Showing some solar flair

A photovoltaic panel captures the sun's energy to produce electricity. Photo by Reuters.
A photovoltaic panel captures the sun's energy to produce electricity. Photo by Reuters.
Kissing goodbye to your power bill is one of the dreams of the modern age - and it might not be as far off as we think. New energy technology using the sun to run the dishwasher and the big-screen TV is coming down in price so quickly it could be producing electricity at the same price as that available from the national grid in as little as five years. Mark Price reports.

Photovoltaics. It's a mouthful of a word often simply referred to as pv.

Not to be confused with solar water heating, pv is the system that turns sunlight into electricity via panels of solar cells usually made of silicon.

And it is a system that is spreading like wildfire across the rooftops of the world.

In just one month this year, German homeowners bolted on to their roofs pv solar panels with a total capacity of one and a-half Clyde dams.

Click graphic to enlarge.
Click graphic to enlarge.
So, why, you might ask, is it so rare in New Zealand and virtually non-existent in Otago?

A great deal is explained by the Government's New Zealand Energy Efficiency and Conservation Strategy 2011-2016 - released with not much fanfare a few weeks ago.

The strategy gave pv just two passing mentions; once in connection with building management and once as a renewable energy "opportunity".

It is the sort of mention energy studies director at the University of Otago Associate Professor Bob Lloyd describes as a "motherhood" statement.

"If the Government says it wants to promote renewable energy, that is a motherhood statement unless it puts some money where its mouth is - that is unless it puts some sort of subsidy or incentive or scheme or even advertising to encourage renewable energy.

"The present Government is at the stage of motherhood statements."

As fossil fuel reserves are used up, Prof Lloyd sees pv becoming one of the predominant sources of electricity.

In a paper he wrote last year, he noted reports of electricity generation from pv "growing faster than any other renewable energy technology" and faster than wind "by a considerable margin.

"The bottom line is that from a materials and technology viewpoint ... pv technologies, in conjunction with other renewable energy sources... could replace the present electricity supply system."

The Paris-based International Energy Agency is just as bullish stating, in August, pv [and solar-thermal] plants may meet most of the world's demand for electricity by 2060.

Prof Lloyd acknowledged there are technical issues to overcome with pv and he also noted the transition from existing electricity systems to renewable systems was likely to be "restrained by vested interests" and social inertia.

In the case of Germany, much of the "social inertia" was overcome by government subsidy that made pv financially attractive to building owners via what is known as a "feed-in tariff" or a premium price for electricity produced by pv.

Under this system those who installed pv panels on their roofs, and hooked them up to the grid, were offered the chance to sell their electricity into the grid for much more than the price of the power they bought from the grid.

That gave pv a huge kick-start and now it has caught on, the German Government has begun reducing the feed-in tariff.

New Zealand building owners have the same ability to sell electricity into the grid but there is no subsidy [no feed-in tariff] so the price is the same whether they are buying or selling.

And, without the subsidy, pv is still not the best financial investment for most building owners - not quite; not yet.

But, the demand for pv created by the German exercise, and others elsewhere in Europe, Asia and the United States, has had a dramatic effect on the price of pv.

Dr Muriel Watt of the school of photovoltaic and renewable energy engineering at the University of New South Wales told the Otago Daily Times pv costs have decreased consistently by 20% each year for the past three years because of a "faster than anticipated" take-up of pv in countries like Spain and Italy.

"As prices go down, pv will increasingly supply power cheaper than central grid power..."

Attaining this "grid parity" has been the holy grail for pv proponents.

Dr Watt says Australia has now reached that point, although there are still issues to be settled over the setting of a "fair price" for the electricity produced by pv.

But back to New Zealand and an interesting, ironical twist.

If the country was not already so "green" with renewable energy from hydro, wind and thermal, there would be a better case for pv.

In many countries, each pv panel added to a roof helps diminish the need to use fossil fuels to generate electricity.

But in New Zealand, 80% of electricity is already from renewable sources and the goal of achieving 90% by 2025 is expected to be provided by more big-scale wind, hydro and geothermal schemes.

And, big-scale development, argues a spokesperson for the Energy Efficiency and Conservation Authority [EECA], is a more effective and cheaper option than subsidising myriad small pv systems on house roofs.

"It comes down to a real cost-effective argument.

"There's really no call for [pv] because you would only be swapping out a large-scale cheaper renewable energy thing for a small but expensive renewable energy thing.

"So in New Zealand it doesn't make economic sense to do it or environmental sense, because you are not winning either way."

That is the present state of play and acting minister of energy Hekia Parata made it clear to the ODT a government subsidy to encourage pv is not on the agenda.

Ms Parata: "As investment is already occurring in renewables without government intervention, there does not appear to be a need for feed-in tariffs in New Zealand at this point."

But, it seems even without Government help, New Zealand homeowners might soon have an incentive to board the pv bandwagon anyway.

The EECA's chief executive, Mike Underhill, had this to say to the ODT about the future of pv in New Zealand: "I have to be careful I don't get into trouble for saying this, but manufacturers [of pv] are saying you can get a [grid-connected] pv installed on your roof ... for around 35c a kW/hr.

"Well the average punter in New Zealand would be paying 25c a kW/hr to be connected up to his electricity company.

"And, the view is that probably in five years time, the 35c [for pv] should have come down below the 25c.

"And that gets interesting ..."

By "interesting", Mr Underhill means pv will add a new element of competition to the electricity market while creating some tricky issues.

The biggest bug in the pv system is, of course, that it needs sunshine to work.

