Tuesday, December 29, 2009

Stealth Bomb!

Just when we thought we could relax and comfortably usher in the New Year a stealthy, between-the-holidays announcement slips out from the bomb bay doors.

On Monday, December 28th, Salt River Project proposed an increase in electricity prices about half of what it had originally proposed.

As reported in SRP proposes average $6 rate hike, the utility is proposing a 4.9 percent increase in electricity prices to pay for a new $1 billion coal-fired plant and for environmental controls at the coal-fired Coronado Generating Station.

As disappointing as it is to pay for a dirty, old coal plant – and a dirty, new coal plant – there may be a spark of hope in the announcement. SRP’s Chief Financial Executive, Mark Bonsall, is quoted as saying, "We have weighted the increase towards the highest-consumption customers because they drive our costs more.”

Please allow me to repeat that, "We have weighted the increase towards the highest-consumption customers because they drive our costs more.

Could it be? Did Rate Crimes just receive a small gift for the Holidays? Does this foretell greater things for the coming year? Will other utilities follow this example of leadership?

Oooh Emmm Geeee!


Arizona Victory Sky

As the year closes, we must reflect. This blog began in late May of this year as a new platform for a message that had exhausted its prior, smaller rostrums. It was also intended to be a public record of a neglected history of what may someday be recognized as yet another great tragedy born of criminal negligence. It is hardly surprising that seemingly provincial economic manipulations would gather little attention in 2009. Few expected that during this past year our society would bear witness to the manifestations of perhaps the greatest economic crime in history; excluding human slavery, and with apologies to the Knights Templar.

This post is the 59th in 32 weeks; an average of almost two posts per week during a busy year. I completed the year having averaged nearly twenty miles a day on my bicycle; more than three times as many miles as I drove in my car. This gives me hope that I may able to discard the automobile before the earth discards me.

A retrospective of this year’s Rate Crimes posts is summarized best in the post Big Squeeze. The items listed there are the core of the Rate Crimes message. Beginning with Arizona’s repressive rate schedules that have long impeded the advancement of solar energy, the list enumerates a grim reality. However, we did indulge in a happy celebrationor two.

During the initial months, the blog’s purpose was didactic. The goal was to explain the complex details of the economic manipulations as simply as possible. Finally, in July, it was possible to publish an Executive Summary that referenced these details. After establishing this foundation, it was possible to begin asking more questions. Rate Crimes promises to continue asking questions. Your input is always welcome.

This past year, solar energy has made great strides in Arizona, and even greater strides elsewhere. There is much to celebrate. Yet, Rate Crimes must resist this urge. For reasons which should be obvious to the readers of Rate Crimes, it is too soon to celebrate in our nation’s sunniest state.

The most important pending question is, “Will 2010 finally be the year that Arizona’s long-standing repressive rate schedules are corrected?” For several reasons, this is doubtful. The most pressing practical reason for continued transgression is that 2010 is an election year. Two seats of the Arizona Corporation Commission will be termed out, and one of Arizona’s solar energy champions will be departing the Commission. The Kabuki Theatre is likely to continue to the benefit of the interests vested in the status quo, and to the detriment of Arizona’s sustainable future. At the root of all of Arizona’s energy troubles are the repressive rate schedules. It is the machination by which all other energy issues are distorted.

Still, a more troubling question remains. The repressive rate schedules are only one example of Arizona’s habit of regressive economic schemes. Even the fees that support Arizona’s solar energy incentive program are a regressive tax. Neither industries, nor states can be sustained by regressive economic systems.

Finally, Rate Crimes would like to thank the many old and new friends who have provided sustenance and inspiration this year. May we all enjoy a happy new year.

Sunday, December 27, 2009

Stationary Play

Gamer Pigs

When a relevant event occurs, or a relevant story is published, the general policy of Rate Crimes is to pause and to contemplate before commenting. However, there are moments when any discipline must be broken…

The day after Christmas in the San Jose Mercury News appeared a story titled, New financing schemes make solar more affordable. The article lists several companies that “are pioneering new business models and creative financing mechanisms to make rooftop solar more affordable.”

