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Building a Solar-Powered Future. Solar pv generation

Building a Solar-Powered Future. Solar pv generation

    Solar Futures Study Draws Insights From Across NREL’s Expertise and Tools To Deliver Detailed Analysis of Solar Energy’s Future in United States

    The next 30 years of solar energy is likely to look very different than the past 30. Photovoltaics (PV) and concentrating solar power are likely to continue to grow rapidly—the National Renewable Energy Laboratory (NREL) projects solar energy could provide 45% of the electricity in the United States by 2050 if the energy system is fully decarbonized—and technology costs are projected to continue to decline.

    But in the coming decades, the evolution of solar energy technologies could be defined more by how they interact with other energy technologies, like wind and storage. Changes across the wider energy system, like the increased electrification of buildings and vehicles, emergence of clean fuels, and new commitments to both equitability and a more circular, sustainable economy, will shape the future of solar energy. These are just some of the key findings of the Solar Futures Study, published by the U.S. Department of Energy Solar Energy Technologies Office and written by NREL. The study is based on extensive analysis and modeling conducted by NREL and synthesizes analysis across many domains to provide a balanced and rigorous assessment of the future of solar power.

    “Solar can play a synergistic role across various sectors including industry, transportation, and agriculture. To better understand the future of solar across the energy system, we brought together numerous experts from across the lab.”

    – NREL researcher Kristen Ardani

    The study brought together expert perspectives across industry, government, nongovernmental organizations, and universities to frame its research direction, said NREL’s lead of the study, Robert Margolis. Then we used several of NREL’s detailed power system modeling tools to examine how the role of solar could evolve under a set of decarbonization scenarios.

    Three Visions of the Solar Future

    The study uses three scenarios: a baseline case using current policies and trends; a decarbonization scenario in which the current electric power system is 95% decarbonized by 2035 and 100% by 2050; and a decarbonization-plus-electrification scenario in which the electric grid grows significantly in scale to power the electrification of buildings, transportation, and industry. With these scenarios to set the scope, NREL researchers collaborated across sectors to determine how each scenario would play out. Their results describe a future rich with opportunities for solar integration: co-optimization with electric vehicles, solar system recycling and reuse, more equitable and widespread community adoption of solar energy, and much more.

    Here we dive into the study’s cross-disciplinary approach and detail some of its specific findings by technology area and sector. For a broader overview of the study’s high-level findings, check out this NREL-authored fact sheet.

    Solar can play a synergistic role across various sectors including industry, transportation, and agriculture. To better understand the future of solar across the energy system, we brought together numerous experts from across the lab, said NREL co-principal investigator Kristen Ardani. We aimed to foster new collaborations and, in doing so, studied solar energy development and integration more comprehensively than ever before.

    At over 300 pages, the Solar Futures Study is definitely comprehensive but still not the full story. Seven NREL technical reports support the main study, each packed with highly detailed results from respective domains. For the curious reader, these supplemental reports dive deeper into the future of other energy technologies and sectors and their relationship to solar energy.

    The Deep Dive: Solar Evolution Across Sectors

    Integrated Energy Pathways

    This research aligns with one of NREL’s critical objectives.

    Like the overall study, a panel of industry experts shaped the scope of each detailed technical report. These reports were also framed by the same three decarbonization scenarios. NREL’s approach to collaboration added a further degree of cohesion between reports, with individual report authors also contributing to the overall study.

    Each technical report drew on its own set of NREL analysis tools, but the results came together within NREL’s power grid modeling package ReEDS—the Regional Energy Deployment System. ReEDS simulates how power plants are added to and dispatched on U.S. electric grids; however, the model depends on a mix of both internal NREL data and outside datsources to estimate future demand and generation. For the Solar Futures Study, the supporting technical reports provide detailed information about the data and tools underlying the study.

