The marginal cost of electricity used as backup for solar hot water systems: A case study

In this study, a method is developed for estimating the long run marginal cost to electric utilities of providing backup service for solar residential heating and hot water (HHW) systems. This method accounts for all investment, fuel, and operating costs required to provide the added electric service for HHW. From the information produced using this method, the impacts of various rate design philosophies and of government tax and regulatory policies on annual homeowner costs, fuel consumption patterns, environmental pollutants, and the net social cost of providing HHW service can be computed. Also, the differences in these parameters among solar, electric, and conventional HHW systems can be compared.In an initial study, it was found that for one Northeastern utility the estimated marginal cost of electricity for backup to solar hot water (HW) systems was less than that for comparable electric HW systems for the period of the mid to late 1990s. Load management (shifting all electricity use to off-peak periods) substantially reduced marginal costs for both electric and solar systems and essentially eliminated any difference between them. In all cases, the marginal cost was lower than the average cost of all electricity generated for market penetration rates that can realistically be expected to be experienced. The impact on total annual costs to homeowners of various electricity rate schemes and the impacts of Federal tax credits and property tax exemptions were computed. Net changes in resource consumption patterns due to the use of solar systems were estimated.     

Solar subsidies and economic efficiency

In this paper the case for subsidies for solar energy to counter inefficient pricing practices of electric utilities, hidden subsidies to non-solar fuels and tax law biases are examined. The conclusion reached for two of three regions in the USA in the case of solar energy replacing electricity for hot water heating is that, far from offsetting biases against solar energy, current subsidies reinforce pre-existing biases in favour of the use of solar energy systems.     

Modeling the impact of integrating solar thermal systems and heat pumps for domestic hot water in electric systems – The case study of Corvo Island

The use of solar thermal systems with electricity backup and heat pumps as hot water suppliers in residential buildings seems to be a very promising way to increase energy efficiency. Nevertheless, the massive adoption of such solutions in small networks (neighborhood, village) may induce problems in the electric grid management. This study explores the impact of such systems in small electric grids, using an hourly electricity backup load model. To test and validate the model, we used the island of Corvo (Azores), a small isolated community where it is being implemented a project of electrification of domestic hot water systems (DHW). We consider different load scenarios to manage the backup of DHW systems and analyze its consequences on the peak load and overall energy demand. For Corvo, for the best case where the backup is limited and distributed along off-peak hours, we observed an increase of 24% in the peak load and 7.5% in the annual energy demand. Critical values of peak load are found in winter, when daily solar irradiation is lower than 2000 Wh/m²/day. We conclude that the solar thermal systems are responsible for most of the peak load increase, but since they have the flexibility to adjust the electric backup hours due to the thermal storage capacity, the use of these systems can minimize the impact on the grid. Heat pumps on the other hand, albeit being more efficient in terms electric backup, are less flexible to contribute to the grid management as they operate continuously.     

Thermal performance, economic and environmental life cycle analysis of thermosiphon solar water heaters

In this paper, the environmental benefits or renewable energy systems are initially presented followed by a study of the thermal performance, economics and environmental protection offered by thermosiphon solar water heating systems. The system investigated is of the domestic size, suitable to satisfy most of the hot water needs of a family of four persons. The results presented in this paper show that considerable percentage of the hot water needs of the family are covered with solar energy. This is expressed as the solar contribution and its annual value is 79%. Additionally, the system investigated give positive and very promising financial characteristics with payback time of 2.7 years and life cycle savings of 2240 € with electricity backup and payback time of 4.5 years and life cycle savings of 1056 € with diesel backup. From the results it can also be shown that by using solar energy considerable amounts of greenhouse polluting gasses are avoided. The saving, compared to a conventional system, is about 70% for electricity or diesel backup. With respect to life cycle assessment of the systems, the energy spent for the manufacture and installation of the solar systems is recouped in about 13 months, whereas the payback time with respect to emissions produced from the embodied energy required for the manufacture and installation of the systems varies from a few months to 3.2 years according to the fuel and the particular pollutant considered. It can therefore be concluded that thermosiphon solar water hearting systems offer significant protection to the environment and should be employed whenever possible in order to achieve a sustainable future.     

