The Second Age of Solar - Driving Costs Down End to End to Get to Grid Parity

In this article, we shall explore some of the methods and techniques to drive down the costs of solar energy production & maintenance while increasing solar energy production efficiency over a much longer life.  By achieving lower costs over life while increasing watts produced over life, solar project financiers and developers are rewarded with a greater return on solar power generation and its sale to the open market, perhaps without the need for incentives by 2016.  That would result in solar power becoming the first of the renewable energies to reach grid parity energy costs.  So, let us begin the exploration by asking solat project financiers the most basic question: 

Why produce solar power?

The bottom line to an investor pursuing solar power production is to make money selling solar power at reasonable margin and at a price they can profitably sell it for over a capital equipment life of twenty years.  Depreciation is one method to enable profitability, but the other driving force for years has been renewable energy credits of some form or another that made solar power generation profitable.  Solar seems to be more favored by more renewable energy investors because solar has no moving parts, with the exception of the inverters with fans whose average life is five years.  This is one major reason why solar power generation is advancing towards grid parity energy costs the fastest – it costs less to maintain over its life cycle.

(But this alone about solar does not count out wind power production in the future - that industry is seeking to make wind power so dispatchable that wind farms become the coal powered generation plants of today, which is a very good thing - but that is another article altogether.) 

What drives solar power return on investment?

Most investors get a fixed price per watt power producing agreement contract with very specific terms and conditions for twenty years of solar power generation.  There is not much flexibility in these contracts.  So, most every investor is focused on solar power production cost per watt over a twenty year depreciation cycle, regarding how the initial, operations and maintenance costs all can be driven down over time.  Only then, with the fixed price power production revenue agreement, can investors ensure themselves of a favorable solar power generation return on investment.

What are the ways to drive down solar power cost per watt over twenty years?

There are only a few ways to impact solar power costs per watt over twenty years: at functional and end to end efficiency, at functional and end to end reliability, the initial equipment & installation costs, and the total life cycle operations & maintenance costs.  There are others, but they are minor at this writing compared to these ways.

What are ways to improve functional and end to end efficiency?

For the last two decades, the solar industry has improved efficiency at the functional points in the system: 

• advancements in solar cell efficiency, improving about 0.5 to 1 pt per year currently for thin film solar cells, which means more output current for solar cells reaching their 35% to 40% total efficiency today;
• advancements in solar inverter efficiency, which has reached 98% and really cannot advance much more unless PV string voltages move from 600 (today) or 1000 (today) to 1200, 1500 and beyond;
• advancements in power distribution equipment, which is ongoing, as most component suppliers strive to handle more power in less volume with less heat;
• advancements in transformer efficiency, which has reached 97% to 98% and really cannot advance more because there is not that can be done about magnetization losses, and so the higher the voltage fed into a transformer to lower the current results in the lowest loss and highest efficiency;
• increasing the gauge of copper cabling and bussing, but because solar farm fields are so large, 2% losses in the wiring at most is considered cost effective, as increasing cable gauge ends up increasing both copper and installation costs.

And so now that solar farms have done everything they could with functional component technology available today, the next thing that can be done to improve efficiency is by designing with higher PV voltages across the farm end to end.  For the same reason, this is why you see utility grid transmissions lines going up to 750 kV – the higher the voltage, the lower the transmission losses and the better the efficiency.

So, it only makes sense to invert PV strings at 1200 volts with higher efficiency thin film PV panels to capture 10% to 20% more PV power through the inverter.  This actually addresses a mismatch between today's actual PV panel maximum power point output and 1000 volt inverters - many brands of PV panels can be strung to 1100 volts and beyond readily - but most inverters overvoltage shutdown at 1000 volts - thus losing that 10% to 20% more PV power actually available in these PV panels, today.  Even though such panels are "1000 Volt rated", most are tested to 2000 volts and pass the manufacturer's internal quality tests easily.  And in utility behind the fence applications, UL, NEC, IEC, etc. - code compliance is at the discretion of the utility. 

