NewEnergyNews: TODAY’S STUDY: SOLAR PV IN 2012

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

Hey, hey, Ms. Abby!!! Go get 'em!!!

The challenge: To make every day Earth Day.

YESTERDAY

  • THE STUDY: THE IMPACT ON REAL PEOPLE OF RISING POWER PRICES
  • QUICK NEWS, Oct. 22: SCHOOLS SAVE W/GEOTHERMAL HEAT PUMP SYSTEMS; BUILDING FOR NEXT-GEN U.S. BIOFUELS; ENERGY STORAGE MARKET EMERGING
  • THE DAY BEFORE

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
  • QUICK NEWS, Oct. 21: SOLARCITY TO CROWDFUND WITH $1,000 BONDS; NEW JERSEY LOOKS AT OCEAN WIND; SMART LED LIGHTING MRKT TO DOUBLE
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    THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: NEW OPPORTUNITIES IN TRANSMISSION
  • QUICK NEWS, Oct. 20: ELEVEN GOOD THINGS ABOUT SOLAR ENERGY; YAHOO BUYS WIND; SMART THERMOSTATS’ BILLION DOLLAR FUTURE
  • THE DAY BEFORE THAT

  • Weekend Video: The Ocean Speaks Out
  • Weekend Video: Adapting To The Inevitable
  • Weekend Video: The Joy Of Driving EVs Powered By The Sun
  • AND THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-HOTTEST SEPTEMBER EVER; WORLD’S HOTTEST MONTHS STREAK AT SIX
  • FRIDAY WORLD HEADLINE-EU WIND BEATS FOSSIL, NUKE ENERGY PRICES
  • FRIDAY WORLD HEADLINE-DESERTEC SUCCUMBS TO MIDEAST TURMOIL
  • FRIDAY WORLD HEADLINE-JAPAN UPS PUSH FOR GEOTHERMAL
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, Oct. 16:

  • TTTA Thursday-THE MILITARY FALLS FOR THE HOAX
  • TTTA Thursday-FORTUNE 100 BUSINESSES BOOST SUN
  • TTTA Thursday-IOWA UTILITY BUYS WIND TO CUT COSTS
  • TTTA Thursday-GETTING ENERGY EFFICIENCY FROM THE CLOUD
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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  • Tuesday, December 18, 2012

    TODAY’S STUDY: SOLAR PV IN 2012

    Tracking the Sun V; An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2011

    Galen Barbose, Naïm Darghouth, Ryan Wiser, November 2012 (Lawrence Berkeley National Laboratory)

    Executive Summary

    As the deployment of grid-connected solar photovoltaic (PV) systems has increased, so too has the desire to track the installed price of these systems over time and by location, customer type, and system characteristics. This report helps to fill this need by summarizing trends in the installed price of grid-connected PV systems in the United States from 1998 through 2011, with preliminary data for 2012. The analysis is based on project-level data for more than 150,000 individual residential, commercial, and utility-scale PV systems, totaling more than 3,000 megawatts (MW) and representing 76% of all grid-connected PV capacity installed in the United States through 2011.

    It is essential to note at the outset the limitations inherent in the data presented within this report. First, the installed price data are historical, focusing primarily on projects installed through the end of 2011, and therefore do not reflect the price of projects installed more recently (with the exception of the limited set of results presented for systems installed in the first half of 2012); nor are the data presented here representative of prices currently being quoted for prospective projects to be installed at a later date. For this reason and others (see Text Box 1 within the main body), the results presented in this report likely differ from current PV price benchmarks. Second, this report focuses on the up-front price paid by the PV system owner; as such, it does not capture trends associated with PV performance or other factors that affect the levelized cost of electricity for PV. Third, the underlying data collected for this report include third party owned projects where either the system is leased to the site-host or the generation output is sold to the site-host under a power purchase agreement. In some cases, installed prices reported for third party owned systems may be based on an appraised value, rather than on a purchase price paid to an installer. To the extent possible, projects for which reported prices were deemed likely to represent an appraised value were removed from the sample, whereas other third-party-owned systems were retained in the data sample (see Section 2 and Appendix A for further details). Nevertheless, some residual number of appraised-value systems may remain in the data sample, though any bias introduced by these projects is unlikely to have skewed the installed price trends presented here.

    The report describes installed price trends for residential and commercial PV systems, and another set of trends for utility-scale PV. In all cases, installed prices are identified in terms of real 2011 dollars per installed watt (DC-STC), prior to receipt of any direct financial incentives or tax credits.

    Key findings for residential and commercial PV are as follows:

    • Installed prices continued their precipitous decline in 2011. Among projects installed over the course of 2011, the median installed price was $6.1/W for systems ≤10 kW in size, $5.6/W for systems 10-100 kW, and $4.9/W for systems >100 kW. This represent a year-over- year decline of $0.7/W (11%) for systems ≤10 kW, $0.9/W (14%) for systems 10-100 kW, and $0.8/W (14%) for systems >100 kW.