Technical and economic performance of residential solar water heating in the United States

This paper examines the regional, technical, and economic performance of residential rooftop solar water heating (SWH) technology in the U.S. It focuses on the application of SWH to consumers in the U.S. currently using electricity for water heating, which currently uses over 120 billion kWh per year. The variation in electrical energy savings due to water heating use, inlet water temperature and solar resource is estimated and applied to determine the regional “break-even” cost of SWH where the life-cycle cost of SWH is equal the life-cycle energy savings. For a typical residential consumer, a SWH system will reduce water heating energy demand by 50–85%, or a savings of 1600–2600 kWh per year. For the largest 1000 electric utilities serving residential customers in the United States as of 2008, this corresponds to an annual electric bill savings range of about $100 to over $300, reflecting the large range in residential electricity prices. This range in electricity prices, along with a variety of incentives programs corresponds to a break-even cost of SWH in the United States varying by more than a factor of five (from less than $2250/system to over $10,000/system excluding Hawaii and Alaska), despite a much smaller variation in the amount of energy saved by the systems (a factor of approximately one and a half). We also consider the relationships between collector area and technical performance, SWH price and solar fraction (percent of daily energy requirements supplied by the SWH system) and examine the key drivers behind break-even costs.     

Solar energy/utility interface: Technical issues

Typical solar heating, hot water, and air-conditioning systems cannot provide all of the thermal energy required by a structure. Auxiliary or “backup” energy is supplied by public utilities. Energy storage capability usually provided as an element in such systems may be employed for utility load management purposes. Technical issues relating to this are explored, including the need for development of standards to optimize the interaction between the solar system and the utility, the effect of variability in the utility's load profile upon the interface, and the impact of the use of solar storage for load management on solar systems. Passive solar heating systems are technically diverse. Technical requirements for interfacing passive systems with utilities in an optimum manner are discussed. Suggested approaches to improvement of this interface are reviewed. One solution to successfully interfacing passive systems with utilities is the development of hybrid systems. This potential is explored.     

The solar water heater industry in South Florida: History and projections

Solar water heaters were a commercial success because they offered homeowners a system for heating water which was economically superior to either electric or gas units. In 1938 a solar user could recover his initial investment from fuel cost savings in less than 2 yr and anticipate a seemingly endless supply of free hot water.By the early 1950s, however, three primary forces combined to reduce the industry to a few firms whose principal solar activity was the repair or replacement of water storage tanks. (1) The rapid decline in electricity rates along with the increasing first cost of installing a solar unit reversed the economic advantage of the solar approach. (2) The widely held opinion that solar systems would last indefinitely was abruptly altered when the water storage tanks began to develop leaks. Tank failures often caused considerable damage and became increasingly costly to repair. (3) The emergence of the large scale builder-developer largely removed the choice of hot water system from the individual homeowner. In his efforts to be first-cost competitive, the developer installed the less expensive conventional hot water unit rather than the solar unit.Recent developments in energy prices and availability, however, have produced an economic environment more promising to a resurgence of solar water heating. Under certain potentially realistic first-cost estimates and projected fuel price increases, a strong economic argument in favor of solar water heaters can be made. Further, homeowner attitudes toward solar units are generally positive and receptive to considering the solar alternatives.     

Performance and economics of annual storage solar heating systems

Annual storage is used with active solar heating systems to permit storage of summer-time solar heat for winter use. This paper presents the results of a comprehensive computer simulation study of the performance of active solar heating systems with long-term hot water storage. A unique feature of this study is the investigation of systems used to supply backup heat to passive solar and energy-conserving buildings, as well as to meet standard heating and hot water loads.

Findings show that system performance increases linearly as storage volume increases, up to the point where the storage tank is large enough to store all heat collected in summer. This point, the point of “unconstrained operation”, is the likely economic optimum. In contrast to diurnal storage systems, systems with annual storage show only slightly diminishing returns as system size increases. Annual storage systems providing nearly 100% solar space heat may cost the same or less per unit heat delivered as a 50 per cent diurnal solar system. Also in contrast to diurnal systems, annual storage systems perform efficiently in meeting the load of a passive or energy-efficient building. A breakeven cost 4¢–10¢/kWh is estimated for optimal 100 per cent solar heating in the U.S.A.     

