Solar Power in NH – Part 5 - Financing a Residential Solar System in New Hampshire

In this post, I take a closer look at funding a residential solar photovoltaic system in New Hampshire. Solar power has received a lot of coverage recently because the State rebates for new solar systems have been halted due to a lack of money in the Renewable Energy Fund that is set aside for this purpose and there have also been changes in the net metering regulations. The key point I want to make in this post is that there are still a lot of good reasons to install solar in NH - the net metering changes and the lack of a state rebate should not deter you.

Among the many good reasons to install solar on your home in NH are the following:

• Electricity prices in NH are high and the production of your own solar power will provide you with some protection from further increases;
• There is a generous federal investment tax credit on the installed cost of your solar system;
• You have the ability to earn money through the sale of renewable energy credits (RECS);
• Net metering of electricity in NH means that you get credit for the excess solar generated electricity that you feed into the grid during the daylight hours and you only pay for the net amount of electricity that you draw from the grid;
• NH state rebates on the costs of installed solar might become available again in the near future.

In this post, I look at a typical system and figure out how these incentives come into play so that your solar system will eventually pay for itself over time. For my calculations and the rest of this discussion, I have assumed that a homeowner installs a 5 kW solar system (about 17 panels) at an installed cost of $15,000, which would produce 6500 kWh per year, and that the homeowner uses about 600 kWh/month (7200 kWh/year) of electricity at a rate of $0.16/kWh. I have also assumed that the homeowner lives in an area where there is a property tax exemption for installed solar. (See the NH Office of Energy and Planning website for a list of NH towns with property tax exemptions for solar installations.)

One of the most important incentives for residential solar systems is the federal investment solar tax credit. This program provides you with a tax credit of 30% of the installed cost of your solar system. This program is in effect until 2019, but the tax credit begins to decrease in 2020 and, beyond 2021, the program has not been renewed and it is possible that it will no longer be available in the future.

Another good incentive is the rebate provided by the NH Public Utility Commission (PUC). Until recently, a homeowner could receive up to $2500 from the Renewable Energy Fund administered by the PUC.. However, this program is presently on hold as has been reported in the press. The program has been a popular one and, owing to the flood of applications, the PUC has had to cease approving projects and awarding rebates until they know how much money they have to work with. The funds for this program come from Alternative Compliance Payments paid by the utilities. As noted in a previous post, these vary from year to year and the funding available from this source is unpredictable. I expect that the PUC will go back to funding projects, but not all installations will be able to get rebates and I expect the rebate amounts to be smaller. For the purposes of my analysis in this post, I have assumed that the rebate is not available. If you are fortunate enough to be awarded a state rebate in the future, this will just improve the cash flow and payback on your solar investment.

Another incentive is the sale of RECs, which I discussed in a previous post. Solar has a special carve-out class – Class II – in the NH Renewable Portfolio Standard: for every 1 MWh (1000 kWh) of electricity you produce from your solar system, you can sell the equivalent REC. Class II solar RECs are presently selling for between $15 and $20, so, if your 5 kW solar system produces 6500 kWh/year, you could sell your six RECs for  $15 each to earn an additional $90. However, it is important to keep in mind that, as a small producer of RECs, the administrative and commission costs involved in tracking, verifying and selling those RECs could be of the order of $50, eating up a good amount of  your REC income. To benefit to a greater degree from REC sales,  homeowners would need higher RECs prices or should install a larger solar system to produce more RECs to defray the administration costs.

Net metering is an important incentive but as of June 2017, new regulations were issued by the NH PUC, which reduced some of the monetary benefits of net metering. With the new regulations, homeowners, whose exports of power exceed their consumption, will receive a reduced rate for their monthly net exports. I discussed this in detail in my last post and determined the rate reduction would be of the order of 20%. Homeowners with monthly net imports will continue to pay the retail rates for their net imports but the non-bypassable charges are treated separately. These charges, which include the system benefits charge, stranded cost recovery charge, and the state electricity consumption tax, are of the order of 0.5 cent/kWh and will be billed for every imported kWh no matter how much electricity is exported. The homeowner will not receive any credit for these charges for their exported kWhs.

To get a better appreciation of net metering at work, consider the following chart which shows the projected usage and solar generation for that typical NH home with a 5 kW solar system. The chart was prepared using generation data from the PVWatt calculator and residential load profiles for a NH residence from the Department of Energy. The graph shows monthly usage and generation and is different from my graph in my previous post which charted hourly data. The monthly view is important one as net metering is presently carried out on a monthly basis. The data shows that in the winter months, October to March, electricity demand is greater than solar power generation so there will be a net import of electricity into the home in those months. Homeowners would pay retail prices for those net monthly electricity imports. For the summer months, April through September, the amount of solar generation is greater than usage so there will be a net export of electricity and the homeowner would earn the lower export rates for their net exports during those months. My calculations indicate that, for the NH home we are considering in this post, a 5 kW solar system would save a homeowner $990 in electricity charges over the year. This is about $57 or 5% lower than the savings that would have been expected from net metering before the recent set of changes to the net metering regulations.