While Rate Crimes applauds efforts to bring the full benefits of solar energy to everyone, we are critical of regressive economic schemes that allow funds contributed by everyone – including our most vulnerable citizens -- to be skimmed by for-profit organizations. While innovative and equitable financing programs have been created in California and other states, the same cannot be said of Arizona.

Of course, Rate Crimes also argues that in our nation’s sunniest places, solar energy has long been more affordable (in a very direct sense) than the electricity delivered by the grid from the utilities’ toxic sources.

Can a strong, independent, and thriving solar industry can be established based upon regressive economic schemes? Untolled subsidies – both direct and from unaccounted costs – have not yet delivered affordable energy from traditional sources. Can we expect better from a system that distributes its energy primarily to more fortunate homeowners with monies from the general fund?

And, how well are the more fortunate among us caring for our increasingly limited resources?

SolarCity has about 5,000 customers. About half buy their solar systems outright, but the other half -- 2,700 customers to date -- have chosen to lease.

One of them is Roger Whitley, 58, who lives near Silver Creek High School in San Jose. With a monthly electric bill of $600, his main motivation for going solar was financial.

"The lease made it easier for us to go ahead and take the leap," Whitley said. "We have a pool, a hot tub, air conditioning, and two teenage boys with Xbox and PlayStation. The electric bill was killing me."

Unless these suburbanites have an epic photovoltaic system with an equally epic battery bank, solar electricity is not directly contributing much to the operation of their pool, hot tub, Xbox, or PlayStation. A society of solar-powered PlayStations? Perhaps, the electric bill is not the central problem here?

Friday, December 25, 2009

Sunday, December 13, 2009

Design for Solar Investment: Fitting the Inverter

Supersize me!

The engineers that deliver energy solutions to homeowners and small businesses labor under demands much different from those experienced by the engineering teams that design large, commercial solar energy systems. For smaller systems, time, money, and effort all become more personal and immediate; if not more precious.

A solar electric energy system is an investment that can yield extraordinary returns in sunny climes. Even where the sun is less ample, energy generated from the sun can have extraordinary value. While a small solar investment may not require funds on the scale of a 401K, it is still an investment that requires significant capital even where rebate incentives apply. Regardless of the size of your solar investment, the system must have a cost-effective design in order to attain the highest possible return.

A cost-effective design will be the least expensive design that provides reliability and durability while maximizing lifetime energy production. In operation, it is important to ensure that each and every watt is pulled from the system throughout its long life in order to avoid the unnecessary purchase of electricity from the grid. Energy production is especially important at times when the cost of energy from the grid is the highest; both at any moment of any day, and in later years as energy costs continue to rise.

Even though this all seems straightforward, many designs falter with the fit of the inverter(s). Too often, the selection of an inverter is determined only by its cost and by guidelines that consider power capacity ranges, but that neglect ‘comfort’ and value. The cost and size alone of a pair of shoes will not inform you whether they will carry you happily down the long road of years. To experience real value and to reach your distant destination unblistered, you need shoes with a proper fit.

One design philosophy that fails the rigorous test of value is the practice of incorporating an oversized inverter.

“The Inverter (the heart of the system) is always oversized. By operating the inverter below its maximum power rating, it stays cooler and extends its operating life.” [emphasis mine]
- company website

In one particular instance, following this dogma led to a system design that incorporated an oversized inverter with a retail cost of $1,200 more than the standard inverter. This additional cost represents a 47 percent increase over the cost of the standard inverter, a 6 percent increase in materials cost, and a 4 percent increase in the estimated cost of the installed system. A design that front loads system costs ignores a central principal of investment: the time value of money.

Modern inverters are designed to endure harsh environments. If the instructions for properly mounting and operating the inverter are followed, a mean time to first failure (MTTFF) of ten years is typical. Quality inverter manufacturers now provide ten-year factory warranties. The argument that cooler operation may extend the operating life of an inverter is not without merit. However, even if the site does not provide a shaded location at which to mount the inverter on a north-facing wall near the electrical service entrance, an adequate, inexpensive cooling solution is available for only about $100. A specialized fan costs dramatically less than the $1,200 additional cost for an oversized inverter.