Economic comparison of solar-assisted heat pumps

A study of the economic performance of a solar system, air-to-air heat pumps, and several solar-assisted heat pump systems (SAHP) for residential heating is presented. The study is based on a computer simulation which is supported by monitoring data from an existing installation, the Terrosi-Grumman house in Quechee, Vermont. Three different SAHP configurations as well as conventional solar and air-to-air heat pump systems are evaluated for a northern New England climate. All systems are evaluated both with and without a peak/off-peak electricity price differential.

The SAHP systems are: (1) the series system in which the solar storage serves as the energy source for the heat pump, (2) the series off-peak system in which the heat pump in the series system operates only during certain periods of the day under a special electric rate structure, (3) a parallel system in which the environment is the source for both the collector and the heat pump, and (4) a peak/off-peak parallel system in which oil is operated during the period of peak electricity price. Hybrid air-to-air heat pump/oil systems are also evaluated.

For all alternatives, two different economic analyses are used: (1) the rate of return which emphasizes the return earned on the capital investment, and (2) the life cycle critical price which compares the current capital cost to the present worth of the stream of all future energy savings.

Both economic measures select the air-to-air heat pump/on-peak oil system when there is a peak/off-peak electricity price differential. (In this case the ratio of off-peak to average price is 40 per cent.) When there is no price differential, the air-to-air heat pump/oil system is still preferred, but the oil system is now operated when the ambient temperature falls below −6.7°C (20°F). When the electricity price is doubled (from 19.5 to 40$/GJ), solar/oil is the preferred system.     

Consumer impacts on dividends from solar water heating

Common domestic solar water heating system usage patterns were investigated by a survey of 55 installations. These usage patterns were modelled by simulation based on the actual occupants' use of boiler or other auxiliary heating control strategies. These strategies were not optimal, as often assumed. The effectiveness of the technology was found to be highly sensitive to the time settings used for auxiliary water heating, and the 65% of solar householders using their boilers in the mornings were found to be forgoing 75% of their potential savings. Additionally, 92% of consumers were found to be small households, whose potential savings were only 23% of those of larger households, which use more hot water. Overall the majority (at least 60%) of the systems surveyed were found to be achieving no more than 6% of their potential savings. Incorporating consideration of Legionella issues, results indicate that if solar thermal technology is to deliver its potential to CO₂ reduction targets: solar householders must avoid any use of their auxiliary water heating systems before the end of the main warmth of the day, grants for solar technology should be focused on households with higher hot water demands, and particularly on those that are dependent on electricity for water heating, health and safety requirements for hot water storage must be reviewed and, if possible, required temperatures should be set at a lower level, so that carbon savings from solar water heating may be optimized.     

Increasing solar gains by using hot water to heat dishwashers and washing machines

Seventy to ninety percent of the electric energy used by dishwashers and washing machines heats the water, the crockery, the laundry and the machine and could just as well be replaced by heating energy from solar collectors, district heating or a boiler. A dishwasher and a washing machine equipped with a heat exchanger and heated by a hot water circulation circuit instead of electricity (heat-fed machines) have been simulated together with solar heating systems for single-family houses in two different climates (Stockholm, Sweden and Miami, USA). The simulations show that a major part of the increased heat load due to heat-fed machines can be covered by solar heat both in hot and cold climates if the collector area is compensated for the larger heat load to give the same marginal contribution. Using ordinary machines connected to the hot water pipe (hot water-fed machines) and using only cold water for the rinses in the washing machine gives almost the same solar contribution; however considerably lower electrical energy savings are achieved. The simulations also indicate that improvements in the system design of a combisystem (increased stratification in the store) are more advantageous if heat-fed machines are connected to the store. Thus, using heat-fed machines also encourages the use of more advanced solar combisystems.     

