solar energy

Solar 101: Frequently Asked Questions Regarding Solar Energy

Solar energy is the future of energy, allowing you as an energy consumer to not only be energy efficient but also save money. Solar energy is one of the main clean and sustainable energy sources that benefits both the consumer and world we inhabit.

 

So, what should you know?

 

What is solar energy?

Solar is the most abundant source of energy we have available to us on Earth. The energy from the sun is more than 10,000 times what the world needs in terms of energy, at any given time of day. It is a form of “renewable energy” or “clean energy” which is energy that comes from natural sources that are always available. In recent years, scientists have studied solar energy as a power source for homes and businesses–it now accounts for more than one-eighth of the energy sources used across the United States. 

This 1/8th includes the energy that has been used to grow our crops, dry foods, and keep us warm, but now it can be used to warm your water and power your homes and businesses.

How does solar energy work?

The US government’s Office of Energy Efficiency & Renewable Energy states that “the amount of sunlight that strikes the earth’s surface in an hour and a half is enough to handle the entire world’s energy consumption for a full year.” Solar energy is derived from the sun. Solar energy comes from the light emitted by the sun—electromagnetic radiation—that reaches the Earth’s surface. Through the installation and use of solar panels, sunlight and solar radiation is converted into power that our technology can use. The heat radiation from the sun triggers a reaction that produces electricity for use.

Does solar radiation have any negative affects to our Earth?

There are no negative effects from the sun’s radiation with the use of renewable energy. On average, 70% of the radiation emitted by the sun is absorbed into the Earth while the other 30% is reflected back into space. However, greenhouse gasses emitted from burning fossil fuels (a non-renewable energy source) trap the sun’s radiation, causing the temperature of the Earth to rise. Earth’s average global temperature that covers the entire surface depends on how much energy we receive from the Sun and how much returns into space, and as a result of non-renewable energy, Earth has experienced an approximate 1℃ global change in temperature.

How is solar power produced?

Solar radiation is captured through photovoltaic (PV) cells in solar panels where it is then converted into electric energy. Solar panels used to capture sunlight and radiation consist of 60 or more solar cells, and comes in two main types—monocrystalline or polycrystalline—with a marginal difference in wattage. Both cell types serve the same purpose for the solar system, but monocrystalline solar panel cells are made from a single crystal of silicon while polycrystalline solar panel cells are made from many melted silicon fragments. Monocrystalline panels -considered the premium of the two- have higher conversion efficiencies and are sleeker looking. Polycrystalline cells are the cheaper option, but they have slightly lower efficiencies and look less aesthetically pleasing to some.

In order for the conversion of sun radiation to electric energy through the solar panels to successfully occur there is a complex process that consists of the following elements—solar panels, PV module, wiring, inverters, etc. The PV module is the core of the solar cells, when light from the sun hits the conversion module, each cell produces direct current (DC) voltage. DC and alternating current (AC) wiring are responsible for switching the power on/off and from the inverter. The inverter is responsible for taking the DC from the solar and/or batteries and turning it into AC for use in a building or on the grid. Batteries are sometimes installed to store the electric energy chemically to be used when the sun is not hitting the panels, like during the night-time. Finally, solar controllers are used to regulate the energy current into the batteries. Solar energy is made possible through the work of each of these components.

How much does solar power cost?

The prices of solar panels are ever dropping. What you should expect depends on the system size and federal solar tax credit, with a 10-kilowatt ranging from $17,650 to $23,828 and the average price per watt ranging from $2.40 to $3.22. The cost depends on how much energy you want to generate, depending on whether you’re planning on fueling solar electricity through your home or business. The below chart depicts the average cost for solar panels depending on the size of the system:

System sizeAverage solar panel system cost before tax creditsAverage solar panel system cost after tax credits
2 kW$5,620$4,159
3 kW$8,430$6,238
4 kW$11,240$8,318
5 kW$14,050$10,397
6 kW$16,860$12,476
7 kW$19,670$14,556
8 kW$22,480$16,635
9 kW$25,290$18,715
10 kW$28,100$20,794
12 kW$33,720$24,953
15 kW$42,150$41,588
20 kW$56,200$41,588
25 kW$70,250$51,985

The solar tax credit reduces your cost by 26% simply for installing a solar energy system, saving you thousands of dollars for going solar. Costs can depend on your state, so it’s best to compare prices with various providers in your area to make sure you’re getting the best deal.