So, the question will be: is it fair for a pv enthusiast, who sells electricity into the grid in the summer when sunshine and electricity are plentiful, to expect to buy it back from the grid at the same price in the depths of winter when both are more scarce?

Mr Underhill says that is something policy-makers, electricity companies and the public will need to be aware of when solar moves "from a few enthusiasts to hundreds of thousands" of pv users.

He believes it is something the market "needs to sort out".

To underline that comment, Meridian Energy - which buys home-generated electricity for the same price it sells electricity - warns new customers taking up the deal the price they are paid "is subject to review".

Says a spokesman: "What we wish to avoid is customers; [electricity] sellers building a business case on the tariff."

In other words, those few making money or planning to make money by selling electricity into the grid should beware; the arrangement might not last.

But, in the broader scheme of things, pv seems to be rapidly becoming the next big thing worldwide - even if it is still quite "alternative" in Otago.

Jay Ray, of Harwood, is an example of someone leading the way here - the $3000 pv system he has installed in his "stationary house truck" complements his wind turbine and wood burner so that he needs grid electricity for only three months of the year.

But, there are plenty of other signs of pv becoming mainstream technology.

There is a growing array of pv-powered devices being advertised for the "outdoor" market this summer - such things as battery chargers, water pumps and outdoor lighting.

Mitsubishi and Solar City New Zealand are offering a deal on solar panels to go with the country's first fully-electric car, the i-MiEV.

And, in the South, Calder Stewart is installing the latest laminated pv panels on the roofs of some Milford Track huts and a small number of homes and buildings in remote locations.

Calder Stewart's roofing general manager John D'Arcy says at this stage the panels are a better fit economically for those buildings where a grid connection would be expensive or for commercial buildings where depreciation could be claimed - rather than for small-scale residential purposes.

But he has not written off the possibility of a feed-in tariff as the Government comes under pressure to find more alternative energy sources.

"You can only flood so many valleys and put so many dams in place. Can't you?"

Calder Stewart works in conjunction with Dunedin's Tansley Electrical.

Its contracts manager Steve Donaldson describes the pv market in Otago as "pretty stagnant" and he puts that down partly to the public's lack of knowledge of the systems available and what they can produce.

"It is not common for us to have solar panels fitted in our homes. We are creatures of habit. Never done it before so why should we do it now?"

He believed home builders were often stretched financially and any surplus money was more likely to go into "comfort items" than "functional things".

He considers the use of some form of solar power should be part of the building code in the same way that double glazing is.

"I believe to obtain building consent it should be a requirement for all new builds to have either a solar electricity generation system or a solar water-heating system installed."

But if, as some commentators are predicting, pv prices halve over the next few years the big stick of regulation and the helping hand of a government subsidy might, perhaps, be overtaken by the carrot of cheaper electricity.


PV in the South

It will come as no surprise that Dunedin - unlike Central Otago - is not one of the better places for a pv solar system.

However, as a vendor of pv systems pointed out, in places like Dunedin it is just a matter of installing more panels.

And, even if pv panels are not yet a good enough economic choice, those building new houses can keep the option open.

When asked for the best orientation and pitch for roofs where solar panels might be fitted, Tansley Electrical contracts manager Steve Donaldson provided the following information:

Orientation
Facing true north is best. Between NE and NW is acceptable. No shading between 9am and 3pm.

Pitch
Latitude -10deg is best for grid-tie [grid-connected] systems.
Latitude +10deg is best for off-grid systems.
Note: The flatter position makes better use of summer sunshine so more electricity can be sold into the grid. The more upright position makes better use of winter sunshine to help keep the batteries of off-grid systems charged.

• Dunedin's latitude is 45deg 52min, Alexandra's 45deg 14min, Gore's 46deg 2min and Omarama's 44deg 28min.



Solar panel use growing like mushrooms

World photovoltaic news from the past two months [and bearing in mind New Zealand's third-largest hydro-electric dam, the Clyde dam, produces 432MW of electricity]:

• In Germany, 664MW of photovoltaic capacity was installed on houses in June, taking advantage of government incentives. PV Magazine, September 20, 2011.

• In the United States, 314MW of photovoltaic capacity was installed in the second quarter of 2011 - a 69% increase over the corresponding period last year. Electroiq.com, September 20, 2011.

• In China, a "collapse" in the price of photovoltaic prices in 2011 and the introduction of a government photovoltaic subsidy has spurred photovoltaic growth of 230% since last year, with 14GW of capacity in the pipeline. Dailymarkets.com, October 10, 2011.

• Worldwide, photovoltaic production "more than doubled" in 2010, reaching a production volume of 23.5GW - 500 times greater than in 1990 - making it "one of the world's fastest-growing industries". Greenwisebusiness.co.uk, September 6, 2011.

• Worldwide, the cost of generating power with photovoltaic panels plunged about 37% in the past year as Chinese factories cut prices. Bloomberg Businessweek, September 21, 2011.

• In Europe, commentators are picking the cost of photovoltaics will drop by 50% by 2020. Oilprice.com, September 8, 2011.

• In Maryland, US, the amount of photovoltaic generating capacity installed on homes has "mushroomed" because of a drop in the price of panels and a "bevy of incentives" to buy them. The Baltimore Sun, October 1, 2011.

• In Oregon state, remodelled public buildings must install solar panels worth 1.5% of the original build contract. Herald and News, October 2, 2011.

• In Australia, photovoltaics on rooftops produce electricity for the same price charged by the grid. ABC, Sydney, September 7, 2011.

• In the US, a 30% photovoltaic panel price drop this year has been a boon for installers focused on the residential and small commercial rooftop market. Reuters.com, October 10, 2011.

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- mark.price@odt.co.nz

 

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