    The full list of deep-dive reports includes:

    Research and Development Priorities to Advance Solar Photovoltaic Lifecycle Costs and Performance: Articulates PV technology research and development priorities that will drive down PV electricity costs to meet the targets required in the study scenarios. The report also examines the effects across the country if cost targets are achieved.

    The Role of Concentrating Solar-Thermal Power Technologies in a Decarbonized U.S. Grid: Examines the future of concentrating solar-thermal technologies and markets. The report also discusses likely research directions and considers markets beyond electricity generation.

    The Demand-Side Opportunity: The Roles of Distributed Solar and Building Energy Systems in a Decarbonized Grid: Presents opportunities to decarbonize grids quickly and cost-effectively using distributed energy resources, such as rooftop PV and demand response, and considers barriers to better use of these resources.

    Maximizing Solar and Transportation Synergies: Considers technological and market pathways that will enable better use of solar electricity as fuel for rail, road, air, and maritime transportation.

    The Potential for Electrons to Molecules Using Solar Energy: Examines an array of potential electrons-to-molecules products and system designs powered by sunlight or solar electricity that can be tailored to different end uses and applications.

    Affordable and Accessible Solar for All: Barriers, Solutions, and On-Site Adoption Potential: Summarizes the barriers low- and medium-income households face when accessing solar energy, including financing and funding, community engagement, site suitability, policy and regulations, and resilience and recovery. The report also considers possible solutions to these barriers.

    Environment and Circular Economy: Addresses environmental considerations related to solar technologies, including environmental justice issues. The report also envisions a circular economy for PV systems and details their basic life cycle phases.

    The Untapped Solar Potential of Buildings

    Solar energy will integrate with the buildings we live, work, and play in through two main ways: how solar systems are deployed on these buildings, and how these buildings can vary their use and storage of energy to complement solar power. Both approaches are major, largely untapped avenues of supporting decarbonization across the power grid. Today, only about 3% of solar-viable rooftops in the United States actually host PV systems. Properly operated demand-side services (energy shifting and storage) could reduce the cost of fully decarbonizing the electric grid by 22% by 2050.

    Such findings emerge from NREL’s solar-building analysis in The Demand-Side Opportunity: The Roles of Distributed Solar and Building Energy Systems in a Decarbonized Grid. In the report, NREL turns its award-winning Distributed Generation Market Demand (dGen™) analysis software to each decarbonization scenario to forecast the full potential for rooftop solar deployments under different electric rate structures and PV price scenarios.

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    The report further explores building and neighborhood opportunities to optimize energy, such as by coordinating heating, air conditioning, electric vehicle charging, energy storage, and rooftop PV. This energy orchestration, relevant in all building types from residential to commercial and industrial, was explored using two NREL tools: Urban Renewable Building and Neighborhood optimization (URBANopt™) to model loads of representative buildings and districts, and Renewable Energy Optimization (REopt™) to find the optimal mix of renewables for each building. Apart from finding the scale of opportunity for future decarbonization, this report provides summaries of pathways and policies for buildings to serve demand-side efficiency.

    Affordable and Accessible Solar for All

    Solar energy expansion promises economic and resilience benefits for many communities, but without attention to how and why communities and individuals adopt solar energy, these benefits are unlikely to be shared equitably. Overcoming past inequalities in solar access has obvious benefits to local air quality, climate change mitigation, and community opportunities. In Affordable and Accessible Solar for All: Barriers, Solutions, and On-Site Adoption Potential, NREL quantifies the opportunity on both sides—for communities and for widescale decarbonization.

    Once again, the dGen software proved to be a valuable tool for considering the fine-scale factors in solar energy equity. dGen is especially good at considering the different realities that different communities experience with regard to energy costs, financial credit, cultural familiarity, and other factors described in the report. dGen quantifies the missed opportunity for rooftop solar on the homes of families with low incomes, renter-occupied and multifamily buildings, and community solar deployments.

