1 Photovoltaic Solar Energy and Solar Hydrogen The Role of Solar Energy in Reducing American Dependence on Foreign Oil Jay Marhoefer Energy Law.

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Photovoltaic Solar Energy and Solar Hydrogen

The Role of Solar Energy in Reducing American Dependence on Foreign Oil

Jay Marhoefer

Energy Law

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The Role of Solar Energy

Renewable source of H2 production.Renewable source of electricity.Easily integrated with grid and renewables.Scalable.

– Residential/community distributed generation.– “DGREPs” (distributed generation real estate

partnerships).– National/international infrastructure projects.

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Problems Addressed

“Chicken/egg” enigma in building a national hydrogen infrastructure.

Requirement of fossil fuels for hydrogen.Requirement of more coal, gas-fired and

possibly nuclear power plants.Peak electricity consumption, both daytime

and summer.Increased vehicle miles of summer.

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Conclusions

Solar is already becoming cost-competitive in some states (including Illinois).

Hydrogen solves the non-dispatchability problem of solar.

Hydrogen also cures the peak/baseload issue of solar.

Solar is one way to ensure that Mexico will continue to have oil for export to the U.S.

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The Power of the Sun

Each day, the sun provides more than 15,000x the entire annual energy needs of the world.

A site of solar panels 20 miles x 20 miles in Nevada could provide enough electricity to meet the entire U.S. demand.

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The Sun’s Energy “Banks”

Second law of thermodynamics requires more energy to produce less energy.

But sun’s energy can be “banked” over time.– Biomass: <1 year (corn/ethanol).– Petroleum: >100 million years (resulting in

highly concentrated energy stores).

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A Brief History of Solar Energy

1839 Edmond Becquerel (19 years old) discovers PV effect.1923 Albert Einstein receives Nobel Prize for theories explaining the photoelectric effect.1954 Bell Laboratories scientists develop first PV cells for space applications.1973 PV introduced to replace fossil fuels during the oil crisis.1995 US PV industry grosses more than $350M.1996 Amorphous silicon PV panels on market at $3 per Wp.

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How Solar Cells Work

Two types of silicon—negative “n” type (A) and positive “p” type (B)—form an electric field.

Each photon hitting the cell will free exactly one electron, e-, which flows toward the load.

This results in an electric current.

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Types of Solar Technologies

Crystalline Silicon– Leading commercial material for PV.– Requires most semiconductor material.– Most expensive and efficient (~15%).

Thin film– Semiconductor material only a few microns

thick; much less required.– Least expensive and efficient (~8%).– Films can degrade over time (amorphous).

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PV Costs--2003

Modules– $3-$5 per peak watt

“Systems”– Installation, inverters, batteries– Another $3-$5 per watt

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Example

Sharp 185W NT-S5E1U– Crystalline silicon– 185 watts per module– Each module 3’ x 5’– $736 per module– $4 per watt

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Example (cont’d)

Marhoefer manor– 3000 kWh in August 2002– 5.5 kW peak PV capacity desired– 30 panels (450 square feet)– Configurable on southern exposure only

• 15’ x 30’

Panel cost: $22,000Installed system cost: $45,000

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Misconceptions About PV

Myth: Solar works well only in hot climates.Reality: Light, not heat, drives PV; too much heat

degrades performance (explains Arizona)

Myth: Solar panels are extremely expensive.Reality: The prohibitive cost of PV is not the

panels, it is the labor and other required components (e.g., inverters, batteries).

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Where Does the Sun Shine?

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Where Does the Sun Shine?

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Who Are the Players?

In 2000, oil companies owned one-third of PV manufacturing capacity– BP Solar

– Siemens Solar (owned by Royal Dutch Shell)

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Who Are the Players?

Between 1995 and 2000– Eightfold increase in Japanese production– Tripling of EU production– Doubling of US production

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Production Cost Trends

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A Cost Comparison

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1980 1985 1990 1995 2000

Cen

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Fossil Fuel Photovoltaic

The expectation is that sometime between 2010 and 2015, the per kWh cost of PV will be equivalent to coal.

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How Much Does Solar Cost?

Assumptions– Unsubsidized– 6 hours per day dispatchable– 20-year system life– 5% percent annual cost of capital– Doubling domestic manufacturing scale

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A “Real” Cost Comparison

Within 5 years, unsubsidized solar costs will be less than summer peak rates for residential consumers

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The Clean Power Calculator

Free example at

http://kyocerasolar.clean-power.com/kyocerasolar/default.asp

The fully customizable version can be found at

http://www.clean-power.com/cpe/setup/

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Million Solar Roofs Initiative

Announced June 1997Goal is to install solar energy systems on

one million U.S. buildings by 2010DOE focuses efforts on national, state and

local partnerships.– Utilities– Building industry– Government agencies

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The Solar Decathalon

Fourteen universities built solar homes on National Mall in Washington, D.C. in Fall 2002

Goal was to prove self-sufficiency.

