Monday, February 27, 2012

Volt/VAr Optimization

This video is about ABB's Volt-VAr Management System (VVMS). The idea behind this system is to lower the load on the grid by adjusting voltage down to a minimum value. The following equation shows the relationship between power, voltage and current. The equation shows that when you lower voltage you also lower power.

Power = Current x Voltage

Voltage management is a great idea but I'm not sure ABB's product is the most cost-effective solution. The bigboys have made the argument that small PV systems cannot be cost effectively equipped with voltage management capabilities. Apparently, SMA didn't get the memo. My question is, why rent voltage control from the utility when it's cheaper to own it yourself?


Here's a price quote for a 12 kW PV system. With favorable financing conditions this 1502 Euro/kW system generates power for a tad under 10 ct/kWh.


It will be interesting to see if field arrays survive the coming round of FiT cuts. On one hand I'm rooting against solar farms because I don't think this solution is elegant or sustainable. On the other I'm rooting for them because it would be awesome if PV farmers could make money in cloudy Germany with a 13.5 ct/kWh feed in tariff. It would also be a hoot to watch the industry try to cover up the temper tantrum they're currently throwing over these new FiT rules. Holy cry me a river of wolves batman! But I must admit, I do enjoy good propaganda.

Wednesday, February 22, 2012

Palo Alto's CLEAN Program (Feed-In Tariff)

Hello Jon

I have a question and some comments concerning Palo Alto's proposed Feed-In Tariff. Can you provide any detail on how the capacity value was determined? I've looked through several documents without any luck. $.006 is considerably lower than I'd expect but I fully realize this determination is utility specific. Also, the program appears to force operators to sell all their production at the FiT rate. I think you should make this part of the program flexible and allow operators to make a choice between gross and net generation payments. A gross payment structure (the status quo) would pay the 14 cents/kWh for all generation. The net payment structure would subtract out production that was consumed on-site at the time of production. You'd be able to measure this because you have two meters recording these quantities. If you give operators the choice between net and gross payment structures I think you'll learn more from the program. You'll also be providing these system owners with another source of potential revenue at no expense to the city.

In Germany the FiT program has a special self-consumption bonus. The operator that chooses to take the self-consumption rate rather than the FiT rate gets paid 8 to 12 cents/kWh rather than 24 cents/kWh. This seems like a ripoff before you consider the fact that electricity in Germany costs 25 cent/kWh. This means the operator who self-consumes electricity is effectively getting 33 to 37 cents/kWh for their production. To me this is almost overkill but it shows you how much they want to encourage self-consumption. The FiT architects in Germany see that the more production is self-consumed the less PV relies on the FiT. The only way for Germany to wean PV off subsidies is to maximize self-consumption.

You can do a similar thing with Palo Alto's FiT. Electricity rates will assuredly be higher than 14 cents/kWh within the next 20 years. Once rates are higher than the FiT the operator would prefer to self-consume their electricity. You should make it so your FiT program allows this. If there is a reason why you are disallowing it I would like to know.

I suspect your 50 MW cap will be heavily over-subscribed. You're in the belly of the solar beast after-all. You'll end up getting 100 applications the first month and the staff will be over-loaded. This defeats part of your program's purpose. It would be smart to consider portioning out the 50 MWs. You start with a 20 slot apportionment that is lottery based. Then you have a 40 slot apportionment that is again lottery based. With this structure you avoid overloading the staff and you also provide a means of observing learning over time. You'd also be able to tweak the FiT down over time based on the number of subscriptions you got.

One last thing Jon. I don't think your program is a true FiT. Feed-in tariffs are independent of the market and technology specific whereas your payment plan is based on avoided cost. Your program is what FiTs become when they grow up. I think Palo Alto should play up the competitive nature of their tariff program. Maybe you could hold an acronym competition that would double as a advertising campaign. The winner would get some solar panels or something. If you do end up changing the program's name I'd suggest Light Pricing - it gets the point across and it has a nice old school acronym. Have a great day.


Sunday, February 12, 2012

Analysts Flabbergasted - Accounting trick allows PV to hit 30 GW of Installs in 2011

Germany: But, but, you didn't install 9000 MW in 2011 - you're moving installs that occurred last year into this year.
Italy: Beg to differ - we connected the systems in 2011 so we're counting them in 2011 - suck it.
Italy: Wa... wa... wa... wait a second... I was just saying. We'll fix the numbers. We don't want any trouble.

Wow... the EPIA finally came around.

