Opportunities and Challenges for Solar Energy Tucker Ruberti May 8, 2009

Opportunities and Challengesfor Solar Energy

Tucker RubertiMay 8, 2009

Agenda

Introduction to solar PV technology Market Overview Policy Issues Smart Grid Challenges going forward

The Photovoltaic Effect• The transformation of sunlight into electricity is explained by the

“photovoltaic effect”

• Sunlight in the form of light particles called photons enters a solar cell

• Photons knock electrons loose from silicon atoms

• The freed electrons flow out of the cell as electric current

• The electric current is proportional to the intensity of the sunlight

Silicon Ingot Wafer Cell Module System

Silicon: A semi-metallic chemical element - the semiconductor material for PV cells.

Ingot: A mass of silicon cast into a shape which is easy to handle.

Wafer: A thin slice of silicon cut from an ingot.

Cell: A wafer with conductors applied that converts sunlight into electricity through the photovoltaic effect.

Module: A finished PV product consisting of a group of cells electrically connected and laminated.

Array: A group of PV modules installed and wired together.

System: One or more arrays connected together to generate electricity.

Photovoltaic Value Chain

Different Commercial PV Materials

5

Amorphous Silicon

6-8% efficient

Cadmium Telluride

8-10% efficient

Crystalline Silicon

16-20% efficient

Securing PV Modules for 20 Years

1. Roof Mount- saves space, but is difficult and time consuming

2. Ground Mount- used for large field of PV

3. Tracker/Pole Mount- increases energy production up to 30%, but adds cost

6

Inverter

An inverter converts DC energy from PV modules to grid synchronous AC power

Inverters are selected based primarily on their conversion efficiency- typically 90%-97%

Inverters are made of copper, steel and electronics/circuit boards

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8

A Grid-Tied PV System

1. PV Modules: Collect the sun’s energy and converts it into DC electricity2. Inverter: Converts DC electricity into AC electricity and synchronizes to utility power 3. Utility Service: Enables the PV system to “trade” energy with the grid

Types of PV Systems

Off-Grid – Drove early market

– Cost fells, new markets opened

Grid Connected– Residential 1-10kW– Commercial 30-2,000kW– Utility 2MW-40MW+

9

Yes- Solar is Big Business

Basics

•550,000 First Solar

•Thin Film Modules

•40MW of solar modules

•40 million kWh/Yr

•About 290 acres

•Started in 2007

•Finish in 2009

•The system will run about 4,000 houses

By today’s standards this 40MW system is very large. In the future this will be small.

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Installed Grid-Connected MW by Country2004 to 2006

0

200

400

600

800

1,000

2004

2005

2006

2004

2005

2006

2004

2005

2006

2004

2005

2006

2004

2005

2006

MW

p

Japan Germany China USA Spain

2006 PV Installations by Market Total 1744 MW

USA140MW

8%

ROW157MW

9%

Germany 959MW

55%

Japan296MW

17%

ROE192MW

11%

Source: Marketbuzz

2007

Worldview of the PV Industry

04/21/2313

Why is the US so far behind?

• Germany and others DO NOT have more sun!• The European markets are driven by stable feed-in tariffs (FIT) that offer an attractive return on investment

• The U.S. can be thought of as 50 countries, with each state having their own objectives, incentives and rules about solar electricity (or worse, 2,000+ utilities…)

• The U.S. has no consistent Federal policy, yet…

…but momentum for action is building because of the need for job growth and clean energy.

CA, NJ, CO, OR, WA, MD, FL, CT, AZ and a few others are usinga mix of tactics to start or accelerate statewide programs

DSIRE: www.dsireusa.org September 2007

Patchwork of State Programs

PV is Nearing Grid Parity in Terms of Cost

Cost Reductions As A Catalyst

Data source: Solar America Initiative Posture Planhttp://www1.eere.energy.gov/solar/solar_america/publications.html

The Cost of Electricity – 2007

Data source: “Utility Solar Assessment (USA) Study”, Clean Edge and CoOp America, June 2008 http://www.cleanedge.com/reports/reports-solarUSA2008.php

The Cost of Electricity – 2015

Data source: “Utility Solar Assessment (USA) Study”, Clean Edge and CoOp America, June 2008 http://www.cleanedge.com/reports/reports-solarUSA2008.php

The Cost of Electricity – 2025

Data source: “Utility Solar Assessment (USA) Study”, Clean Edge and CoOp America, June 2008 http://www.cleanedge.com/reports/reports-solarUSA2008.php

Why do we need a Smart Grid?

If Alexander Graham Bell were somehow transported to the 21st century, he would not begin to recognize the components of modern telephony – cell phones, texting, cell towers, PDAs, etc.

In contrast, Thomas Edison, one of the grid’s key early architects, would be totally familiar with our current grid.

If the grid were just 5% more efficient, the energy savings would equate to permanently eliminating the fuel and greenhouse gas emissions from 53 million cars.

Current State of the Grid

Today’s grid was built to be a ONE WAY system: 9,200 electric generating units more than 1,000,000 MW of generating capacity 300,000 miles of transmission lines The average US generating station was built in the 60s

using even older technology The average age of a substation transformer is 42, two

years more than their expected life span

What is a Smart Grid?

A distributed set of generation resources that are smaller, smarter, and more flexible Small gas plants, On Site CHP, solar, geothermal, wind, landfill

gas, etc

Consumer and commercial loads that are part of the “electric internet” Wired to respond to utility price signals

Balancing supply with demand, and doing more with less Reduce or eliminate “spinning reserves”

An Example of a Distributed Grid

The Challenges for the Legal Profession Siting PV systems has not been a big issue historically,

but as utility scale projects are being proposed there are issues around:– land use for the solar system (ESA, NEPA, etc)– right of way for the utility transmission (BLM land, private land)– Utility interconnection issues (PURPA, etc)

Financing structure called PPA has evolved over the past several years, requires establishment of an LLC to consume state and federal tax credits and other benefits such as accelerated depreciation

A Final Thought

“I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

Thomas Edison