Wednesday, November 12, 2014

SOLAR GRID PARITY HAS ARRIVED (Solar for less than fossil fuel?)

By: Eugene Wilkie


Solar Base Power For Less Than Fossil Fuel?

Lately we have seen a lot of news about renewables ability to be at grid parity.First to understand what solar grid parity is lets look at the definition of grid parity. Grid parity (or socket parity) occurs when an alternative energy source can generate electricity at a levelized cost (LCoE) that is less than or equal to the price of purchasing power from the electricity grid. The term is most commonly used when discussing renewable energy sources, notably solar power and wind power. It has bee a contentious subject since solar begin to be a viable source of integrated power. Many believe the models that have been used have been very unfair by not taking into consideration the true volatility of fuel prices combined with the high cost of maintenance to fossil fuel generating plants




Grid parity has been the Holy Grail of solar's ability to really come into its own as a viable source of energy that could compete with the fossil fuel industry. Bloombberg recently wrote an article While You were Getting Worked Up Over Oil Prices, This Jut Happened To Solar

ARTICLE ABSTRACT
The chart below shows how far solar will come out ahead in each state in 2016, assuming a worst-case scenario of lower tax credits. The blue bars show the anticipated cost of solar energy (assuming a conservative 20-year lifespan for the panels) minus average electricity prices. Positive numbers indicate the savings for every kilowatt hour of electricity.

Grid Parity to Reach 36 States in 2016

Source: Deutsche Bank, EIA. Graph shows LCOE minus average electricity price
Source: Deutsche Bank, EIA. Graph shows LCOE minus average electricity price
Solar has already reached grid parity in 10 states that are responsible for 90 percent of U.S. solar electricity production. In those states alone, installed capacity growth will increase as much as sixfold over the next three to four years, Deutsche Bank analyst Vishal Shah wrote in the Oct. 26 report.

Source http://www.bloomberg.com/
Pretty amazing!
Now remember solar is only produced during the daytime and if solar really wants to be a player in the energy market it needs to have the ability to be a base power source or provide power 24 hours a day. 
In order to do this we need the combined price of solar and storage to meet grid parity and I believe we will see the same pattern with storage that we have witnessed in solar. As solar became more and more a main stream commodity prices dropped dramatically. I have been closely watching the development of quite a few promising technologies as well as known companies that are providing storage and am extremely encouraged that we are getting close to industry price wars like we saw with solar panels which caused the huge drop in prices.




Experts believe it is circa  2010 for energy storage, the year that saw tremendous price declines in solar PV systems.
Last September, a news article appearing in Renewable Energy World discussed why this is so.
The report indicated that solar industry in the U.S. has shown remarkable growth over the last four years and recent statistics speak of this growth.  As of March 2014, solar installations went up to 1,330 MW from a modest  340 MW back in 2010.  Installation costs per watt likewise improved to about $2.30 this year from $6.40 in 2010.
Costs of solar PVs have improved owing to lower technology cost.  Balance-of-System or BoS costs now comprise a large chunk of PV system prices.  Experts foresee that energy storage will relive the solar PV cost scenario, pointing out that  the cost of Li-ion battery technology has been going down to reasonable levels.
However, experts note that Li-ion battery price decline alone will not suffice.
U.S firm  Rocky Mountain Institute (RMI) created the Battery BoS program which aims to probe into BoS costs and address related issues.  It plans to undertake these with various industry players.
Based on actual interviews with utilities, regulators, and other key players in the distributed storage landscape, more than 60 percent of the cost to install residential-type storage systems are eaten up by BoS. An even greater percentage, more than 70 percent, was noted for the non-residential sector, the article explains.
According to the news, the company envisions states across the U.S. turning to renewable microgrids with energy storage systems for their power requirements. To achieve this, RMI stresses the importance of bringing BoS costs down so that the technology could be implemented on a larger scale.




When I first began in the solar industry there were two types of systems and they were both off grid. One was to trickle charge a battery for emergency applications and the other was that you ran your power from a battery bank that was charged from solar and usually backed up with a generator. It is amazing to watch the industry come full circle.



We now have grid tied inverters that changed all that and created its own industry. grid-tie inverter is a power inverter that converts direct current (DC) electricity into alternating current (AC) with an ability to synchronize to interface with a utility line. Its applications are converting DC sources such as solar panels or small wind turbines into AC for tying with the grid.
I believe that we are on the cusp as an industry that no matter how loud or ornery the fossil fuel industry gets about renewables and even if they are able to lobby successfully against renewables incentives we will be able to stand on our own. For all my brethren in the industry who have trudged this long winding road Congratulations! I do believe we are about to see an explosion as an industry. There has been far to much money invested into this industry for it to fail at this point. Imagine, we are very close that even if you unhook from the grid you can still provide all your power from the sun at the same or less price then buying )or as I like to say renting) power from the utilities.

LET THE SUNSHINE IN!







I believe that we are on the cusp as an industry that no matter how loud or ornery the fossil fuel industry gets about renewables and even if they are able to lobby successfully against renewables incentives we will be able to stand on our own. For all my brethren in the industry who have trudged this long winding road Congratulations! I do believe we are about to see an explosion as an industry. There has been far to much money invested into this industry for it to fail at this point. Imagine, we are very close that even if you unhook from the grid you can still provide all your power from the sun at the same or less price then buying )or as I like to say renting) power from the utilities.

LET THE SUNSHINE IN!

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