The marginal cost of solar backup

The long-run marginal cost of providing electricity for solar heating and hot water systems is estimated for three utilities and compared with the cost of providing electricity to electric-only systems. All investment, fuel, and operating costs are accounted for. Hot water systems and combined heating and hot water systems are analyzed separately. It is found that the marginal cost for solar backup is no more than the marginal cost of electricity used for purely electric heating and hot water devices and also no more than the incremental cost of normal load growth. For the three utilities studied, there appears to be little basis for rate distinctions between solar devices using electric backup and electric-only heating and hot water devices. “Off-peak storage” heating and hot water devices have a much lower marginal cost than the standard systems; again, there appears to be no basis for distinguishing between solar and electric off-peak devices. Compared with average cost pricing, marginal cost pricing offers benefits to customers using solar and electric heat and hot water, especially if a separate lower rate is adopted for off-peak storage devices; these benefits can amount to several hundred dollars a year. Substantial savings in the use of oil and gas fuels can be achieved if residences using these fuels convert to solar systems, savings not necessarily achievable by a shift, instead, to electric systems.     

Alternative technologies for US residential water heating : Energy savings and economic benefits

This article evaluates the energy savings and direct economic benefits of introducing heat pump and solar water heaters to the US residential market and the effects of a tax credit for solar installations. Energy savings are estimated for ten regions of the USA, as well as for the country as a whole, over the period 1977–2000. Changes in annual fuel bills and capital costs for water heaters are also computed. The results suggest that heat pump water heaters are likely to offer much larger benefits than solar heaters, even with tax credits. This is because heat pumps provide the same electricity savings (about 50%), but at a much lower capital cost.     

Incentives for solar water heating systems

Life-cycle costing has been used in an economic analysis of three solar domestic hot water installations. These are in operation in Las Palmas (Canary Islands) and are backed by conventional installations consuming either fuel-oil (GG), butane (BB) or electricity (EE). The cumulative cost flows (CCF), including expenditures for purchase, recovery, maintenance, fuel and operating costs, are calculated over the useful life of the installations for expected annual fuel-increment rates. Twenty-seven comparisons are made between the solar (SAS) and conventional systems (CS). Total savings are found over the lifetime and the repayment periods are obtained as a function of discount rate. The SAS and CS are examined with respect to economic incentives such as subvention, tax deduction, loans and their combinations. Finally, the variations of the payback periods and rates of return on investment (IRR) are plotted against the fuel price, annual fuel increment rate and initial investment in the SAS for a wide range of economic parameters.     

Performance evaluation of a passive solar building in Western Himalayas

Under the Passive Solar Building Programme, more than 100 buildings have been constructed in the high altitude region of the Indian State of Himachal Pradesh. A policy decision has been taken by the State that all government/semi-government buildings are to be designed and constructed as per passive solar housing technology. The evaluation studies of some of these buildings have been carried out by our group. In the present study, the thermal performance of a passive solar bank building at Shimla, has been evaluated. This solar building incorporates a heat-collecting wall and a roof-top solar air heater with an electric heating backup, sunspaces and double-glazed windows. The monitoring of the building shows that the solar passive features in the building results in comfortable living conditions. The study shows that the high cost central electric/gas/wood-fired heating systems can be replaced by a low cost solar heating system with backup heaters. This will result not only in reducing higher installation costs of these systems but also the annual running and maintenance costs. It is shown that the solar passive features save electricity required for space heating and reduce the heat losses in the building by about 35%. The strategy to be followed for the propagation of passive solar technology on large scale in this Himalayan State or in any other cold hilly region is also presented.     

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.     

Economic implications of thermal energy storage for concentrated solar thermal power