What can solar energy be used for?

The sun makes plants grow, causes the wind to blow, and affects the temperature across the globe. It can also power your household appliances, your cell phone, and your air conditioning. Solar can be used to:

  1. Provide electricity for homes and businesses – a solar system installed on rooftops can power the entire establishment.
  2. Heat your water – solar panels absorb heat and then transfer it into a water tank. This can be your home water or even your swimming pool.
  3. Heat your home or business – solar space heating systems paired with forced hot air systems can heat homes.
  4. Provide light within your home or business (one of the most common uses) solar lighting is present in homes, streetlights, and road signs.
  5. Charge portable batteries – portable solar PV chargers can be used for charging your portable electronics such as your cell phone.
  6. Power your method of transportation – solar power has been used to power buses, trains, and airplanes. Though not widely available, solar-powered cars are in the works. In 2015, we worked with UAH to solar power some of their golf carts.

With the potential to power your everyday necessities, solar energy has the potential to power your future.

Why isn’t solar power more widely used?

Solar energy is not a new concept, but even just a few years ago, it could be expensive to implement and not readily available to many people. However, now, many families across the U.S. and the rest of the world have converted to using solar energy as their primary source of energy. Solar energy is becoming more widely used as time progresses and prices continue to drop.

The advantages that come with using solar energy include:

  • We can’t run out of solar energy, making it a renewable source that we will always have available.
  • What you pay for energy will drop, how much depends on the size of your solar system.
  • You can generate electricity and heat, making its uses diverse.
  • Maintenance is cheap and easy. It’s as simple as cleaning the panels a few times a year.
  • Improvements are consistently being made to current solar energy systems in the industry.
  • Solar panels typically last for about 25 to 30 years, or even more.
  • Solar energy is more optimal for the environment.
  • While solar energy may cost more starting out, there are tax credits that lower the prices.

The disadvantages that come with using solar energy include:

  • The upfront or initial cost can be high—paying for the panels, inverter, batteries, wiring, and installation.
  • Solar energy is dependent on the weather, and you may need batteries to smooth out your production or save it for later.
  • Adding battery storage makes a system more expensive.
  • You may need more solar panels than you have available space.
  • There is some pollution that comes with the initial manufacturing process of the solar panels.

Who can benefit from solar energy?

Everyone can benefit from the use of solar energy. You don’t have to live on a sunny beach to benefit from the energy that the sun provides for us, nor will you be without if you live in a cloudy region. As long as solar energy systems are properly manufactured and placed, the risks fall far below that of the non-renewable energy the world uses now.

What is the reality of solar energy?

Solar energy has proved to be abundant and is becoming more popular as years progress. Solar pollutes far less, is energy efficient, and saves money. There are many misconceptions about using a solar energy system that have caused people to avoid it, but with our help and determination to teach you about renewable energy, we can move past those misconceptions and implement a clean energy future.

 

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What is a Value-of-Solar Tariff?

A value-of-solar tariff, or VOST, is a rate design policy that gives customers with solar panels credit for the electricity they generate at a specific price. The credit is then applied to the customer’s utility bill. A VOST usually clarifies how much energy is sold from the customer to utility company and from the utility company to customer; it also determines at what rate the energy is valued. Value-of-solar tariffs are generally viewed as unfair and for two main reasons: the value of the tariff is lower than market rate in most areas and the benefits of VOSTs aren’t broadly advertised. But VOSTs don’t HAVE to be unfair.