    This report provides direction on how energy equity could be prioritized to achieve quicker all-around decarbonization. One major finding is that solar adoption could be 10 times greater among low- and medium-income houses if the split-incentive problem were solved—the problem of homeowners lacking incentives to install solar, and renters missing potential savings from installed solar. NREL addresses possible solutions to this and other problems, proposing funding programs, policies, and other provisions already in use by communities throughout the United States.

    Vehicle-Solar Synergy

    Electric transportation is another outsized player in the future of solar energy. The Solar Futures Study finds that solar energy could power about 14% of transportation end uses by 2050. Solar PV couples well to electric vehicle (EV) charging: Both use direct-current electricity, which avoids efficiency losses in conversion to alternating-current electricity—a much as 26% lost, in some cases. Other vehicle-solar synergies include coordinating vehicle charging with solar availability, deploying solar at parking canopies and structures, using EV batteries for second-life storage applications, and even equipping solar PV panels directly on vehicles. Each of these possibilities is discussed in Maximizing Solar and Transportation Synergies.

    We looked at the challenges and solutions of using more solar for transportation, including some of the broader possibilities, said Ardani, who coauthored the transportation report. With the Solar Futures Study’s scenarios to guide us, we performed modeling around EV market demand and electricity demand. Our results fed straight into the main study, showing the complete set of solutions available and how they shape solar growth.

    Following from its decades-long scope, the report explores technological possibilities that are waiting in the wings, like hydrogen vehicle coordination with solar-powered electrolyzers, and timed charging schemes to coordinate EV fleet charging. After establishing the size of future markets, the report considers current barriers, technology-cost constraints, and energy equity.

    An Adaptable Toolkit for Energy Scenario Analysis

    The Solar Futures Study considers the next several decades of solar power with greater breadth and detail than any prior solar-focused study. But the tools that made it possible are in no way exclusive to the study; they are behind many of NREL’s recent analyses of future energy systems.

    With a diverse and continually validated toolkit, NREL can conduct analysis on many energy technologies and scenarios. The Interconnections Seam Study combines sector-specific forecasts into a cross-country analysis of electricity transmission capacity buildout. The Los Angeles 100% Renewable Energy Study (LA100) also uses a similar approach, providing the city with clean energy options adapted to its unique urban composition.

    For even deeper analysis, NREL can combine such computational models with real power testing within the Advanced Research on Integrated Energy Systems (ARIES) platform. Plugging the results of energy scenario analysis into hardware devices can de-risk technology configurations, such as those proposed in the Solar Futures Study. Together, NREL’s capabilities for future energy analysis can help to both understand and design power systems that are technologically diverse, geographically varied, cost-effective, resilient, equitable, and clean.

    The Solar Futures Study goes beyond previous studies by examining how solar technologies will interact with the broader energy system as we pursue deep decarbonization, said Margolis, who led the study. The study demonstrates how NREL’s cross-disciplinary approach to modeling can provide new insights into both the challenges and opportunities we’ll encounter as solar becomes a core component of our energy system.

    How much energy does a solar panel produce?

    While many factors affect the amount of energy a solar panel can produce, you can expect a typical single solar panel in the United States to generate about 2 kilowatt-hours (kWh) per day, saving an average of 0.36 on electricity costs per day.

    Now, 0.36 doesn’t seem like a lot, but that’s just the energy savings for one panel over the course of one day. Installing a whole solar panel system, on the other hand, would save you more like 130 a month (or more!).

    What determines how much electricity a solar panel will produce, and how can you determine the amount of one solar panel’s generation? Let’s find out.

    See how much you can save by going solar

    Key takeaways

    • Most residential solar panels today have a power output rating of between 370 watts and 400 watts.
    • The average-sized solar panel will produce between 1.5 kilowatt-hours and 2.4 kWh of electricity per day.
    • One solar panel generates enough electricity to power small appliances like a TV, lights, or device chargers.
    • How much energy a solar panel produces depends on how much sunlight the panel gets, the panel’s construction, your roof’s characteristics, and even how old the panel is.
    • Installing a whole solar panel system allows you to power your home with renewable energy, decrease reliance on your utility, and, most importantly, lower your electric bill.

