PV Module Rating: A New Tool for Mining the Sun
By Matthew A. Thompson, Ph.D., Executive Director, Principal Solar Institute
Matthew A. Thompson, Ph.D., Director of the Principal Solar Institute
Like any natural resource, solar energy must be economically produced in order to support a sustainable energy business model. Historically, levelized cost of energy (LCOE) models have been used to assess the economic viability of various electrical power generation technologies, including coal, gas, nuclear, wind and solar, among others.
Because of the assumptions and broad range of costs put into these models, the LCOE analysis is useful to understand energy industry trends, but insufficient for project development and production forecasting. From rooftop to solar farm, one essential question lies at the foundation of an economic assessment: How much of the sun's energy can be captured and converted to electricity?
Similar questions are essential to all other energy production decisions, such as: How much coal can be produced from this mine? How much gas can this well produce? And so forth.
Conventional Wisdom Aside
Conventional solar industry thinking often relies upon a simple metric -- dollars per watt. This prevalent figure has some utility in broad financial planning as a cost estimator, or cost comparison of existing solar projects, but it does not address the other side of the energy equation: Is this solar project economically viable? Ultimately, in order to comprehend the economics of solar, we must turn to energy assessment because it is energy that is sold to consumers, not power.
Energy is measured in kilowatt hours, while power is measured in watts. Utility ratepayers readily see this in their monthly bills -- the cost is indicated in kWh, a measure of energy consumed. Once the producible quantity of energy is known, the issues of economic viability may be addressed. The Principal Solar Institute (PSI) has developed an approach for analyzing one key element in this energy-economics assessment: The PSI Photovoltaic Module Rating, an energy assessment tool for comparing the Lifetime Energy Production (LEP) of PV modules over a 25-year period.
How it Works
A 250-watt PV module will naturally produce 0.250 kWh of energy in one hour with standard sunlight conditions (1 kW per square meter). Obviously, it won't produce that much energy early in the day or late afternoon when the sun's rays are less intense. The PSI available-energy model uses a representative distribution of sunlight intensity to calculate the expected energy production over time. So why wouldn't the model predict that 250-watt PV modules from different manufacturers produce the same amount of energy?
In reality, some modules produce more energy than others in low-light conditions. This effect is one of seven characteristics that are combined in the PSI rating approach. All seven of these characteristics have some impact on the energy that PV modules will produce in real-world installations. These characteristics are determined by standard test methods and published in manufacturer's data sheets. In addition to light intensity effects, other characteristics are related to production specifications, temperature coefficients and degradation over time.
The solar industry grown tremendously over the past decade. Even so, the return on investment is only beginning to be realized in terms of long-term energy sales revenue. ___________________________
The PSI computational model combines these effects to calculate the 25-year energy production. Area is also an important metric for the economic assessment of solar energy. Area is a limited resource on rooftops and hillsides and in deserts. Additionally, the energy production per area is directly related to the efficiency of individual solar cells, as well as cell-packing efficiency in PV modules. Therefore, LEP is calculated in terms of energy and area. Finally, to produce a numerical result for the PSI Rating, the LEP of each specific module is divided by the LEP of an ideal module -- one that is 100 percent efficient, is unaffected by temperature and will not degrade over time.
Using the Rating
What is the best PV module for a particular application, one with the lowest cost per watt? Ultimately, it is the amount of energy produced that is the key factor in the economics of investment recovery and profit. By turning to the PSI Rating, one may compare PV modules between manufacturers or within one manufacturer's product line. A 345-watt PV module may show a much better PSI rating than a 295-watt module, but is the difference worth the added cost? For bulk module buyers, the PSI rating could be a basis for negotiating price. Remember, the PSI rating is directly proportional to the LEP for each PV module. A 10 percent difference in the PSI rating indicates a 10 percent difference in energy produced.
Consider another scenario: A solar energy utility company plans to acquire an existing solar farm and must choose the best of two, both in regions with similar sunlight and temperature conditions. The development cost of these projects has been realized, and power purchase agreements are in place. Their economic viability now hinges, in part, on how much energy these farms can produce. Turning to the PSI rating for the modules that are now producing in these projects can contribute to the due-diligence evaluation, comparison and negotiation of these deals.
Presently, the PSI rating is primarily useful as a side-by-side comparison of PV modules. Making comparisons between PV modules in widely different climatic regions is not yet included in the computational models, although this factor will be included in future releases. Also, important external factors such as tracking systems and inverter characteristics are not included. However, the PSI rating is the first comprehensive, comparative tool designed to bridge the gap between the solar development community and the financial investment community.
The solar industry has grown tremendously over the past decade. Even so, the return on investment is only beginning to be realized in terms of long-term energy sales revenue. This is the way of all electrical power utilities: Large upfront costs and payouts over decades.
In many ways, solar energy complements traditional utility production, and has some distinct advantages. Most utility companies face pricing pressures because of variations in raw fuel charges, but that is not the case with sunlight. Utilities, such as nuclear, face uncertain costs of waste disposal and, therefore, add risk to their bottom line.
With careful economic consideration -- and in the right markets -- solar can become a viable component of the electric energy industry. New performance analysis tools complement macroeconomic comparisons, like LCOE models, to provide a better understanding to buyers, developers and financiers of solar projects.
About the Author
Matthew A. Thompson, Ph.D., Executive Director of the Principal Solar Institute is a scientist with 23 years of experience in semiconductor process development and yield enhancement at Motorola and Freescale Semiconductor.