While an approach that focuses on inverter size is faulty, it serves to illuminate a number of important, yet frequently disregarded considerations for fit. A design with an oversized inverter will provide no additional power. In fact, it may provide significantly less.

Transition Power

The inverter's lowest operational voltage (LOV) (a.k.a. startup voltage) is the input voltage at which an inverter starts and stops delivering output power and, therefore, the duration of its operational window. The match of the LOV and the output voltage of a string of (series connected) modules is a critical factor in both maximizing system power output and in determining if any value is achieved from incorporating an oversized inverter into the system.

Even though there are broad ranges of inverters with varying capacities but with similar LOV, the LOV broadly correlates with the size of the inverter. Therefore, a smaller inverter may respond sooner during transitions from low to high irradiance, and postpone a shut down during the opposite transitions.

One might assume that the power generated during these transition times is negligible, and that its value is insignificant. However, the total of transition time is determined by more than sunrise and sunset; it includes many periods of transition between shadow and sunshine. Therefore, potential energy loss during transitions is compounded. It may also be that the energy lost during these times has extraordinary value because of the structure of a rate schedule, consumption patterns, and/or climate. The value of the power generated during these transition periods accumulated over the many decades of the system’s operation can be significant.

If the primary goal is to maximize the return on investment in a solar electric energy system, then a smaller inverter with a lower cost and a lower LOV may be the better option: even if it means using a few less modules. There are also several technological constraints that favor a smaller inverter with a lower LOV.

Temperature Effects

The most obvious constraint is the effect of temperature on module performance. Photovoltaic modules are dynamic, electrical devices with imperfect efficiency. Therefore, they dissipate energy in the form of heat. Because of albedo and to a much lesser extent electrothermal generation, photovoltaic modules operate at temperatures above the ambient.

The practice of incorporating an oversized inverter increases the risk of the voltage of a string or array falling below a larger inverter’s higher LOV. This risk is exacerbated by several factors. First, a module’s operational voltage is lower than its nominal voltage. Second, a module’s maximum power voltage (Vmp) will be lower than its open circuit (Voc) voltage. Thirdly, the voltage of a module operating under high temperature is lower still. In the desert and other regions with hot climates, when outdoor temperatures are extremely high, electricity (for cooling interiors) is particularly valuable. A power loss due to a clipped power generation window during the summer is especially expensive.

When summer ambient temperatures regularly approach 50° C in the desert, then module operating temperatures can become very high. Even though morning temperatures at the onset of the power generation window may not rise this high, power transition periods can occur at any time due to weather, shading, or other factors. Furthermore, when overnight lows are above 35° C (95° F) it does not take long for module temperatures to rise in the morning.

Module Degradation

Another constraint is module degradation. The performance of silicon solar cells and other photovoltaic materials begins degrading naturally after manufacture. The degradation of materials, cells and assembled modules is accelerated when a solar electric system is installed, exposed to the elements, and energized.

The output current of each module in a string, array, or block will diminish as degradation proceeds. In contrast, the voltage (Voc) of most modules in a system will remain relatively constant as they degrade over the years. Still, over the system’s long life, module degradation increases the risk that the voltage of a string or an array will increasingly sink below the LOV of the inverter in a poorly-designed system.

The importance of degradation in system design is amplified because it is highly likely that the cost of energy from the grid – the costs that are expected to be avoided by replacement with solar energy - will increase over time.

Module Mismatch

Yet another important constraint is module mismatch. Any particular model of photovoltaic module is manufactured to tolerances that are typically specified as a percentage range that is evenly distributed around the model’s nominal peak power at Standard Test Conditions (STC). Often, this percentage tolerance is the same for models of dramatically different sizes. A 225-watt module with a ±5% tolerance will cover a range of 22.5 watts and a 95-watt module with the same tolerance will cover a range of 9.5 watts.

For many manufacturers, improvements in quality control have led to improved tolerances. A ±5% tolerance is commonly specified. Yet, a drop of 5% below the nominal peak power in the performance of modules in a string or an array can have significant negative effect on the performance of a system that are magnified by other detrimental factors.

Environmental Factors

There are also a bevy of environmental factors that can cause system performance to deteriorate in both apparent and subtle ways. Dirt, cable and contact wear, moisture incursion, tree growth, and critter nibbling can all exacerbate the technological constraints.