Advances in solar thermal electricity technology

Various advanced solar thermal electricity technologies are reviewed with an emphasis on new technology and new market approaches.In single-axis tracking technology, the conventional parabolic trough collector is the mainstream established technology and is under continued development but is soon to face competition from two linear Fresnel reflector (LFR) technologies, the CLFR and Solarmundo. A Solarmundo prototype has been built in Belgium, and a CLFR prototype is awaiting presale of electricity as a commercial plant before it can be constructed in Queensland. In two-axis tracking technologies, dish/Stirling technologies are faced with high Stirling engine costs and emphasism may shift to solarised gas micro-turbines, which are adapted from the small stationary gas turbine market and will be available shortly at a price in the US$1 ppW range. ANU dish technology, in which steam is collected across the field and run through large steam turbines, has not been commercialised. Emphasis in solar thermal electricity applications in two-axis tracking systems seems to be shifting to tower technology. Two central receiver towers are planned for Spain, and one for Israel. Our own multi-tower solar array (MTSA) technology has gained Australian Research Council funding for an initial single tower prototype in Australia of approximately 150 kW(e) and will use combined microturbine and PV receivers. Non-tracking systems are described of two diverse types, Chimney and evacuated tubes. Solar chimney technology is being proposed for Australia based upon German technology. Air is heated underneath a large glass structure of about 5 km in diameter, and passes up a large chimney through a wind turbine near the base as it rises. A company Enviromission Ltd. has been listed in Australia to commercialise the concept. Evacuated tubes are growing rapidly for domestic hot water heating in Europe and organic rankine cycle engines such as the Freepower 6 kW are being considered for operation with thermal energy developed by evacuated tube and trough systems. These may replace some PV in medium sized applications as they offer potential for inexpensive pressurised water storage for 24 h operation, and backup by fuels instead of generators. In the medium term there is a clear trend to creation of smaller sized systems which can operate on a retail electricity cost offset basis near urban and industrial installations. In the longer term large low cost plants will be necessary for large scale electricity and fuels production. Retrofit central generation solar plants offer a cost effective transition market which allows increased production rates and gradual cost reduction for large solar thermal plant. In the paper the author describes current funding systems in Europe, Australia, and the USA, and makes suggestions for more effective programmes of support.     

Optimization of a community solar heating system with a heat pump and seasonal storage

The optimization of a district solar heating system with an electric-driven heat pump and seasonal heat storage is discussed. The optimization process comprises thermal, economic and system control analyses. Thermal and economic optima have been derived for collector area and storage volume simultaneously. The effects of different collector types and building loads are also investigated. Summertime charging of the storage by off-peak electricity has been applied to avoid severe peaking of auxiliary in the winter and to reduce the yearly energy cost. The thermal co-storage of electric energy is emphasized with systems which fail to supply heat for the heat pump during the winter heating season.‡ It has been found that system cost-effectiveness is only slightly affected as storage volume is increased beyond the optimum size. Large variations in the optima for different system configurations were found. The minimum cost of heat supplied in an optimal 500-unit community with 90% solar fraction was estimated at 8.9 ¢ kWh⁻¹.     

Smart Integration

Electric utilities in the United States and globally are heavily investing to upgrade their antiquated delivery, pricing, and service networks including investments in the following areas: -- smart grid, which generally includes improvements upward of the meters all the way to the transmission network and beyond -- smart metering, sometimes called advanced metering infrastructure (AMI), which usually includes control and monitoring of devices and appliances inside customer premises -- smart pricing including real-time pricing (RTP) or, more broadly, time-variable pricing, sometimes including differentiated pricing -- smart devices and in-home energy management systems such as programmable controllable thermostats (PCTs) capable of making intelligent decisions based on smart prices -- peak load curtailment, demand-side management (DSM), and demand response (DR) -- distributed generation, which allows customers to be net buyers or sellers of electricity at different times and with different tariffs, for example, plug-in hybrid electric vehicles (PHEVs), which can be charged under differentiated prices during off-peak hours. The main drivers of change include: -- insufficient central generation capacity planned to meet the growing demand coupled with the increasing costs of traditional supply-side options -- rising price of primary fuels including oil, natural gas, and coal -- increased concerns about global climate change associated with conventional means of power generation -- demand for higher power quality in the digital age.     

Comparative transient simulation of a renewable energy system with hydrogen and battery energy storage for residential applications

Energy systems for the building sector nowadays are moving towards using renewable energy sources such as solar and wind power. However, it is nearly impossible to fully develop a multi-generation energy system for a building only relying on these sources without convenient energy storage, backup systems, or connection to the grid. In this work, using TRNSYS software, a model was developed to study the transient behavior of an energy system applicable for residential buildings to supply the heating, cooling, domestic hot water, and electricity in demand. This study contains the comparison of two methods of energy storage, a hydrogen fuel cell/electrolyzer package and a conventional battery system. This study also provides information on environmental impacts and economical aspects of the proposed system. The results show that for an HVAC system when using hydrogen storage system the capital cost is twice the cost of using a battery system. However, the hydrogen system shows better performance when used at higher loads. Hydrogen storage systems show higher performance when used at higher size units.     

