Producing electricity with an onsite photovoltaic (PV) system can have several benefits, including buffering your business from volatile energy costs, lightening your carbon footprint, and serving a good public relations role. However, these systems are still relatively expensive, despite declining prices in recent years. Today, a commercial-scale PV array will cost a business on the order of $5 to $8 per watt of output power, including all subsystems and installation. This translates to roughly $0.20 to $0.30 per kilowatt-hour for the electricity produced. However, there are a number of rebates, tax breaks, and other incentives that can substantially reduce the cost of installing a PV system. And once installed, the system can run virtually maintenance-free in any climate for 30 years or more, though the power electronics will likely require periodic replacement.
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What Are the Options
A typical PV system contains two main components: the array and the inverter. The array is composed of a series of PV modules, which themselves are composed of numerous PV cells. The cells are made mostly of silicon or another semiconducting material that converts incoming light energy into electricity. Although there are many emerging PV cell materials and designs, those that are widely commercialized include single-crystal and polycrystalline silicon and thin-film modules made from silicon, cadmium telluride, or other materials. An inverter is a power-conditioning device that converts the incoming direct-current (DC) power from the PV array into grid-compatible alternating-current (AC) power.
The remaining components of a PV system are collectively referred to as the balance of system (BOS). The BOS includes the mounting structure, wiring, switches, and a metering apparatus that facilitates grid integration.
Each type of PV modules has its benefits and drawbacks.
- Single-crystal technology has traditionally been the most commonly used, primarily because it has the highest conversion efficiency of any widely commercialized PV type—as high as 20 percent—but it requires a larger input of energy and raw silicon.
- Polycrystalline technology has lower efficiencies than single-crystal technology—typically 13 to 15 percent efficient—meaning that more panels would be required to generate the same amount of energy, but this is mitigated by slightly lower costs. Polycrystalline PV has become increasingly common in recent years.
- Thin film is the cheapest PV technology, but it also has the lowest efficiency—only about 5 to 11 percent. So for thin film, more modules, wiring, and installation labor are typically required to provide a given power output. However, advances in thin-film production have driven down costs to the point where this technology is becoming competitive with—and in some cases, cheaper than—others. Currently, there are three thin-film PV materials commercially available: amorphous silicon, cadmium telluride, and copper indium gallium selenide, though there are a number of even more exotic compounds in development.
- Building-integrated PV (BIPV) systems, which integrate thin film into building materials, are also an option. Though these products are typically expensive, they save some money by eliminating the need to purchase PV components and building materials separately. BIPV products include solar shingles and window films that allow some sunlight to pass through and provide interior daylighting while harvesting the rest to convert to electricity.
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How to Make the Right Choice
For businesses planning to install PV systems, there are essentially three things to choose: the equipment itself, an installation contractor, and an array location.
Selecting Equipment
The task of specifying quality equipment has largely been completed by organizations that subsidize PV systems, most notably the California Energy Commission (CEC).
Inverters. In addition to complying with all safety and interconnection requirements, the CEC requires that inverters undergo performance testing by a qualified laboratory, and the CEC publishes the results of that testing for each inverter. To make it onto the CEC's list of eligible inverters, individual models are required to pass Underwriters Laboratories' (UL's) tests for safe operation and interconnection with the utility system, as well as a battery of performance tests to evaluate performance under a variety of conditions likely to exist in the field. These additional tests evaluate the inverter's maximum continuous output power, its conversion efficiency at various load points, and its tare losses (the device's power consumption when turned off). Inverter technology has improved in recent years to the point that manufacturers typically offer 10-year warranties on new units, up from the old industry standard of 5 years. And at least one company offers a 20-year warranty on its commercial-size inverters.
Modules. When looking for high-quality PV modules, the CEC's current list of eligible photovoltaic modules is a great place to start. Most utility rebate programs require that the inverters used in a PV installation meet the CEC's or other, similar standards. The sole requirement for inclusion onto the CEC list is that modules must satisfy UL Standard 1703, "Standard for Safety for Flat-Plate Photovoltaic Modules and Panels," which requires that module power output be within 10 percent of the module's nameplate rating. Because some other countries require actual output to be closer to nameplate rating, some observers of the U.S. PV industry have expressed concern that higher-powered modules will be directed to countries with higher standards, and that modules sold in the U.S. will tend to cluster toward the lower end of UL's 10 percent tolerance. Today's PV modules typically carry a 20- to 25-year warranty, though an operating life of 30 years or more is not uncommon.
Selecting Qualified Installers
The demand for qualified installers has grown considerably in recent years as the demand for grid-connected PV systems has exploded. Many contractors have entered this field with little qualification or formal training in PV system design and installation, or in the provisions of the National Electrical Code regarding PV. This lack of PV-specific experience increases the possibility that inexperienced contractors will make design or installation errors that negatively affect system performance.