Risk Engineering

Even with the potential of any particular constraint to damage the performance of the system, the greatest conceptual hurdle is not the technology or the physics, but the probabilities. The probabilities of any constraint occurring must be combined with the probabilities of the magnitude of the occurrences, the probabilities of the speed of degradation, the probabilities of the constraints occurring in combination, and the probabilities of the magnifying effects of their interactions.

Anomalous modules may appear. Occasionally, a module may experience an extreme degradation. Or, an anomalous module’s degradation may express itself as a voltage drop that is apparent only during periods of power transition or under extremely high temperatures. A module may be delivered within stated tolerance, and even remain within tolerance for many years before it exposes a flaw. The probability of anomalies appearing increases with temperature and time.

Even though the risk of an anomalous module appearing increases with the number of modules, the effect of this risk on the duration of the power generation window is counteracted by the greater string voltage. This is also true of module mismatches. Therefore, the overall risk that module degradation will affect the power generation window is higher for smaller, lower voltage strings. For example, choosing to use eight modules instead of ten modules in order to save a few dollars of capital expenditure may result in a more rapid approach to the LOV and an inordinate diminishment of the solar investment.

Another risk to the solar investment is the eventual repair or replacement cost if the inverter fails and the warranty has expired. Will the costs of repairing an oversized inverter be higher than repairing a smaller inverter? Years later, will an unsuspecting owner replace a failed inverter with a similar model, not realizing that the larger model is now too big for the degraded array? Will future technology solve this potential problem?

The Timing of Generation

Further complicating matters is the economic issue of the timing of generation in relation to consumption. For some, early morning and/or late afternoon generation is more important. In the absence of solar trackers, module technologies whose energy production is less dependent on angle-of-incidence have an advantage, but only if the inverter can respond. There may also be a seasonal consideration where increased cloudiness may inordinately diminish production because of a pinched power generation window.

Building an Industry

A cost-effective solution must consider all these interacting factors. System designers sometimes use open circuit voltage (Voc) as a design parameter without considering the ramifications of maximum power point tracking (MPPT), module temperature, mismatch, degradation, and environmental factors for string voltage over the life of the system. Even before degradation occurs, there can be more than a 20 percent voltage difference between Voc at standard test condition (STC) temperature of 25° C (77° F) and Vmp at module temperatures of 50° C.

When designing a system it is important to be both knowledgeable and flexible. Every situation presents unique challenges that may require unique solutions. It may be the case that future expansion is a part of the design strategy. In this case, an oversized inverter might be a valid solution. But, “always” is a very risky design strategy. A cautious “always” is better applied to product, deployment, and operational strategies. Incorporate proven components in systems. Modules should have IEC[1] performance qualification in addition to the required safety certification(s). Design systems for quick, repeatedly dependable installation. It is (almost) always a good strategy to monitor peak power and power generation —with special attention to power transition periods — throughout a system’s life. Finally, provide responsive service should the system’s performance falter. Responsible companies design and build not just superior solutions for their customers, but also work to build the reputation of our very important solar industry.

[1] International Electrotechnical Commission. http://www.iec.ch/

Saturday, December 12, 2009

Local Solutions Globally Applied

Technology Review

A briefing on electricity appeared in the September/October issue of MIT’s Technology Review magazine. The briefing begins with a section titled, “Can Renewables Become More than a Sideshow?” The introduction concludes with some commendable exhortations, but the body contains two exasperating statements:

“The reality is that renewable power and other alternatives to fossil fuels, including nuclear, remain too expensive to compete with coal and natural gas."

… and …

“Renewables are unlikely to end our reliance on fossil fuels within the next 20 years.”

I responded with a letter to the editors that they were kind enough to print in the Letters and Comments section of the December issue:

Our September/October Briefing focused on the prospects for renewable power.

