Photovoltaic Solar Energy and Solar Hydrogen

1. Photovoltaic Solar Energy and Solar Hydrogen The Role of Solar Energy in Reducing American Dependence on Foreign Oil Jay Marhoefer Energy Law

2. The Role of Solar Energy • Renewable source of H2 production. • Renewable source of electricity. • Easily integrated with grid and renewables. • Scalable. • Residential/community distributed generation. • “DGREPs” (distributed generation real estate partnerships). • National/international infrastructure projects.

3. Problems Addressed • “Chicken/egg” enigma in building a national hydrogen infrastructure. • Requirement of fossil fuels for hydrogen. • Requirement of more coal, gas-fired and possibly nuclear power plants. • Peak electricity consumption, both daytime and summer. • Increased vehicle miles of summer.

4. Conclusions • Solar is already becoming cost-competitive in some states (including Illinois). • Hydrogen solves the non-dispatchability problem of solar. • Hydrogen also cures the peak/baseload issue of solar. • Solar is one way to ensure that Mexico will continue to have oil for export to the U.S.

5. The Power of the Sun • Each day, the sun provides more than 15,000x the entire annual energy needs of the world. • A site of solar panels 20 miles x 20 miles in Nevada could provide enough electricity to meet the entire U.S. demand.

6. The Sun’s Energy “Banks” • Second law of thermodynamics requires more energy to produce less energy. • But sun’s energy can be “banked” over time. • Biomass: <1 year (corn/ethanol). • Petroleum: >100 million years (resulting in highly concentrated energy stores).

7. A Brief History of Solar Energy 1839 Edmond Becquerel (19 years old) discovers PV effect. 1923 Albert Einstein receives Nobel Prize for theories explaining the photoelectric effect. 1954 Bell Laboratories scientists develop first PV cells for space applications. 1973 PV introduced to replace fossil fuels during the oil crisis. 1995 US PV industry grosses more than $350M. 1996 Amorphous silicon PV panels on market at $3 per Wp.

8. How Solar Cells Work • Two types of silicon—negative “n” type (A) and positive “p” type (B)—form an electric field. • Each photon hitting the cell will free exactly one electron, e-, which flows toward the load. • This results in an electric current.

9. Types of Solar Technologies • Crystalline Silicon • Leading commercial material for PV. • Requires most semiconductor material. • Most expensive and efficient (~15%). • Thin film • Semiconductor material only a few microns thick; much less required. • Least expensive and efficient (~8%). • Films can degrade over time (amorphous).

10. PV Costs--2003 • Modules • $3-$5 per peak watt • “Systems” • Installation, inverters, batteries • Another $3-$5 per watt

11. Example • Sharp 185W NT-S5E1U • Crystalline silicon • 185 watts per module • Each module 3’ x 5’ • $736 per module • $4 per watt

12. Example (cont’d) • Marhoefer manor • 3000 kWh in August 2002 • 5.5 kW peak PV capacity desired • 30 panels (450 square feet) • Configurable on southern exposure only • 15’ x 30’ • Panel cost: $22,000 • Installed system cost: $45,000

13. Misconceptions About PV • Myth: Solar works well only in hot climates. • Reality: Light, not heat, drives PV; too much heat degrades performance (explains Arizona) • Myth: Solar panels are extremely expensive. • Reality: The prohibitive cost of PV is not the panels, it is the labor and other required components (e.g., inverters, batteries).

14. Where Does the Sun Shine?

15. Where Does the Sun Shine?

16. Who Are the Players? • In 2000, oil companies owned one-third of PV manufacturing capacity • BP Solar • Siemens Solar (owned by Royal Dutch Shell)

17. Who Are the Players? • Between 1995 and 2000 • Eightfold increase in Japanese production • Tripling of EU production • Doubling of US production

18. Production Cost Trends

19. A Cost Comparison The expectation is that sometime between 2010 and 2015, the per kWh cost of PV will be equivalent to coal.

20. How Much Does Solar Cost? • Assumptions • Unsubsidized • 6 hours per day dispatchable • 20-year system life • 5% percent annual cost of capital • Doubling domestic manufacturing scale

21. A “Real” Cost Comparison Within 5 years, unsubsidized solar costs will be less than summer peak rates for residential consumers

22. The Clean Power Calculator • Free example at http://kyocerasolar.clean-power.com/kyocerasolar/default.asp • The fully customizable version can be found at http://www.clean-power.com/cpe/setup/

23. Million Solar Roofs Initiative • Announced June 1997 • Goal is to install solar energy systems on one million U.S. buildings by 2010 • DOE focuses efforts on national, state and local partnerships. • Utilities • Building industry • Government agencies

