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September 8, 2007

The Math Keeps Getting Better and Better...

...although the math should only be the third ranking reason to adopt PV on your property.

pge_chron

Reason one is that our systems are designed to a 30 year life--providing clean power, carbon free power, when the sun is shining.  No moving parts.

Reason two is that PV is a relatively painless way to start making the changes we all need to make to minimize the effect of CO2 in the atmosphere.

And reason three is that the math works.  Now.   Even before PG&E's seven percent rate increase.  How many of your investments get you 10% returns--with no downside?

September 10, 2007

Measuring PV Power Production

is a key part of the California Solar Initiative.  The legislative analysts correctly understood that there is a potential weak link between the global technology designed to harvest the power of the sun and the installer's skill set.  Says Christian Bendel at ISET:

"In 80 percent of the cases..., the problem is incorrect integration of the individual components into a system." 

Systems over 100kW--and soon dropping to >30kW--are paid on their output through California's Performance Based Incentive [currently $0.26/kWh].  Solar Renewable Energy Credits [SREC's} are created and traded for each MWh [=1000 kWh] produced.  Performance matters.

I want to know:

  • how system performance compares with predicted performance taken from onsite irradiation measurements with a sensor.
  • how the system performance varies across inverters.
  • I want to be informed of any deviations via email or SMS.
  • I want to know if any modules are being removed [stolen] from the string, and
  • total performance measured on a revenue grade basis [+/- 2%]

From this data, I can generate the following financial information:

  • total SREC's generated from the system for WREGIS reporting,
  • avoided peak power energy and demand costs obtained from onsite generation.
  • avoided fossil fuel use based on utility company fuel split.

Monitoring adds about 5% to the cost of the system, a relatively small price to pay for peace of mind and knowing how my investment is performing.

September 11, 2007

Module Yields

As a PV power developer, the yields of the systems I design, construct and operate is the primary determinant of how good I am.  Hence, I was disturbed last night when I read the results of Photon Magazine's module test on Sharp modules.

mod_test 

Sharp ended up at the back of the pack on yield--almost 10% behind the test leader.  Sharp has a reputation for under-promising/over-delivering on power, which held true here--their 175Wstc modules actually tested out at 188Wstc, but the yields were dramatically off when compared to other modules.  The yields are standardized to the actual measured power of the module, not the nameplate power.  I don't understand why the yields are so low.  The test looks really comprehensive--a typically thorough German approach to getting to the numbers.

The other surprise was the Sanyo HIP series modules finished just above the Sharp modules--and this module is marketed as a high yield, triple junction module.   These modules were apparently "samples" but were bought through the distribution chain, so my concern is how do I know that I don't end up paying for "samples" rather than the real deal?  These modules are being retested at the request of Sanyo--stay tuned.

I need to really dig into this as I have several jobs in planning that I was going to specify the Sharp module on.

Update:  I traded emails with Sharp--the main takeaway is that if you look at yield on nameplate, so that they are not penalized for under-promising on power, Sharp moves into the middle of the pack, like so--

mod_test_v2

 

September 12, 2007

Another Powerful Incentive...

freiburg_pv ...to go green was Friday's decision by the CPUC to allow commercial building owners charge their tenants for power used, rather than rolled into the base building operating expenses.  Owners will now be able to submeter and charge tenants for the exact amount of power they use.

Large tenants now have a much stronger incentive to utilize on-site photovoltaics as a tool to avoid peak demand charges, reduce their carbon footprint, and increase brand equity.   Inequity in cost allocation need not be tolerated by tenants any longer--Green tenants will no longer be subsidizing more energy intensive uses--and energy intensive users now have incentive to manage this cost exposure.  Landlords now have another way to reduce building operating expenses, and create value.

This rule only currently applies to properties served by PG&E, and the CPUC expressed the intent to expand this statewide.

September 17, 2007

Marin County's SFDEEO and PV

mcc_01 A friend recently asked me about how photovoltaics [PV] is best used to meet Marin County's Single Family Dwelling Energy Efficiency Ordinance, or SFDEEO. 

Designed to compensate for grid-tied energy demands from homes larger than 3,500SF, this ordinance requires that

  • all homes be designed to California's 2005 Energy Efficiency Standards.
  • The delta between the home's calculated energy usage and the energy budget for a 3500SF home built to Title 24 Standards be calculated, and
  • this delta must be compensated for by increasing the energy efficiency of the residence and incorporating on-site pv power production.

The larger the home gets above 3500SF, the bigger the energy offset is required to be.  I went through the guide published by the county, went through the actual ordinance, but still couldn't find the relationship between size and PV. 

sdeeo_energybudget Then I found the analysis that Marin County used to backstop the ordinance.  Basically, the county takes the annual production of the system, multiplies it by 4.2 [PV provides power at the same time demand on the power grid is peaking--so they estimate it is 4.2 times as valuable as an alternate power source not producing during peak times--defined as TDV, or Time Dependent Valuation] and then divides by the square footage of the home to establish the offset.

