Robert Margolis | DOE Solar Analysis Agenda

NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC

Presented at Institute for Analysis of Solar Energy Symposium George Washington UniversityWashington, DC

Robert M. MargolisSenior Energy AnalysisNational Renewable Energy Laboratory

April 24, 2009

DOE’s Solar Analysis Agenda: Current Activities and Future Directions

National Renewable Energy Laboratory Innovation for Our Energy Future2

Agenda

• Overview of current analysis activities– Market, value, policy and financial analysis– Modeling– Grid-integration– Market transformation analysis– CSP analysis

• Future analysis directions


Solar Analysis Organization

DOE Solar Program

NREL DC Margolis, Price

LBNL, SNL, BNLWiser, Bolinger, et al.

NREL Golden: Cory, Dehnolm, Blair, et al.

SubcontractorsNew West, etc.

Data Analysis and Visualization

Energy Forecasting and Modeling

Market and Policy Impact Analysis

Technology Systems and Sustainability


Market and Value Analysis

• Market analysis – Perform detailed analyses of existing and emerging markets. – Compile and publish solar market information.– Assess and revise the Solar Program’s technical, market

and policy targets.– Develop/improve market penetration models.– Carry out market penetration analysis.

• Value analysis – Develop methods and tools for improving the quantification

of the benefits and costs of solar technologies.– Work with modelers to improve the representation of solar

technologies in their models.– Enhance and maintain NREL’s PV Value Clearinghouse.


Market analysis example (a): Tracking installed PV system costs

$0

$2

$4

$6

$8

$10

$12

$14

$16

1998n=39

0.2 MW

1999n=190

0.8 MW

2000n=219

1.0 MW

2001n=13445.6 MW

2002n=252314 MW

2003n=347136 MW

2004n=549748 MW

2005n=508461 MW

2006n=835389 MW

2007n=10272107 MW

Inst

alle

d C

ost (

2007

$/W

)

Capacity-Weighted AverageSimple Average +/- Std. Dev.

$0

$2

$4

$6

$8

$10

$12

1998n=39

0.2 MW

1999n=1900.8 MW

2000n=2191.0 MW

2001n=13445.6 MW

2002n=252314 MW

2003n=347136 MW

2004n=549748 MW

2005n=508461 MW

2006n=835489 MW

2007n=10271107 MW

Year

Capa

city

-Wei

ghte

d Av

erag

e In

stal

led

Cost

(200

7$/W

)

U.S. Module Price IndexNon-Module Cost (calculated)Installed Cost

• Experienced steady installed cost reductions through 2005, then flat through 2007.

• Much of the decline in installed costs through 2005 came from reductions in non-module (i.e., balance of system) costs, which held steady in 2006 and 2007.

Source: Recent LBNL report, Tracking the Sun: The Installed Cost of Photovoltaics in the U.S. from 1998-2007


Market analysis example (b): The Solar Deployment Systems (SolarDS) Model

Regional solar insolation (435 regions)Utility electricity ratesMultiple rate structures (flat, time of use,

demand-based)PV cost & future reductions ($/kW)PV Financing termsFederal and State PV IncentivesBuilding Stock

– Residential: Single Family, Multi Unit, Rentals

– Commercial: 14 building types

Model Input

Cumulative and annual PV installations (GW) for each state

– Residential and Commercial– 2 year resolution to 2030

Fraction of buildings with PVPV payback timeCost of Federal and State incentives

Model Output

SolarDS is a market penetration model that forecasts PV installations on residential and commercial rooftops in the U.S. under various economic and policy scenarios to 2030.

2030


Value Analysis Example:Web-based distributed PV value clearinghouse

• Improving the clearinghouse interface.• Expanding content in clearinghouse.

Access at: http://www.nrel.gov/analysis/pvclearinghouse/


Policy and Financial Analysis• Policy analysis

– Define and carry out analysis that addresses policy questions of importance to the Solar Program and other stakeholders.

