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“Write to be understood, speak to be heard, read to grow.” ― Lawrence Clark Powell

Utility Solar vs Building Integrated Solar - What is the Prospective Tariff Impact?

Posted on 9/27/2017 by in solar renewable energy EV

With potential tariffs on the horizon, Alden Hathaway, P.E., Senior VP Business Development at Sterling Planet discusses the history and future of the solar industry.

This month the brightest minds in the solar industry assembled in Las Vegas, Nevada to discuss the future of the solar industry at the Solar Power International Conference. It is certain that much was discussed about the changes in the clean technology industry since the last conference: the change in leadership at the White House; the withdrawal from the Paris Climate Accords; the DOE study on the value of solar and clean technology on the electric grid; the halt to the Clean Power Plan and possible cancellation of Energy Star Buildings and Green Power Partnership Programs at the EPA. Undoubtedly, the attendees talked most about the possibility of tariffs placed by the administration on all solar panel imports. The International Trade Commission has already found, as of last Friday, September 21, that low cost solar imports have caused harm on two companies that produce domestic solar panels. The Trump administration will decide whether to impose tariffs no later than January 15th, 2018. The tariffs, if imposed, could raise the prices of solar panels 35 – 50%. 

For the average solar home or building project, where solar panels represent perhaps 30% of the cost of an installation, this is barely an increase of 10 – 15%. Yet for much of the solar industry, these tariffs are seen as a big deal and a tremendous threat to the future of the solar business in America. 

Why should the solar panel price increase pose such a threat? Well, actually, the solar industry has fallen in love with the idea that solar power’s best use is for utility scale power plants. This is particularly true where low solar energy prices, as low as $0.05 per kWh, make solar energy more competitive than many traditional forms of energy generation. Solar power plants built at utility scale are much more sensitive to these tariff impacts, however, as solar panel costs are as much as 50% or more of the cost of a project. Some claim that utility scale projects are looking at the possibility of nearly a doubling of the solar energy costs potentially driving solar energy prices to $0.08 - $0.09 per kWh about where they were in 2012. There is no question about it, this level of solar energy price increase will hurt the big business of utility scale solar energy.

Is utility scale solar really the only use for solar power?

The solar industry was started by Bell Labs in 1954 with the invention of the silicon solar photovoltaic cell. Heavily used by the space industry, at the time, solar that was not used in space was referred to as terrestrial. Terrestrial solar applications were for remote power needs, out of reach of the electric utility’s lines. Terrestrial solar included solar systems for telemetry or weather instruments, repeater stations for telecommunications, marine lights or offshore lighthouses. If solar was used on a home, it was for a house on an island or remote mountain top. 

By the 1970s solar installations started to appear on entrepreneurial, or environmentally conscious homeowners' houses that were tied into the electric grid, coining the term “grid-tied solar”. By the early 1980s solar began to be designed (or integrated) into buildings, with larger and larger solar arrays tied into the electric grid. One of the most notable of these grid-tied solar arrays, and the largest solar array at the time in the world, was the 384 kW solar roof at the Georgia Tech Aquatic Center designed by Solar Design Associates, which was a feature site during the Atlanta 1996 Summer Olympic Games. The occasion marked the first time an indoor Olympic sporting event was 100% solar powered.

The birth of utility scale solar was perhaps the next year, in 1997, when a 500 kW solar array was built by Asbeck/Solar World on a warehouse in Bonn, Germany to sell solar energy to the electric utility, RWE. German utilities at the time published a special new solar tariff to purchase solar energy at a rate that would favor its development. These new tariffs, called feed-in tariffs, kicked off utility scale solar development, which, from then on, would outpace and out-size solar on buildings. Eventually, utility grade solar would come to the US in full force, reinforced when the solar costs fell dramatically in 2010 – 2013. So, even though solar has been around for over 60 years, less than ten of those years in the US have been at the utility scale level. 

Yet solar on the building is more beneficial to the electric grid than utility scale solar energy. Why? Building integrated solar helps match load to supply, reducing the costs associated with the distribution and even transmission of electricity. Utility grade solar does little for the load and may actually increase transmission costs. In California, the un-relenting pursuit of utility solar farms has not helped the deformed load factor curve, which looks like a duck’s silhouette. That is because solar alone, no matter how large, cannot solve it. Solar must be paired with other technology. California utilities are now exploring ways to incentivize solar development closer to the load to smooth out the notorious “Duck Curve”. 