Solar energy is an attractive renewable energy source because the sun's energy is plentiful and carbon-free. However, solar energy is intermittent and not suitable for base load electricity generation without an energy backup system. Concentrated solar power (CSP) is unique among other renewable energy options because it can approach base load generation with molten salt thermal energy storage (TES). This paper describes the development of an engineering economic model that directly compares the performance, cost, and profit of a 110-MW parabolic trough CSP plant operating with a TES system, natural gas-fired backup system, and no backup system. Model results are presented for 0–12 h backup capacities with and without current U.S. subsidies. TES increased the annual capacity factor from around 30% with no backup to up to 55% with 12 h of storage when the solar field area was selected to provide the lowest levelized cost of energy (LCOE). Using TES instead of a natural gas-fired heat transfer fluid heater (NG) increased total plant capital costs but decreased annual operation and maintenance costs. These three effects led to an increase in the LCOE for PT plants with TES and NG backup compared with no backup. LCOE increased with increasing backup capacity for plants with TES and NG backup. For small backup capacities (1–4 h), plants with TES had slightly lower LCOE values than plants with NG backup. For larger backup capacities (5–12 h), plants with TES had slightly higher LCOE values than plants with NG backup. At these costs, current U.S. federal tax incentives were not sufficient to make PT profitable in a market with variable electricity pricing. Current U.S. incentives combined with a fixed electricity price of $200/MWh made PT plants with larger backup capacities more profitable than PT plants with no backup or with smaller backup capacities. In the absence of incentives, a carbon price of $100–$160/tonne CO_2eq would be required for these PT plants to compete with new coal-fired power plants in the U.S. If the long-term goal is to increase renewable base load electricity generation, additional incentives are needed to encourage new CSP plants to use thermal energy storage in the U.S.     

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.     

Simulation of a solar heating and cooling system

This paper presents thermal and economic analyses of a solar heated and air conditioned house in the Albuquerque climate. The system includes the following components: water heating collector, a water storage unit, a service hot water facility, a lithium bromide-water air conditioner (with cooling tower), an auxiliary energy source, and associated controls. The analysis of the thermal performance indicates the dependence of output on collector area (considered as the primary design variable) and shows, for example, the manner in which annual system efficiency decreases as collector area increases. Based on the computed thermal performance, cost estimates are made which show variations in annual cost as functions of collector area and costs of collector and fuel.     

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.     

Design of hybrid power-to-power systems for continuous clean PV-based energy supply

The increasing penetration of intermittent renewable sources, fostering power sector decarbonization, calls for the adoption of energy storage systems as an essential mean to improve local electricity exploitation, reducing the impact of distributed power generation on the electric grid. This work compares the use of hydrogen-based Power-to-Power systems, battery systems and hybrid hydrogen-battery systems to supply a constant 1 MW_el load with electricity locally generated by a photovoltaic plant. A techno-economic optimization model is set up that optimizes the size and annual operation of the system components (photovoltaic field, electrolyzer, hydrogen storage tanks, fuel cell and batteries) with the objective of minimizing the annual average cost of electricity, while guaranteeing an imposed share of local renewable self-generation. Results show that, with the present values of investment costs and grid electricity prices, the installation of an energy storage system is not economically attractive by itself, whereas the installation of PV panels is beneficial in terms of costs, so that the baseline optimal solution consists of a 4.2 MW_p solar field capable to self-generate 33% of the load annually. For imposed shares of self-generation above 40%, decoupling generation and consumption becomes necessary. The use of batteries is slightly less expensive than the use of hydrogen storage systems up to a 92% self-generation rate. Above this threshold, seasonal storage becomes predominant and hybrid storage becomes cheaper than batteries. The sale of excess electricity is always important to support the plant economics, and a sale price reduction sensibly impacts the results. Hydrogen storage becomes more competitive when the need for medium and long terms energy shift increases, e.g. in case of having a cap on the available PV capacity.     

The utility of energy storage to improve the economics of wind–diesel power plants in Canada

Wind energy systems have been considered for Canada's remote communities in order to reduce their costs and dependence on diesel fuel to generate electricity. Given the high capital costs, low-penetration wind–diesel systems have been typically found not to be economic. High-penetration wind–diesel systems have the benefit of increased economies of scale, and displacing significant amounts of diesel fuel, but have the disadvantage of not being able to capture all of the electricity that is generated when the wind turbines operate at rated capacity.Two representative models of typical remote Canadian communities were created using HOMER, an NREL micro-power simulator to model how a generic energy storage system could help improve the economics of a high-penetration wind–diesel system. Key variables that affect the optimum system are average annual wind speed, cost of diesel fuel, installed cost of storage and a storage systems overall efficiency. At an avoided cost of diesel fuel of 0.30 $Cdn/kWh and current installed costs, wind generators are suitable in remote Canadian communities only when an average annual wind speed of at least 6.0 m/s is present. Wind energy storage systems become viable to consider when average annual wind speeds approach 7.0 m/s, if the installed cost of the storage system is less than 1000 $Cdn/kW and it is capable of achieving at least a 75% overall energy conversion efficiency. In such cases, energy storage system can enable an additional 50% of electricity from wind turbines to be delivered.     