Saturday, February 11, 2012

Dear Bureau of Land Management

Dear BLM

Please don't open up public lands to solar developers. Every European country that has tried supporting solar farm development has subsequently revoked support. Why have farms lost support? Simple, solar farms bust subsidy budgets. This is why Germany, Spain, Italy, France, the U.K. and the Czech Republic have all sharply curtailed and/or cancelled their support of solar farm development. Note that Germany, France, Italy et cetera have not cancelled support for rooftop solar. There's good reason for this - rooftop solar is much more cost effective. Even in cloudy Germany solar electricity costs about half as much as retail electricity from the utility (12 ct/kWh vs 24 ct/kWh). The U.S. solar market is headed in the same direction. Despite the best of intentions, BLM is subverting the natural and rational course of development for solar by encouraging an unsustainable build out of farms.

The mega-solar crowd doesn’t promote their imagined future out of green righteousness – it’s pure greed. The public at large may currently support solar farm development but that’s only because they don’t yet understand all the hidden costs. Each new transmission project or upgrade that goes in to accommodate an extra gigawatt (GW) of solar farms will cost one to two billion dollars (See Sunrise Powerlink). Rate payer will be on the hook for these unnecessary transmission costs. Consider also that the above market Power Purchase Agreements associated with solar farms will cost rate payers another one to two billion dollars in extra electricity charges over the 20 year life of the PPA deal. Each GW of solar farm will also cost public coffers a front loaded 600 million to a billion dollars in lost tax receipts due to the 30% investment tax credit. Please don’t encourage this irresponsible waste of money. We shouldn’t be making it any easier to build these farms – we should be making it harder.

I’m a die hard pro-solar guy but I believe solar belongs on school rooftops, on homes, over box stores and throughout the community. When you develop solar locally it puts solar in the public’s eye and in the public’s mind – this leads to knock on adoption.

Again, I understand that the BLM has nothing but the best of intentions here but you’re playing with fire and the public is going to end up getting burned. Leave our wild lands be. Please don't open up public lands to solar developers.



The BLM will be taking public comments concerning the competitive leasing of public lands until February 27th. You can submit a comment here.

Fits Over FiTs in Germany

There's a big Feed in Tariff review going on in Germany right now. The solar rags and popular press have been splashed with he said, she said solar rumors and speculation for the past month. In the left corner you have the pro-solar prematurely gray Environmental Minister Norbert Röttgen, Christian Democrat (CDU) and in the right corner there's the curiously Asian looking Economics Minister Philip Rösler of the Liberals (FDP).

FUN FACT: Turns out Philip Rösler isn't curiously Asian looking... He actually is Asian, Vietnamese to be more specific - he was adopted as an infant from a Roman Catholic orphanage near Saigon. His parents raised him well. The guy is a physician turned politician - not too shabby. Talk about rags to riches.

Rösler is every solar advocates worst nightmare - a young, handsome, smart politician with a hard on for killing solar subsidies. Rösler wants to put a cap of 1000 MW on annual PE installations - a measure that would effectively strangle the PE market in Germany. Röttgen is open to tweaking the FiT but he opposes a hard cap - suggesting instead that they continue using the "breathing cap" mechanism to guide future subsidy cuts.

What is the breathing cap?

In outline, the breathing cap is a series of set-point corridors that determine how far the FiT gets cut every 6 months. The higher the installs the higher the cut. Under 1500 MW you cut by 1.5%. 1500 to 2000 MW gets a 4% cut. 2000 to 2500 MW get cut by 6.5% and so on up to a >7500 MW category that gives a 15% cut. One set of cuts occur at mid-year with another occurring at year-end. For example, if mid-year installs are at 3000 MW there will be a 9% cut. If year end installs reach up to 7000 MW there will be an additional 12% cut. For simplicity I've distorted the details somewhat but look here for more precise information.

What's wrong with the breathing cap?

Nothing, except the prices for photoelectrics have gone down faster than the FiT degressions. For two years in a row Germany has installed twice as much PE as intended. After last year's 7400 MW the Germans went back to the drawing board and reworked their FiT to add steeper degressions and an additional mid-year cut. was a good plan but anemic first half installation figures coupled with a struggling domestic manufacturing sector resulted in regulators skipping the planned mid-year FiT cut. In hindsight, that turned out to be a mistake. Nosediving panel prices produced very attractive economic returns which in turn led to a shit-load of second half installations. To put things in perspective, Germany installed about as much solar in one quarter as the U.S. has installed in total.

What's the plan Stan? Drawing boards, bargaining tables and backroom deals. We now take you live to our super secret fly on the wall feed.

Rösler: We must cap annual installs at 1000 MW

Röttgen: Sumo scheiße am steil!!! OK... wait a second... How about we pull forward the planned mid-year degression up to March/April and institute smaller monthly degressions.

