Hybrid Energy Systems in Future Low Carbon Buildings
 
Scope  
Background  
Design concept  
Hybrid concept  
Methodology  
Modelling tools  
Case study results  
Annual evaluations  
Seasonal storage  
Hybrid systems report  
Pv report  
Wind report  
Environmental impact  
  



Report on annual evaluation of PV energy

Results

We have calculated the annual electrical demand concerning our 2 case studies in Glasgow and Palermo.

In Glasgow our electrical demand is 2954 kWh which is the sum of:

Appliances: 1828 kWh
Ground Source Heat Pump: [1000.5kWh for space heating+(3560kWh DWH demand -1675kWh produced by solar thermal collectors)]/3 ≈ 960 kWh
Ventilation-Heat Recovery: 166kWh

In Palermo our electrical demand is 2377 kWh which is the sum of:
Appliances: 1828 kWh
◊ Domestic Hot Water: 3051kWh DHW demand - 2645kWh produced by solar thermal collectors= 406kWh
Ventilation-Heat Recovery: 166kWH

Then, we have evaluated what the PV energy production in these areas is by using the HOMER software
The following table summarises the key numbers for dwellings in both Glasgow and Palermo.

Key numbers for dwellings

The capacity factor represents the ratio of actual energy produced and the energy that would be produced if system was producing at constant rated power.

We have decided to use the monocrystalline PV module BP4175T produced by the BP Solar both in Glasgow in Palermo. The efficiency of this module is 14%. Its dimensions are 1587mm * 790mm * 50mm and has a power output of 175Wp

Since the electrical demand and the PV’s production are different in our case studies, we need different number of PV panels:

Glasgow --> In order to cover our demand we use 25 PV panels which require an area of 31.343 m2 so we have a power output of 4.375kWp.

Palermo --> We utilise 12 PV panels that require an area of 15.045 m2 and provide a power output of 2.1kWp.

The data was plotted in the following graph for capacities of PV ranging from 1kW to 5kW for both Glasgow and Palermo.

Pv yearly energy yield

In Glasgow we have seen (as presented before) that we need more than 4kW of PV to fulfil the demand. This is actually quite high but it is due to the relatively low capacity factor of 6.9% in this climate.

As there may be restrictions to integrate so much PV to the building for an individual dwelling either for reasons of physical space or for financial reasons, it is therefore important to compare with the evaluation of other resources such as wind and evaluate whether a hybrid wind-solar PV (or possibly micro-CHP) system for electrical generation would work as well.

In Palermo where the solar resource is a lot higher (capacity factor of 14.6%) we need around 2kW of PV to fulfil the dwelling electrical demand. This is a fairly reasonable number, we can probably anticipate about 15m2 of space required but we should ensure that financially it makes sense as well. We show in a different section how this capacity can be integrated.


Verification of results

From the maps in the PVs background info we expect that PV panels of 1kWp produce an electrical energy of about 760kWh in Glasgow and 1425kWh in Palermo respectively. Thus, we notice that there is about a 10% difference compared to the values which are provided by HOMER. Taking into account all the results that are mentioned above we concluded that:

◊ From a technical point of view, PV can fulfil the electrical demand in Glasgow, provided that there is sufficient physical space for integration within the building, otherwise we will need to have another form of renewable electricity generation in the hybrid system.
◊ In Palermo, from a technical point of view PV seems well adapted to provide the required demand.
◊ We will therefore pursue further simulation work using PV systems for both case-studies and look at how to combine PV in a hybrid system with other renewable sources of energy.

Financial analysis

In the financial analysis we have to consider several parameters:

  • The net investment cost, which depends on
     ◊ The equipment and installation cost
     ◊ Grants applicable
     ◊ The loan terms (interest rate and duration)
  • The yearly maintenance cost (O&M) expressed as a percentage of the equipment cost
  • The value of the electricity produced
Yearly cost: The net investment cost and maintenance will be compiled into a yearly cost for the duration of the loan. The duration of the loan is set at what would be a reasonable lifetime for the equipment.

Revenue obtained assuming all electricity produced is sold at a given value.The value of the electricity produced will depend on whether there are feed-in tariffs.