    • Partial data for the first six months of 2012 indicate that installed prices have continued to fall, with the median installed price of projects funded through the California Solar Initiative declining by an additional $0.2/W to $0.4/W during the first half of 2012, depending on the system size range, amounting to a 3-7% drop relative to systems installed in 2011.

    • The recent decline in installed system prices is largely attributable to falling module prices, which fell by $2.1/W from 2008 through 2011 (based on Navigant Consulting’s Global Power Module Price Index), and have fallen further still in 2012, with spot prices falling by roughly $0.3/W from January to September 2012. Movements in global module prices, however, do not necessarily translate into an immediate, commensurate change in the price paid by the system owner; in some cases, system prices may lag changes in module prices.

    • Over the long-term, installed system prices have fallen also as a result of reductions in non-module costs (which may include such items as inverters, mounting hardware, labor, permitting and fees, customer acquisition, overhead, taxes, and installer profit). From 1998-2011, non-module costs declined by approximately $2.0/W (30%), constituting more than one-third of the reduction in total installed system prices over that period.

    • Although this report focuses on describing trends in median installed prices, the distribution of installed prices across projects is quite wide. For example, among ≤10 kW systems installed in 2011, roughly 15% of systems had an installed price less than $5.0/W, while a similar percentage was priced above $8.0/W. The price distribution has narrowed somewhat over time, though no discernible narrowing has occurred in recent years.

    • Third party owned systems were screened out of the data sample in cases where reported installed prices were deemed likely to represent appraised values; the median installed price reported for these systems was significantly higher than for host customer owned systems (e.g., $8.0/W vs. $6.2/W, among ≤10 kW systems completed in 2011). In contrast, installed prices reported for other third party owned systems that were retained in the sample were similar to those reported for host customer owned systems.

    • Installed prices exhibit significant economies of scale, with a median installed price of $7.7/W for systems ≤2 kW completed in 2011, compared to $4.5/W for commercial systems >1,000 kW. The installed price of utility-scale systems is even lower, as discussed further below. To a limited extent, these economies of scale help to explain the long-term decline in median installed prices, as typical PV system sizes have grown over time.

    • Installed prices vary widely across states. Among ≤10 kW systems completed in 2011, for example, median installed prices range from a low of $4.9/W in New Hampshire to a high of $7.6/W in Washington D.C., potentially reflecting a number of differences in state and local factors (e.g., market size, permitting requirements, the competitiveness of the installer market, labor rates, sales tax exemptions, and incentive levels).

    • International experience suggests that greater near-term price reductions in the United States are possible, as the median installed price of small residential PV installations in 2011 (excluding sales/value-added tax) was just $3.2/W in Germany, $4.0/W in Australia, $4.5/W in Italy, and $5.4/W in France, compared to $6.0/W in the United States.

    • Installed prices for systems installed at tax-exempt customer sites are moderately higher than for similarly sized systems at residential and for-profit commercial customer sites. Among 2011 systems, for example, the median price of tax-exempt systems was $0.2/W to $0.5/W higher than residential and commercial systems, depending on the system size range.

    • Among systems ≤10 kW, installed prices have generally been somewhat higher for building integrated PV (BIPV) than for rack-mounted systems, with a median price differential of $0.3/W to $0.9/W in each year from 2007-2010 (though median prices were nearly identical for systems installed in 2011).

    • The installed price of small residential PV has historically been lower in new construction than in retrofit applications. Over the 2007-2009 period, the median installed price of 2-3 kW systems installed in new construction was $0.3/W to $0.5/W less than comparably sized residential retrofit systems, depending on the year (or $0.8/W to $1.2/W less if comparing only rack-mounted systems). The same trends did not persist in 2010 and 2011, which may potentially be an artifact of the slowdown in the residential housing market.

    • Installed prices have generally been higher for ground-mounted systems than for similarly sized rooftop systems, and higher for systems with tracking than for fixed-tilt systems. For example, among ≤10 kW systems installed in 2011, the median installed price was $8.0/W for ground-mounted systems with tracking, $6.3/W for fixed-tilt ground-mounted systems, and $5.9/W for rooftop systems.

    • Reductions in cash incentives and falling solar renewable energy certificate prices have offset recent installed price reductions to a large extent. Among systems installed in 2011, the median pre-tax value of cash incentives provided by state and utility PV incentive programs ranged from $0.9/W to $1.2/W, depending on systems size, representing a 21% to 43% drop from 2010 and a roughly 80% decline relative to the historical peak in 2002.

