SOLAR 3
Photovoltaics: The Efficacy of Solar Power
at Central Oregon Community College
This study came about as a response to an ongoing desire to develop a ‘Green Science’ building at Central Oregon Community College (C.O.C.C.). RMI (1998) has provided the definition of green development as “a successful fusion of resource efficiency, environmental sensitivity, attention to human well being, and financial success…” (cited in Hawken, Lovins & Lovins, 1999, p85). In that context, what part does a photovoltaic array (solar power) play in the development of a future science building? Before we attempt to answer that question, it is important to generally define photovoltaic (P.V.) technology.
General Definition of Photovoltaics and the Components of Solar Power
According to Webster’s Ninth New Collegiate Dictionary, photovoltaic is defined as “utilizing the generation of voltage when radiant energy [sunlight] falls on the boundary between dissimilar substances (as two different semiconductors).” In other words, using solar panels, we can generate direct current (d.c.) electricity as long as there is sunlight! This energy, in the form of electricity, is described in terms of watts or, for our purposes, kilowatts (one thousand watts). The capacity of a system or the amount of energy it produces is described in terms of kilowatt hours (kwh)—the number of kilowatts of d.c. electricity it produces in one hour. Obviously, a larger P.V. array will produce more kilowatts than a smaller one.
What is done with that energy once it is produced? Most solar power systems have traditionally used batteries to store that power, but a newer technology using “inverters” transforms the direct current electricity into alternating current (a.c.), which is in the form supplied by our power plants. By Oregon law, we are able to feed this electricity directly into the power grid (the system that supplies our electricity) that, in effect, allows you to “spin your meter backwards” (Sunlight Solar Energy, n.d.).
Photovoltaic System Parameters
What are the parameters of the system? Having had several consultations with Paul Israel, the owner of Sunlight Solar Energy (personal communication Feb.18,2004) he has suggested a system of solar panels mounted on the roof of our proposed building plus integrating some panels into the building design as was done in the Portland Brewery Blocks project (Brewery Blocks, 2004). Utilizing both approaches, we would be able to mount a P.V. system that could supply 20 kilowatts continuously (system capacity: 20 kW). If we assume an average of five hours of sunlight per day (Mr. Israel has stated that this is, in fact, the case in Bend), this system could produce 100 kW/day or 36,500 kilowatts in one year.
What would a 20 kW system cost? Again, according to Mr. Israel, a system of this size would run $100,000 plus a $20,000 “fudge factor”. For our purposes here, we will use the higher number. It is thought that we can probably make a system work for less money but using the higher figure of $120,000, we are better prepared for unanticipated costs and a higher figure also allows us more security in providing comparisons to normal electricity use.
So, a photovoltaic system of 20 kW capacity could be roof-mounted and integrated into a future science building for $120,000 supplying up to 36,500 kW of a.c. power over the period of one year. The standard warranty for such a system is 25 years (Sunlight Solar Energy, n.d.). Our goal here is to decide whether or not this system is worth the capital cost to Central Oregon Community College. To do that, a review of all the various incentives and rebates available to the college needed to be done. With that information available, a mitigated cost can be presented that, when compared to the normal cost of purchased electricity at C.O.C.C., will better inform our decision. Secondly, a discussion of the intangible benefits and/or any other possible drawbacks will need to be presented. We will begin with the main focus of our research—how can C.O.C.C. reduce the cost of a photovoltaic system?
Reduction of System Cost Through Incentives, Rebates and Laws
There are four main ways to reduce the cost of purchasing and installing a P.V. system. An excellent resource, the Database of State Incentives for Renewable Energy (2004, May 14) lists all the currently available incentive programs in every state. This site is updated weekly, so it will provide a great starting point when the construction of a new science building is decided upon. Here is what has been found:
First and foremost, the Business Energy Tax Credit (BETC) is an incentive program being offered through the Oregon Department of Energy (2004. May 4). This program, as its name implies, offers tax credits to businesses that buy and install a renewable energy system. If you are such a business, you can offset your state tax liability, dollar for dollar, up to 35% of the total cost of buying and installing a P.V. system. The offset is over a five year period and breaks out thusly: 10% credit for the first and second year and 5% each year thereafter through the fifth year. A business may carry the credit forward for eight years if they do not have the liability to offset it in five years. This 35% of total project cost does not include maintenance, replacement costs, or funds needed to satisfy codes.