The feed-in tariffs in the UK for PV are:

  • ≤4 kW new building --> 36.1 p/kWh
  • ≤4 kW retrofit --> 41.3 p/kWh
  • >4-10kW --> 36.1 p/kWh
The feed-in tariffs in Italy for PV are:
  • ≤3 kW partially integrated -->0.422 €/kWh
  • ≤3 kW fully integrated -->0.470 €/kWh
  • 3-20kW partially integrated -->0.403 €/kWh
  • 3-20kW fully integrated -->0.442 €/kWh
There are other tariffs applicable for PV in Italy but they do not concern us for this study.
As these tariffs will not last forever and are expected to come down, we will look at financial viability for electricity value from average grid price to highest feed-in tariff.

Net revenue: this is the revenue minus the yearly cost.

Pay-back period at present (under feed-in tariffs / no grant)

To look at the pay-back period for PV systems in Glasgow and Palermo, we have to make the right assumptions for the price of installed PV panels, which is difficult as there are quite a lot of different manufacturers and models and different prices for different efficiencies.
Our models were made according to the specifications (efficiency in particular) for BP panels. We have used the current list price (incl. tax) although we believe the PV industry should be continue to see a regular price (per kWp) reduction for a number of years in the future.
We have made assumptions regarding the installation cost based upon several published data available. We believe that in the very near future installation costs will come down in UK as they have in other European countries.
After consulting several people with relevant expertise as well, we believe the assumptions should fairly realistic for the present situation.

PV installations ranging from 1 to 5kW with the following parameters:

◊ Equipment cost = £600 per panel (PV module BP 4175T --> 0.175Wp power output)
◊ Installation cost = £2000/kW down to £1500/kW for 5 kW
◊ Connection cost of £800 fixed
◊ O&M = 0.5% per year
◊ Loan interest = 2.5%
◊ Loan duration = 25 years
◊ We applied various two different feed-in tariffs for Glasgow
◊ For Palermo the tariff used is €0.47 (fully integrated PV below 3kW)
◊ No grant is assumed (The reason being that in the UK there is a £2500 limit for all renewable systems within the dwellings and therefore a grant may not always be accessible if it has been obtained before for other equipment. All countries do not have grants also at present. Grants will be looked at later)

KW capacity

From this analysis, we obtain the above graph for which each colour represents a feed-in tariff price and the conclusions concerning our 2 case studies are:

Glasgow
Based on the assumption that PV panels will last 25 years we see that in Glasgow the panels would barely pay for themselves only assuming a high feed-in tariff applicable to retrofit cases and lower installation cost for 5kW.
If the lower feed-in tariff applies (new building) then the pay-back period is near or above 30 years depending on the capacity (and the initial cost).
The capacity factor we have obtained in Glasgow of about 6.9% accounts for the long pay-back periods however the high initial cost also plays an important role in this, since the BP panels are not the cheapest equipment available.
While the capacity factor is not likely to change much (unless some breakthrough in improving the efficiency was made) we can probably anticipate some reasonable reduction in PV panel costs as well as installation costs mostly due to increased production volume and competition between suppliers.

Palermo
Using the fully-integrated feed-in tariff the pay-back period in Palermo is much smaller than in Glasgow, due mostly to the higher capacity factor of 14.6%.
It is now possible to achieve pay-back period in the region of 15 years.
Also equipment and installation costs go down for PV panels.

Break-even point for a 1kW system without a grant but under feed-in tariffs

Obviously the pay-back period data is directly reflected in this chart (demonstrated below) but here we also can see what happens for locations with different solar potential energy and capacity factor. The costs and loan parameters are the same.
As expected without feed-in tariff PV do not break even anywhere, 16% capacity factor in Europe is representative of the best areas (Palermo is 14.6%).
Using the lower and higher UK tariff we need respectively 11-12% and 10% to break even over 25 years, which is probably not achievable in the UK.
Other countries with more solar potential have introduced higher feed-in tariffs (France, Germany, Greece) allowing to break-even relatively easily within 25 years.

KW capacity

We conclude here that in Glasgow a PV installation would be barely viable assuming a 25 years lifetime and no grant is obtained. However the lifetime should be longer than 25 years (especially as technology improves) and grants are available in UK (up to £2500 for the moment). We can now look at way to reduce the pay-back period of PV in UK.