With these incentives in mind, let’s look at funding a solar system. There are three basic ways that homeowners can finance their solar systems:

• The first, and very popular with frugal northern New England Yankee types, is simply to buy the system outright using savings. The system then pays for itself through electricity savings, the federal solar tax credit, REC sales, and, if available, the NH rebate.
• The second is taking out a loan from a bank to fund the solar system and paying it back over a number of years. For the purposes of my calculations, I have assumed a $15,000 home equity line of credit (HELOC) with an interest rate of 6%, no down payment, payable over 15 years, and that the interest payments on the loan are tax deductible.
• The third approach is having a solar company pay to install the panels on your roof and you sign an agreement, known as a power purchase agreement (PPA), to purchase electricity at a reduced rate for an agreed number of years (typically 15). In a variant of this approach, known as a solar lease, you can end up owning the system after a number of years. The advantage of this approach is that there are no upfront costs, no bank loan, and you benefit during the period of the agreement from reduced electricity rates. However, in this approach, the solar company makes the investment and benefits from the incentives.

Each of these approaches have their respective pros and cons and will work for you in different ways – what is right for you depends on your savings and financial situation and how long you plan to be in your home. I took a look at each option and calculated the annual cash flows  over 15 and 20 years to compare how much money each of these options would put into your pocket. My key assumptions are that the electricity price is currently 16 cents/kWh and will increase by 2%/year, that RECs are $15 each and prices will decrease by 5%/year and that the administrative costs involved in selling RECs are $50/year. The results for all three financing options are plotted below.

The outright purchase option is plotted in blue. The initial outlay of $15,000 for the system is offset in the first year by the federal solar tax credit, the electricity savings of $990/year and REC sales of $90 (offset by the associated administrative costs and commissions). Every year thereafter, the initial capital outlay is offset by the annual electricity savings and REC sales. Early in the ninth year, the cumulative cash flows go from negative to positive. This is the payback point, so the payback period would be just over 9 years. After this, the investment is cash flow-positive and, by Year 15, the cumulative cash flow from the project is almost $7000. By Year 20, it will have risen to almost $14,000. Another way to view this financing option is that it is equivalent to making a $15,000 investment and earning a 8.7% return over 20 years, a return which, for most of us, is very hard to find these days. (Should the NH rebate become available, the project cash flows would be larger, the payback period would improve to 7 years, and the 20-year investment return would increase to 11.7%.)

Should you not have $15,000 available for a solar investment, you could consider taking out a loan for the solar system. There are a number of solar-system-specific deals available from NH lenders but, for this post, I have assumed a simple 6% home equity loan paid back over 15 years with tax-deductible interest. The cash flows are shown in orange in the chart above. The attraction of this option is that there is no initial cash outlay on your part and you benefit right away in the first year from that $4500 federal tax credit, which immediately puts that nice stack of money in your pocket. Going forward, you then have annual benefits of electricity savings and REC sales, but you also have loan payments of approximately $1520 per year. In this scenario, your annual loan payments are higher than your annual savings and that, over time, eats into that Year 1 tax benefit. By Year 15 your loan has been paid off and, from that point on, you benefit fully from your electricity savings and REC sales. By Year 20, the cumulative cash flow from the project will have risen to ~$8100.

The third option, popular with many homeowners in other states, is to have a solar company install a system on your home and then sign an agreement with them to purchase the produced solar power at a rate lower than the prevailing utility rate. For this case, I have simply assumed no outlay on the part of the homeowner and they get to purchase solar generated electricity for 13 cents/kWh, instead of 16 cents/kWh, giving an annual saving of ~$200. The cash flows for this option are shown in green - the cumulative cash flow from the solar project by Year 15 is approximately $3400; by Year 20, it will have risen to $4700.

Should you have different numbers and want to consider different system sizes, interest rates, or loan periods, feel free to use the Excel-based calculator that I have posted on this site and see what works for you. Please use the calculator as a guide only. Collect as much information as you can from other sources, get multiple quotes for your solar system and quiz each solar company on their payback calculations. Ultimately the more informed you are, the better your decision is likely to be. If you have questions or comments about the calculator, please reach out to me via email.