In “Solar Power Will Make a Difference—Eventually,” the author presumes that ubiquity is a condition for a valid global solution, but the maps of the “energy belts” on page 97 are clear enough evidence that each region must respond to energy issues in its own way. Solar power, particularly, is now an economical solution in our sunniest climes. This fact has been disguised by—among other factors—an energy pricing scheme that defeats the investment value of on-site solar energy and other energy management strategies. We can’t blame the tardiness of technology while we remain tardy in implementing transparent and equitable economic systems. The answer to the rather silly question in the opening section—“Can Renewables Become More than a Sideshow?”—is not only “Yes!” but “They must, and soon.”

This was all that could be said within the constraints of the allotted space. Many other thoughts can be explored here on Rate Crimes. Yet, if I had been permitted to express just one more idea in a periodical devoted to technology it would be that clever technology and honest economics cannot alone resolve our energy issues; humanity will be sustained only by a conscientious and comprehensive discipline of stewardship.

Friday, December 11, 2009

Big Squeeze

big squeeze

A special, existential absurdity accompanies the state of being a citizen of Arizona. The great, swelling, air-conditioned cities of the Southwest each attracts denizens with particular promises. The tag lines are expressive, “What happens in Vegas stays in Vegas”, “Entertainment Capital of the World”, “The City Different”, “America’s Finest City”.

Los Angeles flaunts itself. Las Vegas celebrates itself. Santa Fe examines itself. San Diego prides itself.

In Arizona is proclaimed, “The Valley of the Sun” and “The West's Most (Mid)western Town”. Living in Arizona comes only with the promise of easy winters amidst a prosaic culture. To those familiar with the Arizona milieu, there can be little wonder why Harlan Ellison’s 1970’s classic, A Boy and His Dog was set in a barren, post-apocalyptic Phoenix underlain by an insipid, predatory, subterranean Scottsdale; and why the smartest and most interesting creature in the story was a dog.

Ruling above ground today in Arizona are the vapid tenets and myopic vision of Goldwater “conservatism”. Scottsdale names its streets after such dogmacrats. The predatocracy is already firmly established in preparation for the apocalypse now being foreshadowed by Arizona’s most recent economic “malaise”.

Rate Crimes’ midsummer Executive Summary focused on the structural elements of the central analysis of the predatory economics. As the end of the year approaches it is time to recap and expand the list of predations relevant to clean, sustainable solar energy:

  1. The long-standing and now unique system of repressive utility rate schedules that has long impeded the advancement of solar energy.
  2. The shell game of hidden, regressive taxation that results from the rate schedules.
  3. The further regressive taxation of the Renewable Energy Standards and Tariff scheme.
  4. The rapid emergence of leasing programs and companies whose economic viability depends on an ephemeral and regressive incentive scheme.
  5. The not so “choice” surcharges for electricity from the utilities’ “green” energy programs.
  6. The hidden costs of traditional energy generation.
  7. The multi-million dollar compensation for utility executives who have left Arizona ill-prepared for the impending energy gap.
  8. The ludicrous kabuki theatre of Arizona energy politics wherein costly institutions exist only to maintain a distracting charade.

In A Boy and His Dog, the protagonist, Vic, is a virile, wide-eyed youth who enthusiastically follows an enchantress into the underworld to discover that he is absurdly valued only for what an impotent society can literally squeeze from him. Happily, his faithful and perceptive best friend comes to his rescue.


Thursday, December 10, 2009

Solar-Powered Coal

Coal Module

Arizona’s Green Divide has a less apparent extraction of wealth from captive electric utility ratepayers and taxpayers.

These unsuspecting payers are funding the installation of solar electric systems on their more fortunate neighbors’ houses; thereby assisting their neighbors to abandon them to pay for an ever greater share of increasing utility electricity costs.

These captive ratepayers are also funding the electric utilities’ acquisition of environmental (a.k.a. carbon) credits.

There is an environmental credit associated with each kilowatt-hour (kWh) of electricity produced by your RE System, which represents the environmental benefits, emissions, reductions, offsets and allowances attributable to the generation of energy from your RE System. Title to and ownership of any and all environmental credits associated with your RE System will be assigned to us when we make payment of the Credit Purchase Payment to you. Thereafter, we will have exclusive title to and ownership of all such environmental credits. The calculation, use and retirement of any and all environmental credits will be in our sole and exclusive discretion. Your acceptance of the Credit Purchase Payment operates as your waiver and relinquishment of any right, title, claim or interest in the environmental credits and entitles APS to any and all environmental credits associated with your RE System from the Effective Date of this Agreement through the date that is twenty (20) years following the Commissioning Deadline (as defined below).
- Arizona Public Service agreement

These credits allow the utilities to maintain and extend the consumption of toxic fuels. Will Arizona develop the world’s first effectively solar-powered coal mine?