So, for a very high efficiency PV string of 10 amps, that’s 2000 watts more of additional power possible per PV string at 1200 volts.  That’s 200 kW more per 1 MW farm field – 20% more potential power capture.  And at utility scale farms, that’s 100 MW more per 500 MW farm field – which is worth 2,000 additional homes per year powered by solar.  So, by increasing the number of watts captured per PV string, end to end cost per watt is driven down which improves solar project ROI.  And as PV panels improve in efficiency and rise in output voltage, inverter OEMs will have to follow to 1500 volts next or they will not be able to capture the additional power produced.  In this regard, inverter efficiency doesn’t mean anything if the inverter cannot capture more voltage and hence more power produced anyway.

What are ways to improve functional and end to end reliability?

For the past two decades, the solar industry has improved reliability at the functional points in the system:

• advancements in reducing solar cell efficiency degradation over twenty years – this has been so dramatically improving in the past five years that in five years it may no longer be as issue for most PV OEMs;
• advancements in inverter reliability, which typically last 5 years especially if air cooled, as the cooling fans seldom last beyond 3 to 5 years.  In addition, when power semiconductors are exposed to large fluctuations in junction temperature, they fail prematurely within five to ten years instead of their lab-tested twenty year life. Another issue with air-cooled inverter reliability is the use of printed circuit boards mounted unenclosed inside the cabinet, which are subjected to the extremes of temperature & humidity, which is not a good design practice for utility grade equipment.  As a result, longer warranties are being offer to cover the costs of early equipment failure, but the revenue lost by a shutdown inverter is not replaced, so costs per watt has not improved here;
• advancements in power distribution equipment in terms of reliability is not at issue – but the growing issue is revenue loss due to DC or AC arc flash accidents that destroy equipment, which can shutdown a site until the arc flash hazard condition is corrected, thus impacting revenue production at a high cost per watt;
• advancements in transformer reliability – not much to gain here, as they are quite reliable over twenty years already with proper maintenance;

And so now that solar farms have done everything they could with reliability today, with what was the most expensive problem, PV efficiency degradation, coming under control, investors are targeting improved inverter reliability as the next item to address – and they are actively asessing inverter design and its manufacturing to determine what ought to be improved.

So it only makes sense to improve several of the well known inverter problems of today, starting with power module air cooling and replacing it with liquid cooling.  Liquid cooling provides better heat transfer, so that power modules are kept cooler at a constant temperature, both which dramatically lengthen power semiconductor life.  In addition, liquid cooling pumps last much longer than high-velocity air cooling fans or blowers, which fail because of dust and dirt destroying the fan bearings.  With judicious use of low cost radiator technology as a heat exchanger, liquid cooling will allow an inverter to operate beyond 50C ambient temperature without depowering – and that means full output power production in the sunniest yet also hotest places on the planet - and that translates to more watts of solar power produced, again boosting solar project ROI.

Another method to improve reliability is through the use of industrial grade high temperature and high EMC hardened programmable controllers designed and tested for the harshest environments in the world.  This level of reliability combined with the highest level of simple programmability brings both a significant level of reliability to the inverter control functions while enabling end customer customization at a lower cost.  Because of this high level of programmability, numerous functions can be implemented with very few controllers within the system, which again improves reliability.

Last but not least, DC and AC arc flash safety needs to be addressed by design.  A 1000 volt 1000 amp PV farm field has essentially the power of a very large steel welding machine.  Strike a DC arc, and because the current does not go through zero like in AC, that DC arc will perpetually continue without extinguishing unless drawn very far apart. No matter what anyone thinks, utility scale solar DC voltages are not safe – they can be more dangerous than their AC arc flash hazards.  So, solar inverters should have a load-break rated DC disconnect switch that senses handle movement to off and drops contactors, on both the PV and the MV side, while commanding the inverters off to ensure an arc less disconnect event that totally isolates the system for the greatest operator safety.  This addresses arc flash at the inverter - for further protetcion against AC arc flashes at the substation, arc flash mitigation switchgear should be specified in the solar substation to protect the whole farm from AC as well as DC arc flash hazard conditions.

What are ways to improve initial equipment and installation costs?