I have summarized the 15- and 20-year cash flow information for the three options in the table below. If we look at the cash flows for the project, it is clear that the best option, assuming that a homeowner has the funds, is the outright purchase of the system. The loan option, especially after 20 years when the loan has paid off, starts looking good as well. The least favorable option, over the 20-year view, is the PPA; however, if you don’t have the funds, and don’t want to take out a loan, it might be an interesting possibility.

Many of us don’t like home-investment projects with long payback periods or lengthy loans unless we are committed to staying in our homes for an extended amount of time. A report from the Lawrence Berkeley National Laboratory indicated that solar panels do increase the value of your home, but this only applied to homes with an owned solar system and not to homes where a solar company owned the system. So, if you pay to install a solar system and sell it before reaping all the long-term energy savings, you should gain from a higher sale price.

Take a look at the solar calculator I have developed and, if you have not done so already, seriously consider installing a solar system on your home. It will put money in your pocket over the long term, it will partially shield you from future electricity rate increases, and, most importantly, you will be helping to reduce greenhouse gas emissions from the burning of fossil fuels. In the meantime, while you are contemplating installing a solar system, remember to turn off the lights when you leave the room. 

Mike Mooiman

Franklin Pierce University

mooimanm@franklinpierce.edu

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Solar Power in NH Part 4 – Residential Solar Output and Net Metering

In a previous post, I pointed out that there are many reasons for installing solar in New Hampshire and that residents should be taking advantage of these and benefiting from energy delivered daily by the sun to our homes. In this post, I take a look at a typical NH home with an installed solar system and examine its electricity consumption profile and its generation of solar power.

Let’s consider a typical NH home that uses about 600 kWh/month (7200 kWh/year). Such a home uses approximately 20 kWh/day, but this is highly variable and depends on the season, the outside temperatures, the number and nature of the installed electrical devices, and whether there is someone at home during the day.

Let’s assume that this home has installed a 5 kW system solar system (about 17 panels), which would (according to the NREL PVWatts calculator) produce about 6500 kWh/year or about 18 kWh/day. On an annual basis, this is a close match between consumption and generation. However, solar electricity generation only occurs when the sun is up and, as pointed out in a previous post, is highly dependent on the time of day, temperatures, and the amount of cloud cover. As a result, there is a significant mismatch between the hourly solar power generation and the consumption profiles, as shown in the figures below for typical winter and summer days in NH. The hourly consumption data were generated from a smart meter at a NH home and the hourly generation data from the PVWatts calculator.

The daily electricity consumption profiles, shown in blue, are different in winter and summer. In winter, there is an early morning bump up in electricity use as the house is warmed up, showers are taken, and breakfast is made. It then it drops off until the evening, when the home is heated again, lights are turned on, cooking is done, and the TV is turned on. In the summertime, we don’t see as much of a bump in electricity use in the morning because home heating is not required, but towards the end of the afternoon, the air conditioner gets turned on, along with cooking, lights, and TV to produce a significant increase in electricity consumption. (For this particular home, the AC unit is clearly used very frugally because the late afternoon/evening AC bump up is typically larger.)

Overlaid on both charts is the generation of electricity from the solar panels. For both dates, a sunny day was chosen and it can be seen that, for a most of the daylight hours, the system generates more electricity than the home is using. In this case, the excess energy is fed back into the grid and is available to be used by someone else nearby who does not have an installed solar system. It is this excess electricity, produced from a multitude of solar systems in New England, that allows the coordinator of the electric grid, ISO-NE, to ratchet down the generation of electricity from large fossil-fuel generation plants during this period. However, as soon as the sun sets and solar electricity production plummets, these same plants need to be ready to turn on electricity production to keep on the lights in New England. This highly variable generation profile presents challenges for utility-scale electricity generation in these days of large-volume solar power generation.

This data is notable because it shows that approximately 15 kWh, ~70% of the solar electricity produced during the daylight hours, makes its way to grid because the home’s electricity consumption is low during the period of peak solar power production. Using generation data from the PVWatt calculator and residential load profiles for a NH residence from the Department of Energy, I did the same hourly analysis for a whole year and it turns out that more than 60% (!) of the generated solar power would be exported from the home and energy use profile I chose. For a home using more electricity, say 9500 kWh/yr, the exported amount drops to 51%. For homes with larger solar systems, the amount could increase to above 70%. It is not obvious, but it turns out that even if, on a daily (or monthly) basis, solar power production is short of a homeowner’s needs, most of the electricity generated by the solar system makes its way to the grid.

