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Optimizing Solar Projects to Maximize Return on Investment (ROI)

The solar industry is facing new realities as the economics of solar are changing. Predicting photovoltaic (PV) panel pricing is 'iffy' at best. The US Treasury 1603 cash grants are history. Optimizing the energy produced and making the most of available land have become increasingly important as investors and project developers look for a viable economic model to maximize ROI. With fossil fuel energy prices on the rise, government incentives for solar wavering, and a solar trade war being waged over the price of Chinese solar panels – delivering innovative, high-performing solar power solutions is more critical now than ever before.

At the end of the day, solar has to make economic sense to be a viable energy solution. There are two primary levers to increase the return on a solar investment and make this economic equation work – either drive down the cost of the solar system hardware or increase productivity, or output, from the installed solar power system.

Cheaper Panels?

Solar PV panels typically represent up to 40% of a project’s overall cost. And the price of solar panels fell 47 percent in 2011, according to Bloomberg. This has made the business case for solar more competitive and is driving the industry towards grid parity. With these lower panel prices, another year of growth is expected for the industry in 2012. However, there is a cloud on the horizon. Should the US impose tariffs on the low cost panels imported from China, US manufacturers will be in a better position to compete, but the overall competitiveness of solar as an energy alternative could be slowed with these lower cost panels from China no longer available. Whatever happens, the availability of cheaper panels cannot be counted on as a solution to the ROI challenge.

Optimized Solar Power Systems

The other way to paint a brighter picture for investors is to optimize solar power systems. By capturing more sun and generating more electricity to bring to market higher returns on the project investment become a reality.

Tracking the Sun

A solar tracking system is an automated racking system which moves the solar panels to follow the trajectory of the sun throughout the course of the day. Solar trackers can increase solar power production by up to 25% compared to a fixed-tilt system. SPG Solar is one of a handful of solar companies worldwide that specializes in building solar systems that utilize single-axis ground mount tracking technology. The larger the project, the greater the impact of today’s tracker technology.

 Efficient Power Conversion

Producing more energy from panels with a tracker system is pointless if it can’t be transferred to the grid. The latest inverter technology is keeping pace with the increased power output from PV panels. Inverters boost total power transfer by 5 – 12 percent through high efficiency, localized command and control and higher kilowatt-hours per day. Advances in inverter technology mitigate power loss, and significantly add to a solar power system’s output over its lifespan.

As the solar industry struggles with the uncertainty in panel pricing, it is turning to the optimization of system energy output to make the economic case for solar and attract investment dollars. The focus is no longer on driving down panel and other system hardware costs or on improving the output of the actual cells.  Innovation—the industry’s trademark—across the entire value chain will save the day.

Learn More at SOLAR Power Gen

At Solar POWER-GEN 2012 in Long Beach, CA next week there will be a panel of experts addressing ways to improve the return on investment for utility scale PV power generation.  The panel, held Wednesday February 12, 2012 includes Bill Elwell of SPG Solar, Brian von Moos of Borrego Solar Systems, John Skibinski of American Electric Technologies, Joseph Mossoba of Satcon Technology Corporation, Mark Rawson of Sacramento Municipal Utility District, Seema Ghosh of Black & Veatch.  It will be an open discussion targeting ways to achieve ROI, including system design, module and BOS selection, performance modeling and O&M.

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