How could small PV be more viable in the UK?

As the solar resource cannot be changed and the feed-in tariffs are rather high already, we can only look at 2 separate parameters to see whether PV can become viable:
  a) A lower investment cost
  b) A longer lifetime of the equipment.

Influence of equipment cost

We first introduce a grant of £2500 (applicable in UK), limited to 50% of cost. The grant represents a high proportion of the 1kW installation (about a third) but a lower proportion of larger systems cost. We can notice from the following graph that as a result the 1kW installation now has the shorter pay-back period.

KW capacity

We note also that all schemes pay-back periods drop below 25 years under the high feed-in tariff and below 30 years under the lower feed-in tariff.
In Palermo the pay-back period for a 1kW installation would fall below 10 years if the same grant scheme was available.
Many countries have a higher scheme of grants than UK, in France for instance 3kW installation can obtain about €6k grant making the pay-back period near 10 years for the South part of France.

The other option to reduce the initial investment is to make assumptions on progressive price reductions from the industry. PV panel prices have been dropping regularly over the past years and will likely to continue doing so, as manufacturers of PV panels improve the equipment efficiency and optimise their production cost.
We believe that the price/kWp will drop significantly within 1 or 2 decades, however so will the feed-in tariffs!
Feed-in tariffs are basically set in order to make the product attractive in areas where the production is sufficient and they are updated regularly. We believe that governments will drop feed-in tariffs as prices drop so to make things break-even (on national average).
Palermo in our case-study does very well because it benefits from higher solar potential than average for Italy.
As a result we do not consider it useful to model future drastic reductions in equipment cost as we do not believe the feed-in tariffs will be there anyway and pay-back period are not likely to change.
Based upon the highest UK feed-in tariff we see that we require a capacity factor of about

A longer lifetime of the equipment

   ♦ We model PV systems of 1kW assuming a lifetime of 35 years and that is shown in the graph below.

As previously the left column represents the net yearly income so positive values show the system pays itself before the lifetime is over.
The loan duration is taken as the same as the lifetime.

Break even grant

The smaller system if installed in Glasgow (~7% capacity factor) is still not viable without the feed-in tariff. However with the low fed-in tariff it is quite viable and yields a positive yearly net income.

Assuming a similar loan would be available in Palermo(~15% capacity factor) we see that the system is nearly profitable even without feed-in tariff. This is quite interesting because long term we can anticipate that:

  • PV costs will drop (steadily)
  • Lifetime will increase (slowly)
  • Efficiency will increase (slowly)
  • Normal grid prices will increase (possibly dramatically)
So basically this shows that in areas with good solar potential PV could become viable without feed-in tariffs quite soon.
In the UK assuming 8% capacity factor average this system become viable if the value of electricity reaches £0.24 per kWh, whether it is with a feed-in tariff or due to grid price increase, or both.

 ◊ Now the PV modules are of 5kW having a lifetime of 35 years. The following graph demonstrates the results concerning this system.

Cap factor

The larger system benefits less in proportion than the smaller one from the fixed £2500 grant, the grant here has a small effect. As a result we barely break even in Glasgow under the low feed-in tariff of £0.361.
Without feed-in tariff the system do not break even in the better European locations, however if electricity value was double at £0.24 (a reasonable future tariff or maybe even grid price), then we break even at a capacity factor of 10-11% which means the PV would be viable for quite a large part of Europe.


Conclusions

  • In Glasgow a PV installation is barely viable under current feed-in tariff, if we assume a 25 years lifetime and no grant is obtained.
  • In Palermo the pay-back period for a 1kW installation would fall below 10 years if the equipment cost was 30-35% less (either through a grant or equipment price reduction). This assumes current Italian feed-in tariff.
  • A PV system with a 35 year lifetime at roughly the current cost of installation would be financially viable if the value of electricity was £0.24 in most of Europe south of UK (£0.24 is a reasonable assumption for longer term feed-in tariffs or grid price).
  • A PV system with a 35 years lifetime at a cost about 30-35% cheaper would be viable in Glasgow if the value of electricity was higher than £0.24