TechCon  09 Symposium on Cleantech Energy Conversion, Storage and Related Processes Santa Clara, CA, USA May 13, 2009  Society of Vacuum Coaters

T he B asic E conomics of P hotovoltaics for Vacuum Coaters 8:30 am CT-5, May 13, 2009 Greg P. Smestad, Ph.D. Solar Energy Materials and Solar Cells, Sol Ideas Technology Development

T he B asic E conomics of P hotovoltaics for Vacuum Coaters 8:30 am CT-5, May 13, 2009

 Photovoltaics and Systems Systems Approach - A process of estimating or inferring how localized actions and changes influence the state of the neighboring aspects or the whole. One goal of a Systems Approach is identifying “leverage” -- seeing where actions and changes lead to overall improvements. Examples: Supply Chain Design, Program Management, Biology, Engineering, Photovoltaics. Source: Joe Morabito @ 3/2009 DOE SETP Program Review

Systems Approach - A process of estimating or inferring how localized actions and changes influence the state of the neighboring aspects or the whole.

One goal of a Systems Approach is identifying “leverage” -- seeing where actions and changes lead to overall improvements.

Examples: Supply Chain Design, Program Management, Biology, Engineering, Photovoltaics.

 Levelized Cost of Energy Unlike module manufacturing cost ($/Wp), it combines module efficiency, lifetime and systems aspects. Source: Kiss+Cathcart Architects To measure cost-competiveness of solar energy. Cost-competitiveness is key to very wide-scale use. LCOE captures all economic costs.

Unlike module manufacturing cost ($/Wp), it combines module efficiency, lifetime and systems aspects.

To measure cost-competiveness of solar energy.

Cost-competitiveness is key to very wide-scale use.

LCOE captures all economic costs.

 LCOE is DOE SAI’s Target

 Goal of this Presentation To go from module cost per square meter to PV System LCOE

 Solar module evaluation criteria Source: ECN , Netherlands Costs Factors Efficiency Economic life expectation (depreciation ) Ease of manufacturing Cost/Wp (power) Cost/m 2 (area) BOS (Balance of Systems) Throughput (MWp/year) Costs of production Cost/kWh (energy)

Efficiency

Economic life expectation (depreciation )

Ease of manufacturing

Cost/Wp (power)

Cost/m 2 (area)

BOS (Balance of Systems)

Throughput (MWp/year)

Costs of production

Cost/kWh (energy)

 How do you put the machine cost into cost/m 2 ? Courtesy: PDIL NREL

 Step 1: Annual Worth P = equipment cost “ i” = discount rate N = number of years Let’s take: P = 20 million dollars worth of equipment i = 10% N = 7 years

P = equipment cost

“ i” = discount rate

N = number of years

 Step 2: Equipment Cost/m 2 Annual worth (P, i, N) -- Previous slide Production volume in MWp/year Efficiency, 

Annual worth (P, i, N) -- Previous slide

Production volume in MWp/year

Efficiency, 

 Calculating Equipment Cost For: P = 20 million dollars worth of equipment i = 10% N = 7 years Annual module production = 20 MWp Depreciated equipment cost = approx. 20 $/m 2 for modules of 10% conversion efficiency.

 Step 3: Module Cost

 OK, you have the PV module - Now what? Put it in the Sun Source: UL G.Smestad Source: NREL/Spire Source: G. Smestad

 Irradiance and Solar Resource Courtesy: NREL Photos

Watts New Under the Sun?

 Step 4: Watts Under the Sun 5 kWh/m 2 day will be used. This corresponds to a location such as San Jos é , California (annual insolation on a horizontal surface - 1820 kWh/m 2 /year; south-facing solar array, tilted at the latitude - 1980 kWh/m 2 /year). For the month of May -- 200 kWh/m 2 of energy for either orientation. For comparison, a properly tilted array at that location would have an average annual irradiance on it of 270 - 300 W/m 2 .

5 kWh/m 2 day will be used.

This corresponds to a location such as San Jos é , California (annual insolation on a horizontal surface - 1820 kWh/m 2 /year; south-facing solar array, tilted at the latitude - 1980 kWh/m 2 /year).

For the month of May -- 200 kWh/m 2 of energy for either orientation.

For comparison, a properly tilted array at that location would have an average annual irradiance on it of 270 - 300 W/m 2 .

 Step 5: Module Cost/Peak Watt A 12% efficient module with a cost of $400/m 2 = cost per peak watt of $3.33 For a PV module operating at a solar conversion efficiency of 16%, $/Wp = 2.5 if the module cost is 400 $/m 2 . For a 10% efficient module, it’s 2.5 $/Wp for 250 $/m 2 .

A 12% efficient module with a cost of $400/m 2 = cost per peak watt of $3.33

For a PV module operating at a solar conversion efficiency of 16%, $/Wp = 2.5 if the module cost is 400 $/m 2 .

For a 10% efficient module, it’s 2.5 $/Wp for 250 $/m 2 .