Since Central Oregon Community College presumably does not have tax liability, there is a pass through option available for BETC. This program allows the college to partner with a legitimate Oregon business that does have state tax liability. Such a business would receive the full 35% tax credit pursuant to the aforementioned process by providing a lump sum payment to C.O.C.C. for 25.5% of total project cost. If our project costs $120,000, the business would pay us $30,600 thus reducing our cost by that amount. The business wins as well, by offsetting their tax liability by 35% of $120,000 or $42,000. This saves the business a net $11,400 over five years.
A second incentive program available to C.O.C.C. might be the Energy Trust of Oregon (2004). “[It] is an independent nonprofit organization dedicated to energy efficiency and renewable energy development.” They have a buy down incentive program that pays $2.25/watt of system capacity capped at $15,000. Since the proposed system capacity at the college is 20,000 Watts (20 kW), the maximum $15,000 would be available. The builder (C.O.C.C.) of the P.V. system must be a customer of either Pacific Power or PGE, go through an approval process, and install a new system that is grid tied and net metered. The Energy Trust would not pay C.O.C.C. but rather a qualified photovoltaic dealer/installer who, in turn, would reduce his or her bill to the college accordingly. It will be very important to agree on the exact costs associated with materials and installation so that the $15,000 payment does not become a slush fund for the installation company. In other words, if a company commits to provide and install a system for, say, $110,000, the college will commit to pay $95,000 and any increase in cost must be thoroughly documented and justified. If both of these programs (BETC & ETO) were to be implemented, the cost of a 20 kW solar power array would be reduced by $45,600 leaving a cost of $74,400.
A third possible cost reducer is the Bonneville Environmental Foundation (2004) green tags program. According to Mainstay Energy (2003), green tags are environmental benefits that are derived from not generating electricity from fossil fuels. This foundation will pay up to ten cents/kWh of produced clean, renewable energy like photovoltaic energy. If C.O.C.C. were to produce 36,500 kWh per year, this would give the college $3650 in green tags revenue for producing that power. As of this writing however, the foundation website states that it does not deal with system capacities larger than 10 kW or with entities who have benefited from the Energy Trust of Oregon incentive program. There are conflicting reports on this so it would be prudent to follow up on this once a decision to build has been made. Another possible green tag alliance may be found through Mainstay Energy (2003). They have a green tag program that pays between two and five cents per kilowatt-hour that would result in $730 to $1825 per year of revenue.
A fourth consideration that will lower the cost of our project is found in two Oregon laws. The Oregon Net Metering Law (cited in Sunlight Solar Energy, n.d.) allows the producer of solar power to sell that power back to the power company. In this way, the college would reduce the cost of their power bill by the cost of that power they produce. Presently, electricity costs about six cents per kilowatt-hour, which would reduce the college electric bill by $2190 each year. The State Energy Efficient Design (SEED) Law (Oregon Dept. of Energy, 2004, May 4) has dictated that any state building heretofore built must exceed by 20%, the Oregon state building codes dealing with energy conservation provisions. This law has further dictated that a $75/hour energy consultant must be on the building fund payroll until such time as the 20% threshold is met. This cost shall not exceed .002% of the total building cost. For example, if the college were to spend five million dollars to construct a science building, the cost for SEED could conceivably be $10,000. The extent to which a P.V. system and other energy conservation measures such as passive solar design and orientation could contribute to that 20% threshold, mitigates the cost of SEED by that amount. In other words, if we have exceeded the Oregon state codes by 20% or more, the college saves as much as .002 % of total building cost by utilizing P.V. technology and other energy conservation measures. For the sake of argument, a $5,000 savings due to conservation measures avoiding some of the cost of SEED will lower the total cost of the solar array from $74,400 to a net cost of $69,400.
