Affordable Clean Energy for Underprivileged Communities: A Case Study AECbytes Feature (June 28, 2018)
Design Engineer, SunPower
Energy access is one of the largest issues of our time, and greater access to clean energy would result in a much higher standard of living for so many individuals, particularly in the Global South. The question is not whether we need greater access to energy, but rather what kind of energy we invest in and how we choose to make the investment in that energy. To balance the need for more energy with the requirement for sustainable, nonpolluting energy sourcing, we consider renewable options like solar and wind. However, these nontraditional energy sources—up until now—often have a high upfront capital cost with longer term savings, whereas cheaper, dirtier forms of energy appeal because they are more affordable in the short term. This trend means that those with low access to capital are inclined towards the latter, whereas those with high access to capital reap the financial and environmental benefits of clean energy like solar. A major piece of sustainable development is bringing clean, renewable energy to those who don’t have the capital for it. How can environmentally sustainable technology be made more affordable?
Helping underprivileged communities gauge the affordability of clean energy technology is one step in the direction of empowering them to make the investment. Solar, in particular, has a lot of promise in certain Global South nations that have high solar availability, with dense populations that require spatial efficiency. It is a simple, elegant, and relatively low-maintenance technology that can serve the needs of many communities and offer exceptional long-term savings via a reduced or eliminated energy bill. Coupled with government subsidies and incentives, the solar market can be an effective solution to the problem of energy poverty for many communities in Global South nations. One such community is the Purkal Youth Development Society, an institution that won the 2017 International Social Impact Award.
A Solar Analysis for Purkal Youth Development Society
The Purkal Youth Development Society (PYDS) is a nonprofit organization founded by Mr. G.K. Swami. and located in Purkal, India. It serves low-income communities from the surrounding villages. PYDS offers quality K-12 education to children via the Purkal Learning Academy, and works to empower women via Stree Shakti, a quilting workshop that enables women to learn quilting and provides them with a platform to earn a living through their own craft.
PYDS, a growing institution with increasing costs, seeks to minimize its energy bill. The organization anticipates a sharp rise in energy prices from the utility and is interested in building its own solar system as an alternative to continued purchase from the utility.
Given the author’s affiliation to SunPower as a Climate Corps Fellow and a prior relationship with a member of the PYDS board of directors, an arrangement was made for the author to provide a consulting service on the above problem.
To this end, the author developed a framework of four scenarios that the school could compare:
- Scenario 1. 30 kWp South facing ground mount system (optimal tilt/orientation for solar performance)
- Scenario 2. 30 kWp East-West facing rooftop system (suboptimal tilt/orientation for solar performance)
- Scenario 3. Continued purchase from utility at current rate
- Scenario 4. Continued purchase from utility at increased future rate
The Configuration Scenario Prediction Engine and the Levelized Cost of Electricity
Next, the author developed an Excel-based model called the Configuration Scenario Prediction Engine (CSPE). This tool works in collaboration with a PV performance engine to generate the Levelized Cost of Electricity (LCOE)—a basis for comparison of the four scenarios. The LCOE is the net present value of the total life cycle costs of the project divided by the quantity of energy produced over the system life, which is discounted based on a derived discount rate. Thus, the LCOE provides a common way to compare the cost of energy across technologies, capturing capital costs, ongoing system-related costs and fuel costs, and converts them into a common metric: $/kWh. For PYDS, the CSPE generates the LCOE in rupees per kilowatt-hour for each proposed solar system configuration. [Reference: Campbell, M. (2008), The Drivers of the Levelized Cost of Electricity for Utility Scale Photovoltaics, SunPower Corporation]
The user inputs required for the CSPE are as follows:
- Upfront cost of the system: The cost the client must pay upfront and includes the cost of panels, inverter, cables, installation and grounding. PYDS received a substantial government subsidy that lowered this cost.
- Yield: The total number of kilowatt-hours a system produces in a year divided by the number of units of power (kilowatts). This number is the energy produced by each kilowatt installed over the period of one year.
- System size: The number of kilowatts of power installed.
- Predicted system life: The number of years the system is expected to perform, or the number of years considered for the sake of financial analysis.
- System degradation rate: A linear degradation rate expressed as a given percentage degradation per year that reflects how the system will degrade and produce slightly less energy over time.
- Discount rate: a derived rate that gives the present discounted value of an asset (how much future energy is worth in the present), and is applied in addition to the system degradation rate to the energy production over the life of the system.