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.     

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.     

The prospects for cost competitive solar PV power

New solar Photovoltaic (PV) installations have grown globally at a rapid pace in recent years. We provide a comprehensive assessment of the cost competitiveness of this electric power source. Based on data available for the second half of 2011, we conclude that utility-scale PV installations are not yet cost competitive with fossil fuel power plants. In contrast, commercial-scale installations have already attained cost parity in the sense that the generating cost of power from solar PV is comparable to the retail electricity prices that commercial users pay, at least in certain parts of the U.S. This conclusion is shown to depend crucially on both the current federal tax subsidies for solar power and an ideal geographic location for the solar installation. Projecting recent industry trends into the future, we estimate that utility-scale solar PV facilities are on track to become cost competitive by the end of this decade. Furthermore, commercial-scale installations could reach “grid parity” in about ten years, if the current federal tax incentives for solar power were to expire at that point.     

Nomograph for rapid technical and economic assessment of solar thermal systems for DHW production

Different types of tools, software and empirical methods to size and assess the performance of solar thermal systems are available today. A quick and easy-to-use graphical tool is proposed here. It is based on a single diagram, called a nomograph, which embeds technical and economic information, allowing the optimisation of the size and performance of a solar thermal system starting from the main input parameters, such as the specific costs of the system and the auxiliary fuel. The optimal surfaces are calculated as a function of the fuel cost through several regressions made on data from the application of the F-Chart method for a set of system configurations. The authors have found good correlations among these two parameters for given collectors types, climates and fuel costs.Furthermore, the design information stemming from the use of the diagram considers the optimal area of the surface of solar collectors, the corresponding annual solar fraction, the annualised total cost of the solar system and the conventional systems meeting the same load, the annual savings achieved with the use of solar system and the corresponding payback time. Nomographs have been drawn for three Italian locations, representative of different South Europe climates, for a given demand of hot water and for two types of collectors. The methods and algorithms related to the construction of the diagrams are described in this paper. Additional nomographs can be produced through a standardised procedure based on Excel Macros. An analysis of the results obtained is then performed for a sample application.     

Optimisation of minimum backup solar water heating system

Current flat plate solar water heaters overproduce slightly in summer and have poor performance in winter at the time of maximum load. They use an expensive absorber plate over the entire absorbing aperture of the collector and fail to use the backside of the absorber. They often have under insulated tanks and are not optimised as integrated systems. This paper describes a design approach taken to use existing commercial flat plate absorber and tank components in a new way to maximise solar contribution and minimise material usage in the construction of the system. The design criterion used is not maximum peak efficiency, but minimum annual backup energy supplied to the system to meet an annual load. This corresponds to meeting a minimum greenhouse emissions requirement in both invested pollution during manufacture and pollution from backup energy supplied. Two new designs are shown which allow the solar fraction of systems to be increased to approximately 80–90% in Sydney Australia using a standard model of domestic hot water usage specified in Australian Standard AS4234. Pollution from fuel use drops to as little as 40% of that of conventional flat plate solar water heaters. These new designs use one absorber plate instead of two and a smaller and better insulated tank. Comparisons of solar fraction are evaluated for a range of climatic conditions. An important insight is that with such a performance optimised system the ultimate solar fraction is limited by occasional long duration cloud cover at the site of installation and making the system larger only increases dumped energy, not utilisable energy. Technical efficiency improvements only reduce the required collector area. However, some additional backup fuel reductions can be made through manual control of backup energy use, because this allows finer control of backup relative to real demand. Pollution from backup fuel usage may be able to be reduced to 1/4 that of current flat plate solar water heaters.     

Representation of variable renewable energy sources in TIMER,an aggregated energy system simulation model

