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Solar Could Save Money, Power Half of New York City's Peak Demand

John Farrell
June 30, 2011 | 12 Comments

The City University of New York (CUNY) released a solar map of New York City last week, allowing building owners in the city to determine the amount of solar power their roof could host. The cumulative impact is enormous, with city rooftops capable of providing half the city's peak power, and 14% of its annual electricity consumption.

The city should immediately maximize solar power development to save millions in electricity costs.

At $3.50 per Watt installed, and with the federal 30% investment tax credit (ITC), solar power in New York City can provide electricity at 16 cents per kilowatt-hour (kWh), a full 4 cents lower than the average residential electricity price (as reported by the National Renewable Energy Laboratory's PV Watts program).

Commercial installations that can also use the federal depreciation tax deduction could deliver electricity for nearly 12 cents per kWh, 40% lower than the average residential rate.

These prices are well within reach. Already in the U.S., aggregate purchasing has driven down residential solar PV prices as low as $4.22 per Watt. The average cost of rooftop solar PV installations in Germany is between $3.40 and $3.70 per Watt. In our new report, Democratizing the Electricity System, we show that even small-scale solar is being built for under $4 per Watt in the U.S.

As it turns out, when it comes to solar self-reliance, New York City is a microcosm of the state (in solar potential if not comparative electricity price). In our 2009 analysis, Energy Self-Reliant States, we found that New York's statewide rooftop solar PV potential was 15% of its electricity consumption, almost identical to CUNY's estimate of 14% of the city's electricity use.

Whether immediately (NYC) or in the near future (NY state), it's clear that rooftop solar PV is the route to greater energy self-reliance and electricity cost savings.

This post originally appeared on Energy Self-Reliant States, a resource of the Institute for Local Self-Reliance's New Rules Project.

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

12 Comments

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ANONYMOUS
July 6, 2011

Alligatorhardt asks in comment #11:
" If a 15% savings can be had, and the immediate need for more electricity be offset without building new large dirty energy sources, Why not take advantage of the 15%?"

He seems to have misread the article as there is no 15% savings because without the Federal subsidy the author's own estimate is that solar costs $0.23 kWh (an optimistic number for NYC) even neglecting the additional costs from intermittency considerations (which are not as small as he believes), line losses from pushing the solar power around the grid (factored into the retail price of electricity now but not included in the author's price for solar power) and various other factors. This is MORE than the highest retail price of electricity. One cannot count on huge federal subsidies for more than a tiny fraction of the consumption envisioned --they will be phased out as demand increases.

FInally, isn't wind power (transported in via the grid) cheaper than solar power--and by a large multiple? If yes, then solar costs MORE money that the lowest cost renewable solution.
Steven

Allen Gerhardt

Allen Gerhardt
July 6, 2011

I am also reminded that GE, a company with a wide range of products, dirty and clean, have introduced a gas turbine based on jet engine technology, that scales up rapidly for load balancing uses. Solutions are available for the variability issues. http://www.reuters.com/article/2011/05/25/us-ge-power-idUSTRE74O3B720110525

Allen Gerhardt

Allen Gerhardt
July 6, 2011

I am always amazed how commenters go to extremes, in looking for one big solution, or arguing over outside influences. If a 15% savings can be had, and the immediate need for more electricity be offset without building new large dirty energy sources, Why not take advantage of the 15%? If one where to offer a 15% bigger profit, everyone would gladly accept it. Distributed generation eliminates the immediate need for grid expansion, by using existing lines. Think of the air and water improvements jumping 15% by reducing use of dirty energy. Let's not get tunnel vision on these power adjustments. http://www.renewableenergyworld.com/rea/blog/post/2011/06/value-of-solar-power-far-exceeds-the-electricity

ANONYMOUS
July 4, 2011

Regarding Rojello's comment #8:
NYC's energy mainly comes from natural gas generation and the city also has the most extensive cogeneration system in the world. Natural gas prices are on the DECLINE in the US due to new techniques for extracting methane. Peak coal is a long way off, and certainly US supplies are extensive, so pricing pressure on coal generation is mainly going to come from increased regulation and environmental pressure--at least in the near future. PV prices are declining rapidly and in such a pricing environment the best strategy is to only add such generation as it is needed. Thus, if adding PV precludes the need for building a new natural gas turbine it might be reasonable. Rushing a buildout of expensive PV now merely to reduce usage rates for extant natural gas generation is an expensive and highly dubious strategy. Furthermore, the amount of intermittent generation that the city grid can accommodate isn't clear; these costs are never considered in these articles claiming that PV can provide a large fraction of energy needs. New capacity from wind generation is already much cheaper than PV so why isn't that a better alternative?