The math is different for each home, but it looks like a 5kW system would offset a prototypical 5,000SF home [1500SF larger than the design standard], an 11kW system would offset a 7,000SF home, and a 21kW system would offset a 10,000SF home.  This assumes no greater energy efficiency improvements and in climate zone 2--where 70% of us in the county live.  A lot of assumptions.

There are a multitude of ways to slice and dice the energy consumption and generation to get to the home you want.  You will want to put all options on the table--such as increasing insulation, using radiant barriers, solar shading, and glazing locations and options.  PV is a great component to any home,  and the wisdom of this ordinance is that it gives you credit for using onsite PV to minimize your effect on our old, obsolete power grid.

The good news is that harvesting your onsite available solar resource to reduce the environmental footprint of a large home makes sense for a lot of reasons. 

The bad news is that each deal must be taken on its own, the best outcome is achieved by iterating through the options, and an increasing amount of PV is needed for each additional square foot of conditioned area.

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February 24, 2008

PV Powering the Future

Spent the last week in the United Arab Emirates on a potential solar development project.  The heart of the issue is that development growth has outstripped the capability of the grid to power this growth.  Is solar power part of the solution?

Part of the solution may be what I saw in Abu Dhabi, at the site of a new Sir Norman Foster designed zero carbon city.  Located in the emirate with the fourth largest oil reserves in the world, Al Masdar (Arabic for "the source") plans to meet a significant amount of its power needs with a 200MW array.  masdar_pv

The question is how well PV will work in the summer heat of the UAE.  PV does not like heat--it produces less power when the cells increase in temperature.

image

Summer ambient temps can reach 45C [113F] and temperature at the cell [Tcell] can be 25C +/-5C over that.  To determine how PV actually performs, Dr. Abu-Zaid at Masdar is running the largest PV competition in the world--testing over 30 1kW systems from manufacturers in UAE field conditions.  Data from the competition, including

  • power output,
  • temperature,
  • power loss from dust and
  • peak power output

using identical inverter and measurement equipment will be used to determine what type of pv power is best suited for desert conditions.

masdar_pv2

At roughly 9A that morning, with 25kW installed, these systems were collectively performing at over 50% of max--in February!  The UAE has great potential as a market for PV.

Dr. Abu-Zaid is doing the right thing.  There is a dearth of actual performance data available for use when designing systems.  This competition will be a great add to the Photon data.  And it motivates me to incorporate ways to get more performance from my systems deployed in high-heat environments.

March 23, 2008

The Green Ten Percent

pvpanel&sky A friend with a client seeking approvals on a biotech campus in the SF Bay Area called this week.  His client wanted a pv power purchase agreement proposal for a biotech campus in SF.  So far, so good.

Turns out the city is apparently asking for a percentage of the project's power be generated onsite. And they want the commitment as part of the entitlement process.

If the project draws a total of, say, 25 kWh/SF/year [average for a biotech building in SF], you would need 2SF of PV array area to feed 1SF of gross building area[GBA] to meet 100% of demand.  For example, to power 10% of this complex with onsite pv generation means 1SF of array area for every 5SF of GBA.  A 40,000SF array over a parking garage would meet 10% of forecast power demand for 200,000 square foot biotech building, or 500,000 SF of a general office building.

PV is cost effective--PG&E rates and current incentives work--our industry deployed over $700 million of PV in California last year alone.  PV is basically a prepaid clean power contract--you get 20 to 25 years of power for an upfront payment of six to eight years of electrical demand.  You have to get over the first costs problem, and then you have to match onsite pv power generation with onsite demand.

The problem is not that the math doesn't work, it is timing, and agreeing to a commitment that allows for a couple of different ways to get the job done.

Onsite clean power generation typically comes from the user, or increasingly, from the institutional investor partner.  This is the first time I have heard of a jurisdiction making onsite green power generation part of the entitlement process--well intended, but you need to add some carrot to the stick...

The wrinkle is the area I want to use would not be built for four years and they wanted a price now.  PV is, and will be, a tax driven deal for the next four to five years in California--designed to pull demand forward and grow the 40,000 or so green collar jobs expected in this industry sector.  The federal incentives presently available will expire at the end of this year.  Any forecast more than nine months out is based on the probability these incentives will continue.  Not a bad bet--current sense is that a one year extension has an 80%+ probability of happening this year--but you can't take it to the bank.  Four years out?  No way to predict a green power price in a market that is growing 60% a year--globally.  PV is a great plug and play solution--but to propose on something that is four years out, for a real estate investment that has not been entitled yet?  There had to be another way.

So no proposal--but I wanted to help my friend out with an answer--what I would do if it were my project.  Here's what I would do:

Plug in SREC's for the 10% renewables component until the garage is built and the buildings are occupied.  And get a quid pro quo with the jurisdiction that we provide 10% renewable energy if they offer to buy the renewable energy credits--something that is already starting to happen here in Northern California.  The system owner owns the SREC attribute in California--it is ours to sell or use.