During the period of excess solar power production, the homeowner is delivering electricity into the grid and building up an electricity credit that can be used to offset their consumption during the nighttime hours. This, basically, is how the concept of net metering works – the homeowner gets credit for excess electricity generated and is only billed for their net consumption. In this example, the home consumed 20 kWh during the winter day but generated 19 kWh from their solar system, so the homeowner would only be billed for their net consumption of 1 kW (if it was done on a daily basis). For the summer day, the home used 22 kWh but produced 24 kWh, to earn the homeowner a credit of 2 kWh. Net metering is typically done over a month so the daily credits and debits are totaled and, at month end, the ratepayer is responsible for paying any shortfalls or enjoying any credits that they can then apply the following month’s electricity consumption.

However, net metering is changing. The approach of just netting the consumption and generation of kilowatt hours and being billed for the monthly difference at retail rates is being reconsidered. There has been a lot of pushback from utilities across the country because they are concerned that net metering customers do not pay their fair share of the transmission and distribution costs that are built into rates. Homeowners with larger solar systems, who generate more electricity than they consume, end up not paying for transmission and distribution(T&D) costs but enjoying the privilege of been connected to the T&D grid and of drawing on it when the sun sets. Net metering is under review across the country and in NH the Public Utilities Commission (PUC) recently decided that the matter was an important one, that an interim change was necessary and further study was warranted.

The PUC issued new net metering regulations in June 2017, and, as a result, homeowners installing new solar systems could see a reduced benefit from net metering. If a home imports electricity - calculated by the monthly netting of imported kWh and exported kWh - the home owner will pay the full retail rate for their net usage. This includes all components of their electrical bill which includes the energy service charge, transmission and distribution charges. Other charges such as the system benefits charge, stranded cost recovery charge, and the state electricity consumption tax (the so called non-bypassable charges) will be billed for every kWh imported and the homeowner will not receive any credit for these charges for their exported kWh. However if, on a monthly netting basis, a home exports electricity,  solar system owners will receive for the net exports the full retail rates for the energy service and transmission charges but only 25% of the distribution charges and no credit for the non-bypassable charges.

In the table below I have calculated the implications of these changes for a typical Eversource retail customer in NH. The second column shows the components of present retail rates for electricity which total up a retail cost of electricity of 18.1 cents/kWh. The last column shows what the homeowner would be paid if they export more than they use after the recent net metering changes. The export rates take into account full credit for energy services and transmission charges, 25% of the distribution charges and no credit for the non-bypassable charges. My calculations show that the homeowner with monthly exports would receive 14.5 cents/kilowatt hour for their net exports which is a 20% reduction off the retail rate for imported electricity. Of course, the exact reduction depends on the particular utility and their retail rates in effect at that time. These changes will largely impact homeowners who install larger solar systems that deliver net monthly exports of electricity and will extend the payback period for their solar investment.

It should be noted that these changes do not impact homeowners who already have installed solar systems. They will continue to benefit from the strict monthly netting of consumption and generation and they will receive the benefit of full retail rates for exported electricity until 2040.

In my next post, we will take a look at the same home and look at the financing of a solar system and the importance of the various incentives, including the net metering changes, in generating a return from a new solar installation in NH.

Until next time, remember to turn off the lights when you leave the room. 

Mike Mooiman
Franklin Pierce University

mooimanm@franklinpierce.edu

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Solar Power in NH – Part 3 – Ranking NH’s Solar

This is my third installment dealing with solar power in NH. In the first two posts, I provided some basic concepts about solar power, as well as information about NH solar potential and the large solar farm in Peterborough. As I drive around New England, I see solar installations popping up everywhere, especially in Massachusetts and Vermont. Rhode Island recently passed new laws that will continue to support solar in a big way so I thought it would be useful to do a comparison between the various New England states to see how New Hampshire stacks up.

The first information I sought out was how much installed solar each state has. There are several sources for this information, which have different degrees of reliability, ease and cost of accessibility, and different bases for the rankings. Direct comparison of the various sources is complicated by the different ways of rating the power outputs of solar plants. As explained in my previous post, solar photovoltaic (PV) installations produce direct current (DC) electricity and the rating of solar PV operations is often given as the combined DC output capacity, in kilowatts (kW) or megawatts (MW) DC, of the panels under the standard test conditions of 1000 W/m2 irradiation and temperature of 25oC – conditions known as one peak sun (see an earlier post for an explanation of irradiation and the peak sun hour concept). To feed electricity into the grid, the DC electricity needs to be converted into alternating current (AC) through a device called an inverter. During this conversion, there are losses through the electrical system and wiring. These losses are typically of the order of 5 to 10%, so the peak AC output of a solar system, in in kW or MW AC, can vary from 90 to 95% of the DC rating. However, there are also performance losses due to dust on panels, degradation of the panels over time, and elevated temperatures. In my calculations, I typically assume that the peak output of AC electricity from a solar system is about 80% of its DC rating.