    How much electricity does a solar panel generate?

    The average solar panel is able to output between 370 and 400 watts of power. This works out to a single solar panel producing about 2 kilowatt-hours (kWh) of electricity per day. That’s enough electricity to watch your TV nonstop for almost a full 24 hours.

    The following table outlines how much electricity a 400-watt solar panel would produce under ideal conditions over the course of a day, a week, a month, and a year:

    Time Electricity production of 400-watt solar panel
    1 day 2 kWh
    1 week 14 kWh
    1 month 60 kWh
    1 year 730 kWh

    How many solar panels do I need to power my house?

    Let’s be honest, no one is installing just one solar panel on their roof. As mentioned above, one solar panel will produce roughly 2 kWh daily. On the other hand, the average U.S. home uses about 29 kWh of electricity daily. So, you’ll need a lot more than just one panel.

    In fact, you’ll probably need at least 15 solar panels on your roof to generate enough electricity to cover your daily energy usage. That works out to about 6,000 watts of solar, or 6 kilowatts (kW). A 6 kW system will produce about 10,950 kWh per year. That’s enough electricity to cover the average household’s electricity usage and potentially eliminate a 135 electricity bill.

    The actual number of solar panels you need will largely depend on how much energy you use throughout the year. But it will also depend on your panels’ environment and the panels themselves.

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    factors that affect the amount of electricity that solar panels produce

    We want to be totally honest with you, most of the time, solar panels won’t produce the maximum amount of energy possible. Solar panel specifications, like power output ratings, are determined by testing the panels in a laboratory under Standard Test Conditions.

    Your roof isn’t exactly a lab, and the conditions it’s under aren’t always going to be ideal for your solar panels. There are a number of things that will impact how much energy your solar panel is generating.

    Amount of sunlight

    The amount of sunlight that hits a solar panel is one of the biggest factors in how much electricity it will generate. The more sunlight available to the panel, the more electricity it can produce.

    This means you’ll want to install solar panels on an unshaded portion of your roof. You don’t want overhanging tree branches or your chimney casting shadows on your panels. Even dust and debris can cause your panels’ production to drop, so it’s important to clean your solar panels once or twice a year.

    It’s more than just if your panels are shaded or not. It also has to do with if where you live naturally gets a lot of sunlight. Scientists use “peak sun hours” to compare how much sunlight different places get. Solar panels will be able to generate more electricity in places that get more peak sun hours.

    The following table lays out how much energy a 400-watt panel could produce in states that receive different amounts of sunlight, assuming all other conditions are the same:

    State Number of peak sun hours Daily electricity production
    Arizona 7.5 3.0 kWh
    Alaska 2.5 1.0 kWh
    California 6 2.4 kWh
    New Jersey 4 1.6 kWh

    You can hear more about how weather conditions impact solar panel production in this video from SolarReviews founder, Andy Sendy:

    Panel characteristics

    The panel itself also affects how much energy it can produce. Solar panels are made up of solar cells, which are what actually turn sunlight into electricity. Today, most solar panels use monocrystalline solar cells, AKA the most efficient silicon solar cell made today. If you used a polycrystalline solar panel, it wouldn’t be able to generate as much electricity as its monocrystalline counterpart.

    It’s not just about the material the solar cells are made out of – how much electricity a panel produces is also impacted by how many cells there are and how those cells are shaped! Solar panels typically come in two sizes: 60-cell solar panels for homes and 72-cell panels for larger commercial installations.

    72-cell panels have more solar cells, so they’re able to generate more electricity, but they’re too large to use on many residential roofs. However, a lot of solar panel manufacturers today are starting to make 66-cell solar panels that are still practical for home solar, but the extra six cells mean the panels can produce more energy!