– Example topics include: • Analysis of carbon emissions reduction potential of solar

technologies under a range of growth scenarios. • Investigating the use of enabling technologies with PV such as

energy storage and plug-in hybrid electric vehicles.• Reviewing state RPS policies that include solar/DG set-asides.

• Financial analysis– Define and carry out financial analysis that meets the needs

of the Solar Program and other stakeholders.– Examples include:

• Tracking and analyzing investment trends.• Writing reports and case studies on selected financing topics.• Developing a solar/renewable web based financing portal.


Policy analysis example (a): 2009 residential PV and electricity price differences with existing incentives

• Analysis for 1000 largest utilities in the U.S.

• Key drivers for PV are incentives, electricity prices and quality of the solar resource.

Draft


Policy analysis example (b): 2015 residential breakeven cost with federal ITC but no state incentives

• At $5/W, attractive in 98 of 1,000 largest utilities, which provide ~25% of U.S. residential electricity sales.

• At $4/W attractive in 328 utilities, ~42% of sales.

• At $3/W attractive in 743 utilities, ~80% of sales.

Draft


Financial analysis example (a): Tracking and analyzing investment trends in solar

• Global investment in solar increased from $66M in 2000 to over $16B in 2008.• Venture Capital/Private Equity and Debt took on larger role in 2008.• Most of 2008 investment (83%) took place during 1st three quarters of 2008

(Q4 accounted for only 17% of 2008 investment).

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

$ in

Mill

ions

Solar M&A Activity

VC & PE Investments

Solar Debt

Solar Public Equity Activity

Source: New Energy Finance*Excluding government R&D and project finance investments; 2008 numbers are preliminary.

99% CAGR 2000-2008 74% CAGR 2000-2004 127% CAGR 2004-2008

Total global investment in solar energy


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$3,00020

0020

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08

Asia EU* US**

Region / Year

Mill

ions

of $

0

10

20

30

40

50

60

70

80

90N

umber of Transactions

Thin Film PVSolar Heating & CoolingProject DeveloperPolysiliconOtherNext Generation PVMultijunctionManufacturing EquipmentInvertersCSPCrystalline Silicon PVCPVNumber of Transactions

Financial analysis example (b): Tracking and analyzing investment trends in solar

Global private investment in solar by region and technology

• U.S. investors are pursuing a more diverse set of technologies than investors in other regions.


Financial analysis example (c): Report on financing PV by state and local government

• Identify best practices for state and local governments with respect to financing PV on public property:– Reduced electricity bills– Value of green attributes– Use of state incentives– Taking advantage of 3rd

party ownership models– Options for owning and

financing public-sector systems

– Understanding insurance requirements


Modeling Analysis• Develop validated modeling platforms for all solar

technologies– Credible energy production and levelized cost of energy

analysis for project development, evaluation, and due diligence (Industry).

– R&D prioritization (DOE).• Key modeling tools include:

– PVWATTS - familiar, easily accessible and linked to other programs.

– Solar Advisor Model (SAM) - model energy output, levelized energy costs, cash flows, parametric analysis.

• Validate models for a variety of technologies, applications, and locations against measured data– Support development of standards for modeling annual energy

production.– Database of necessary information, e.g. measured module

and inverter parameters, weather data, etc.


Modeling analysis example: The Solar Advisor Model (SAM)

• Original Vision – Combine all solar technologies in one

modeling environment.– Model performance, costs and

financing consistently across technologies.

– Calculate impact of R&D technology improvements on LCOE, NPV, etc.

– Extensive sensitivity analysis and output/plotting capabilities.

– Do not reinvent the wheel, i.e., use existing models when possible.

• Current Vision– Robust simulation tool that both DOE

and industry will use.– Implementation of best performance

models (Sandia/NREL PV, NREL trough, Sandia Inverter, 5-Parameter PV via UW-Madison and CEC).

– Policy, Markets and Technology Analysis

– Siting Tool (especially with detailed Google-Maps solar satellite data).

– Easy to Use interface.