Wednesday, December 9, 2009

Solar Phunny

Solar Phunny Phoenix

The City of Phoenix, Arizona Public Service, SolarCity, and the National Bank of Arizona are collaborating to bring on-site solar electricity to a few of the city’s less affluent homeowners. The Solar Phoenix program will allow 1,000 Phoenix homeowners who lack the means to purchase a solar electric system to instead lease a system. The initial program will provide more than a megawatt (nameplate) of proximally-produced solar electric energy to the citizens of Phoenix. The Solar Phoenix motto is “Energizing Phoenix with Affordable Solar Power” [emphasis mine].

Rate Crimes applauds any effort to bring the full benefits of solar energy to all the citizens of Arizona, our nation, and the world. However, bringing solar energy to 1,000 homeowners’ roofs is not necessarily the same as bringing these 1,000 homeowners the full benefits of solar energy.

As described in Arizona’s Green Divide the funding for the solar rebate programs are extracted from all the electric utilities’ ratepayers. However, only a small segment of relatively wealthy homeowners have been able to reap the benefits of the REST scheme.

The Solar Phoenix program purports to bring affordable solar energy to another slender segment of Arizona homeowners. Yet, for the privilege of using their valuable roof space, the program will deliver to lessees benefits that are far more slender than the full benefits enjoyed by those fortunate enough to be able to own, rather than lease, a solar electric energy system.

Here is how the Solar Phoenix program appears to operate within the REST program:

Solar Phoenix Green Divide

The vast majority of taxed citizens/ratepayers are still receiving no direct benefit from their contributions. However, they are now supporting a few more neighbors, their electric utility, the City of Phoenix, the National Bank of Arizona, SolarCity, and Arizona’s solar module manufacturer, First Solar, whose modules SolarCity is using. What percentage of the ratepayer (and taxpayer) funds that are going into this regressive economic system is reaching the lessees?

As I have been explaining for the past half-decade, solar energy in the form of electricity in our nation’s sunniest state has long been less costly (affordable!) than the electricity from traditional forms of energy generation. Yes, there are considerations that confound the rapid adoption of solar energy. However, compounding hidden taxation resulting from a regressive system of rate schedules with further regressive taxation from a supposedly pro-solar incentive program, and then playing phunny with the money through suspect leasing programs is hardly a solution.

P.S. Aren't paintbrush circles a bit passé?

Solar Phoenix logo
Lucent logo

Tuesday, December 8, 2009

Arizona's Green Divide

There is a deep chasm in the Grand Canyon State. It is a chasm deepening so quickly as to shame the timeless workings of geology.

The Arizona Corporation Commission’s Renewable Energy Standards and Tariff (REST) rules are an inherently flawed attempt to animate a languid solar industry†. The major flaw is the process by which wealth is extracted and redistributed. Here is how it appears to operate:

Fees for the REST are assessed on each electric utility bill. All residential “ratepayers” are assessed equally based on monthly kilowatt-hour (kWh) consumption. The fee has a maximum limit. For example, a residential ratepayer is charged 0.3288 cents for each kWh consumed up to a maximum charge of $1.32 per billing period. This limit represents approximately 400 kWh of consumption.

The funds gathered by this scheme are distributed through a rebate program administered by the electric utilities. The funds are distributed to homeowners who possess the discretionary funds to purchase a solar electric energy system. These relatively wealthy homeowners gain the advantage of the rebate programs, escape electric utility costs, and therefore abandon the unfunded citizenry to pay for an ever greater portion of the increasingly expensive energy from the utilities. Furthermore, because they are escaping electricity costs, the solar overclass contributes less to future REST funding!

Can a strong, independent, sustainable solar energy industry be created based on a regressive economic scheme?

Why the Arizona solar industry has so long remained listless is explained elsewhere in the Rate Crimes energy blog.