Consumer Solar Power


Want to never pay a power bill again?

It's possible, and achievable, with solar power. Here we examine the feasibility of solar power in the domestic home.

What is consumer solar power?

Solar power in this context is the generation of electricity from the sun, as distinct from using the energy of the sun for heating e.g. hot water.
In large-scale installations electric power can be generated by steam-driven generators powered by the sun's heat, but in smaller and domestic installations the overwhelming trend is to use solar photovoltaic (hence PV) cell arrays which directly produce electricity.

 These arrays produce dc current which can either directly power lower voltage systems, or be fed into inverters to produce normal household ac supplies. The power can also be stored in batteries, to be feed back through the inverters later, when the sun isn't shining enough to produce useful power.

To a large extent it is free power, (once the equipment is established) as the only thing consumed is the sun’s rays. Of huge ecological significance is the fact that it is also sustainable, as the sun is effectively an infinite resource, and free from polluting by-products.

These advantages, together with recent incidents that have cast severe doubts over the future of nuclear power, have made solar power, along with wind power, the fastest growing trend in energy production, (albeit from a very low base) with an exponential growth curve. (Observer 2011)
The disadvantage of solar power is of course that it is not available at night or in extreme weather. This mandates the use of some alternate source of power and/or the storage of the solar power to cover the periods of non-availability. In a domestic situation, the issue is confined to whether to simply accept and return power to and from the grid as usage demands, or add battery storage, or both.

Despite a lack of publicity, it is possible in NZ to connect to the power grid, and sell your generated power back to the power companies. Unfortunately in this country there is no legislated rate for this, and the power company is not obliged to pay the same rate it charges you.

Grid-connected systems are simpler as they eliminate the battery system and only require another meter (provided by the power company for around $100) to measure the reverse flow.

For off-grid systems, lead/acid batteries are still the most economic storage, but have a limited life (around 5 years). An off-grid system will always risk outages unless sufficient excess capacity is added to cover all extremes, with an added cost for that capacity.


Solar Environment

“On average, New Zealand has about 2000 hours of bright sunshine each year. In energy terms, New Zealand's solar energy resource is about 4 kWh/m2 per day. To put that in perspective, if every New Zealand home had a 3kW photovoltaic (solar) panel array, they would collectively generate enough power in a year to satisfy over a quarter of New Zealand's annual residential electricity needs.” (EECA 2012)



World Average Annual Insolation
New Zealand has excellent solar resource, with potential yields higher than most European countries already utilizing solar power, as can be seen from the world solar irradiation map above.



The solar power output is seasonal, as can be seen in the following table from MED (2009) data; it is interesting to compare this with the actual annual domestic usage profile (BRANZ 2005) below, as it shows the need to plan for highest usage months at lowest generation efficiencies.( i.e. over-capacity in summer months )


 Technological Advances

Hybrid Systems

The fact that both solar thermal hot water heating systems and PV systems use rooftop arrays made it obvious that some synergies might be obtained by combining the two. Another factor suggesting this combination is the fact that PV cell output can be reduced by 5% or more due to the heating of the solar cells under operating conditions. If that heat can be drawn off into water heating systems, there is a double benefit. One would also expect some cost savings in the area of installation.
A Turkish company called Solimpeks has announced such a system, although costs are not available.

A similar hybrid is also the basis of a system using polymer film PV on the back of oil-filled heat transfer tubes, with 30% efficiencies claimed (standard crystal cell PV systems currently run at around 20%)


New Techniques

By all accounts PV technology has made huge strides from a cost/benefit point of view, and the flow of advances in the technology seems to suggest that we are only just beginning; some evidence:

 3D photocells almost double efficiency

Radical reductions in size, and incorporation of control circuitry, with attendant cost benefits

Increasing output per footprint by 3d stacking in PV arrays

If all these technologies achieve commercial execution, PV array outputs and costs will be hugely improved; and in fact the latter two examples could be executed together, as they are complementary, thus compounding gains.

Strategic, Ethical and Regulatory Issues To Consider

Financial

The attraction of alternative power is essentially the on-going operational cost savings. Recent history of electricity prices trending above inflation, plus the quite reasonable expectation that solar power equipment like most technology will continue to plummet in real costs, means that the savings will continue to increase.

