Wednesday, October 31, 2012

Escalating Self Consumption

Last night it occured to me that my IRR calculations would be improved if I allowed the self consumption value to change over time. Previously I had it so that the self consumption rate was fixed as a percentage of generation. This means that over time the annual amount of self consumption goes down as a result of total generation shrinking due to degredation. Well... That's no good. I figure you should be able to hold the self consumption variable constant or even make it go up over time. Today I added some lines of logic to accomplish this.

If you want to make is so that the annual amount of self consumption shrinks with the degredation of the modules select Self Consumption Escalator NO. The calculator will follow the normal protocol.

If you want to make it so that the annual amount of self consumption remains constant select Self Consumption Escalator YES and assign a Self Consumption Escalator Rate of 0%.

If you want to make it so that the annual amount of self consumption goes up select Self Consumption Escalator YES and a assign a positive value for the Self Consumption Escalator Rate. Keep the Escalator Low - anything above 1% will probably give unrealistic results.


Bell Solar Battery

Man has at last dipped his hand into the sun and drawn down a spark to warm the hearts of men.

November Update

Economics of Photoelectricity - November 2012
  • Plenty of new product and deployment data
  • Fixed French FiT tables
  • Added a prototype LCOE calculator for conventional power (coal, NG, nuclear)
  • Initiated preliminary work on expanded assumption sets
  • Added guide for LCOE, IRR calculations
  • And lots more...

Tuesday, October 30, 2012

Photoelectrics Blow Corridor - Next Stop Propagandaville

The Bundesnetzagentur is set to release installation statistics for September in a few days. The September spike in conversion area installations should push the installs for the month well over 1 GW. This September surprise will re-ignite the political gabfurno that's been burning since the EEG surcharge was revised up. Lots of nothing is expected to come of the bickering. We can maybe hope for some choice insults here and there.

On the administrative side of things remember that the November, December and January degressions will be based on July, August & September installations multiplied by 4. Here's how it works.

July = 543.2 MW
August = 329.4 MW
September > 1 GW
Sum x 4 > 7500 MW

From the graphic we can see that a  7500 MW installation pace results in a 2.8% degression rate for November through January.

Here's where things gets interesting. From October forward the industry will have to rely primarily on installations in the sub-MW bracket for the bulk of the market. This new condition is two blessings and one curse. First blessing is that mathematically speaking this sub-MW market segment is less reliant on the FiT for profitability because this segment has the benefit of self-consumption displacing retail electricity. Second blessing (depending on who you talk to) is that the large EPCs who have been working on multi-MW projects are mostly out of the picture which means the remaining players (smaller installers) have a more focused agenda as far as incentive policy goes. The curse is that the market is likely to shrink from the current 8 GW/year rate down to a 2500 to 3500 MW per year pace.

The lower installation rate is actually what the FiT architects would like to see but the maggot-ass opposition will use this contraction as a propaganda cudgel. They'll say, look at this frivolous industry. Take away their billion dollar training wheels and they crash. This negative spin can have a real effect on people considering purchasing a photoelectric system - it sure has in the U.K. despite their tremendously generous FiT structure.

The best way to counter the negative advertising is to get high quality information out into the marketplace. Problem is I don't see solar advocates doing that at the moment. Everybody is mostly spinning their old talking points. Very few are talking about market integration.

As I see it, the mathematics shows that the FiT can be phased out in short order. I don't think we need to shock the system with an over-night FiT reduction but I think it's about time Germany laid out a quick and simple transition policy. I figure a penny a month FiT reduction is doable. That's three times faster than the 2.8% monthly reduction that we'll see in November through January. If Germany implemented an aggressive transistion ramp they could have the FiT down to 10 cents/kWh by this time next year. At that point the incentive program is placing minimal load on ratepayers which gives the FiT architects breathing room to more carefully tweak things from then on. The program effectively moves out of the political arena and into the unemotional hands of the engineers, operators, installers and so on. There's still work to do in building the market but the political hysteria is striped out of the equation. I figure this transition will give the market a tremendous amount of confidence.

It's not about FiTs... It's about sustainability...

The goal isn't to keep FiTs alive. The goal is to build a market that keeps itself alive - call it sustainability. Anybody remember where the FiT was three short years ago today? Check out the graph. Things sure have come a long way. Another 8 cents/kWh ain't gonna stop this train. Given today’s average installed costs a 10 cents/kWh FiT gives an internal rate of return over 8%. It won't be hard to continue selling 8% IRR inventments. The logic is that plain and simple. Solar advocates have the economic argument but they don't seem to know it. Do the math.


If average installed costs can get down to 1500 Euro/kWp the 8% IRR threshold can be met with a FiT at 5 cent/kWh. This isn't magic - it's all possible because your production costs are 10 cent/kWh and 30% of your production (at least) is offsetting retail electricity that currently costs 26.2 cent/kWh and climbing.

The New Normal

Someday not too far from now people won't look at solar as an investment with IRR thresholds and payback periods. People will look at solar as an appliance that makes 10 cent/kWh electricity. Simple as that.