    Manufacturers are also making more half-cut solar panels, where the solar cells are cut in half with a laser before being put into the panel. This increases the efficiency of the panel so it can generate more electricity. Half-cut panels are also wired differently than traditional panels, so shading has less of an impact on how much energy is generated.

    Bifacial solar panels: Bifacial solar panels are able to generate electricity from light that hits both the front and the back of the panel. When sunlight hits the ground and bounces back up, bifacial panels can capture that reflected light and use it to make more electricity. These aren’t particularly useful for homeowners with rooftop solar, but they can be a great option for ground-mounted systems.

    Your roof

    The truth is, not all roofs are good for solar. The characteristics of your roof are a major player in how much energy solar panels can produce for your home.

    The number one thing you need to consider is the direction of your roof. The best direction for solar panels to face is south, so you’ll want to have a south-facing roof for maximum energy production. This doesn’t mean you can’t install solar panels if your roof faces a different direction. The panels will just generate less electricity because they get less sunlight.

    The following table outlines how much electricity a solar panel will generate facing different directions if all other factors are the same:

    Solar panel direction Estimated output
    South 2 kWh
    East 1.7 kWh
    West 1.7 kWh
    North 1.4 kWh

    Assumes 400-watt solar panel and 5 peak sun hours

    The panel’s age

    The panel’s age is often forgotten, but it’s important to remember that your solar panels won’t produce the same amount of energy for their whole life. As solar panels age, they lose a bit of their ability to generate power. You can think of it as any other electronic you have. your laptop probably doesn’t work as well as it did the day you bought it.

    Solar panels, on average, degrade at a rate of about 0.5% per year. So, by the end of a panel’s typical 25-year warranty period, they usually operate at about 85% of what it was initially. Don’t worry – your solar panels will still generate enough electricity to help lower your utility bills.

    See how much it would cost to power your home with solar panels

    How to determine how much electricity a solar panel can produce

    So, now that we’ve covered what impacts a solar panel’s ability to produce electricity, we can get into the good stuff. figuring out how much power solar panels will produce for your home.

    We’ve already established that there are a number of factors that are going to impact how your solar panels generate electricity. So for the sake of simplicity, we’re only going to take a couple of things into account for the below example, including:

    All you need to do is multiply the wattage of your panel by the number of daily peak sun hours. A homeowner in Florida who installs a 400-watt solar panel can expect about four peak sun hours in a day. That means this panel would produce 1,600 watt-hours of electricity per day. Electricity is usually measured in kilowatt-hours, so you simply divide your 1,600 watt-hours by 1,000 to get 1.6 kilowatt-hours.

    400 watts x 4 peak sun hours = 1,600 watt-hours per day 1,600 watt-hours /1,000 = 1.6 kWh per day 1.6 kWh x 30 days = 48 kWh per month 1.3 kWh x 365 days = 584 kWh per year

    Bear in mind, this is a really simplified way of calculating how much electricity a solar panel produces. The actual amount will fluctuate day by day, even hour by hour, based on all the factors mentioned earlier. Use our solar panel calculator to get a more accurate view of how much electricity you can expect solar to produce on your roof.

    Solar panel model Power rating Estimated daily power production
    SunPower M-Series 440 W 2.20 kWh
    REC Solar Alpha Pure 430 W 2.15 kWh
    Candian Solar HiKu6 420 W 2.10 kWh
    Qcells Q.PEAK DUO BLK ML-G10 410 W 2.05 kWh
    Jinko Eagle 66TR G4 400 W 2.00 kWh

    Estimated production of a single panel assuming 5 peak sun hours at STC.

    Keep in mind, high-wattage panels tend to come with high price tags, too. This means you may have to pay more upfront for your system, but you’ll need fewer panels to meet your energy needs.

    Power your whole home with solar to save money

    Now you know how much solar electricity you can expect one solar panel to produce and how much a whole system can, too.

