July 8, 2009

Will Photovoltaics Energize Your Future ?

When I was in college I took a course called Direct Energy Conversion. Beyond remembering the name of the course, about all I can muster at this point is that the efficiencies of all the alternative generating schemes we studied were meager at the time, often in single digits. This meant that all the different approaches were strictly academic because before the ‘70s oil crises--when gasoline was 35-cents a gallon and electricity 2-cents a kWh--energy was so cheap it was essentially free.

How things have changed! I just filled up at about 3-dollars a gallon and my friendly electric utility is around 12-cents per kWh and climbing. Energy is no longer free or even cheap. Change may be in the wind (pun intended).

So as an electronics manufacturer, I was interested to read a piece in this month’s Circuits Assembly magazine about photovoltaic cell efficiencies. In the old days, the best of this breed was one percent, according to this article. Today the best laboratory made, multi-junction cells can do around 36 percent! That is actually an amazing number because the thermodynamic efficiencies of large fossil fuel generating plants are typically in a similar range or not much more.

Now I know we’re talking apples and oranges here to some extent, but it’s still a striking comparison because of the vastly different scales. In order to deliver a third of the energy out of oil, you need a massive plant requiring hundreds of millions of dollars of investment, huge regulatory costs, probably about 10 years to commission a greenfield facility, and substantial environmental exposure. The photovoltaic alternative is a flat surface facing the sun that can glean about the same fraction of value from the source while placing the power close to its use, with no conversion technologies beyond relatively common electronics like transformers or inverters. And no fuel cost.

So what’s wrong with it?

Maybe not so much anymore. According to Wikipedia, the earth receives 342 W/m2 of solar energy on average (this averages day and night, and all latitudes or 684 W/m2 daytime only, all latitudes averaged). About 55 percent makes it to the ground--losses are due to clouds reflecting, atmosphere reflecting and atmosphere absorbing--so about 188 W/m2 is available at ground-level for conversion.

I estimate my house has 15 x 50 feet of roof pointing roughly south (one side). That’s 750 ft2 or 69.7 m2. That means the roof is receiving on average about 23.8 kW on a 24-hour basis or just over 570 kWh per day. If solar cells can extract, say, a third of it (and if connected to the grid you could sell it to others when it’s not needed), that’s 171 kWh per day available.

My 2008 electric bill averaged 11.1-cents per kWh, so the value to me of the total available kWh would have been about $569 per month. But my actual need for electricity averaged only 35 kWh per day year-round, or about $120 per month. So, if I could get that much power off my roof, there would be well over 100 kWh per day to sell back to the electric company. They probably would not give me back 11.1-cents a kWh, but would it make sense for them to buy it at, say, a 3-cent marginal rate? Possibly, and if they did, I’d have a zero electric bill plus about $110 per month in my pocket.

So why is this not being done everywhere? Despite energy coming for free, the cost to produce the capacity is substantial. Based on the U.S. Energy Information Administration, photovoltaics cost about $4,750 per kW. So in my case, to really deliver all the needs for the house, I’d probably need to install between 2 and 3 kW to handle peak loads. Then the capital cost of my installation would be between $9- and $12,000. If I could get by with 2 kW, that would be about a 6-year payback by avoiding my average annual bill. OK, but maybe that’s not so exciting. It would be greatly improved if the electric company would buy my excess, although that’s rare for residential installations.

Another consideration is how much capital cost the utility would avoid if they did the installation. Would this be better than the alternatives for adding capacity? Maybe not because ultimately photovoltaics would have to compete with gas turbines and other fossil fuel approaches that are generally less than a third of the capital cost of photovoltaics.

So despite the excitement, photovoltaics still have a long way to go before they are broadly economical. The good news is there have been great strides made. There is still much work to do to reduce the first cost of the technology. But it’s been done before and I would not bet against our ingenuity in ultimately making it happen. If it did, the entire electronics industry would see large changes across the supply chain. We would all gain from the increased business while saving money and improving the environment.

--Jeff Cosman


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