Update: My September guess missed on the high side by 22 MW and this means the degression step will only be 2.5%. We'll see about the other stuff.

Going for Speed

Tuesday, October 23, 2012

Build the Best Lighthouse Ever... Call it the Photoelectric Research Center

Lighthouse at Alexandria
They should move all the photoelectric activities of NREL to California. It was a ridiculous strategic mistake to put the Solar Energy Research Institute (SERI) in Colorado in the first place so distant from all the money and minds at Stanford, Berkeley and CalTech. It's about time we fixed the mistake and launched a Kentucky Fried Chicken to KFC type PR campaign all at the same time.

Call the institution PERC - Photoelectric Research Center

Has a nice ring right? Damn right it does.

You kill multiple birds with this new institute. First off you give solar energy a new better roll-off-the-tounge name - photoelectric rather than photovoltaic. Second off you distance PE from a generic grouping with renewables. We should think of renewables individually just as we think individually of coal, oil, nuclear and gas. Solar is by far the most plentiful resource on the planet - there's no good reason to group it with tidal energy.

Monday, October 22, 2012

Ring Ring

Operator: It's Photoelectricity.
Siemens: What does she want?
Operator: She wants to know where you gonna run to.

Friday, October 5, 2012

Dollars, Bricks, Watts and Sense

  • A US bill covers roughly 100 square centimeters
  • A standard brick around 115 square centimeters - subway tile the same
  • Two watts of solar at 20% efficiency can fit on a bill, two watts at 18% on a brick
  • One watt will produce 1 to 1.5 kWh of electricty per year
  • The current retail price for Suntech panels is 79 cents/watt on the Sun Electronics site - All in system prices are expected to reach $2/Watt.
  • The current retail price of electricty in the US is...

    Thursday, October 4, 2012

    My Hero Does it Again

    What year will Jigar win the Peace Prize?

    Before Billy Ripken there was Old Hoss Radbourn

    Ligers and the Future

    Imagining the future is difficult but it's a fun game to play. Some people like jet pack futurism. To me that's art not futurism. I say, if you're going to experiment with futurism the story you imagine should make sense - the transition steps in your narrative should be evenly spaced. I like to imagine a process that stretches two places shouting distance apart. For example.

    Start out with hybrids
    Work the bugs out of the first generation technology
    Come up with goals for future generations
    Build a hybrid capable of 10 km on battery only
    If battery costs come down by $100 reduce the car price by $50 and add $50 more worth of batteries
    How far can you practically get on battery only - 20, 30, 40 km? You have to find out.
    Add the plug in feature.
    Lobby for work places and commercial zones to install plugs for your plug in hybrids.
    Get up to 10% of new cars sold as hybrids
    Pass gas mileage rules that encourage electric mileage
    Get up to 10% of all car miles on electricty
    Add 500 Watts of high efficiency solar skin to the hybrids. Call it Sun Skin.
    Get up to 20% of new cars sold as hybrids
    Make tinted windows out of photoelectric materials.
    Increase your range by a few km with higher efficiency solar skin.
    Get up to 25% of all car miles on electricty
    Watch gas stations start to go out of business like video stores. See it as progress. See it as process.
    Keep going.

    My daydreams often have me thinking Germany should be leading the charge on hybrids, plug-in hybrids and solarized plug-in hybrids. They have an awesome automotive industry and a grid that will soon have more electricity than you can shake a stick at. Two birds vith von stone.

    More Proof German Installers are on Speed

    • Gehrlicher Solar connects 35 MWp PV plant on former military airport Perleberg

    Wednesday, October 3, 2012

    Thoughts on the Wind PTC

    I think a lot of us want to hear the Wind Industry say something like this: We, the Wind Industry, don't want the PTC forever. We, the Wind Industry, want an extension of the PTC that starts at 2 cents/kWh and shrinks down quarterly by X to Y mils (depending on conditions) until it phases out. We, the Wind Industry, believe we can install a lot more wind and become more competitive if given this extension. 

    The wind industry would have my full support with that kind of pitch. All I want to see is something that looks like progress. I think there are many people like me. It baffles the mind that the wind guys aren't in bargaining mode yet? Why the standoff? Why is it nothing but complaints about jobs lost and factories closing and this that and the other? Yeah... that sucks but the negativity comes off like Greenpeace advertising about polar bears which I for one have never enjoyed. 

    I don't want to be sold a sob story about a sinking ship. I want to support a solid idea with a chance of standing on its own feet. Give us a good plan and we'll sign your petition for a PTC extension. If you have a good product you have to believe in it enough to put skin in the game and meet the public half way. I've bet my best and lost plenty skin in my days so I'm not armchairing it here. I expect skin from wind. A lot of people (me included) have been living under wage freezes. We're making it work. Even Hollywood is taking pay cuts and compromising these days. Hockey is totally out to lunch. But I digress. 

    The message from the coal et al. opposition is weak but it works. Let them start fine tuning their instruments and things go south fast. Dear Wind Industry... Make a deal.

    7¢ per kWh

    Foxconn, GCL-Poly to Build, Operate China Solar Power Plant