How can businesses gain assurance that the contractors they're working with know what they're doing? Proper training and a track record of successful installations are key elements in building confidence in contractor capabilities. Certification by a competent and credible organization can also be a good indicator of contractor proficiency. Many state and local solar industry associations offer certification and maintain lists of certified installation contractors. But such certifications are only as good as the training and testing they require of recipients. No doubt many certification programs are rigorous and credible, but it may take a fair amount of work just to determine whether the certification document that a given contractor presents is worth the paper it's printed on.
Since 2003, one ironclad indicator of contractor proficiency has been certification by the North American Board of Certified Energy Practitioners (NABCEP). This certification is conferred on PV installers who pass a rigorous exam developed with input from a broad swath of PV-industry stakeholders. Before they are eligible to take the NABCEP exam, which is offered twice each year at many locations around North America, contractors must demonstrate that they possess the necessary experience or educational prerequisites (see sidebar). NABCEP certification is widely recognized in the industry as the single most credible indicator (but not a guarantee) of contractor competency. As of mid-2008, more than 500 contractors had received NABCEP certification (as listed in the NABCEP contractor database), and that number is growing quickly. Findsolar.com is another resource for finding local contractors and reviewing their certifications.
To qualify to take the certification exam offered by the North American Board of Certified Energy Practitioners, candidates must demonstrate that they possess one of the following combinations of experience and education:
- Four years of experience installing PV systems.
- Two years of experience installing PV systems in addition to completion of a board-recognized training program.
- An existing licensed contractor in good standing in solar or electrical construction–related areas with one year of experience installing PV systems.
- Four years of electrical construction–related experience working for a licensed contractor, including one year of experience installing PV systems.
- Three years of experience in a U.S. Department of Labor–approved electrical construction trade apprentice program, including one year of experience installing PV systems.
- A two-year electrical construction–related, electrical engineering technology, or renewable energy technology or technician degree from an educational institution plus one year of experience installing PV systems.
- A four-year construction-related or engineering degree from an educational institution, including one year of experience installing PV systems.
For definitions of experience and acceptable training, please refer to the
Candidate Information Handbook from NABCEP.
Selecting an Array Location
Though some businesses place PV arrays on parking lot canopies or atop pole mounts, the majority are found on rooftops. Four important criteria to consider when selecting the location for commercial PV installations are the available solar resource, the condition of the existing roof, the size of the roof compared with the desired output of the system, and the presence of any objects that will shade the array.
Available solar resource. Solar resource refers to the average annual amount of sunlight that reaches a given site. The greater the solar resource, the more energy a particular PV array will generate. In general, in the U.S., the solar resource is higher in the South and Soutwhest (the "Sun Belt") than in New England or the Pacific Northwest. Because the feasibility of installing a PV system is closely linked with the amount of sunlight available, evaluating the solar resource at a given location is an important first step when considering a PV installation. One of the most powerful and simple tools to help with this type of site evaluation is a free online tool from the National Renewable Energy Laboratory called PVWatts. This tool allows you to quickly estimate system output throughout the year based on geographic location and system setup.
Condition of the existing roof. It's vital for businesses to be apprised of the condition of their roof prior to installing a PV array because the cost of repairs or a complete reroofing will be substantially greater once the array is in place. So if the existing roof is in poor condition, the time to address that problem is before the array is installed.
Size of rooftop and system output. A general rule of thumb is that for every kilowatt of peak power generated, you need about 100 square feet of installed panels, though this can vary depending on many factors, including climate, panel orientation, shading, type of module, and outdoor air temperature. Also, it is important to remember that in a commercial rooftop array, you'll often have to allow for space between parallel rows of panels, unless the panels sit flush on the rooftop—to maximize system output at many locations, the array must be tilted upward to optimize the collection of incoming sunlight. Unless adequately spaced, one row of panels will partially shade the row behind it. This is particularly problematic in the winter, and in northern climates where the sun sits lower in the sky. So although a tightly laid PV system may bring in 10 watts per square foot, you may need more roof space to reach a desired output. Any contactor you work with should be able to analyze the site specifics to maximize wattage with the existing roof space. It is also important to reiterate the fact that most thin-film technologies are considerably less efficient than single- or polycrystalline silicon and will thus require substantially more space to produce the same amount of energy.