It should be mentioned that at the moment the rates for generation credits for grid-connected domestic systems are at the whim of the power companies, and it would perhaps be unwise to make any assumptions on future rates (if any) in any cost/benefit analyses.

For example Meridian currently pay 1 for 1 (28c/kwh) but have now openly admitted that to be unsustainable (Otago Daily Times, 2012), and are about to reduce that to 25c for the first kw/h, 10c per kw/h above that. Contact Energy pay 17.285c per kw/h, and Trustpower pay a miserly 7c per kw/h.

 Solar power systems have a high capital outlay. However in places like Auckland, property price increases have in recent cases exceeded council valuations by six figure amounts, 40-60% (NZ Herald, July 6, 2012), so one would expect little difficulty in incorporating the full cost of the solar power upgrade into the price.


Ecological / Ethical

Gradually the world is coming to realize that we cannot keep treating our natural environment as an infinite resource that is completely unaffected by what we do. Individually we are beginning to consider our own stance towards conservation of this environment, and what our expectations are of our elected government.

Solar power is now seen as a shining light amidst the gloom of what we have done, and are still doing, to our environment. The costs of implementing solar power generation are plummeting. At the same time many of us are accepting that the cheapest solution is not the best if it carries a penalty of environmental damage with it, and we are becoming willing to accept a higher initial financial cost if it can ameliorate the damage we do to our environment. The net result is a much more positive case for considering a domestic solar power installation than has existed in the past.

Nuclear power, long seen as a cheap and non-polluting power source, provided a sharp reminder of the risks associated with nuclear reactions with the Chernobyl disaster. The recent Fukushima fiasco put many countries nuclear power plans into suspension, with question marks over any resumption at all.

 Bloomberg(29 June 2012) reports that Japan, in the wake of its Fukushima disaster, is throwing legislative weight into solar power incentives to the extent of NZ67c/kw credit for power fed back into the grid, over 20 years. This is an extreme case but may have a big impact on near-future advances in solar technology, given Japan's undoubted tech expertise, not to mention the example it shows.
The same article also reported Germany, Spain and other OECD countries winding back their solar power incentives, as their depressed economies combined with a higher than expected uptake of the incentives create pressure on government budgets. However since that same Fukushima disaster also threw those countries nuclear power plans into reverse; it is highly likely that those incentives will be restored as soon as the world economic situation improves, if sustainable energy has been truly accepted as a long-term imperative.


How Much Do We Trust Electricity Suppliers?


These changes are taking place in an environment of distrust of the power utilities. Residential electricity prices rose by 48 per cent in real terms between 2000 and 2011 (MED 2011) and price rises of a further 10% in some areas have been announced as power companies plan large capex expenditures due as a result of years of under-spending on infrastructure.

This will act as incentive for consumers to 'take a punt' on further price gouging, and seek alternatives. The likely reaction of power companies to loss of revenue / customers will be to raise prices further, to cover costs, further fuelling the process!


Typical Household Power Usage Patterns


New Zealand households use an average of about 9,000 kWh of electricity per year. 24.7 kwh/day, or 1kw per hour.

Of this, 26% is water heating(Electricity Commission 2009), normally metered separately and attracting a lower rate by being controlled by the power company who can turn it off in times of heavy load.

Empirical stats from sites in NSW (http://pvoutput.org/live.jsp ) that are similar to NZ's North Island in solar intensity (see earlier solar map) show average efficiencies between 3.7 and 4.3, so a centre efficiency of 4kw (per day per installed kw) is reasonable.
On that basis, a 3kw system would generate 12kw per day, or roughly half the average household usage.


  Costings


Mapping an observed output profile for solar power (3kw system) against the average household demand profile (Electricity Commission, 2009) , shows the pattern below:



The graph shows that at times of peaks rates in the middle of the day, the 3kw system is supplying all domestic power requirements, and even earning a small amount in generation credits. Furthermore the lower usage would result in the household being able to drop down into “low usage” tariffs, furthering the savings.