 Historical Trends

 Learning Curves Where: P(t) is the average price of a product at time t q(t) is the cumulative production at time t b is the learning coefficient Robert Margolis of DOE

Where:

P(t) is the average price of a product at time t

q(t) is the cumulative production at time t

b is the learning coefficient

Robert Margolis of DOE

 Going Further: Payback time Payback time for a 150 $/m 2 module of 20% efficiency at an electricity selling price of 0.08 $/kWh is approximately 5 years.

 Step 6: Levelized Cost of Electricity ratio of the total life cycle cost to the total lifetime energy production O&M = Operations and Maintenance finite lifetime of the PV panels

ratio of the total life cycle cost to the total lifetime energy production

O&M = Operations and Maintenance

finite lifetime of the PV panels

 Step 6: LCOE from Module Costs PC = Power Conditioning CFR = Capital Recovery Factor IND = Indirect Costs O&M = Operating & Maint.

 Interest rates For utility scale power, i = 6%; for investor funded projects, i = 10% is appropriate. For residential systems and projects on commercial buildings, a low interest loan might be secured and so for this analysis, a more generous i = 5% is used.

For utility scale power, i = 6%;

for investor funded projects, i = 10% is appropriate.

For residential systems and projects on commercial buildings, a low interest loan might be secured and so for this analysis, a more generous i = 5% is used.

 Estimating LCOE Cost ($/kWh) of a photovoltaic system for i = 5% and a 200 $/m 2 module. O&M = $0.005/kWh; area-related BOS = 75 $/m 2 ; inverter costs = $170 per peak kW; indirect cost (IND) of 30%.

Cost ($/kWh) of a photovoltaic system for i = 5% and a 200 $/m 2 module.

O&M = $0.005/kWh;

area-related BOS = 75 $/m 2 ;

inverter costs = $170 per peak kW;

indirect cost (IND) of 30%.

 Cost and Lifetime Even a low cost solar module that has an 8% efficiency must have a lifetime of > 10 years if its solar generated electricity is to be competitive with conventional sources . Source: Risø - DTU www.riso.dk/solarcells Frederik C. Krebs

Even a low cost solar module that has an 8% efficiency must have a lifetime of > 10 years if its solar generated electricity is to be competitive with conventional sources .

 Now and Needed Lots of opportunities for cost reductions

Lots of opportunities for cost reductions

 Opportunities Full system cost reductions includes: installation, inverters, and balance of system (BOS) components

Full system cost reductions includes:

installation,

inverters,

and balance of system (BOS) components

 Residential Courtesy Ron Smestad Smart Grid - Solar Energy Grid Interconnection Systsms (SEGIS) http://www.sandia.gov/SAI/

Courtesy Ron Smestad

 Roofing Source: ECD

 Tracking Courtesy SunPower

Courtesy SunPower

 Utilities Sources: NREL photos/Arizona Public Service facility in Prescott and ASE/Boston

 Goals DOE  Tools The Solar Advisor Model (SAM) evaluates several types of financing (from residential to utility-scale) and a variety of technology-specific cost models for several and, eventually, all solar technologies. https://www.nrel.gov/analysis/sam/

 Availability P.H. Stauffer et al, Rare Earth Elements - Critical Resources for High Technology, USGS (2002 )

The analysis does not include costs of securing contracts for materials, or the availability of In, Ga, Ge or Te [see: Anderson, Freundlich, Fthenakis]. Indium is primarily obtained from the mining of zinc It is used for flat panel displays and thin film PV. It is also part of the absorber layer itself in CIGS-based cells. Molybdenum, Selenium, and Tellurium are obtained primarily from the by-products of copper mining. Gallium is scarce; 95% of its global supply is obtained as a by-product of aluminum production.  Availability Matters

The analysis does not include costs of securing contracts for materials, or the availability of In, Ga, Ge or Te [see: Anderson, Freundlich, Fthenakis].

Indium is primarily obtained from the mining of zinc It is used for flat panel displays and thin film PV.

It is also part of the absorber layer itself in CIGS-based cells.

Molybdenum, Selenium, and Tellurium are obtained primarily from the by-products of copper mining.

Gallium is scarce; 95% of its global supply is obtained as a by-product of aluminum production.

 Conclusions Visit http://www.solideas.com/ for further information, references and links and to help me update the numbers. A simplified economic analysis for the production of a PV module has been presented and integrated into a framework where of the complete PV system can also be considered. One can gain insights as to whether a given material or process can produce a cost-effective solar technology. Even a solar cell that is free must have a minimum efficiency and lifetime for the cost of solar generated electricity to be competitive with conventional sources.

A simplified economic analysis for the production of a PV module has been presented and integrated into a framework where of the complete PV system can also be considered.

One can gain insights as to whether a given material or process can produce a cost-effective solar technology.

Even a solar cell that is free must have a minimum efficiency and lifetime for the cost of solar generated electricity to be competitive with conventional sources.