24. The Solar Decathalon • Fourteen universities built solar homes on National Mall in Washington, D.C. in Fall 2002 • Goal was to prove self-sufficiency. Winning home by University of Colorado, Boulder

25. The Solar/Hydrogen Solution • Non-dispatchable solar power can be stored in hydrogen through electrolysis. • Then, hydrogen can be run through fuel cell for baseload power. • Efficiencies: • Solar PV: 15%-20% • Electrolyzer: 90% • Fuel cell: 45% (excluding thermal)

26. The IIT Solar/Hydrogen Project

27. The IIT Solar/Hydrogen Project

28. Why Does This Matter to Oil Imports? • Hydrogen is far more expensive to produce than gasoline; there are no hydrogen “mines.” • Producing H2 requires a “free” source of energy (exclusive of capital costs) to be viable. • Solar and wind are the only two renewables that have this potential.

29. Energy Life Cycle Facts • Most vehicle miles are driven in summer; solar is most productive in summer. • Most vehicle miles come from residential/consumer use; solar is much better suited for residential. • Most peak electricity use occurs in daytime; solar is productive only during daylight hours.

30. Other Renewables • Wind tends to blow more at night and during winter months. • Provides the perfect complement to solar. • Solar and wind together can provide adequate coverage when either by itself might be inadequate. • Example is Chicago, which has low average wind velocity but higher speeds at night and in winter. • Only issue is cost.

31. Seasons of the Wind Winter Spring Summer Fall

32. A New Dispatchability Paradigm • Hydrogen is used as common denominator between grid electricity, NG, renewables. • Solar/wind/fuel cell provides baseload; grid provides peak. • Hydrogen produced by either electrolysis or natural gas reformation. • H2 production allows home fueling. • System saves consumer money even before the hydrogen cars arrive.

33. Residential Optimization

34. Community Optimization • Networked version of residential • Single refueling station for a community • Mid-rise public housing • New housing developments • 250kW fuel cell generator • Use of smart cards to “bank” energy inputs/outputs • Issue: QF for grid or independent transmission?

35. Large-scale Corporate Distributed Generation • Alternative to pure IPPs. • Large companies develop renewable-based QFs to produce hydrogen. • QF is remote to company’s site. • Company may be active or passive in hydrogen refueling site. • Smart card/debit card/branded credit card transactions. • Insource or outsource the “hydrogen fuel” business.

36. National Infrastructure Projects • National (or Mexican) site incorporating recycled solar panels. • Nevada: 80% federal land, prime PV site. • Mexico: Panels for barrels program. • Mexico expected to be net importer of oil by 2020 unless major changes occur. • Prime PV site. • Use of recycled panels a possiblity.

37. How This Could Play Out • Critical mass of residential refueling stations developed in “clusters.” • 2-3 million. • SFHs, new developments and public housing. • Provides benefits even without H2 cars. • Automakers get interested. • “Commuter car” market. • Oil companies get interested. • “Clusters” need to be networked; who better? • Feeding frenzy develops.

38. What Would It Cost? • Residential (2003) • Solar panels: $30,000 • Micro wind turbines: $15,000 • Inverter: $10,000 • Electrolyzer: $15,000 • Reformer: $15,000 • Fuel cell: $25,000 • Optimizer: $5,000 Total: $115,000 Value of independence: Priceless

39. Current Law: $100K Tax Deduction • However, • 26 U.S.C. 179A (2)(A) provides a $100,000 tax deduction for constructing a clean energy refueling station. • Only components covered by the law are for “holding” and “dispensing” clean fuel. • Same law that provides $2,000 credit for buying a LEV. • Entire deduction must be taken in one year. • Property must be depreciable.

40. Current Laws and Incentives

41. Current Laws and Incentives • Illinois • Chicago Million Solar Roofs Partnership (Illinois) • City of Chicago - Green Power Purchasing (Illinois) • Fuel Mix and Emissions Disclosure (Illinois) • Illinois Clean Energy Community Foundation Grants (Illinois) • Photovoltaic Incentive Program (PIP) (Illinois) • Renewable Energy Resources Program Rebates (Illinois) • Renewables Portfolio Goal (Illinois) • Special Assessment for Renewable Energy Systems (Illinois) • State of Illinois - Green Power Purchasing (Illinois)

42. Current Laws and Incentives • Federal • Energy Efficient Mortgage (Federal) • Energy Star Financing and Mortgages (Federal) • Job Creation and Worker Assistance Act of 2002 - Special Depreciation (Federal) • Renewable Energy Production Incentive (REPI) (Federal) • Renewable Energy Systems and Energy Efficiency Improvements Program (Federal) • Solar and Geothermal Business Energy Tax Credit (Federal) • Solar, Wind, and Geothermal Modified Accelerated Cost Recovery System (MACRS) (Federal)

43. Questions?