The pricing of off-peak power

Benefit-cost analysis is used to show that even with only one electricity production technique, marginal cost pricing of electricity in a firm off-peak period might reduce social welfare rather than improve it. This may occur when there are more periods with dissimilar demands for power than feasible prices for electricity. Thus the conclusion is reinforced that it may be more important to charge a higher price for electricity during periods of peak demand than a price equal to marginal running costs during the most off-peak hours.     

Control of a hybrid solar/electric thermal energy storage system

A controller for operating a hybrid thermal energy storage system (HTESS) is presented. The storage system accumulates solar energy during sunny days and releases it later at night or during cloudy days and, simultaneously, it stores electric energy during off-peak periods and releases it later during on-peak periods. The control of the system rests on an anticipatory strategy and on a regulation strategy. The anticipatory strategy is based on a fuzzy logic and feedforward controller (FLFFC) that can handle simultaneously the storage and retrieval of both electricity and solar energy. It takes into account the weather forecasts for solar radiation and outside air temperature, and optimizes the off and the on-peak periods for electrical heating. The regulation strategy depends on a PID controller which regulates the air flow from an electric fan in order to maintain the room temperature at the set point. Numerical simulations were conducted over one to three-month winter periods to test the response of the controller. Results indicate that the proposed control system is far superior to traditional control systems. It remains robust and reliable even for cases in which the weather forecasts are of poor reliability and accuracy (5-day horizon weather forecasts with reliability of 50%, ?10 K temperature accurate and ?50% solar radiation accurate). The performance of the HTESS as well as the thermal comfort of the room is maintained in all situations and at all times. Moreover, the electricity consumption for space heating is minimized and 95% of this electricity is consumed during off-peak hours.     

Financial incentives for the adoption of solar energy design: Peak-load pricing of back-up systems

Most solar energy systems for the space conditioning of buildings require a full sized back-up system for long periods of cloudy weather. If gas or electricity is a source of energy for that back-up system, not only does the building owner have to provide both a solar energy system and a back-up system, but the utility company has to build and maintain full sizedfacilities to provide for the demand by the back-up system during peak load conditions.

One method to limit capacity design of utilities is to design a peak-load pricing scheme which would tend to flatten the utilities' load curve. The scheme could also provide incentives for the installation of solar energy design that would use electricity or gas as back-up systems during off-peak hours only. Indeed, the success of the diffusion of solar energy construction into widespread usage may depend upon such financial incentives to the consumer.     

Environmental benefits and the economics of UK solar energy schemes

The use of solar energy to displace conventional fuels gives rise to benefits from resource saving and also from avoided adverse environmental effects. On the assumption that the displaced fuel is coal-generated electricity, this paper estimates the health benefits from avoided air pollution attributable to using solar panels for domestic water and space heating in the UK. These benefits are compared with those stemming from fuel savings. It is found that the environmental benefits, while non-trivial, are small in relation to the resource-saving benefits. All the benefit estimates considered are crude, and there is a clear need for further work in this area.     

Heating Characteristics and Economic Analysis of a Controllable On-Demand Heating System Based on Off-Peak Electricity Energy Storage

The working principle of a controllable on-demand heating system based on off-peak electricity energy storage(COHSBOEES) is as follows: the cheap off-peak electricity energy is converted into heat energy for storage in the evening, and the heat energy can be extracted on demand for heating during daytime peak or flat electricity periods. This technology can promote the smooth operation of the power grid, solve the problem of peak regulation for the electrical network, and promote renewable energy consumption. Based on the controllable on-demand heating strategy, a COHSBOEES for a heating area of 1000 m^2 was designed and built. Variations in the energy consumption and operating cost of the COHSBOEES in different heating situations were analyzed. The results showed that, off-peak electricity energy storage for heating was energy saving in comparison with central heating when the heating intensity of the COHSBOEES was 70 W/m^2 and the on-demand heating rate was less than 73.0%, and the off-peak electricity energy storage for heating was energy saving at any on-demand heating rate when the COHSBOEES had a heating intensity of 50 W/m^2. After the COHSBOEES has been running for three complete heating seasons, when the off-peak electricity price was 0.25 yuan/kW·h, the energy consumption cost of the COHSBOEES can be saved by 77.6% in comparison with central heating.