole roofs may carry considerable numbers of solar panels and these panels may provide the entire electricity needs of the home or building on which they have been installed.

There are several reasons why solar energy has become so popular and is likely to keep growing over the next two decades. One reason is a general recognition that the days of cheap and abundant fossil fuels are numbered, or at least it is recognized that fossil fuels will diminish in availability in the future, driving the cost per unit of electricity provided by them up faster than at any time in the past.

A second reason is the attention given to the effects of fossil fuel combustion on the world’s atmosphere and a global awareness of the potential effects of rapidly increasing climate change. While substitution of fossil fuel generated power by solar energy is not a complete answer to the planet’s environmental woes it certainly will be part of the response.

Thirdly, the unit cost of PV systems has been dropping fast. This is partly a factor of larger scale production and partly because of better technology. The unit cost of electricity generated by solar panels has dropped by at least 50% over the last decade, making it more competitive when compared to traditional forms of generating electricity. In many countries solar installations have been encouraged by subsidies and tax breaks, but there is recognition that the industry will soon be able to support itself against conventional electricity sources without subsidies.

Fourthly, the adoption of PV systems has been welcomed by many consumers because it allows them to control their own power supply and make them more independent of utility companies and the grid in general, even if they are still connected to the grid and may even be able to sell surplus electricity to the grid at times when the days are long and sunny. To many people solar energy helps to break the monopoly power of utility companies, which in some countries seem to have lost no opportunity to keep raising the cost of power well ahead of inflation.

Most home based PV systems consist of a number of solar panels, or just one panel, connected to a battery or a number of batteries. The batteries then supply electricity direct to the appliances used. In some situations, the electricity is used at a low voltage such as 12 or 24 volts. This is typical in RVs, vehicles and boats where the electrical appliances may run on direct current at 12 or 24 volts. Many of these vehicles may also have an inverter which is connected to the battery and converts direct current (D.C.) to 110 volts alternating current (A.C.). Many common electrical appliances normally run off A.C., hence the need for an inverter.

For home based solar installations or installations that have been fitted to a spare roof on a school building or factory or wherever else may be appropriate, then the inverter is a standard feature and all electricity is 110 volts A.C. Where homes or buildings are connected to the grid, there will be a device which connects the two systems and allows power going either way to be measured. In many, if not all states where solar energy has become popular, utility companies may be required to monitor energy flow in both directions so that credits for power supplied to the grid from the solar installation can be accounted for. This remains a very important incentive for families to retro install solar energy systems on a suitable roof on an existing home.

PV cells and panels are still in use in many other applications. They can be found on calculators, torches, street lighting, marine light beacons, garden lamps, space craft, remote campsites and cabins and are being creatively designed so that their use can be extended wherever they may be useful.

PV systems are increasingly being used to power whole communities. They have an obvious value in many third world locations where a village lies far from any source of electricity and the possibility of generating power with a conventional diesel generator is seen as prohibitively expensive.

However, it is not just impoverished communities that are seeing the benefits of electrification by solar energy. The number of large solar farms and solar power stations is growing rapidly, especially in locations that get year round high intensity sunlight such as the desert regions of California and Nevada. Some of the larger power stations using thin film PV cells are capable of generating over 500 MW of power.

 

How Green is Solar?

Enthusiasts for solar energy which is the use of sunlight to heat water and generate electricity, stress its environmental credentials and suggest the widespread adoption of solar is an answer to some of humanity’s greatest environmental challenges, like climate change. But how environmentally sound really is solar and what are the environmental negatives if there are any?

The environmental advantages of solar energy basically come from the period when the panels are being used to generate useful energy, while the environmental disadvantages are centered on the manufacture and distribution of the panels as well as their ultimate disposal when they are no longer operating at useful levels of efficiency.

The balance sheet for solar energy also has to look at the different components of a typical solar energy set up. This consists of the solar panels themselves as well as the remaining infrastructure. Solar water heaters are the simplest setups as they use a network of water pipes, pumps and tanks which are similar or identical to plumbing that already exists in a typical household.