In searching for installed solar capacity information, the most useful I found was the 2016 data from ISO-NE, which is included in the table below, along with the 50 state ranking carried out by the Solar Energy Industries Association (SEIA). I have also included a chart from the ISO-NE Final 2017 Forecast that shows the growth in New England PV installations since December 2013. The ISO-NE data (reported in MWAC) shows that Massachusetts is clearly on top of the New England installed solar rankings, followed by Connecticut and Vermont. Massachusetts is also ranked #7 out of the 50 states in installed solar capacity. California, as one would expect, is ranked #1. In the 50-state ranking, NH is presently in 33rd position.

Source: ISO-NE

Even though Vermont’s installed solar capacity is a small fraction of that of Massachusetts, I was still impressed at how much solar they have installed, so I calculated the installed solar capacity on a per-person basis and generated the chart below. In this ranking, Vermont rises to the top, with installed solar capacity of 318 W AC per capita. To put this into perspective, this means that Vermont has installed the equivalent of more than one solar panel for each person in the state (modern solar panels have a DC rating of 300 W and an AC output rating of ~240 W (after losses)). This is a little lower than the California figure of ~370 WAC, but I’m still impressed.

 Source: ISO-NE and  Census.gov

In terms of installed solar, NH is very much at the back of the pack, but there are other solar ranking systems out there. I am a fan of the state rankings carried out by the folks at Solar Power Rocks. They order states on the basis of regulations, incentives, investment returns, and cost of electricity (among other factors that are supportive of solar power). In their ranking, which I have shared below, NH places fairly high, coming in at #10. The other New England states, MA, RI, VT and CT, also appear in the top 10, while Maine is found in 23rd position.

Source:SolarPowerRocks

The specific scorecard for NH is reproduced below: it is clear that with a “B” grading, NH has a lot going for it in terms of support for solar power. The factors in NH’s favor include:

• High electricity prices;
• Net metering;
• The Federal solar tax credit – presently 30% of the cost for installing a PV system;
• Production credits through the sale of renewable energy credits;
• State rebates on the costs for installing solar.

Source: SolarPowerRocksNH

There has been a fair amount of news recently about the NH state rebates available from the Public Utilities Commission. The program is presently on hold due to its record demand and concerns about sufficient funding. Nevertheless, there is much in favor in terms of installing solar in NH, and we should be taking advantage of this. In my next posts, I will take a close look at how these factors play out in considering whether to install solar on your home in NH. So, until next time, remember to turn off the lights when you leave the room. 

Mike Mooiman

Franklin Pierce University

mooimanm@franklinpierce.edu

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Solar Power in New Hampshire – Part 2

Today we see solar power and especially photovoltaic (PV) technology everywhere: it is powering homes and businesses, roadside warning signs, large community applications, and even larger grid-scale operations. PVs generate electricity directly from sunlight using semiconductor technology that is built into the PV panels. The ever-increasing scope of PV applications ranges from small devices that generate tiny amounts of electricity used to power calculators (outputs in the milliwatt (mW) range), to one- or two-panel systems generating 100 to 300 watts (W) to charge cell phones and provide light (often installed in developing countries), to 2 to 50 kilowatt (kW) systems that power homes and businesses, all the way to grid-scale solar farms with ratings as high as 1000 megawatts (MW). Below are photographs of some solar installations that I have recently observed.

There are two kinds of PV systems: grid-connected and off-grid systems. In grid-connected systems, the excess AC (alternating current) output of a solar operation is fed into the electrical grid to supplement the power produced by other power plants. These operations usually do not include any storage so they can only generate and supply power to the grid during daylight hours. The supply from these operations is therefore highly variable: low in the mornings and afternoons, high at midday, and cloud cover significantly reduces their output. The electrical grid needs to be managed to adjust to this variable output. Most smaller residential solar systems in the US are grid-connected, and range from large utility-scale systems to smaller home-based units in which electricity produced during the day in excess of that used by the homeowner is fed back into the grid. These systems are often bidirectional: during the day, electricity is supplied to the grid; during the night, when no solar electricity is produced, power is drawn from the main electrical grid.

The other type of solar system is not connected to the main electrical grid. These are known as off-grid systems and are typically found in off-grid homes or in remote areas far away from the grid in developing countries. These usually incorporate batteries so that any excess energy can be stored for use during evening hours. During the day, the sun generates electricity that is used to power the site, while excess electricity is stored in batteries to provide power for the evenings. Off-grid systems are sometimes combined with other means of electricity generation, such as diesel generators, that can provide backup power during cloudy conditions or when the batteries are depleted. These are referred to as hybrid systems.