As of right now, there aren’t many markets that have fair compensation for solar in the form of VOSTs. The two main places that are under the current implementation of value-of-solar tariffs, Minnesota and Austin, Texas, purchase all of their energy at the utility’s retail rate and pay out a separate VOS rate in dollars per kilowatt hour. In Minnesota, the VOST rate is about $0.145 per kilowatt-hour which is above the residential retail electricity rate of $0.115 per kilowatt-hour. This rate means that for every kilowatt-hour a solar user produces, the user doesn’t have to pay for a kilowatt-hour and they save a little on the electricity they don’t produce but still use. Why would a state or utility pay higher than retail? Because through a VOST process, IF the total value of solar energy is taken into account, there may be cases where it is in fact worth more than retail.  This type of VOST is very customer friendly to encourage the residents of Minnesota to begin producing solar energy themselves; unfortunately, outside of Austin, Texas, the same cannot be said for other states. One of the reasons for less than market rate compensation is the cost of providing the VOST in the first place or other services that utilities must provide for you to sell to them.

What is the unseen value of a VOST?

An end financial value of a VOST is made up of many subparts. For example, some value components include: avoided cost (money saved by the utility from not having to buy additional fuel for the power plant), environmental (the value of reducing harm to the environment and its subsequent cleanup), and transmission system impact (less strain on power lines due to generation being located closer to where it is being used), among others.

For a user to successfully produce and sell back solar energy to a utility company, they have to use the grid. Even if a customer produces the same amount of energy as they use, there are still costs to selling the energy back and for energy used from the grid when solar is not producing. When paying out for solar, utilities have to consider the cost of business (grid maintenance, labor, parts, etc.), which takes a portion out of the amount the customer receives. The need utilities to receive compensation for their services in a VOST to maintain the grid cannot be overlooked.

The second reason value-of-solar tariffs can get a bad reputation is customer lack of knowledge about its benefits. Utilities can better understand customer load, timing, and volume because a VOST separates electricity generated by the consumer from electricity consumed. This is valuable information that utilities can use to better predict when peak times might occur and how much electricity they’re actually using. However, customers may not understand all the variables that make up a VOST or why they are there.

Another reason is how customers receive compensation based on utility-specific benefits and costs of their electricity generation, instead of fixed retail rates that may span many regions. Customers are able to select what VOST is most beneficial to them depending on their energy production and use, as opposed to going with the rate of their region no matter the circumstances.

Value-of-solar tariffs are one of several viable options for solar users to sell back their solar energy, and there are both good (Minnesota and Austin, Texas) and bad (almost everywhere else) ways of providing it to customers. One important aspect that cannot be overlooked is how a VOST is beneficial to the energy system (e.g. the grid) as a whole. With a true integrated value, a VOST can provide the grid with much needed support and gives utilities valuable information; but as it becomes more widespread, concrete worth needs to be given to the value provided from things like environmental and avoided energy costs. VOST has a bright future if implemented correctly, and as more states follow Minnesota’s example, solar will continue to grow more valuable.

Solar Shingles, Are They Really Worth It?

Photo courtesy of Tesla

Tesla has done it again. The sexy, cutting-edge, tech company has come out with a product called Solar Tiles, also known as Solar Shingles. This revolutionary product will pave the way for sustainable energy to become the next home-design trend. The 8.65”x14” tiles currently come in two different styles, textured and smooth; the website also shows the two new designs being released next year. How does it work? Glad you asked… The solar tiles are strategically placed all over a home’s roof to maximize sun exposure. The light from the sun is converted into power that is then transported into a Powerwall, or assumedly any other battery system, where the surplus energy is stored. The energy is stored in the Powerwall to guarantee uninterrupted electricity even during bad weather.

Photo courtesy of Tesla

The nice thing about Tesla is that their website allows you to input your address, square-footage, and current electricity bill amount. They use all that information to calculate the percentage of solar tiles you would need, how much it will cost (whether you pay for it all upfront or you finance it), and how much it will save you per month and over the period of 30 years. Now, you may be wondering, “if I only need 40% of my roof covered in solar tiles won’t you be able to notice a difference in tiles?” Tesla has already thought of that. The roof will be made with the same style as whatever tile you select and the remaining 60% of the roof would be covered in tempered glass tiles. Now you’re also probably thinking, “glass tiles don’t sound like they have a long lifespan”. Once again, Tesla is one step ahead of us. These tiles come with a lifetime warranty, and they have proven to be 3 times stronger than standard glass tiles. Tesla’s website has a video of a 2-inch hailstone being thrown at the tiles at 100mph, the other tiles break instantly and the Solar Tile is completely unharmed.