Solar electricity generators are somewhat more complicated as they need to have wiring, batteries, an inverter and connections that link the solar setup with the grid.

Any analysis of the environmental effects of solar energy has to look at each of these different components, the environmental effects of their manufacture, distribution and ultimate disposal.

Any comparison of solar energy from an environmental perspective also has to assess the environmental credentials of the alternatives so every renewable source of energy has its own advantages and disadvantages, as do every non renewable sources of energy.

A typical gas powered power station, for instance, has to be constructed, there are the environmental effects of the actual generation of power from the combustion of the gas and then there are the effects of dealing with the power station once it has reached its used by date and needs to be renovated, removed or replaced.

The environmental advantages of solar
These are well known and well advertised. Both solar water heaters and solar electricity generators use a resource that is virtually limitless and is available without having to disrupt the Earth’s surface through mining, drilling, transportation of a product and its purification as is the case with fossil fuels and nuclear material which are the main sources of electrical power at present.

Positive Effects of Solar Power

 

The other huge environmental advantage of solar is that the conversion of sunlight into electricity or heat produces no significant waste products which could have a damaging effect on our environment. Basically, the use of solar energy is non-polluting. This compares very favorably with either fossil fuel combustion or nuclear power. Each of these produces considerable pollution. In the case of fossil fuels, carbon dioxide is acknowledged to be one of the main contributors of atmospheric warming and the long term acidification of the world’s aquatic systems. There are also other pollutants such as carbon, sulfur and nitrogen oxides just to mention a few. Nuclear energy appears to be a clean source of power at first but there are concerns about the safe long term storage of byproducts of the nuclear process and the potential for these to be used by unscrupulous groups to further their own ends.

On this basis, solar energy wins hands down compared to the main existing alternatives and if this was the only criterion, the conclusion would be that solar energy is a far more sound choice environmentally than either fossil fuel combustion or nuclear energy.

Disadvantages of solar energy

All manufactured products involve some disruption to the environment. Metals must be mined and refined, glass has to be made from its precursors, silicon for solar cells must be in a very pure form which is quite difficult to achieve. Then there are the other items which are part of any normal solar setup like wiring, batteries and so on. These also need to be manufactured and assembled then distributed to the point of sale.

While the environmental effects are definitely negative at this stage, the overall effect can be reduced by aiming to produce solar components that last as long as possible. Solar panels themselves seem to have a relatively long life span. They are usually guaranteed to produce over 90 to 95% of their power generating capacity for 25 years. Technological innovation may be able to extend that useful life span or even extend it almost indefinitely by recycling all the different components. Research may be able to develop solar panels that last even longer reducing the overall effect of their original manufacturing and assembling.

The component with the shortest life span and potentially the highest environmental cost is the battery. Batteries don’t last nearly as long as solar panels. In fact, regular lead acid batteries may not live for more than about 5 years before their lead plates become covered in sulfate, reducing the charge that can be carried on them. Deep cycle batteries should theoretically be able to be cycled for storage purposes up to a certain point but then they can no longer be used.

Potentially, the worst damage is done when the various components of solar energy systems have come to the end of their life and need to be disposed of. Some of the components are potentially toxic, like the lead in lead acid batteries and some of the parts inside the solar panels. The pollution problem, like that of many manmade items can be reduced by clever recycling and this can also help to extend the usable life of the solar energy components and therefore reduce the average environmental cost of the original manufacturing.

There is no discussion here of the comparison with other forms of power generation, except that any power station that has come to the end of its life will need dismantling and there will be an inevitable amount of waste and pollution from this process even though the average life time of a typical fossil fuel or nuclear plant is quite long – at least as long as a solar panel.

Conclusion

While solar energy is certainly not without environmental cost, it seems that in comparison the advantages of using solar energy are far greater than that for any other non renewable type of energy generation while the disadvantages involved in manufacturing, distribution, assembling, maintenance and final disposal are no worse and probably less overall than for non renewable energy generation.