I like Solar Renewable Energy Credits [SREC's} as an interim solution. The SREC is the "green" attribute of solar power stripped off from the clean energy produced and sold separately.

image A 100,000SF biotech building would require roughly 250 green tags a year to offset 10% of total demand.  At current pricing of $50/solar green tag, this would add $12,500 to the occupancy costs, probably passed through to the tenant on a triple net lease, similar to other utility costs.  It would add $0.06PSF a year to the rent.

The City of Palo Alto is currently purchasing green tags [pdf, 30k] for solar power generated within the city limits, paid for by the ratepayer. 

Could this jurisdiction set up a similar program?  This would be a great motivator for a property owner to quit buying SRECS and install the actual onsite generation at the time you have leased up sufficiently to put in the system.  A nice carrot, indeed...

August 2, 2009

Investment Solar Feasibility Course

The key to commercial and utility scale solar is finding feasible projects and successfully capitalizing them.  I am the instructor for a UC Berkeley Extension course this fall, taught at the downtown campus, that has precisely this course objective.image

Click here for the current draft of the syllabus.  The course commences with a low gear flyby of current technology and then dives into demand, capitalization and design of commercial PV systems.  The essence of the course is a team-based exercise in investment grade due diligence for a solar photovoltaic [PV] investment.  The capstone of the course is the preparation of your team's investment grade feasibility study for presentation to your classmates and a professional jury on 7NOV09.

These are the texts I use.

image       and         image

Intent is to build a foundation for getting commercial solar projects identified, quickly selecting the feasible ones, and putting them on a track to executing a deal.  Planning and Installing is exhaustive enough that you can really dive in, or just refer to it when needed.  I believe this is the best current overview and reference on PV--it covers what is happening in Europe and the world, for PV is a globally applicable technology.  Strategic Selling was added this semester, because when you do a feasibility study, you want it to lead to a project, and the study isn't going to do it on its own.

Cooperate and graduate is a big part of the course--you will learn a great deal from your fellow classmates, and you are expected to contribute your experience and perspective as well.  In addition, we are fortunate enough to have some great guest lecturers on several evenings.

My perspective is that of a seasoned solar developer with over twenty years of commercial real estate investment and development experience here in Northern California.

 

Here are a couple of slides from the course:

I hope you can join me for this course.  First session is Saturday, 26 September from 9A to 5P, then five Tuesday evenings from 630P to 930P, capping off with Presentation Day on Saturday, 7NOV from 9A to 3P with a debrief afterward at the Thirsty Bear.

Click here for enrollment information.

August 20, 2010

CORENET Carbon Reduction Panel

image Thanks to my friend Luigi, I was given an opportunity to talk about solar to over 100 intelligent, engaged and fun members of CORENET’s Northern California chapter on 19AUG2010. 

I moderated a panel on Getting the Carbon Out, and had the chance to frame solar and other renewables as the third step in a coordinated carbon reduction campaign.  Gratitude to event organizer Melody Spradlin for putting this together, and kudos to fellow presenters Stephanie Glazer and Tim Chadwick for a really informative session.

image

Over the course of an hour and fifteen minutes, we walked our CORENET friends through the steps of understanding and curating your corporate real estate portfolio in a future where leadership is increasingly defined by how you manage the carbon intensity of your operations.

Click here for a copy of Stephanie’s carbon accounting presentation [1MB pdf].  Click here for a copy of Tim’s Improving carbon [and energy] efficiency presentation [2 MB pdf].  And click the slide below for a pdf of my relevant slides on implementing renewables[200k pdf]:

 

image

A very relevant question was “How would you understand what to do with an older 100,000SF building you just bought?”  My approach is headcount focused, since most companies look at revenue per employee, RSF per employee, and have readily available utility bills.  Here is my take:

  1. Understand energy use per employee—California average is 7.5MWH/person, I have one client whose use is currently 43.75 MWH/employee [pharma]--so this number needs to be put in context with your industry peers.
  2. Have an energy audit done of the building—PG&E can do this for you.  They identify lighting upgrades, VFD swap-outs, and EMCS options that can help frame the easy wins on focusing carbon intensity.
  3. Look at renewables, primarily solar, in locations where shade becomes an asset—parking, rooftops, western glazing.

One particular point that resonated well was the fact that fuel cells, if natural gas is your feedstock, are dirtier [800# CO2/MWH] than PG&E’s current mix of generation [635# CO2/MWH].  Won’t be long before permitting a fuel cell will trigger CEQA compliance issues, requiring environmental impact analysis and mitigation measures.  I am a big fan of fuel cells run off of landfill gas, digester gas, or captured methane from CAFO--but natural gas is too useful a feedstock for fuel cell applications.

The other point that hit home was, thanks to AB 2473, permitting of all types of solar systems in California “shall not be willfully avoided or delayed”.

And did I mention that installed PV costs a third less on a capacity basis, lasts three times as long [10 yrs v 30 yrs], produces zero C02 emissions, and costs a helluva lot less to operate than a fuel cell?

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