We now have a 20-kilowatt photovoltaic system for a net cost of $69,400 with a 25 year warranty and approximately $3190/year income in produced energy and green tag sales ($2190 for energy and $1,000 estimate for green tags). That means that over 25 years at $3190/year, the system will more than pay for itself while under warranty. This, of course, does not take into consideration debt service—an issue that complicates this argument. Below is a graph representing various costs of electricity. This illustrates just how many years it would take to recoup the initial investment (through the income provided by the P.V. system) based on the price of a kilowatt-hour of energy. Several prices are shown for comparisons sake and because it is not knowable what the actual cost of energy will be in the future. First, a review of the important figures:
· Gross Project Cost: $120,000
· Business Energy Tax Credit: $30,000
· Energy Trust of Oregon: $15,000
· State Energy efficient Design: $5,000
· Net Project Cost: $69,400
Cost ofElectricity / Income:
(36,500 kwh/yr.) / Income:
Green Tags / Total Yearly
Income / Net Project Cost / # Years to Repay Net
4 cents/kwh / $1460.00 / $1000.00 / $2460.00 / $69,400.00 / 28.21 years
6 cents/kwh / $2190.00 / $1000.00 / $3190.00 / $69,400.00 / 21.76 years
8 cents/kwh / $2920.00 / $1000.00 / $3920.00 / $69,400.00 / 17.70 years
10 cents/kwh / $3650.00 / $1000.00 / $4650.00 / $69,400.00 / 14.92 years
This graph has provided a more complete financial picture of the actual cost of a photovoltaic system (without considering debt service). Are there other considerations besides the financial one when attempting to decide whether a solar array will benefit Central Oregon Community College?
Other Benefits of Solar Power
Certainly, solar power is not inexpensive. Why should C.O.C.C. consider it? One very good reason is the idea of solar power as a clean, renewable energy. Clean means that there are few, if any, polluting byproducts—chief among them, the carbon dioxide (CO2) emissions prevalent in hydrocarbon based fuels. Renewable bespeaks an unlimited supply. By pursuing this P.V. strategy, the College is not using up a limited or finite fuel supply, but rather, harnessing the unlimited energy of the sun.
Intangible Benefits of Solar Power
Following the above reasoning, what is the role of a community college? Should it not set an example for its students and the community at large? There is, presently, ample evidence of global warming that is thought to be due to the increased emissions of carbon dioxide. One can argue the extent to which that evidence presents itself, but the point here is that there is widely accepted evidence and it is being taught here at C.O.C.C. If CO2 emissions are a problem, renewable energy without those emissions is an answer. It is incumbent upon an institution of higher learning to follow the science wherever it may lead, offer challenges to that science and, perhaps most importantly, provide and explore workable solutions. It is also important for a community college to show its support for leading edge technologies that improve our lives and demonstrate the viability of those industries in contributing to our regions’ economic engine. The benefits here are that Central Oregon Community College, by embracing this technology, not only fulfills its obligations to the students and community but also provides an alternative and supports change in dealing with solving the problems brought on by global warming.
Opportunities for Classroom Participation
There is the added benefit of utilizing this system as a teaching tool. Presently, The University of Oregon (2003) has a Solar Monitoring Research Laboratory (SMRL) with various monitoring stations throughout the Northwest. It is possible to partner with them, although such an alliance cannot be discussed realistically unless/or until C.O.C.C. were to move forward with this project. A photovoltaic system is a physical technology that can provide a hands-on example for students to witness and work with. For instance, suppose the Science Department decided to design, through student participation, a moveable roof-mounted array that not only swiveled from east to west, but also moved vertically with the sun as the day progressed? This orthogonal orientation to the sun’s rays could provide the highest possible energy generation for the system. Industry currently does not provide such systems (at least not on a large scale) presumably because of cost. If C.O.C.C. where to do a study of this with a standard roof-mounted system and then a moveable roof-mount and compare the results, who knows what might be found?