Good for you and your community
By Kelley Christensen, Michigan Tech News
 |
Beyond the
environmental benefits and lower electric bills, it turns out installing solar
panels on your house actually benefits your whole community.
For years some
utility companies have worried that solar panels drive up electric costs for
people without panels. Joshua Pearce, Richard Witte Endowed Professor of Materials Science and Engineering and professor of electrical and computer engineering at Michigan
Technological University, has shown the opposite is true — grid-tied solar
photovoltaic (PV) owners are actually subsidizing their non-PV neighbors.
Most
PV systems are grid-tied and convert sunlight directly into electricity that is
either used on-site or fed back into the grid. At night or on cloudy days,
PV-owning customers use grid-sourced electricity so no batteries are needed.
Sunny Savings
A previous Michigan Tech study found
all customers in Michigan would profit from installing their own solar systems,
which would generate electricity for less than they currently pay for it.
“Anyone who puts up solar is being a great citizen for their neighbors and for their local utility,” Pearce said, noting that when someone puts up grid-tied solar panels, they are essentially investing in the grid itself.
“Customers with solar
distributed generation are making it so utility companies don’t have to make as
many infrastructure investments, while at the same time solar shaves down peak
demands when electricity is the most expensive.”
Pearce and Koami
Soulemane Hayibo, graduate student in the Michigan Tech Open Sustainability
Technology (MOST) Lab, found that grid-tied PV-owning utility customers
are undercompensated in most of the U.S., as the “value of solar” eclipses both
the net metering and two-tiered rates that utilities pay for solar electricity.
Their results are published online now and
will be printed in the March issue of Renewable and Sustainable Energy Reviews.
Value
of Solar
The value of solar is becoming the preferred method for evaluating the economics of grid-tied PV systems. Yet value of solar calculations are challenging and there is widespread disagreement in the literature on the methods and data needed.
To overcome these limitations, Pearce and Hayibo’s paper reviews past studies to develop a generalized model that considers realistic costs and liabilities utility companies can avoid when individual people install grid-tied solar panels.
Each component of the value has a sensitivity analysis run on the core
variables and these sensitivities are applied for the total value of solar.
Solar
for the People
Some
communities, serviced by utility co-ops, have chosen to establish community
solar installations, spreading the up-front investment across all participants.
It’s a system that makes solar power available to people from all economic
groups. Read about L’Anse, Michigan,
which is one such community.
The overall
value of solar equation has numerous components:
- Avoided operation and maintenance costs (fixed and variable)
- Avoided fuel.
- Avoided generations capacity.
- Avoided reserve capacity (plants on standby that turn on if you have, for example, a large air conditioning load on hot day).
- Avoided transmission capacity (lines).
- Environmental and health liability costs associated with forms of electric generation that are polluting.
Pearce said one
of the paper’s goals was to provide the equations to determine the value of
solar so individual utility companies can plug in their proprietary data to
quickly make a complete valuation.
“It can be
concluded that substantial future regulatory reform is needed to ensure that
grid-tied solar PV owners are not unjustly subsidizing U.S. electric
utilities,” Pearce explains. “This study provides greater clarity to decision
makers so they see solar PV is truly an economic benefit in the best interest
of all utility customers.”
Not
Just Solar Panels
In addition to
being good for human communities, solar PV technology is good for the planet,
and it is now a profitable method to decarbonize the grid. If catastrophic
climate change is to be avoided, emissions from transportation and heating must
also decarbonize, Pearce argues.
One approach to
renewable heating is leveraging improvements in PV with heat pumps (HPs), and
it turns out investing in PV+HP tech has a better rate of return than CDs or
savings accounts.
To determine the
potential for PV+HP systems in Michigan’s Upper Peninsula, Pearce performed
numerical simulations and economic analysis using the same loads and climate,
but with local electricity and natural gas rates for Sault Ste. Marie, in both
Canada and U.S. North American residents can profitably install residential PV+HP
systems, earning up to 1.9% return in the U.S. and 2.7% in Canada, to provide
for all of their electric and heating needs.
“Our results suggest northern homeowners have a clear
and simple method to reduce their greenhouse gas emissions by making an
investment that offers a higher internal rate of return than savings accounts,
CDs and global investment certificates in both the U.S. and Canada,” Pearce
said. “Residential PV and solar-powered heat pumps can be considered 25-year
investments in financial security and environmental sustainability.”