Shading. When an individual cell within a module or an individual module within an array is shaded, its output will be reduced—and this will typically reduce module or array power to a degree much greater than simply by the proportion of the module or array area that's shaded. This is because PV modules are composed of numerous individual solar cells connected in series to provide the desired module voltage. Often, a module will contain several series, or "strings," of cells that are wired together in parallel to the module terminals. The current output of any given cell string is limited to the current output of the least productive cell in the string. Similarly, an array is typically composed of at least one string of modules that are wired in series to provide a DC voltage compatible with the system's inverter. The current output of a string of modules, and thus the power that it can deliver, is limited to the current output of the least productive module in the string. So if part or all of one module in the string is shaded, the power output of the remaining modules in the string will also be reduced.
It's difficult to predict the actual amount of reduction because it depends not only on the pattern of shading, which in itself can be quite complex, but also on the array layout. For example, if an array is composed of four strings of modules connected in parallel, and each string has at least one module that is partially or completely shaded for part of the day, the impact on generation will be greater than if all of the shaded modules are from one string and the other three strings remain completely unshaded all day. In the former case, the output of all four strings will be reduced, which could cause the array voltage to drop below the inverter's operating window, shutting the system down entirely. In the latter case, the three unshaded strings will perform normally, keeping the array voltage up and allowing the system to deliver at least 75 percent of what an equivalent unshaded array would produce (Figure 1).
The ideal situation is of course to select a location where the array will remain completely unshaded all day throughout the year. But this is often not possible because trees, neighboring buildings, rooftop HVAC equipment or other objects will block sunlight at least some of the time. Measurement tools and software from companies such as Solar Pathfinder and Solmetric are available to assess the degree of shading a proposed array will experience throughout the year.
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What's on the Horizon?
By all accounts, the PV industry is expected to continue growing at a rapid pace. Since 1999, the industry has averaged over 30 percent growth per year. With a global silicon shortage ending and a rapid uptick in thin-film production, some analysts are predicting 50 percent annual growth and rapidly declining prices over the next few years. According to the U.S. Energy Information Administration and the Solar Energy Industries Association (SEIA), the U.S.-installed solar electric base at the end of 2007 was nearly 820 megawatts (MW). The U.S. Department of Energy's Solar America Initiative (SAI) projects that 5,000 to 10,000 MW of total PV capacity could be installed by 2015. There are three critical forces that will affect the PV market significantly over the coming years: political developments, technological advances, and economic forces.
Policy drivers. In the U.S. and Canada, it's likely that in the next several years there will be national legislation that sets limits or reduction goals for greenhouse gas emissions. With such a policy in place, it could mean the economic picture is very different for corporations that consume significant amounts of electricity, which could face a carbon tax or increased energy prices under a cap-and-trade regime. This could result in a surge of on-site power generation in the commercial sector and potential increase in system costs, if demand outstrips supply.
Tax incentives and rebates provide the most direct and responsive ways that government and utilities are helping to facilitate PV market growth. Although the number of tax incentive programs is growing as the North American PV market continues to mature, the monetary amount of incentives should decline in the long term as the cost of PV systems continues to drop. By the time PV becomes directly cost-competitive with conventional electricity, there will be little need to use tax breaks to promote PV purchases. The federal, state, and local incentives range from sales tax waivers on new PV equipment to income tax write-offs. The North Carolina Solar Center's Database of State Incentives for Renewable Energy provides incentive information for any jurisdiction in the United States.
Technical drivers. A global shortage of high-grade silicon that began in 2005 led to a construction boom of new polysilicon manufacturing facilities. But because these facilities take roughly three years to come on-line and demand remained strong during that period, there was a temporary reversal to the decades-long trend of declining PV prices. As new facilities begin entering production in 2008 and beyond, there is now a possibility of an oversupply of modules, which could significantly depress prices. However, it is not yet clear whether this scenario will play out, or whether other forces will combine to keep supply in step with demand.
In recent years, research institutions and the solar industry have funneled millions of dollars into developing new thin-film technologies and production methods. Those investments are beginning to pay off, as thin film—which can be engineered into sheets nearly as thin as paper—has made huge strides in efficiency, production volumes, and cost reduction. Because the duration and full effects of the silicon shortage are still unclear, the extent to which thin film will affect the PV industry also remains uncertain, though it will certainly continue to gain market share because the design flexibility and plummeting costs will continue to appeal to many purchasers.
Economic drivers. Cost has traditionally been the single largest barrier to widespread residential PV adoption. The SEIA has found a direct link between costs and sales: For every doubling of solar power sales volume, costs have historically declined by at least 10 percent. The SEIA has set goals of $4.65 per installed watt for installed PV system costs by 2015 and $2.33 per watt by 2030. Meanwhile, the SAI has set 2015 as the target date for solar to directly compete with traditional electricity, which translates to an installed system cost of roughly $3.50 per watt.
Who Are the Manufacturers?
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