Some solar systems combine grid-connected and off-grid approaches. These have battery storage, but are also connected to the grid. Such operations generate some or all of the electricity needed by the homeowner or business during the day and any excess is stored in the batteries (as opposed to sending it out to the grid); however, the grid connection is there to provide any shortfalls in power production from the solar panels or when the batteries are depleted. These systems offer the best of both worlds—they produce and use renewable energy so their electricity purchases from the grid are reduced, but the grid is there as a standby to cover any shortfalls. Solar systems utilizing the much-touted Tesla Powerwall battery systems are of this type and I anticipate that we will see many more of these systems in the future.

In the energy field, one needs to be sure to understand what is meant by the rating of a power plant, whether it be a small residential solar system or a nuclear power plant. For most power plants, say the 1244 MW Seabrook nuclear power plant in NH, the power rating refers to the output of AC electricity. In this case, it is easy to calculate how much electricity a power plant would generate over a certain time period. For example, if the Seabrook plant was running at its rated output, uninterrupted for 24 hours, the yield of electricity would be:

1244 MW x 24 hours = 29,856 MWh.

Solar system ratings are different. The PV modules produce direct current (DC) electricity and the rating of solar PV operations is given as the combined DC output capacity of the panels under the standard irradiation condition of 1000 W/m² at 25^oC – conditions known as one peak sun (see an earlier post for an explanation of irradiation and the peak sun hour concept). As I showed in my previous post, the irradiation levels are only close to one peak sun at around noontime. A solar panel will therefore only produce its rated output of DC electricity for a short period around midday; at other times, the irradiation is lower and the output is commensurately lower. But DC electricity is not particularly useful for powering our existing homes and businesses: we have to convert that DC current to AC to operate our appliances, lights, and devices. During this conversion, there are losses through the electrical system and wiring. These losses are typically of the order of 5 to 10%. There are also performance losses due to dust on panels, degradation of the panels over time, and  elevated temperatures.

Intuitively, one would expect hot sunny days to be ideal for solar power generation, but an aspect of PV technology not often appreciated is that the electricity output of PV panels actually decreases as the temperature increases—by approximately 0.5%/^oC. When temperatures are high, panels operating in the New England area can often reach surface temperatures of 140^oF (60^oC), which can cause a 10 to 12% decrease in performance. This problem is even more extreme in the sunny environments of Nevada and Arizona, where the choice of solar power may seem obvious. Furthermore, when clouds roll over the skies during the day, we can also expect a big decrease in electricity production.

Between the conversion, dust, degradation, and temperature losses, clouds, and the limited number of peak sun hours during the day, the AC output of a solar installation is, in fact, a small fraction of its DC rating. For example, the PV calculator from NREL shows that a DC-rated 1 MW solar plant in NH will produce, on average, 3.6 MWh of AC electricity per day. A 1 MW AC-rated fossil-fuel plant operating for 1 day would produce 24 MWh—almost seven times more electricity, This is an important distinction that is often forgotten. Size is important in energy production, but it is important to understand what the rated size means.

Speaking of size, the largest solar plant in NH is presently the 942 kW operation that is powering the wastewater treatment plant and other municipal buildings in Peterborough. Here are some interesting specifics about this plant:

• It cost $ 2.4 million. Half of the funds came from the Renewable Energy Fund administered by the NH Public Utilities Commission; the remainder was funded by the developer and builder of the solar array, Borrego Solar.
• The array is built on land previously covered by a holding pond at the wastewater treatment pond.
• The plant consists of 3088 Canadian Solar modules, each with a rating of 305 W.
• The project went online in November 2015.
• The benefit to Peterborough is that there was no upfront capital investment and, per the power purchase agreement, the town buys all the electricity produced by the solar array at a cost of 8c/kWh (with a 1%/year increase for next 20 years). Previously, the cost for electricity from the utility was 14c/kWh. It has been estimated that this solar installation will produce savings of $ 250,000 to $ 500,000 over the 20-year term of the agreement.
• Borrego Solar gets to sell the associated renewable energy credits and benefits from the 30% federal tax credit.
• Based on the NREL PVWatts calculator, the annual output for the Peterborough system should be 1165 MWh; however, as noted above, the output will vary from year to year depending on the irradiation conditions, temperatures, and amount of cloud cover. In 2016, the annual electricity production was 1280 MWh, which was a little better than calculated.
• The performance of the plant can be monitored online through a useful solar dashboard link.

Aerial View of Peterborough Solar Plant. Source: Peterborough

The chart below shows the panel temperatures and solar radiance levels for one recent day, 7/20/17, at the Peterborough solar plant. Even though the ambient temperature only reached 90^oF, the panel temperatures rose to as high as 140^oF. The periodic dips in the solar power and irradiance levels are due to passing clouds.