Photo courtesy of Tesla

Now, as all Tesla products are pricey, this one is no different. I can use my home as an example. It’s 2 stories, 3,500 square feet, 5,000 roof square footage, and has an average electricity bill of $280. The overall price for my home would be $132,500, which includes 3 Powerwalls installed in my home and 50% of my roof covered in solar tiles. However, Tesla has it set up to where, not only do you receive a tax credit, but you can finance through your monthly home mortgage payment. For my house, I would receive a $36,900 tax credit and $490 monthly loan payment. If you’re depressed because of the sticker price, I’ll share with you the calculator’s savings estimation. I would save $259 a month over 30 years and $93,300 total for 30 years. Overall, I would most likely break even, considering the cost and the savings put together.

Compare that to a standard solar array, to completely offset my usage it would likely cost around $40,000 before tax incentives. Also keep in mind that because my usage is a little higher than average, I’m having to install a system that is a good bit larger than the average installation in North Alabama.

So, are Solar Tiles worth it? We’re voting no. But only for now. And only because of the price. If Tesla’s performance from the introduction of the Model S to the Model 3 is any indication, Solar Tiles could be a harbinger for much cheaper, mass market products.

The Importance of Reducing Solar Soft Costs

What are solar soft costs? Soft costs are any costs, fees, or taxes that are included with a product after material and labor. While solar energy is worthwhile, thanks to the long term savings and the benefits for the environment, many potential users are hesitant at first due to the initial cost. A significant portion of the heavy sticker price is the “extra” added when taking soft costs into account.

Solar is becoming more prevalent in America, and many users are beginning to see their investment come to fruition. Unfortunately, many potential users are halted before they get started; so let’s look at some of the soft costs and how they could be reduced.

Courtesy of U.S. Department of Energy

As the graph shows, a massive 64% of the cost of solar is due to soft costs. Costs like permitting fees, interconnection labor, installation labor, and installer profit are significant portions of the soft costs, but are also necessary. The solar system needs to be approved by the city (permitting fee), connected to the grid (interconnection labor), installed (installation labor), and the company selling it needs to make some profit to stay open and continue selling their product (installer profit). However, most of the other costs could be trimmed down so there isn’t as much of a cost for each one.

The other portions of soft cost: sales tax, transaction costs, supply chain costs, indirect corporate costs, and customer acquisition, CAN be reduced, sometimes to virtually nothing. Some states actually pay the solar user, through stipends or other incentives, to install rather than charge sales tax; therefore, sales tax could be done away with or reworked so the user gets that cost back. In fact, some states like Florida, do not charge sales tax on renewable energy, effectively eliminating this soft cost.

Transaction costs are costs that come from a third-party lender when the buyer needs a loan and could be reduced to a lower rate. We find that buyers need to be aware of the hidden fees and transactions costs that can quickly add significant cost to their installation. Some transaction costs are unavoidable and more than fair. After all, no one is going to loan you money at 0% interest. That being said, be aware of who is charging what fees and where they’re being charged in the process. Supply chain costs are from the transporting and housing of solar units from the company to the buyer. Better supply chain management and cooperative buying can help reduce this cost.

Lastly, and probably most interestingly, customer acquisition is the cost for the solar installer to reach out and connect its potential customers. This cost is effectively sales and marketing; and while it’s a necessary function, you can immediately see the issue. If hundreds of people contact their local solar installer only to be turned away because of bad site conditions, not being able to finance the system, or any number of reasons, the solar contractor has spent money on a customer that ultimately cannot buy its product. That means this cost must be charged to the next customer who CAN purchase the system. The U.S. Department of Energy and many startups around the country are developing tools explicitly designed to attack this problem. The more information at the fingertips of consumers and contractors helps reduce the amount of time spent on projects that just simply could never be built.

A good way to think of solar installation with lower soft costs is to merely look overseas. Germany is one example of solar installation working without high soft costs and their wide user base is proof it’s effective. By making solar more available (cheaper), Germany has a much bigger user base than the United States and they see more users every year. Although the process of buying solar is different in Germany, they immediately provide savings by getting rid of most soft costs from the start.