Winning home by

University of Colorado, Boulder

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The Solar/Hydrogen Solution

Non-dispatchable solar power can be stored in hydrogen through electrolysis.

Then, hydrogen can be run through fuel cell for baseload power.

Efficiencies:– Solar PV: 15%-20%– Electrolyzer: 90%– Fuel cell: 45% (excluding thermal)

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The IIT Solar/Hydrogen Project

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The IIT Solar/Hydrogen Project

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Why Does This Matter to Oil Imports?

Hydrogen is far more expensive to produce than gasoline; there are no hydrogen “mines.”

Producing H2 requires a “free” source of energy (exclusive of capital costs) to be viable.

Solar and wind are the only two renewables that have this potential.

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Energy Life Cycle Facts

Most vehicle miles are driven in summer; solar is most productive in summer.

Most vehicle miles come from residential/consumer use; solar is much better suited for residential.

Most peak electricity use occurs in daytime; solar is productive only during daylight hours.

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Other Renewables

Wind tends to blow more at night and during winter months.– Provides the perfect complement to solar.

Solar and wind together can provide adequate coverage when either by itself might be inadequate.– Example is Chicago, which has low average wind

velocity but higher speeds at night and in winter.– Only issue is cost.

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Seasons of the Wind

Winter Spring

Summer Fall

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A New Dispatchability Paradigm

Hydrogen is used as common denominator between grid electricity, NG, renewables.

Solar/wind/fuel cell provides baseload; grid provides peak.– Hydrogen produced by either electrolysis or

natural gas reformation.H2 production allows home fueling.System saves consumer money even before

the hydrogen cars arrive.

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Residential Optimization

Fuel Cell

Optimizer

H2 Storage

JunctionBox/Load

ManagerAC/DC

Transformer

Electrolyzer

NG Reformer

H2

H2

DC

Steam

DC/ACTransformer

DC PV Solar DC Wind

DC Renewables

DC

AC

DC

Traditional NG from pipe

H2 forcar

ACSplitter

Traditional ACFrom Grid

AC

NGSplitterNG

H2O

Web Cellular

Userinput

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Community Optimization

Networked version of residential– Single refueling station for a community

• Mid-rise public housing• New housing developments

– 250kW fuel cell generator– Use of smart cards to “bank” energy

inputs/outputsIssue: QF for grid or independent

transmission?

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Large-scale Corporate Distributed Generation

Alternative to pure IPPs.Large companies develop renewable-based QFs

to produce hydrogen.– QF is remote to company’s site.– Company may be active or passive in hydrogen

refueling site.Smart card/debit card/branded credit card

transactions.– Insource or outsource the “hydrogen fuel” business.

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National Infrastructure Projects

National (or Mexican) site incorporating recycled solar panels.

Nevada: 80% federal land, prime PV site.Mexico: Panels for barrels program.

– Mexico expected to be net importer of oil by 2020 unless major changes occur.

– Prime PV site.– Use of recycled panels a possiblity.

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How This Could Play Out

Critical mass of residential refueling stations developed in “clusters.”– 2-3 million.– SFHs, new developments and public housing.– Provides benefits even without H2 cars.

Automakers get interested.– “Commuter car” market.

Oil companies get interested.– “Clusters” need to be networked; who better?

Feeding frenzy develops.

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What Would It Cost?

Residential (2003)– Solar panels: $30,000– Micro wind turbines: $15,000– Inverter: $10,000– Electrolyzer: $15,000– Reformer: $15,000– Fuel cell: $25,000– Optimizer: $5,000Total: $115,000Value of independence: Priceless

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Current Law: $100K Tax Deduction

However,– 26 U.S.C. 179A (2)(A) provides a $100,000 tax

deduction for constructing a clean energy refueling station.

– Only components covered by the law are for “holding” and “dispensing” clean fuel.

– Same law that provides $2,000 credit for buying a LEV.

– Entire deduction must be taken in one year.– Property must be depreciable.

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Current Laws and Incentives

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Current Laws and Incentives

Illinois •Chicago Million Solar Roofs Partnership (Illinois) •City of Chicago - Green Power Purchasing (Illinois) •Fuel Mix and Emissions Disclosure (Illinois) •Illinois Clean Energy Community Foundation Grants (Illinois)

•Photovoltaic Incentive Program (PIP) (Illinois) •Renewable Energy Resources Program Rebates (Illinois) •Renewables Portfolio Goal (Illinois) •Special Assessment for Renewable Energy Systems (Illinois)

•State of Illinois - Green Power Purchasing (Illinois)

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Current Laws and Incentives

Federal •Energy Efficient Mortgage (Federal) •Energy Star Financing and Mortgages (Federal) •Job Creation and Worker Assistance Act of 2002 - Special Depreciation (Federal) •Renewable Energy Production Incentive (REPI) (Federal) •Renewable Energy Systems and Energy Efficiency Improvements Program (Federal) •Solar and Geothermal Business Energy Tax Credit (Federal) •Solar, Wind, and Geothermal Modified Accelerated Cost Recovery System (MACRS) (Federal)

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Questions?