Applying the current Meridian tariffs of 28.96c per kw/h (day) to the above graph and usage figures gives the following for a 30-day month for the average household:


STD
LOW USAGE
3kw SOLAR
Night rate:
52.71
60.93
60.93
Day rate
147.70
166.31
79.44*
Fixed charge
35.56
11.50
11.50
TOTAL/MONTH
235.97
238.74
151.87

* Solar power day rate includes a generation credit of $13.50 for the month


N.B. The Meridian Low Usage rate is not applicable above 8000 kw/h per year, which is 1000kw/h below the average family rate, and as you can see it would actually be more expensive than standard anyway.
However the low usage tariff becomes significant if we start applying solar power savings.

The net result is a reduction in the daily power cost from $7.87 to $5.06, saving $84 per month or $1020 per year.



Solar Power - Supplier’s Offerings

Solarpower Ltd


Item
Panasonic 1.84kWp PV System
Panasonic 2.76kWp PV System
Collector
8 Panasonic 230W Panels
12 Panasonic 230W Panels
Inverter
Enasolar 1.5kWGT
Enasolar 2kWGT
TOTAL COST
$10,599
$14,270


  Option 2 – Cell power Grid-Connected System


Item
2kw System
3kw System
Collector+inverter
11 panel
16 panel
TOTAL COST
$8,300
$11,550


Option 3 – Powersmart Grid-Connected System


System Size
2.09 kW System
3.04 kW System
Panels
11 x 190W Sunrise
16 x 190W Sunrise
Inverter Model
ES-2kWGT-AU
ES-3kWGT-AU
Roof Area (m2)
14 m2
20 m2
Installed Price (incl. GST)
$9,245
$12,245


Option 4 – Solimpeks Hybrid Solar Power / Water Heating Panel System


We were hoping to be able to cost this state-of-the-art hybrid, but Solimpeks are only just finalizing NZ Dealer arrangements, and prices were not available when this report was compiled.


Commentary and Cost Benefit Analysis


From our established savings for a 3kw system of $1020 per annum, payback for the 3kw Cell power system is therefore $11550/$1020, = 11.3 years, a return of interest on capital rate of 8.8%.


Solar Power – Off the Grid


The major decision when installing solar power is whether to install a battery system and aim for 100% off-grid electricity independence, or install a grid-connected system and do without the complications of battery power.

Most NZ solar power suppliers are not even offering an off-grid alternative. The probable reason for this is that setting up an off-grid system IS much more complicated. Your battery backup has to cope with all extremes of normal conditions, or its light-out time – or even worse, cold-shower and freezer thaw time. That, plus the fact that the solar power system only has a fixed window of time during the day during which it is able to charge the battery system, means that one is forced to install significant over-capacity in the battery system, plus over-capacity in the solar panels to both supply your power needs PLUS renew the battery charge for night and morning use, plus over-capacity in the charge-control and inverter systems.

Space and storage also become issues; we are talking 9 large 12v batteries or over 500kg, plus 45 x 210w panels, which would occupy 75 sq/m in 3 rows (5m) of 15 panels. Not many houses have that much north-facing roof area, so you might have to add a solar panel veranda!

But it still is a viable alternative, as we see below.
The suppliers make a point of saying that if you do decide on an off-grid system, you should also be considering the alternatives to the heavy-current heating devices such as hot water cylinders and electric cookers.


Off-Grid Costing Estimates


(from the U.S. Altestore.com online calculator and pricings)

Looking at $USD prices for a typical U.S. supplier of off-grid systems and doing exchange rate conversions at $0.75c yield system prices for our average 9000 kw/h per year household of approximately NZD$38,000. If we save all of our previous $2832 power bill, that’s a 7.4% return on investment, including battery replacement costs over the 13.4 year payback period.

ITEM
QTY REQUIRED
TOTAL COST
1800ah battery system (min 1400ah) 3x12V banks
9x200ah
USD $ 4050* (every 5 years)
Solar panels (for 3.5 sun hours, worst day) 9.2kw array required
50x190w panels (5x10)
USD $12500
Charge controllers (one per 12v bank)
3
USD $ 1500
Inverter
2x2kw
USD $ 2000
TOTAL
USD $20050


Some Recommendations For Implementing Solar Power


Energy Monitoring


“The old aphorism “you can't manage what you don't measure” is certainly true of energy.