Given the outrageously high prices for electricity in NYC and the government incentives in place, certain residential users may benefit from switching. It is quite a different matter to say that the generation system as a whole would benefit from a massive shift to PV.
Steven

Roger Moore

Roger Moore
July 4, 2011

As a lay-person I wonder how dollar/watt calculation are affected medium term? Even if PV is still more expensive than one would like, doesn't it keep on giving for year after year with relatively low maintenance? Some credible people are predicting peak coal by as early as 2015 (e.g, Richard Heinberg)and there are likely to be SOME kind of carbon controls in the near future, however anemic they may be.

If one makes a, let's say 10-year projection on costs, doesn't already-in-place PV look pretty stable compared to fossil fuel costs which are almost certainly guaranteed to rise each year?

ANONYMOUS
July 2, 2011

If we accept the author's own number, and $3.5/W is a shade optimistic, without the Federal tax credit, which cannot be expected to continue at the installation volume the author proposes, solar PV would be ~$0.23/kWh. He compares this to the retail price of electricity in the highest rate category and it is still higher. Utilities sell much of their energy at lower rates to high volume users and for subsidies uses and they only charge for the energy consumed; issues such as line losses and maintaining a proper power factor are not included when comparing the utilities per kWh rate. Furthermore a shift to large amounts of solar power will raise the costs of maintaining grid stability considerably and the author never considers such factors in his analysis. In short, solar would raise the price of electricity by more than even the author admits (after including the tax credit, which is payed by someone).

If I used the same arguments the author does, I could point out that wind energy costs MUCH less than solar power so putting up lots of wind turbines (in upstate NY or even in North Dakota) and bringing in this cheaper renewable energy via new transmission lines would be more cost effective than solar PV. Of course, this is an overly simplistic argument and the optimal electricity generation scheme will depend on many complex factors. It is noteworthy, however, that even at the simplistic level of the author's own reasoning his solution isn't the optimal one.

Steven

James Leavenworth

James Leavenworth
July 1, 2011

So what's the big holdup, has Bloomberg (ahem) run out of gas?

David Carl

David Carl
July 1, 2011

The article is about peak demand. From a utility provider perspective solar is a poor choice for peak demand. Electricity consumption begins to rise at about 6:00 am and hits a peak at 10:00 am. This is not prime solar production times. The utility would need to have base line facilities, peak facilities for the morning, and solar installation for the afternoon. This would make natural gas peak firing even more expensive since you now only use it for a few hours instead of 12 or more a day. You may even have to fire the burners twice a day as peak demand extends into the early evening, also not good hours for solar production. If an individual pays higher rates for peak demand solar makes sense. It makes much less economic sense for utilities.

john daglish

john daglish
July 1, 2011

An economic alternative to PV particularly in temperate climates where CSP concentrating solar power are not viable or for isolated parts of the electrical network are low temperature thermal solar electric power plants. They can be located at the edge of urban areas to provide local power and heat to nearby industry or heating habitations. Using low cost array's of evacuated tube collectors (80 - 160C), a thermal store using PCM phase change materials for high energy densities and to keep a constant temperatures, and an ORC vapeur compression/thermal fluid cycle low température electric generators. Electricity can dispatched as needed to maximise economic returns.
http://www.materiatech-carma.net/html/pdf/actesmiec08/Didier_ROSSI-SAED-Productionelect.pdf
http://www.sophia-energie.com

Jeff Blood

Jeff Blood
July 1, 2011

Cost comparisons to fossil fuel energy are always done using standard average rates. But this article is about PEAK demand and those rates are much higher. As this article states, solar could provide half of the PEAK electical demand for NYC. As a renewable, solar is unique in that it provides local power when power is needed most - during peak demand. To build fossil fuel plants with enough capacity to satisfy peak demand is very expensive. If this peak demand were to partially come from solar, it would be a smart solution and use the best of both technologies.

Michael Keller

Michael Keller
July 1, 2011

At 4000/mWh, I am highly skeptical solar could compete with a simple cycle gas turbine using $5/mmBTU natural gas. Throw in the relatively low incidence of solar radiation in New York and the financials look even bleaker. Throw out subsidies (FYI, the taxpayer and consumer are out of money) and the whole thing becomes a financial train wreck.

sol Shapiro

sol Shapiro
July 1, 2011

Since these people will probably want to remain connected to grid, they will also have to pay the capital cost of this grid. Two other concerns: Is $3.50 per watt real? And where will the money come from to replace the investment tax credit?

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John Farrell

John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper,...

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