Solar Power Generation in the US: Too expensive, or a bargain? by Richard Perez, ASRC, University at Albany, Ken Zweibel, GW Solar Institute, George Washington University, Thomas E. Hoff, Clean Power Research. That’s Albany, New York, but it applies even more to Albany, Georgia and Lowndes County, Georgia, since we’re so much farther south, with much more sun.
Let’s cut to the chase:
The fuel of heat waves is the sun; a heat wave cannot take place without a massive local solar energy influx. The bottom part of Figure 2 illustrates an example of a heat wave in the southeastern US in the spring of 2010 and the top part of the figure shows the cloud cover at the same time: the qualitative agreement between solar availability and the regional heat wave is striking. Quantitative evidence has also shown that the mean availability of solar generation during the largest heat wave driven rolling blackouts in the US was nearly 90% ideal (Letendre et al. 2006). One of the most convincing examples, however, is the August 2003 Northeast blackout that lasted several days and cost nearly $8 billion region wide (Perez et al., 2004). The blackout was indirectly caused by high demand, fueled by a regional heat wave3. As little as 500 MW of distributed PV region wide would have kept every single cascading failure from feeding into one another and precipitating the outage. The analysis of a similar subcontinental scale blackout in the Western US a few years before that led to nearly identical conclusions (Perez et al., 1997).The sun supplies solar power when you need it: at the same time the sun drives heat waves.
In essence, the peak load driver, the sun via heat waves and A/C demand, is also the fuel powering solar electric technologies. Because of this natural synergy, the solar technologies deliver hard wired peak shaving capability for the locations/regions with the appropriate demand mix peak loads driven by commercial/industrial A/C that is to say, much of America. This capability remains significant up to 30% capacity penetration (Perez et al., 2010), representing a deployment potential of nearly 375 GW in the US.
The paper identifies the problem I’ve encountered talking to local policy makers, especially ones associated with power companies:
A mix of federal and state incentives, whether tax based, or ratepayers levied, can make solar an attractive investment in many parts of the US; feed in tariffs (FITs) have been particularly effective in Europe and Asia. Without incentives, however, the needed revenue stream for solar generation is still considerably higher than the least expensive way to generate electricity today, i.e., via unregulated, mine mouth coal generation. This large apparent grid parity gap can hinder constructive dialogue with key decision makers and constitutes a powerful argument to weaken political support for solar incentives, especially during tight budgetary times.Yep, they’d rather keep buying coal. And financially they need incentives not to.
So what’s their solution?
In this paper, we approach the apparent grid parity gap question on the basis of the full value delivered by solar power generation. We argue that the real parity gap i.e., the difference between this value and the cost to deploy the resource is considerably smaller than the apparent gap, and that it may well have already been bridged in several parts of the US. This argumentation is substantiated and quantified by focusing on the case of PV deployment in the greater New York City area. Since this is not one of the sunniest places in the US, this paper should serve as an applicable case to other regions and/or solar technologies.That’s right: if it works in New York City, it should work much farther and sunnier south.
OK, but coal isn’t all power companies use. What do they use for peak load?
Right. And that air conditioning is on high when there’s a heat wave, which is when solar power generates the most.
Built in peak load reduction capability:
For a utility company, Combined Cycle Gas Turbines (CCGT) are an ideal source of variable power generation because they are modular, can be quickly ramped up or down and answer the question: is power available at will? As such CCGT have a high capacity value.
Solar generators, distributed PV in particular, are not available at will2, but they often answer a similar question: is power available when needed? and as such can capture substantial effective capacity value (Perez et al., 2009b). This is because peak electrical demand is driven by commercial daytime air conditioning (A/C) in much of the US.
All this and what other power source pays for itself after a few years and then keeps producing profit with no fuel? OK, wind, wave, and tide. But not coal or gas. And which power source can generate the most power? The one that powers the entire planet: the sun. Without generating any more CO2. And without generating any more heat that was already falling on the planet.
So what to do about the cost/value question? Look beyond just the investors in and builders of solar plants. Look beyond the power purchasers, that is, the utility companies. Also look at the society at large that benefits, and consider the value to the taxpayers of public R&D and tax-based incentives. It’s not just the investors and buildrs who benefit.
The utilities get locally-generated energy, at peak demand, distributed near where it’s used, so little need for new lines. That plus known prices not affected by commodity fossil fuel prices.
The public gets more reliable energy, since solar produces at peak load and is distributed so it’s unlikely to all fail at once. (Add on wind off the Georgia coast and you’d get generation during storms and other cloudy days.) Public health is enhanced by not adding more dirty coal plants or depending on overaged and decaying nuclear plants. Installing new solar is much less costly to the public than installing new nuclear: witness Georgia Power has already raised rates to pay for its two new nukes, even though they are nowhere near ready. Better national security through less dependence on fossil fuel sources that either degrade local environments or have to be shipped from overseas. Finally: jobs, jobs, jobs!
The paper summarizes all this in text and a table, and concludes that with conservative estimates of benefits, that solar is cost-effective right now when you take into account not just the direct costs and benefits to investors and developers but also the costs and benefits to utilities and the the tax-paying public. Jobs right now, leadership in a solar economy, a more dependable grid, less dependence on variable fossil fuel prices, and public health. Win, win, win!
PS: Found this paper on Hannah Solar’s facebook page.