Steps in setting up SAM analysis case

1. Choose technology

2. Define environment (including location, financials and incentives)

3. Define system parameters (including system configuration and costs)

4. Add parametrics


Grid-Integration, MT, and CSP Analysis• Grid-Integration Analysis

– Improving distribution system analysis and modeling for high penetration PV

– Working with Western Wind and Solar Integration Study (WWSIS) on spatial and temporal impact of solar resource on PV system integration.

• Market Transformation Analysis– Developing database of grid-tied PV installations and related

data.– Analysis in support of: workforce development, utility and

state-level stakeholders, and Solar America cities program• CSP Analysis

– Quantify and assess energy and capacity value of CSP systems with & without storage; model high penetration scenarios

– Identify environmental and transmission barriers to CSP deployment; assist with definition of Renewable Energy Zones


Grid-Integration Analysis Example:The Renewable Systems Interconnection Study

The 15 RSI reports include:• Renewable Systems Interconnection: Executive

Summary• Distributed Photovoltaic Systems Design and Technology

Requirements• Advanced Grid Planning and Operation• Utility Models, Analysis, and Simulation Tools• Cyber Security Analysis• Power System Planning: Emerging Practices Suitable for

Evaluating the Impact of High-Penetration Photovoltaics• Distribution System Voltage Performance Analysis for

High-Penetration Photovoltaics• Enhanced Reliability of Photovoltaic Systems with

Energy Storage and Controls• Transmission System Performance Analysis for High-

Penetration Photovoltaics• Solar Resource Assessment• Test and Demonstration Program Definition• Photovoltaics Value Analysis • Photovoltaics Business Models• Production Cost Modeling for High Levels of

Photovoltaics Penetration • Rooftop Photovoltaics Market Penetration Scenarios


Future analysis directions

• Launching “Solar Vision” high penetration study– Including supply chain issues– Workforce needs/benefits– Environmental benefits– Impacts on electricity grid operation

• Developing suite of manufacturing cost models for PV technologies.– Accounting for: labor, material, throughput, yield, etc.– Separate models for: CdTe, CIGS, III-V devices

• Expanding work in support of market transformation– Foundational analysis on workforce development – Support for state level regulatory commissions– DOE recently issued RFI for “Solar Policy and Analysis

Regional Centers” (comments due 5/7/09)


Example Publications• Quantifying Avoided Fuel Use and Emissions from Solar Photovoltaic Generation in

the Western United States, Environmental Science and Technology, 2009, 43 (1), 226-232.

• Supply Curves for Rooftop Solar PV-Generated Electricity for the United States, NREL Technical Report, November 2008.

• Evaluating the Limits of Solar Photovoltaics (PV) in Electric Power Systems Utilizing Energy Storage and Other Enabling Technologies, Energy Policy. Vol. 35, pp. 4424-4433. 2007.

• Land-use Requirements and the Per-capita Solar Footprint for Photovoltaic Generation in the United States, Energy Policy. Vol. 36, pp. 3531- 3543. 2008.

• A Historical Analysis of Investment in Solar Energy Technologies, 2000-2007, NREL Technical Report, December 2008.

• Financing Non-Residential Photovoltaic Projects: Options and Implications, LBNL Report, January 2009.

• Solar Photovoltaic Financing: Deployment on Public Property by State and Local Governments. NREL Technical Report (NREL/TP-670-43115). May 2008.

• Utility-Interconnected Photovoltaic Systems: Evaluating the Rationale for the Utility-Accessible External Disconnect Switch. NREL Technical Report (NREL/TP-581-42675). January 2008.

• Renewable Systems Interconnection Study. Set of 15 reports published in 2008 exploring technical and analytical challenges that must be addressed to enable high penetration levels of distributed renewable energy technologies. http://www1.eere.energy.gov/solar/solar_america/rsi.html

http://www1.eere.energy.gov/solar/solar_america/rsi.html

Robert Margolis | DOE Solar Analysis Agenda

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