For the past two decades, the solar industry has utilized the knowledge and expertise of engineering, procurement and construction firms to lower installation costs.  Regarding equipment costs, cost per watt has been improving with manufacturing economies of scale for solar cells continuously, and power distribution component and transformer cost per watt for the most part have been improving continuously for years - but inverter cost per watt has not improved as dramatically as other functions in the system.

The evolution of solar inverters has been supply of just the grid tie inverter, then bundling with a DC disconnect, then bundling with an AC disconnect, then bundling with a DC master combiner, then bundling with monitoring, and so and so forth - but always without re-integration of the separate functional designs.  And then sometimes the functions then all are mounted into an expensive shipping container with yet another expensive function not necessarily needed - a large air conditioner.  Why this is done makes no sense - when you buy a house, do you buy separate rooms, or one house with an appropriate cost adequately allocated to each functional room of the house, all constructed as one house at a total price you are willing to pay?

The solar industry has not taken bundling to the level of re-integration and re-design – it was just about putting two boxes together at more cost instead of re-integrating functions so that the overall cost was lower.  And even at solar project sites today, installers still have to bundle these boxes and the MV transformer together with the core inversion packages to complete the system.  Nothing is being optimized by design, manufacture or construction installation.

So, true integration by design, manufacture and construction installation results in one single integrated non-containerized NEMA 3R PV direct to 13.8 kV solar inversion station fully revenue ready after wiring – no bundling needed to be done by anyone.  True integration implies no nickel and diming pricing games as well - all fuses, lightning arrestors, surge suppressors, meters, monitors and relays are all pre-installed and the entire system is pre-commissioned for rapid start-up once placed on the pad.  This can equate to up to $150,000 in equipment and installation savings that translates right down to cost per watt and a far more favorable solar project ROI.  The customer gets one end to end system part number, one end to end system warranty, from one vendor "to choke", as solar system integrators like to refer to these "touchpoints" - the fewer the balance of plant touchpoints, the better the farm's ROI.

What are ways to improve total life cycle operations and maintenance costs?

For the past two decades, the solar industry has just begun to capture and develop O&M knowledge and a base of experience.  Operations and maintenance costs, and so cost per watt, has been improving with solar cell design for reliability and manufacturing quality improvements.  Power distribution components have improved with design for reliability and manufacturing quality improvements.  Tansformers have mostly improved with supply chain and manufacturing quality improvements.  But most inverters seldom last 5 years without some major failure that results in revenue downtime.

Inverter reliability discussed previously plays heavily into this category, but one of the problems with some inverters is the manner in which they filtered the air.  Low to the ground air intake with high volume air intake using low cost foam or paper filters that are easily clogged by dirt and dust result in overheating the inverter and depowering it, sometimes even shutting it down.  Operators just don't understand how their expensive inverter can be brought down by a clogged filter.  

In addition, foam and paper filters are easily chewed through by rodents and insects, which then really go to town on the cables inside.  This has been such a problem that solar system integrators have been mounting stainless steel mesh screens over air intakes and exhausts themselves to correct this problem.  The way to address the problem in the inverter's design is utilize washable stainless mesh screen filters, which are a deterrent to rodents and insects, as it is a material that they don’t like to chew on.  A minor increase in cost per watt compatred to extending the operations of the inverter over a twenty year life.  Again, attention to details like this all translate back to favorable solar project ROI.

Another way to addess lost revenue production is by having two separate and isolated dual redundant grid tie inverter paths from PV input to MV output – even if one side of the system is offline, the other one can continue until the other side is back online.  Since the solar industry has serious concerns about a single 1 MW block inverter, the use of dual redundant 500 kW power inversion paths addresses this concern by improving long term reliability by ensuring at least half of the system is operating at any point in time.

In Summary 

Today we explored just some of the methods and techniques to drive down the costs of solar energy production & maintenance while increasing solar energy production efficiency over a much longer life.  By achieving lower costs over life while increasing watts produced over life, solar project financiers and developers are rewarded with a greater return on solar power generation that could result in solar power becoming the first of the renewable energies to reach grid parity energy costs by 2016.  None of these methods and techniques are unique to solar - eventually all renewable energies will be examining ways to improve power generation ROI end to end across the project without the need for incentives - it's only a matter of time.