What is the downstream payback, and how will it inform solar use?

For the most part, this column has concentrated on technologies and processes used to raise the efficiency and lower the cost of photovoltaic (PV) cells. But have you thought a bit further downstream as to what that may mean in terms of how the cells will be used, the payback and, ultimately, the value to the homeowner? I’m guessing that a large percentage of you have not! (Come on, admit it.)

We are often so focused on a certain element of solar technology, that the bigger picture is overlooked. So, this month I thought it would be interesting to provide a general overview of residential PV systems – from installation to ROI to cell efficiency benefits to common myths.  Perhaps after reading this, your roof will soon be the proud owner of some solar panels.

The PV system and how it works.
Understand the distinction between on-grid (or grid-connected) and off-grid (or non-grid-connected). On-grid systems are most common in areas of high population density and have connectivity to a local power supply. During peak/daylight hours, the homeowner draws what they need from the PV system and feeds the “extra” electricity generated into the national grid, for which there is a payout based on local Feed-in-Tariff rates. During the dark/off-peak hours, the homeowner draws power from the national grid. There are four main components to an on-grid system:

Meter to monitor the quantity of power the PV system is pushing to the national grid, so the homeowner can be compensated.
A home that is completely off-grid is one that does not have easy accessibility to the nearest grid line. These systems are more popular in remote areas, where it is simply too expensive to provide the cables necessary to connect to the national power grid. In this case, the homeowner would have all the same components as the on-grid system, as well as:

How many panels, how much power, what’s the cost and payback? Obviously, the quantity of panels required for a residential installation is dependent on a number of different factors, including the size of the home, average power consumption rates, orientation (sun facing or not) of the residence, roof tilt, on-grid or off-grid configuration and Feed-in-Tariff rates. Solar panels/modules are most commonly fabricated from approximately 60 c-Si solar cells, with each panel producing 200W to 250W peak. Anywhere from 12 to 15 panels are required to deliver a typical 3kWp system, which, generally speaking, will power a modest-size home (2000 – 2500 sq. ft.). Of course, if you have the roof space and the budget, a higher power system may also be appropriate.
Using a typical English home as an example, one could purchase a budget/lower-end installation for a cost of around $9,400 or a deluxe/higher-end system for approximately $17,200.

With a modest solar PV panel installation (3kWp) positioned on an optimum roof configuration (south facing with a 30˚ tilt) in Birmingham, England, that was registered for the UK’s Feed-in-Tariff before Dec. 12, 2011,  the homeowner could receive and save:

These examples certainly illustrate the massive impact that Feed-in-Tariff rates have on payback time and the effect that has on solar system adoption. Certain countries (read: Germany and Italy) had huge incentives for many years, making them the solar installation centers of the universe. With those subsidies now reduced, installations have slowed significantly. But, it’s not all bad news for solar. Solar system prices have simultaneously fallen dramatically due to several factors, the most significant of which is reduced incentive levels. In fact, the average cost of Chinese Tier-2 crystalline PV modules1 dropped to $0.96 per watt in January, representing an annualized price shift decline of 22%. So, while incentives may be lower, so are module costs (Table 1).

Table 1

The efficiency equation. On the cell manufacturing side, there is a clear shift toward more efficiency, as opposed to more capacity. Instead of churning out average-rated 14% efficiency cells, there is certainly a move toward hitting the 18% to 19% efficiency mark, despite the higher cost. Obviously, the view is that more efficient systems will deliver a greater payback (fewer modules needed for the same energy generation), and, though the difference is slight at the moment, a more significant cost benefit is projected for the long-term.

The various technologies discussed previously in this column, such as print-on-print, rear-side passivation, MWT and selective emitter, all combine to substantially improve cell efficiency, thereby generating more power and ultimately lower the cost over the life of the system.

Solar fact or fiction. There are numerous myths about solar and its use as an alternative energy source, so I thought I’d take this opportunity to dispel a few.

Myth: “The energy required to make solar panels is greater than all the energy those panels will ever produce.”

Reality: The energy delivered over a 25-year period by a roof-mounted solar system in Central Northern Europe is roughly five times that of the energy required to make the panel.

Myth: “Solar panels work just as well when it’s cloudy.”

Reality: Solar panels will still work when it’s cloudy, but many of them will only produce 10% to 20% of their peak power. Before buying, it’s worth comparing the low light level performance of various panels. The panel datasheets usually show power graphs at several different light levels, ranging from the normal solar standard of 1000w/m2 to 250w/m2.

Myth: “Solar technology is improving so quickly that it must be better to wait before I buy.”

Reality: Small advances in cell efficiency do occur each year, but many countries are also reducing their Feed-in-Tariffs, so waiting may mean missing out on a good deal. Module prices are falling, so from that point of view, it may be worth waiting. But, for the overall cost of ownership, the Feed-in-Tariff is the real metric, and the longer you wait, the more likely this incentive will be lower.

Is there solar in your future? There’s no doubt that the solar industry is going through a bit of a reset at the moment, but for the long-term it is one of the most affordable and effective energy technologies and is no doubt here to stay. The majority of solar modules are guaranteed for 25 years and, at current Feed-in-Tariff rates, most homeowners realize complete ROI well before any modules need to be replaced. As new technologies continue to improve cell efficiencies, solar will only become an even better investment.

1. IMS Research, PV Module Price Tracker, February 2012.

Tom Falcon is a senior process development specialist at DEK Solar (dek.com); This email address is being protected from spambots. You need JavaScript enabled to view it..
His column runs bimonthly.

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