In my next post on solar power in NH, I will look at how the state is doing with respect to solar installations. I will also highlight some recent changes that NH homeowners who are considering solar should take into account.

Until next time, remember to turn off the lights when you leave the room. 

Mike Mooiman

Franklin Pierce University

mooimanm@franklinpierce.edu

Click on this link to receive email notifications for Energy in New Hampshire updates

Solar Power in New Hampshire - Part 1

In states such as Massachusetts, New Jersey, and California, there is a remarkable roll-out of solar energy generation operations underway, both large- and small-scale, driven by generous solar power incentives as well as improvements in technology and the falling prices of solar panels. In some respect, NH is arriving late to the game, but, as I will highlight in future posts, there are positive steps being taken. In my next series of posts, I discuss various aspects of solar energy, how NH is benefiting from its 2500 hours/year of sunshine, and how the state could further tap into this solar energy potential. 

There are several ways to harness the energy of the sun:

• Solar thermal uses the heat of the sun to warm up water so that it can be used for showers and other hot-water applications like washing.
• Concentrating solar power concentrates the energy of sunlight by mirrors onto a focal point. The focused sunlight heats a fluid, which is used to generate steam, which then turns a turbine to generate electricity.
• Photovoltaic generation of electricity through the use of solar panels is the most widely used and most promising approach to tap into the sun’s energy. Its application is growing exponentially in many countries and it represents one of the most significant resources of renewable energy.

Each of these applications requires sunny days and the direct radiation of the sun, so let’s start with some simple measures of solar radiation. The state of New Hampshire has ~2500 hours of sunshine and 90 clear days per year. In comparison, Nevada has about 160 clear days annually and about 3600 hours of sunshine. For a more exact determination of the power available from the sun, we use the concept of irradiance, which is a measure of sunlight intensity on one square meter of horizontal surface at a point in time. This, of course, changes during the day: it is low in the early morning; at a maximum at noon when the sun is directly overhead; and then tapers off towards evening. It also changes depending on the location, time of year, and amount of cloud cover. The typical average peak irradiance at noontime is 1000 watts per square meter (W/m2) for the planet. This value is referred to as the peak sun value. Measurements of irradiance averaged over 30 years for two days in June appear in the figure below. The yellow June 8th data show an essentially cloudless day, whereas the grey June 18th data show a day with a considerable amount of cloud cover. The drop-off in irradiance levels with cloud cover is significant.

 Source: PVWatts

Irradiance is a measure of the intensity or power of sunlight at a point in time, but what we are really interested in is the energy that we can harvest over a period of time. In an earlier post, I explained the difference between power and energy. Energy is the amount of power expended over a period of time (an hour or a day). The mathematical relationship between Energy and Power is given by the simple formula:

Energy = Power x Time.

In the solar field, we determine the energy that can be potentially harvested over a day by calculating the area under the irradiance curve, such as the yellow area in the figure above. This measure of energy over a day is termed insolation; it is measured in kilowatt hours per square meter (kWh/m2). Another measure of insolation is to calculate how many hours of peak sun (with a fixed irradiance of 1000 W/m2) will deliver the same energy as the sum of the varying (irradiation x time) values over the day. The hours of peak sun per day is a particularly useful measure and is extensively used in the solar energy field to determine the daily output of electricity from solar panels. Insolation data are often available in tables of peak sun hours for different times of the year and different locations around the world. For example, the figure below shows peak sun hours for Concord, NH, at different times of the year. On average, the annual peak sun value for Concord is 3.9 hours.

Source:NREL

These insolation measures are for a panel lying flat on the ground, but that is not the normal orientation for most solar projects. In the northern hemisphere, solar panels are angled towards the south, so as to capture as much sunlight as possible as the sun rises and sets in the southern skies. Typically, the mounting angle of the panels is equivalent to the latitude of the location: panels in Concord, NH are ideally oriented at an angle of 43o from the horizontal. With the correct mounting angle, the average annual insolation value increases from 3.9 to 4.6 peak sun hours, an 18% improvement over a horizontally mounted panel. This is the average improvement for a fixed-angle array, but further improvements can be achieved by adjusting the orientation of the panels during the year. In winter, panels should have a higher mounting angle to capture the sunlight from the sun sitting lower in the southern skies and, in summertime, the panels should lie flatter to catch the rays of the sun when it sits high in the sky during the day.

Some solar arrays are very sophisticated, with intricate motor drives and control systems that can follow the sun from east to west during the day and also make small daily adjustments in the tilt angle to follow the sun’s seasonal orientation. Dual-axis systems, such as these, can boost the insolation by about 28% or more over a fixed-angle array; however, these systems are expensive and maintenance issues with the drives and controllers often occur. Solar panels are pretty cheap these days, so a 28% gain in efficiency can rather be captured by simply adding more panels and avoiding the maintenance headaches. For this reason, most solar systems are simple fixed-angle systems.

