Design for Solar Investment: Fitting the Inverter

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.

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

A Nice Day

The friendly symbol of sunny well-wishing should be an appropriate companion to solar energy.

In his September 15th Op-Ed in the New York Times, Have a Nice Day, Thomas L. Friedman deplores the fact that the photovoltaic manufacturing industry in the United States is lagging. He notes that California-based Applied Materials, one of the world’s leading providers of solar module manufacturing equipment and fabrication solutions does nearly all of its business outside the U.S! Mr. Friedman does us all a great service by bringing this critical issue to more widespread attention. Yet, his listing of “the three prerequisites for growing a renewable energy industry” neglects the more fundamental issue that Rate Crimes exists to explain.

Mr. Friedman’s “prerequisites” are the same as those upon which the Arizona Renewable Energy Standards and Tariff (REST) rules and most other such programs are founded. However, the nation’s solar future —and even the still inadequate programs inspired by the Arizona REST rules—will continue to be delayed while the long-standing, repressive rate schedules in the nation’s sunniest state go unchallenged and unchanged. More than reparative rules, the marketplace for energy is in need of transparency and equitable accounting.

Until such change occurs, Mr. Friedman’s sarcastic, “Have a nice day” must be accompanied by a new symbol:

Made in China

Mr. Friedman exposes a sad irony, “So, right now, our federal and state subsidies for installing solar systems are largely paying for the cost of importing solar panels made in China, by Chinese workers, using hi-tech manufacturing equipment invented in America.”

It must first be admitted that we should be grateful for the efforts and foresight of China and Germany. They have sustained a critical industry while vested interests in the U.S. have repressed its advancement. However, there is a doubly sad irony.

Rate Crimes has discussed before the risks of using modules of unproven design and how the United States lags in assuring product quality. Not only should the nation immediately declare repressive energy pricing schemes to be illegal, but it should require more than safety certification. In addition, performance certification should be required for any and all photovoltaic modules sold in the United States.

Won’t that be a nice day!

The Followers of Texas

The Goldwater Institute’s 36-page policy paper of July 21st, Opening the Grid: How to Recharge Arizona’s Electricity System for the 21st Century begins with a promising first sentence. It is no secret that Arizona’s effectively unregulated, monopolistic electricity industry “is ill-equipped to meet the state’s growing demand for energy.” There is an impending, precipitous gap between the projected energy demand and what energy provision has been prepared or planned.

However, the paper abruptly steps into something squishy and pungent with its second sentence. The authors state, “Nor, is [the electricity industry] well-suited to contain the higher costs that are likely to result from renewable energy mandates.” Apparently, the authors – two university economics professors – have missed the fact that in sunny Arizona, on-site solar electricity is an increasingly superior investment in comparison with the purchase of electricity generated from traditional, toxic fuels at gargantuan, centralized plants. This, despite the existence of repressive rate schedules that result in hidden taxes; as well as the existence of unaccounted subsidies (water, liability, etc.) that have artificially (and temporarily) maintained the illusion of inexpensive electricity from the traditional power sources.

As a central piece of evidence for its arguments, the persistently dogmatic Opening the Grid heaps hefty praise on Texas for the deregulation of their retail energy market. Even a quick glance at Texas’s energy mix shows that little has changed since their deregulation began in 2002; other than a small, but significant increase in the amount of wind power.

The landscape of Northern Texas has enjoyed abundant wind resources since it was formed. Modern wind technology has been available for decades. Only recently was Texas’s increase in wind power generation finally inspired as a reaction to the increasing costs of the traditional, toxic fuels; and by the Renewable Electricity Production Tax Credit (PTC). Because of its reliance on expensive natural gas, Texas’s cost of electricity is among the highest in the nation. The PTC is a federal tax incentive that runs counter to the fundamental tenet of the Goldwater Institute.

In its second paragraph, the Goldwater Institute’s policy paper claims that, “Texas, Pennsylvania and Britain have recently restructured their electricity industries to achieve remarkable improvements in both conventional and renewable generation capacity”. Opening the Grid is three dozen well-written pages of dogmatic arguments based on, at least, one false premise.

If the dogma of the Goldwater Institute is unquestioningly accepted, our energy policy will remain short-sighted and reactive. Following Texas will only get us deeper into a sticky status quo. Any Texan will tell you, “When following the herd, be careful where you step.”

Success will depend – for more than just Arizona - on Arizona’s ability to achieve a unique, long-range vision; and to then act proactively and with constancy. Such behavior is commonly recognized as leadership.

Solar Price Drop Soup

An article published on August 26th in the New York Times, titled “More Sun for Less: Solar Panels Drop in Price”, delights in the recent lowering of the cost of solar electric modules and praises the benefits for consumers.

While the brief article provides some of the causes of the recent 40 percent drop in prices, and also discusses some of the ramifications, it neglects to deliver the most important message: buyer beware!