Let’s not handicap solar right out of the gate. By working to significantly reduce soft costs, we can make solar more affordable for everyday Alabamians. Quite literally, giving them the power back.

Battery Storage and Ancillary Services

Ancillary services by definition are services that support the transmission of electricity from its generation site to the customer or helps maintain its usability throughout the system. Many people may not know that the standard 120 volts we are used to receiving from the wall actually varies a tiny amount from second to second. If you were to monitor the power from the wall, the voltage may swing from 118-122 volts. We do not typically think about the mechanisms that take place to keep our power useful and ready for when we flip the switch.

On a larger scale, ancillary services are generators or other service providers that are synchronized to the grid and are able to rapidly increase output in three major categories: contingency, regulation, and flexibility reserves. The contingency reserve requirement is assumed to be constant for all hours of the year and corresponds to a spinning reserve equal to about 3% of peak load and about 4.5% of the average load. Another way to think of “spinning reserves” are the backup or redundancy built into the grid. Basically, we slightly overbuild the total generation needed so the grid can be provided with ancillary services making good quality power possible.

Additionally, regulation and flexibility reserve requirements vary by hour based on the net load and impact of variability and uncertainty of wind and solar. The availability and constraints of individual generators to provide reserves are a major source of the cost of providing reserves. Not all generators are capable of providing certain regulation reserves based on operational practice or lack of necessary equipment to follow a regulation signal.

So, what does the future of ancillary services hold and how can they be more beneficial?

At a residential level, a combination of solar and storage is only worthwhile when specific conditions are met that make the value of storage greater than the cost of installing It. For example, when the renewable energy creates an excess, the extra energy can be stored for later consumption. This would allow the customer to buy less power from the grid and enable them to cut their costs.

However, some customers are now being charged for using power during peak times, which is known as a demand charge. Energy storage can be used to lower peak time energy consumption, or the highest amount of power a customer draws from the grid; therefore, reducing the amount customers spend on demand charges. In North America, the break-even point for most demand charges is $9 per kilowatt. Energy storage can lower that cost to $4 or $5 per kilowatt by as early as 2020. As storage costs decrease, more customers will begin to see economic benefits and existing storage users will see the optimum size of energy storage increase.

Lastly, energy storage will impact electricity grids as a whole because it provides more function than just power on demand. Batteries can provide the grid with ancillary services like frequency regulation and should be compensated to do so. All this is to say, if utilities provide appropriate price signals to the market, customers will respond by installing battery storage where and how they can be compensated.

Currently, grids experience a continuous imbalance between the power they produce and its consumption because of the millions of devices that are turned on and off in an unrelated way. The imbalance can cause frequencies to deviate, which can affect equipment and potentially hurt the stability of the grid. Energy storage is well suited for frequency regulation because of its rapid response time and its ability to charge and discharge efficiently. This storage could significantly reduce the amount and cost of the reserves currently needed to provide such services to the grid.

One reason for the optimistic outlook on battery storage’s role with providing ancillary services is the progress lithium ion batteries have made in recent years. In 2015, lithium-ion batteries were responsible for 95 percent of energy storage at both the residential and grid levels. The reason for the increase in popularity is due to the price dropping, safety improving, and better performance characteristics. All of these qualities are leading to lithium-ion batteries being suitable for stationary energy storage across the grid; ranging from large-scale installations and transmission infrastructure to individual and residential use, even without being appropriately compensated for ancillary services.

The most important aspect is the large-scale deployment of energy storage that could overturn the status quo for many electricity markets. In developed countries, central or bulk generation traditionally has been used to satisfy instantaneous demand, with ancillary services helping to smooth out discrepancies between generation and load; and energy storage is well suited to provide such ancillary services. Eventually, as costs fall, it could move beyond that role, providing more and more power to the grid, displacing plants; however, that time has not yet come although approaching quickly. It is important to recognize that energy storage has the potential to upend the industry structures, both physical and economic, that have defined power markets for the last century or more.