Let’s return for a moment to measures of solar insolation. We have been using units of peak hours, which are particularly useful when calculating the energy that a photovoltaic (PV) panel will generate. Another useful unit is the direct measure of energy per square meter, i.e., kilowatt hours per square meter, kWh/m2. We determined above that the average for a Concord, NH, array mounted at 43o was 4.6 peak sun hours. So, at a peak sun value of 1000 W/ m2, we can calculate the average annual insolation value as:

4.6 hours/day x 1 kW/m2 x 365 day/year = 1679 kWh/year.

Of course, higher irradiation values created by improved mounting angles lead to higher annual insolation values. To gauge the amount of solar energy that can be harvested, maps of annual solar insolation have been prepared for the entire planet. The map below shows the average annual insolation, in kWh/m2, for the USA.

It is clear that New Hampshire is not subjected to large amounts of high-intensity solar irradiation. The choice areas lie in the Southwest, but there is still sufficient solar radiation here in the Northeast to make it worthwhile harvesting.

In an earlier post, I noted that annual electricity consumption for New Hampshire was ~11 million megawatt hours/year (MWh/y). Using the average insolation value of 1680 kW/m2 as determined above, we can roughly calculate how much land area would be needed to generate New Hampshire’s annual electricity demand using the following assumptions:

PV panel efficiency: 15% (a typical value for modern panels)
Electrical and storage system losses: 50%
Panel coverage of land area: 50%

Based on these assumptions, we can determine that an area of approximately 67 square miles would be needed to generate sufficient energy to meet New Hampshire’s annual electricity needs—an area approximately 8 miles by 8 miles. This hardly seems much in state with a land area of 9350 sq. miles. The thought that it would only require ~0.7% of NH’s land area to generate all of the state’s electricity needs is an intriguing one; however, it is important to put this fun-to-do order-of-magnitude calculation into perspective and consider the technical and economic feasibility of this idea.

Let’s start with the size of the plant. Very large solar plants are being built today. There are several in the 500 MW range in the US and some larger ones in India and China. As of the date of this post, the largest solar power plant in the US is the BHE Renewables Solar Star operation in Antelope Valley, California. This is a 579 MW AC output plant, capable of generating ~1, 800,000 MWh of electricity per year or about 16% of NH’s needs. It uses 1.7 million solar panels and is located on 5 sq. miles of land. Technically, large-scale solar plants are feasible, but the costs are high. The cost for a 550 MW plant in California was reported to be $ 2.4 billion. The largest solar farm in the world is presently the Kurnool Ultra Mega Solar Park in Andra Pradesh, India. This monster has over 4 million panels, a nameplate capacity of 1000 MW, a cost about $1.1 billion, and covers a land area of 9.3 sq. miles. It is reported to produce 2.6 billion kWh of electricity annually, which is 24% of NH annual needs.

Cost is an issue, but the bigger problem associated with solar power is that it is an intermittent and variable resource. Unlike a traditional nuclear, fossil fuel, or hydroelectric power plant that can vary its output day or night (within a certain range), a solar resource can only produce energy during the daylight hours and is subject to the whims of cloud cover and passing storms – during which output can drop considerably. To fully utilize solar energy, we need electricity storage in batteries to provide power for the nighttime and when it is cloudy. Unlike grid-scale electricity generation from large PV plants, grid-scale battery storage is still in its infancy. It is complicated and very expensive. To date, the largest grid-scale battery-based storage operation is near San Diego in California – a 30 MW unit with storage of 120 MWh. To store just one day’s worth of electricity for NH would require some 30,000 MWh of storage. This is 250 times the capacity of the largest existing storage plant and is simply not technically and economically feasible at this time. In many respects, generation of electricity from sunlight these days is fairly straightforward; the storage aspect is the bigger challenge that we face this century.

My back-of-the-envelope cost estimates yield a $10 billion price tag for a solar and storage operation to supply all of NH's electricity needs and one full day of storage. This is certainly cheaper than building a nuclear power station and I am confident that with the falling cost of storage and solar panels, we will, within the next decade, be building solar and storage plants of this size. Perhaps one of these will be in NH.

This is the first in a series of posts about solar power and its application in NH. I trust that I have given you a sense of the resource available and the scale that is needed to harness it, but also a sense of the technical challenges, complexities, and costs involved in developing this resource.

Until next time, remember to turn off the lights when you leave the room. 

Mike Mooiman

Franklin Pierce University

mooimanm@franklinpierce.edu

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