A homeowner interviewed in the article is ecstatic about his $23,000 savings (on an original price of $100,000), “I just thought, ‘Wow, this is an opportunity to do the most for the least’”. Such savings would certainly appear to be a good thing. It may also be that the solar company increased its margin and made a few extra dollars. All good, so far.

The source of the problem is mentioned without analysis in the article, "'A ton of production, mostly Chinese, has come online,' said Chris Whitman, the president of U.S. Solar Finance, which helps arrange bank financing for solar projects." The problem is that increased production of modules does not equate to an increase in the proportion of quality modules. Not all modules are the same. Some manufacturers, some designs, are better than others. With a surge in production, with the arrival of numerous new companies, and with increased competition in the market, it is likely that the number of substandard manufacturers and module designs will also increase.

Modules from nearly every manufacturer now carry a 25-year warranty. The terms of these warranties are based on a number of factors, not the least of which is the competitive advantage enjoyed by experienced, large, and/or well-capitalized manufacturers who establish the de facto warranty standard, yet run a relatively low risk compared to their smaller, emerging competitors who must provide a similar warranty. A warranty is really only as valuable as the strength of the company backing it.

The only way to be assured that a module design might be reliable and durable is to subject it to a test regimen that includes advanced aging techniques. Such testing is an expensive endeavor, made doubly so because it is time-consuming. Established manufacturers often perform their own tests. However, all photovoltaic module manufacturers who intend to sell their product into the world market must obtain a performance qualification to international standards from an independent testing laboratory.

However, there is contention that even the most rigorous advanced aging tests in the existing standards only reflect about a decade of a module’s active life. More than half the module’s life is unaccounted for by these tests. Furthermore, the performance qualification examines only the module design. The performance standards do not include manufacturing standards or factory inspections.

As troubling as are the limitations of the current standards, it should be highly troubling that in the United States only safety certification is required for solar modules. No performance qualification is required for modules to be sold in the United States! This imbalance leads to the United States being a magnet for modules that are safe, but suffer from substandard performance.

A 23 percent cost savings greatly improves the economics of a solar investment. It can also cover a lot of future performance problems. However, risking $77,000 to potentially substandard modules is an inordinate risk. Buyers should be aware of the real value of the warranties. They should also demand that photovoltaic modules have at least the IEC performance qualification for the design. If the module manufacturer cannot provide a valid certificate of performance, then . . . buyer beware.

Note: It is important to verify the authenticity of any certificate of performance qualification. The industry has experienced forged certificates. The testing authority, as indicated on the certificate, will be able to provide confirmation of the certificate’s authenticity.

Note: The title of the New York Times article is guilty of using a common misnomer. The term “panel” is appropriate for the boxy solar thermal collectors for domestic hot water systems. A solar electric collector is a package of interconnected photovoltaic cells. These packages are modular components of one or more strings or arrays in photovoltaic systems. Therefore, even though there is often confusion in the common parlance, they are appropriately called solar modules. Distinguishing between the technologies provides greater clarity.

School Reformulation

The Arizona Corporation Commission has been asked to reclassify Arizona schools as residences for the purpose of qualifying for Renewable Energy Standard and Tariff (REST) program funds. The REST divides funding between the commercial and residential sectors. The commercial program is becoming rapidly subscribed while the residential program lags.

Even though it is tardy, bringing solar into all the schools would benefit Arizona. However, a haphazard approach that brings solar only to the schools in the more economically fortunate neighborhoods will only repeat what is already occurring in (and across) the residential and commercial sectors where those least able to afford rising energy costs are also the least able to avoid them. The funds collected by the REST program are received from all utility ratepayers, but are only distributed to homeowners and to generally larger businesses; leaving renters and small businesses to continue paying.

This situation exacerbates the long-standing, hidden energy tax on small businesses in Arizona that is forwarded onto Arizona’s consumers. This hidden tax is a result of rate schedules that repress the value of solar energy and other energy management strategies.

Schools must also endure this burden. While they might be reclassified for the purpose of funding, they will continue to purchase energy under the repressive commercial rate schedules. These rate schedules will prevent the schools (i.e. the taxpayers) from realizing the savings they would under more equitable rate schedules.

In order to realize the maximum savings from a solar electric energy system, it must be part of a comprehensive technological, operational, and economic solution. Too few of Arizona’s solar providers offer comprehensive energy solutions that integrate energy generation and energy management into an optimal whole. Even fewer understand how the commercial rate schedules work to defeat the value of such measures.

While reclassifying schools in order to ensure funding has obvious short-term benefits, it is only a palliative. Rather than treating only the symptoms, the priority should be to develop a program that provides equitable funding to all Arizonans, and that leads to the rapid adoption of solar energy and the efficient use of energy across all economic sectors.

More fundamentally, the market manipulations that lead to inequity must be corrected.