This isn’t to say that solar on buildings is perfectly matched to the load, but if you want to get close to the load, there is no better way than on the building. And there are many synergistic opportunities when solar is placed on the building that can mitigate the adverse load curves we are beginning to see in the major solar states. 

What are these potential building energy interactions that involve solar and the load? 

Solar Building Materials Eliminate the Use of Traditional Building Materials. Solar materials such as  Tesla's solar shingles, solar tiles, solar curtain walls or even solar windows can take the place of traditional building materials, eliminating their costs and the costs of the solar mounting structures. We call this Building Integrated Photovoltaics (BIPV), because the solar is literally built into the building. 

Solar Shading Reduces Air Conditioning Load.  According to a report from University of California, San Diego, when solar panels are placed on the roof, they eliminate up to 38% of the heat of the sun through shading. The report says that the savings is equivalent to an additional 5% output of the solar array. In heat load reduction terms, the shading achieves up to 3 BTUs per square foot, or, more specifically, reduces air conditioning requirement by up to 10%. Power Parasol produces large scale solar canopies that shade whole buildings and even outdoor parks reducing temperatures underneath by ten degrees or more.

Solar Thermal Capture Reduces Heating Load and Improves PV Efficiency.  Technology can easily be deployed that captures the heat of the sun on the solar array and stores it for thermal uses, such as, process needs, laundry, pool heating, heat pump, or even absorption cooling. At least one company, Sun Drum Solar, has developed a system that not only captures the thermal energy off the PV panels but simultaneously cools them boosting solar electric output another 6%. 

Solar DC Operation of LED Lighting Eliminates Inverter.  Solar generates naturally in Direct Current (DC) form, yet we invert the DC to AC to run the typical Alternating Current (AC) loads in the building. However, new energy efficient LED lighting runs off DC naturally. Nextek Power Systems has developed a solar to LED power system around the concept of direct coupling DC to DC. The DC output of solar is directly connected to the DC input of LED lights, like those provided by, Independence Lighting, and saves 15 - 20% of the solar energy by not having to invert to AC. An additional indirect interactive effect is that the energy efficient LED lighting will reduce air conditioning loads another 3 BTUs per square foot, or 10%. When this load reduction is combined with the solar shading, it may be possible to invest the HVAC savings in more energy efficient air conditioning such as Carrier’s variable refrigerant flow equipment.

Solar and Energy Storage. When most people think of solar and energy storage they think of electric battery backup. To be sure, there are a number of companies that have backup electric battery systems, and they can use the solar during the day to recharge them. But there are other kinds of energy storage; kinetic energy (fly wheel); potential energy (pump storage); and, what must have been the darling of the show, hydrogen gas storage. The hydrogen opportunity is certainly exciting, but its use in buildings may be limited. I am particularly interested in thermal energy storage (TES), which is cheaper than battery and can also be used in most buildings. My favorite TES is ice storage. The Ice Energy people have developed a compact ice storage system that works with most rooftop air conditioning systems. The benefit of solar and ice is that it uses solar to drive refrigeration equipment to make ice during the early to mid part of the day, and then uses the ice to cool the facility during the mid afternoon hours when peak power prices otherwise drive high electric costs.   

Solar Charging of Electric Vehicles. Adding solar to the parking garage to charge electric vehicles (EV) provides an opportunity to increase load and solar, simultaneously, which can help provide a more balanced load factor. The folks at Brightfield Transportation Solutions specialize in installing solar charging stations for EVs. When solar charges an EV, as opposed to the electric grid, tailpipe emissions are eliminated (not traded for another emissions impact – such as coal or natural gas). This creates carbon emission reductions that can be claimed as carbon offsets. Brightfield Transportation Solutions provide carbon offsets that can be used to mitigate the remaining energy impacts not reduced through energy efficiency or generated by renewable energy.

When all these interactions are captured in a building project, it is quite likely that the building project will attain some level of carbon neutrality or zero energy. And that means achieve carbon reduction goals one building at a time. 

Now I’m not saying that we should abandon our utility scale solar power projects, but if we gain anything through the prospect of tariffs on solar imports, I hope that we can, at least, refocus on buildings where we can achieve our environmental, sustainability and load factor goals. And, oh by the way, we may actually support a lot more American energy companies and their products for buildings integrated with solar. 

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