Power Electronics Needs and Performance Analysis for Achieving Grid Parity Solar Energy Costs

1. Power Electronics Needs and Performance Analysis for Achieving Grid Parity Solar Energy Costs T. Esram, P. T. Krein, P. L. Chapman Grainger Center for Electric Machinery and Electromechanics Dept. of Electrical & Computer Engineering University of Illinois at Urbana-Champaign B. T. Kuhn, R. S. Balog SmartSpark Energy Systems

2. Outline • The nature of grid parity. • Solar production and value. • Performance analysis. • Power electronics requirements. • Parity expectations. • Timelines.

3. Potential From Solar Energy Industries Association, “U.S. Solar Industry – Year in Review, 2007”

4. Background • The issue: small photovoltaic systems. • For reference: 25 year operating life. • Energy performanceuses NationalRenewable EnergyLab (NREL) 30-yearsolar database. • Electricity “cost” basedon locational marginalprice (LMP), the standard utility tool for cost tracking and bid evaluation. www.midwestiso.org

5. Grid Parity • Solar energy becomes economically competitive. But what does this take? • Solar energy is not base load. Comparisons tonuclear, coal, hydro,or even wind powerhave limited validity. Navajo coal plant techalive.mtu.edu

6. Possible Grid Parity Values • Spot parity -- $1000/MW-h. • Appears under extreme conditions • Sometimes argued to justify fuel cells,microturbines • But, integrated impact is a few percent at most • Peak parity -- $200/MW-h • Cost of diesel or natural gas peaking • The basis for PV power tariffs in parts of Europe • But, solar intensity peak is shifted from system peak www.microturbine.com

7. Possible Grid Parity Values • Retail parity -- $120/MW-h. • The usual measure • Ignores timing or potential premium • PV systems as “negative load” • But, main impact for residential • Cost parity -- $50/MW-h • Expands PV relevance to industrialmarkets • Can bid within the total resource mix • But, extremely difficult to achieve www.protesoft.com

8. Grid Parity Reference • Average LMP, California ISO 2005: $55.90/MW-h. • Average LMP, Ameren 2007: $44.28/MW-h. • When actual solar incident radiation is integrated over actual hourly LMPs, the integrated value is about 25% higher.

9. Solar Production • Reference location: Bondville, IL 8/15/08 (approximately 89° west, 40° north) • Notice peak shift,about 3 hrs.

10. Solar Production • NREL 30-year database: • Actual measured incident solar energy is 4.8 kW-h/day/m² on average over 30 years. • Taking the reference nominal power as 1 kW/m², a ratio of 4.8 is observed. • Implication: for any PV technology, the expected delivered energy is 4.8 W-h per day for each of 1 W nominal power. • Capacity factor is 20%.

11. Solar Production • Ideal would be 24 W-h/day per nominal watt. • But, include de-ratingfactor of 80% deliveredto the grid, expected in small installations. • Result: 16% solarcapacity factor to the grid..

12. Solar Production – Value • 25 year production: 35.0 kW-h per nominal watt. • Energy value per nominal watt, 2008 dollars:

13. Power Electronics Requirements • A retail U.S. system today costs about $9 per peak watt before subsidies. • Roughly 1/3 cells, 1/3 mounting, 1/3 inverters and panel packaging.

14. Power Electronics Requirements • If solar cells were free, cost parity and retail parity could not be achieved. ($1/W??) • Power electronics today: separate inverter. • Costly dc connections. • Inverter life issue. • Inverter price today:$0.722/W plusinstallation.

15. Power Electronics Requirements • Power electronics can be a major driver in parity. • Increase operating life  match panel life • Facilitate installation • Improve energy delivery • Current price of $0.722 ismisleading: installation,repair over limited life.

16. Parity Expectations • Increase operating life • Inverters today have mean time between failure (MTBF) of less than 10 years • Must match panel capability • Eliminate electrolytic capacitors • Avoid delicate power devices • Computed MTBF above 100 years has been achieved in recent modular solar inverters.

17. Parity Expectations • Installation flexibility. • Conventional system requires precision rail mounts for aiming and integrity.

18. Parity Expectations • Instead: modular inverterfor “plug and power” ™installation. • No dc protection or wires. • Mount and connect. • Each module deliversmaximum power, for hightotal output. Photovoltaic ac module SmartSpark Energy Systems, Inc.

19. Parity Expectations • There is at least as much system cost improvement to be gained from power electronics as from photovoltaic cells. • Packaging, mounting, installation, … • Are there synergies in working on aggressive cost reduction in power electronics and PV cells?

20. Adapted from Solar Energy Industries Association, “Our Solar Energy Future,” 2004

21. Timelines

22. Timelines • Improvements in PV cells alone do not lead to grid parity. • Given present trends for PV cost reduction, and assuming high investment in power electronics cost reduction: • Retail parity by 2015 seems to be attainable. • Cost parity by 2030 is plausible.

23. Conclusion • Highly reliable modular solar inverters have the potential to be an explosive breakthrough. • Cost parity is a target that opens vast solar markets. • Cost parity may be possible by 2030. commons.wikimedia.org

24. Solar Two thermal solar power plant www.nrel.gov