    This report separately summarizes installed price data for utility-scale PV projects, defined for the purposes of this report to include all ground-mounted projects larger than 2 MW. Several additional limitations are worth noting with respect to the utility-scale PV project data. First, the sample size is small (80 projects in total, including 49 projects installed in 2011), and includes a number of relatively small projects (i.e., 2-10 MW) and projects with “atypical” characteristics that have installed prices that are likely higher than for many of the larger utility-scale PV projects currently under development. Second, the installed price of any individual utility-scale project may reflect component pricing one or even two years prior to project completion, and therefore the reported prices of the utility-scale projects within the data sample may not fully capture the steep decline in module prices that occurred over the study period.

    With these important caveats in mind, key findings for utility-scale PV are as follows:

    • The installed price of utility-scale systems varies significantly across projects. Among the 49 projects in the data sample completed in 2011, for example, installed prices ranged from $2.4/W to $6.3/W, reflecting the wide variation in project size (from 2 MW to 35 MW), differences in system configurations (e.g., fixed-tilt vs. tracking and thin-film vs. crystalline modules), and the unique characteristics of individual projects.

    • Discerning a time trend for the installed price of utility-scale PV is challenging, given the small and diverse sample of projects. As a rough measure, the capacity-weighted average installed price declined from $6.2/W for projects installed during 2004-2008, to $3.9/W for projects installed during 2009-2010, and to $3.4/W for projects installed in 2011.

    • Larger utility-scale systems have lower installed prices. In particular, among projects installed in 2011, the installed price of projects larger than 10 MW generally ranged from $2.8/W to $3.5/W, whereas projects smaller than 10 MW span a broader range, with most priced between $3.5/W and $5.0/W.

    • Installed price trends according to system configuration are less evident. Among <10 MW utility-scale projects installed in 2011, systems using thin-film modules are relatively low priced, compared to crystalline systems with and without tracking. Among projects >10 MW, however, no clear differences in installed prices are observable either between crystalline and thin-film systems or between systems with and without tracking.

    • Within the class of systems 2-10 MW in size, utility-scale systems (ground-mounted, by definition) generally have slightly lower installed prices than similarly sized commercial rooftop systems. Although median installed prices are similar between these two groups, the distribution is skewed lower for utility-scale systems, with one-third priced from $2.9/W to $3.5/W, whereas the lowest-priced third of the large commercial roof-mounted systems range from $3.6/W to $3.8/W.

    Conclusions and Policy Implications

    The number of PV systems installed in the United States has grown at a rapid pace in recent years, driven in large measure by government incentives. Given the relatively high historical cost of PV, a key goal of these policies has been to encourage cost reductions over time. Efforts to drive cost reductions have also been led by the U.S. DOE’s SunShot Initiative, which aims to reduce the cost of PV-generated electricity by about 75% between 2010 and 2020.

    Available evidence confirms that the installed price of PV systems (i.e., the up-front cost borne by the PV system owner) has declined substantially since 1998, though both the pace and source of those cost reductions have varied over time. Prior to 2005, installed price reductions were associated primarily with a decline in non-module costs. Starting in 2005, however, installed price reductions began to stall, as the supply-chain and delivery infrastructure struggled to keep pace with rapidly expanding global demand. Starting in 2008, global module prices began a steep downward trajectory, driving installed price reductions of 25-35% among residential and commercial installations by 2011.

    Non-module costs, in contrast, have remained relatively stagnant since 2005. Trends in non-module costs may be particularly relevant in gauging the impact of state and utility PV deployment programs. Unlike module prices, which are primarily established through global markets, non-module costs consist of a variety of cost components that may be more readily affected by local programs – including deployment programs aimed at increasing demand (and thereby increasing competition and efficiency among installers) as well as more-targeted efforts, such as training and education programs. Historical non-module costs reductions from 1998-2005 suggest that PV deployment policies have, in the past, succeeded in spurring cost reductions; however, the fact that non-module costs have remained largely unchanged since 2005 highlights the potential need to identify new and innovative mechanisms to foster greater efficiency and competition within the delivery infrastructure.

    Preliminary data for California systems installed in the first half of 2012 indicate that installed prices have continued to decline. Notwithstanding this success, further price reductions will be necessary if the U.S. PV industry is to continue its expansion, given the expectation that PV incentive programs will also continue to ratchet down financial support. Lower installed prices in Germany and other major international markets suggest that deeper near-term cost reductions in United States are, in fact, possible and may accompany increased market scale. It is also evident, however, that market size alone is insufficient to fully capture potential near-term cost reductions, as suggested by the fact that many of the U.S. states with the lowest installed prices have relatively small PV markets. Targeted policies aimed at specific cost barriers (for example, permitting and interconnection costs), in concert with basic and applied research and development, may therefore be required in order to sustain the pace of installed price reductions on a long-term basis.

    Finally, installed prices vary substantially across system sizes, market segments, technology types, and applications. Policymakers may wish to evaluate whether differential levels of financial support are therefore warranted (e.g., to avoid over-subsidizing more cost-competitive installations while providing sufficient support for promising but less mature technologies and applications).

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