Equipment is available for quite reasonable prices that you can plug any appliance into to measure its instantaneous power consumption. This can be quite useful, for example, to establish the working power consumption of an appliance versus its idle power; it can be quite surprising how high the latter is.

Solar power systems themselves often have inverters equipped with load displays that can even be interfaced to computers for logging power usage patterns. You can see changes in the load e.g. a dishwasher turning on) without having to measure individual devices.

Once you know what power is being used where, you can make informed energy conservation decisions.


Modifying Your Usage Profile


Solar power generation peaks in the middle of the day, when it is probable that a 3kw system will be meeting all demand, and furthermore feeding excess power back into the grid for a small credit.

Because that excess generation is credited at a lower rate than the domestic usage rate, the ideal would be to store the excess somehow, and use it instead of drawing down more expensive power from the grid.

Practically, the additional cost of storage, e.g. a bank of lead-acid cells, is more than any such savings; the excess generation priced at standard usage rates (as opposed to feedback rates) for a 3kw system would only be around $210p.a., so the $8000 or so for appropriate battery storage would take almost 40 years to recover, a payback of less than 3%.

Normal domestic power usage peaks just outside the start and end of the working day, when solar output falls well short of demand, so the grid is then supplying nearly all the power.

It therefore follows that we can save money by moving demand out of each end of the day into the middle; often this isn't practical, but it is worth considering the possibility of changing some patterns, such as setting appliances like dishwashers and washing machines to run during the day.


  Holistic Approach to Energy


Solar Power needs to be considered in the context of the total household energy strategy; Aside from sustainable energy philosophies, the cost difference between energy sources such as natural gas and power can vary over time, and usage volumes.
For example if you are with Meridian, just the fact that solar power will probably allow the household to fall within the power company Low Usage plans will mean that although the overall cost is way down, your hot water unit rate goes up and the hot water heating bill is a much higher percentage of your total bill, which may change the economics of solutions in this area.


Hot Water Heating


Consumer (2009) report that a good electric heat pump water heater can now save two thirds of your hot water power bill, and quote approximate costs of $5000 for such a unit. In our example household low usage power plan, that equates to $489 per annum, or a 9.8% return on investment.


LPG / Natural Gas Heating / Cooking


While gas may be an inappropriate energy source in terms of the philosophical support of environment issues and sustainability, it is attractive on purely financial grounds. At approx. 19.4c/kwh (Consumer, 2012) its cost is lower than grid power (28c/kwh), and on that basis can be a good option to reduce overall power demand and costs. Heating, whether for cooking or hot water, is a high energy drain (i.e. to remove from your power demand), and it is widely accepted that gas is superior for cooking from a temperature control aspect.


Energy Conservation


It bears stating that every unit of power NOT used is a unit that doesn't have to be generated and paid for. It follows that conservation measures such as efficient home insulation can have a value applied to them that is the equivalent to the power saved.

It is significant, for example, that BRANZ (2003) note that a Maori raupo (reed) house build over 100 years ago would have had superior insulation to any NZ house build to building insulation codes prior to the year 2000.
Such measures should be implemented before those of power generation; as it may mean for example the optimum solution would be a 2.5kw installation where otherwise a 3kw+ solution would have been required.
There is even some funding available for the installation of insulation in homes built before 2000, from the EECA; refer the Consumer organisation website for more details. (under Insulation ->Before you get started)


Intelligent Building


The equipping of buildings with sensor-driven computer processors allows us infinite capacity to refine the delivery of energy to where it is needed, according to e.g. where we are in the building, what our daily patterns of use are.


 Conclusions

  • Consumer Solar PV power is a viable option right now, and will only get cheaper.
  • Until the economics of power storage technology improves, grid-connected solar PV systems will be simpler and more cost-effective than off-grid systems.
  • New Zealand's climate in general is highly suitable for solar PV power, but much less so for wind power.
  • Solar water heating is economically viable, especially if hybrid PV/thermal systems have the expected positive impact on cost/benefits.
  • The implementation of a domestic solar PV power system also improves the economic justification for solar or heat-pump water heating.
  • If the government reintroduces incentives to reduce our dependence on non-renewable forms of energy, including legislated power buy-back crediting rates, the economics will get even better.

