Wednesday, November 28, 2012

The Texas Solar Energy Math Challenge

Let’s diffuse the old news that solar energy is too costly and is only competitive with subsidies and take a more current look at some simple data that indicate that we have a great opportunity in Texas to tap the untapped natural resource.

Which is better for Texas residential and small business energy consumers - $9.00/kWh peak wholesale electricity from centralized power plants that must be transmitted over long distances with the associated energy losses, or $0.07/kWh from distributed photovoltaic (PV) solar power generated where it is consumed with no transmission losses and which is generally aligned with the peak energy demand time periods in Texas?

The Texas Public Utility Commission (PUC) recently raised the price cap on wholesale electricity prices to $9,000/MWh, which is $9.00/kWh, and then denied a petition to have more public discussion about increasing the emphasis on using a huge, untapped natural resource in Texas – the SUN!

A September 25th article in Renewable Energy World comparing the cost of a residential-sized PV system (4kW) between the US and Germany indicated that the unsubsidized total installed cost in Germany is approximately $2/Watt.  With the sunshine we have in Texas, this is equivalent to decades of electricity at less than $0.07/kWh.

The basic calculation to translate $2/watt into $0.07/kWh is as follows:
  • 4,000W(DC) system at $2/Watt is $8,000.
  • A south facing PV solar system installed in Texas is estimated to produce 1,400 watt-hours, or 1.4kWh(AC) per installed watt(DC) of PV solar. 
  • Therefore, a 4kW(DC) installed system will generate 4000 times 1.4kWh which equals 5,600 kWh per year. (467 kWh average per month)
  • For 20 years, 5,600 kWh times 20 equals 112,000 kWh.  The cost per kWh over the 20 year period is then $8,000 divided by 112,000 kWh which equals $0.07/kWh, and then FREE after that……
So, the use of solar energy in Texas can provide:
  • More energy independence from unfriendly foreign countries;
  • More energy diversification and security by including the unending power of the sun in our energy mix;
  • More stewardship of our natural resources – by using the untapped energy of the sun, and also saving our precious water resources normally needed by centralized conventional power plants;
  • More price stability by pre-paying for long term energy (the life of PV solar systems is at least 25-40 years); For PV solar systems, the total cost is the installed system cost. There are NO ongoing fuel costs. For conventional power plants, there is the installed cost of the power plant plus the ongoing cost of fuel. Can anyone even obtain a 10 year energy contract from their utility company vs a 25-40 year price contract?
  • More consumer choice with the option to generate some of your own electricity versus being totally dependent on the utility company;
  • More support for the local economy with sales, design, and installation jobs for solar systems;
  • More pollution-free energy production;
  • Less energy wasted due to losses in the transmission and distribution systems by generating a portion of the electricity where it is used;
  • Less peak energy demand and stress on the Texas electric grid because distributed solar electricity is generated where it is used and when we need it the most – on sunny summer days;
  • Less financial risk due to uncontrolled and unpredictable future energy price spikes;
  • Less air and water pollution.
Are we saying that Texans don’t have the innovation, technological drive, and the cost competitiveness to match what is already being done today in Germany with distributed PV solar energy?  Let’s check this math again and find a way to tap this untapped Texas resource of the SUN!

Plano Solar Energy Advocate (LH)

For more information about energy subsidies, see "The Renewable Energy (Actually All Energy Sources) Subsidy Topic", at