Rösler: We must cap annual installs at 1000 MW

Röttgen: Fick mich in den Arsch Ziege!!! OK... um... work with me here. How about we pull forward the cuts, do the monthly cut thing too but then also add a cap to how much production you can get the FiT for.

Rösler: We must cap annual installs at... wait, what was this you just said about a production cap?

Röttgen: Breaks down like this. In Southern Germany you get about 900 kWh for each kWp installed for a well placed rooftop system but ground mounted systems with optimal placement and tracking can get more like 1100 to 1200 kWh/kWp. So I'm saying let's not throw the baby out with the bath water. Let's put a cap on FiT payments at say 900 kWh/kWp. That won't effect the end-user market but it will squeeze the larger projects - the excess production above 900 kWh/kWp will have to be sold separately on the open market.

Rösler: Hmmm... But then next year we could turn the cap down to maybe 800 kWh/kWp.

Röttgen: Yes, exactly... The end-users won't care. Thanks to direct consumption rules they'll only be selling 500 or 600 kWh/kWp at FiT rates anyways. But each year we'll be able to force the project developers to sell more and more of their production at market rates. Not a bad plan eh?

Rösler: Ahh... About a third of installations last year were ground mounted projects. This feature would curtail those installations somewhat. I think we can work this out.

Röttgen: Right on. Ya know... one other thing we could do would be to implement an MPR based price for the production over 900 kWh.

Rösler: What's an em pee ar?

Röttgen: The Market Price Referent (MPR) is the "predicted annual average cost of production for a combined-cycle natural gas fired baseload proxy plant." They use the MPR as a price benchmark in California - we could modify it to fit our own conditions and use it as a go-no-go economic test.

Rösler: What kind of numbers are we talking about?

Röttgen: A twenty year contract price is around 7 cents/kWh. That's slightly higher than current wholesale electricity rates but you'd have to expect a premium to account for the environmental benefits.

Rösler: So you pay the developers based on the value of the electricity.

Röttgen: Right, and if the developer doesn't like the guaranteed rate they are free to go ahead and set up their own off-take agreements for their non-FiT production. Das ist gut, ja?

Rösler: Ja... Ya wanna grab a beer?

Röttgen: Do bears shit it the woods?

Well see how things go. Word may come as early as Wednesday.

Wednesday, February 8, 2012

How Much Does Solar Cost?

Depends on the market (or lack thereof).

Here's a fresh off the presses report out of the U.K. that looks into the costs there. Two recent price quotes for 10 KW systems come in at about 17,000 and 18,000 pounds - that's $2,635 to $2,790 per KW in real money.... Amazingly cheap compared to the U.S. How do they do it?

Here's another new report that digs into the costs of PPAs in California. Thank you Senator Padilla.

A Letter to Senator Alex Padilla

Hello Senator Padilla

Congratulations on SB 836. I am writing to request that you submit legislation to broaden the reporting requirements of SB 836. When the utilities assess a power plant they do a Benefit-to-cost ratio analysis. Two things included on the cost side are Integration Costs and Transmission Costs. Transmission and integration costs can be high - the 2 billion dollar Sunrise Powerlink Transmission project is a good example. I fear we may be overlooking these costs. I suggest future RPS cost reports include more information on Integration costs ($/kWh) and Transmission costs ($/kWh) to go along with the existing information on Average Costs of Contracts Approved.

I wholeheartedly support expanding solar power in California. I believe that despite the best intentions of solar advocates and legislators our current support policies are poorly constructed and in many cases counter-productive. Germany is approaching $2/Watt installed costs for home sized solar systems - this is less than half the average installed costs in California. In cloudy Germany solar power costs about 15 cents/kWh. If sunny California could install solar for $2/Watt we'd have solar power for about 10 cents/kwh.

If homeowners and business owners could produce electricity for 10 cents/kwh there would be no need for solar subsidies. California would have a self-sustaining solar market that employed tens of thousands of people all across the state - electricians, roofers, salesmen etc. That would be great. Question is, how do we get to $2/Watt? I don't know the whole answer but I'm confident these RPS driven PPA deals are not helping us move in the right direction.

I believe our current solar support policies are throwing money in the wrong directions. If we more fully detail how much money is being spent we have more information to make wiser decisions in the future. If you have any questions I'd be happy to provide additional information.


Sunday, February 5, 2012

Why Don't They?

Watching the Super Bowl Halftime show with Madonna. She's got pom poms and now there's a marching band. OK... so it's a great performance but here's my Why Don't They? Why don't they dance like the players do? Seriously, the players are bad-ass mother fuckers. Why not mix about 20 dances together - everything from the Icky Shuffle to Ochocinco's Riverdance. People would love it.