The power system is expected to play an important role in climate change mitigation. Variable renewable energy (VRE) sources, such as wind and solar power, are currently showing rapid growth rates in power systems worldwide, and could also be important in future mitigation strategies. It is therefore important that the electricity sector and the integration of VRE are correctly represented in energy models. This paper presents an improved methodology for representing the electricity sector in the long-term energy simulation model TIMER using a heuristic approach to find cost optimal paths given system requirements and scenario assumptions. Regional residual load duration curves have been included to simulate curtailments, storage use, backup requirements and system load factor decline as the VRE share increases. The results show that for the USA and Western Europe at lower VRE penetration levels, backup costs form the major VRE cost markup. When solar power supplies more than 30% of the electricity demand, the costs of storage and energy curtailments become increasingly important. Storage and curtailments have less influence on wind power cost markups in these regions, as wind power supply is better correlated with electricity demand. Mitigation scenarios show an increasing VRE share in the electricity mix implying also increasing contribution of VRE for peak and mid load capacity. In the current scenarios, this can be achieved by at the same time installing less capital intensive gas fired power plants. Sensitivity analysis showed that greenhouse gas emissions from the electricity sector in the updated model are particularly sensitive to the availability of carbon capture and storage (CCS) and nuclear power and the costs of VRE.     

Technological-economic assessment and optimization of hydrogen-based transportation systems in China: A life cycle perspective

Hydrogen energy is increasingly incorporated into long-distance transportation systems. Whether the coupled hydrogen-based transportation system can achieve a sustainable business operation mode requires quantification of environmental and economic performance by a comprehensive cost-benefit analysis. This study proposes a cost-based life cycle assessment method to evaluate the environmental and economic benefits of hydrogen-based long-distance transportation systems. The innovative cost assessment method introduces internal and external economic costs to conduct a multi-scenario assessment. According to the key factors of mileage, government subsidies and hydrogen fuel prices, this research identifies the key cost component of the hydrogen-based transportation system in China by using a multilevel comparison with cell-driven and oil-fueled vehicles. The results show that hydrogen fuel cell electric vehicles are competitive in terms of both fuel costs and environmental costs. As hydrogen costs are expected to be gradually reduced by 43% in the future, hydrogen logistics vehicles and heavy trucks are expected to have better life-cycle economics than other energy vehicles by approximately 2030. Hydrogen buses will outperform other vehicles by approximately 2033, while hydrogen passenger cars will have a reduced life-cycle cost per kilometre within 0.1 CHY/km compared to other vehicles by approximately 2035. Ultimately, fuel consumption, average annual mileage, and hydrogen fuel cell electric vehicle policy are three factors that have greater impacts. Policy implications are put forward to implement optimal investment plan for hydrogen transportation systems.     

Passive and active residential solar heating: A comparative economic analysis of select designs

This paper compares four passive solar heating concepts to a conventional air collector/rock storage system. Masonry (Trombe) and water walls are considered in the presence and absence of night insulation. The performance of optimally sized systems is evaluated on a state-by-state basis. The effects of low interest loans and National Energy Act (NBA) income tax credits are examined. With natural gas as the alternative fuel, the passive designs evaluated here offer more promise than the active system. This is true with or without inclusion of incentives, although either incentive option enhances economic performance. The passive designs evaluated in this paper are economically competitive against the electric resistance alternative in all but a few states. Moreover, on a life cycle cost basis, these designs are feasible today. Although the optimal solar fractions are generally low, passive designs offer the opportunity to incorporate solar heating into a new home at costs much less than their active counterparts. This is because there are no discernible fixed costs, thereby allowing a simple movement from zero to 100% solar when evaluating economic feasibility. When both active and passive design are shown to be cost competitive against alternative fuels, higher solar fractions will be associated with the active systems. This is principally due to the substantial fixed cost component of active systems, which forces one to achieve a given solar fraction before economic feasibility can be shown.     

A comparison of GaAs and Si hybrid solar power systems

Various silicon hybrid systems are modeled and compared with a Gallium Arsenide hybrid system. The hybrid systems modeled produce electric power and also thermal power which can be used for heating or air conditioning. Various performance indices are defined and are used to compare the system performance. The performance indices are: capital cost per unit electric power out; capital cost per total power out; capital cost per unit electric power plus mechanical power; annual cost per unit electric energy; and annual cost per unit electric plus mechanical work. These performance indices indicate that concentrator hybrid systems can be cost effective when compared with present day energy costs. Realistic costs and efficiencies of GaAs and Si are respectively $35,000/m² for 15 per cent efficient solar cells and $1000/m² for 10 per cent efficient solar cells based on information available at the time of this study in late 1975. The performance indices show that the limiting values for annual costs are 10.3¢/kWh and 6.8¢/kWh for Si and GaAs respectively. Results demonstrate that for a given flow rate there is an optimal operating condition for maximum photovoltaic output associated with concentrator systems. Also concentrator hybrid systems produce a distinct cost advantage over flat hybrid systems.