Solar Power - Final Recommendations

As things stand now, it may pay to defer the installation of solar power systems until the economic climate improves. There are several factors supporting a deferred decision:
  • It will increase the likelihood of capital expenditure being recovered should you sell your home.
  • Government incentives and legislated feedback rates for excess capacity may be reintroduced.
  • Solar panel costs per output will probably continue to improve dramatically.
  • There will soon be the available option of hybrid PV power / solar water heating panels.
Against this should be weighed the possibility that demand (and prices) rise again before new technology gains can be successfully implemented by manufacturers.
Homeowners should start implementing energy conservation measures to reduce the total energy requirement of any future solar power installation.

Homeowners should start measuring where and when they use power, in order to make informed decisions about managing their power usage.

If you are confident that you will be staying in your existing residence for at least ten years, or that you can recover the capital cost of the solar power installation on resale, you can install a solar power system now and start saving money straight away.

REFERENCES

Bloomberg (29 June, 2012). Japan Clean Energy Funding to Double as Incentives Start. downloaded 2 Sept 2012 from http://www.bloomberg.com/news/2012-06-29/japan-clean-energy-funding-to-double-as-incentives-start.html

 BRANZ (2003). STUDY REPORT No. SR 122 (2003) Energy Use in New Zealand Households Report on the Year 7 Analysis for the Household Energy End-use Project (HEEP) . Downloaded 13 Sept 2012 from http://www.branz.co.nz/cms_show_download.php?id=6c3d2a8dabb2e917bdcb38fcdf19abda0beeabe5

 BRANZ (2005). STUDY REPORT No. SR 141 (2005) Energy Use in New Zealand Households Report on the Year 9 Analysis for the Household Energy End-use Project (HEEP) . Downloaded 13 Sept 2012 from http://www.branz.co.nz/cms_show_download.php?id=b869c9c110a8b41d4a022b78f6898033994040b7

BRANZ (2006). STUDY REPORT No. SR 155 (2006) Energy Use in New Zealand Households Report on the Year 10 Analysis for the Household Energy End-use Project (HEEP). Downloaded 13 Sept 2012 from http://www.branz.co.nz/cms_show_download.php?id=b1ab61dd06f50e83e6a184b29b68a989472502ed

Consumer (2009)  Heat-pump water heaters Cost-effectiveness. Downloaded 12 Sept 2012 from http://www.consumer.org.nz/reports/heat-pump-water-heaters/cost-effectiveness Consumer.(2012). Fuel prices compared. Downloaded 12 Sept 2012 from http://www.consumer.org.nz/reports/heating-options/fuel-prices-compared

EECA (2012) Solar Energy. downloaded 25th August 2012 from http://www.eeca.govt.nz/efficient-and-renewable-energy/renewable-energy/solar-energy-in-nz

Electricity Commission (2009). About The New Zealand Electricity Sector. Downloaded 11th August 2012 from http://www.powerco.co.nz/uploaded_files/Our%20Buisness/Buisness%20Overview/NZ%20Electricity%20Market/Aboutthesector.pdf

Ministry of Economic Development (2009). Assessment of the Future Costs and Performance of Solar Photovoltaic Technologies in New Zealand. downloaded 2 Sept 2012 from http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/technical-papers/pv-in-new-zealand.pdf

Ministry of Economic Development (2011) Energy prices. Downloaded 13th August 2012 from http://www.med.govt.nz/sectors-industries/energy/pdf-docs-library/energy-data-and-modelling/modelling/energy-outlook/energy-prices-414-kb-xls.xls

NZ Herald (6 July, 2012). Mt Albert house fetches $400k above valuation. Downloaded 10 September 2012 from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10817726

Observer (2011) Worldwide electricity production from renewable energy sources: Survey of regional dynamics by sector. Downloaded 10 September 2012 from http://www.energies-renouvelables.org/observ-er/html/inventaire/charge.asp?inv=13&doc=13e-inventaire-Chap02.pdf

Otago Daily Times. (7 June 2012). Electricity return falls. downloaded 5th September 2012 from
http://www.odt.co.nz/regions/otago/212234/electricity-return-falls