Discounted energy production is a key factor in calculating the levelized cost of electricity. The discount rate accounts for the time value of money/assets (TVM), a financial concept that means that money/assets are worth more in the pocket today than they are tomorrow. The question of how much more they are worth today than tomorrow is complex and based many factors. Largely, however, the answer depends on access to capital.
Low access to capital means money is worth a lot in the pocket today because making one investment may mean sacrificing another. This implies a high discount rate. On the other hand, if access to capital is high, one investment doesn’t necessarily undermine another, implying a low discount rate.
This is a valuable concept when investing in solar because the client pays a large upfront capital cost. For those with a low access to capital, investing in a solar system implies energy discounted over time at a high rate, taking into consideration the following:
- Annual number of washes: The number of times the solar system will be washed in one year. Energy production can be significantly decreased due to dust, soiling by birds and other animals, and other particles on the solar panels. For this reason, the system must be washed and cleaned at least once a year (ideally two to three times depending on the amount of dust and soiling in the area).
- Cost per wash: The amount of money that the client will spend on each wash.
- Annual miscellaneous maintenance costs: Any additional annual costs for maintenance including electrical fixes, etc.
A screenshot of the user interface for the CSPE is shown in Figure 1.
The total quantity of energy produced over the system life is generated via PVsim, a tool developed by SunPower to model solar system performance. In this analysis, the author used PVSim to model the performances of each of the solar scenarios: South facing ground mount and East-West facing rooftop.
The most useful number gained from the simulation is the annual yield (the number of kilowatt-hours produced for every kilowatt peak of solar installed over one year), an input for the CSPE in generating the LCOE. The PVSim reports show that having the ideal photovoltaic system azimuth (the system’s orientation in degrees east or west of true south) and array tilt angle (a solar array’s inclination as measured from the horizontal) for the South facing ground mount system significantly increase the annual yield (Figure 2).
PVSim and Model Impacts
PVSim inputs include information on both the DC side (power-generating components) and the AC side (power-distributing components), e.g. the module manufacturer, number of modules, electrical stringing, inverter size and manufacturer, estimated losses due to various factors (efficiency, wash frequency, etc.).
The solar radiation data is based off a weather file from the latitude and longitude of the area. PVSim takes these inputs and produces a report of the one-year performance, layout-specific losses, inverter- specific losses, system losses, and monthly summaries of production.
The system azimuth and array tilt angle impact the annual yield because they affect the plane-of-array irradiance and the angle-of-incidence loss:
Plane-of-array irradiance: The irradiance on the plane of array is the total irradiance on a module surface. It includes direct, diffuse and reflected components (see http://uppamtdca01.sunpowercorp.com/docs/SimEng/index.html)
Angle-of-incidence or Incidence Angle Modifier loss (IAM): The Incidence Angle Modifier (IAM) loss is decreased energy production due to irradiance being reflected on multiple layers of the module glass surface. Less irradiance on the PV cell means lower energy production (see http://files.pvsyst.com/help/index.html?iam_loss.htm).
Results and Conclusions
The results of this analysis (see Figure 3) show that Scenario 1, the 30-kilowatt ground mount system, is the best option in terms of maximizing solar performance, and providing the lowest LCOE of Rs. 3.22/kWh. This occurs because the plane of array for ground mount systems can be optimized for the highest solar exposure by using the ideal array tilt angle and system azimuth. A ground mount system will also be accessible for easy cleaning and maintenance, which will maximize its performance and extend its life significantly. Furthermore, its accessibility lends itself well to educational demonstrations of solar technology for students at the Purkal Learning Academy.
Nevertheless, a ground mount system requires land area, and a system of 30-kilowatts will use at least 20 square meters of land. If land is unavailable to PYDS, Scenario 2, the 30-kilowatt rooftop system is the best alternative.
The rooftop system provides a competitive LCOE of Rs. 3.71/kWh. While, the plane of array here is predetermined by the existing rooftop and thus cannot be optimized for maximum solar exposure, this system will still provide enough energy on an annual basis to offset PYDS’ anticipated electrical loads. Accessibility for maintenance and educational purposes is lesser than with the ground mount system, however spatial efficiency is greater with no additional land required.
Both Scenarios 1 and 2 will earn PYDS significant savings on its energy bill, especially when compared with the anticipated increased electricity rate from the utility. Solar technology is elegant, environmentally sustainable, cost-effective, and the one of the major energy technologies of the future. An investment in a solar system will benefit PYDS financially as well as display its commitment to environmental sustainability through the use of progressive clean technology.
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