    But the best part is that installing solar does way more than just let you power your home with renewable energy. it helps you save money. By using the electricity generated by solar panels on your roof, you don’t have to take electricity from your utility, which means they don’t have to charge you.

    Most of the time, you can install enough solar panels to cover all of your electricity costs. In fact, that 6 kW solar system we discussed earlier could save the average American homeowner around 130 a month!

    But of course, this is just an estimate. Just like with how much electricity a panel produces, how much solar panels can save you depends on many factors. The easiest way to determine how much solar panels can save you is by using our solar panel savings calculator below. Not only will you get a free solar savings estimate, but you can also choose to get in contact with vetted local solar installers to start getting real solar quotes for your specific home.

    How does a PV system produce electricity?

    As a solar professional, it’s important to be able to explain the process of how a solar photovoltaic system produces electricity. This process seems mysterious to many and misconceptions abound among those unfamiliar with solar energy. In this article, we get back to basics with an overview of how solar installations provide electricity and how the process works for the customer.

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    Let’s start with the foundations of how solar energy is produced and then we’ll get into the specifics of pv systems.

    The basics of a solar PV system

    Solar PV systems are essentially any combination of solar panels, the hardware needed to help the energy flow through the panels, and inverters.

    Depending on the type of system they can utilize string inverters, microinverters, or power optimizers to convert the energy, but the basic makeup of most PV systems is the same.

    How does solar energy work in a PV system?

    Solar panels convert the energy of photons (light particles) into electricity (as we discuss in The Beginner’s Guide to Solar Energy ). This process is called the photovoltaic effect.

    When a photon hits a photovoltaic (PV) device, its energy is transferred from the photon to the local electrons in the material. These excited electrons begin to flow, producing an electric current.

    Solar cells (within solar panels) produce direct current (DC) electricity, which is typically converted to alternating current (AC) electricity by an inverter. This allows it to be sent back to the electric grid, which operates with AC electricity, as well as used to power appliances in the customer’s home (or commercial building, in the case of commercial solar installations).

    That’s the in-depth explanation. In summary, the process of how solar panels works involves three primary steps:

    • Solar cells within solar panels absorb light from the sun, which causes an electric current to begin flowing.
    • An inverter converts DC electricity to AC electricity.
    • This electricity is used to supply current energy demands in the customer’s building and excess electricity beyond what the customer can use is exported to the grid.

    What happens with the energy a PV system produces?

    Most solar customers in the U.S. have grid-connected solar installations. Because their homes and PV systems are both connected to the electric grid, these customers have the option of buying additional utility power if their solar installations aren’t generating enough energy — like on rainy days or when the sun goes down.

    It also means that whenever their PV system produces more power than they need, that excess energy can be sent to the grid for other utility customers to use. And thanks to different state-level incentives — like net metering and feed-in tariffs — it’s often possible to monetize some of this surplus solar power and save even more money.

    Net Energy Metering

    Under state-level net metering programs, utility customers can feed unused solar power into the grid in exchange for credits they can use to offset the cost of future utility bills.

    Net metering has played a significant role in making solar energy cost-effective. However, around the country, we are beginning to see some changes in how utility companies implement net metering. And quite often, these changes attempt reduce the long-term value that solar customers receive from their PV installations. (Don’t take this sitting down, see what you can do.)

    Feed-in tariffs

    Feed-in tariffs are another way of compensating solar customers for the electricity they send to the grid. Under most state-level feed-in tariff programs, utility customers receive cash payments instead of credits for any unused solar power they feed into the grid.

    What are the parts of a Photovoltaic system?

    A simple PV system contains two basic types of components:

    • Solar Modules : Solar modules contain PV cells that convert sunlight into electricity.
    • Solar Inverter : An inverter converts DC electricity to AC power. It can also perform other functions that are beneficial to the electricity grid (see our article on Smart inverters. which are now required in California).

    Diagram of a simple PV system. Source: Aurora Solar.

    BOS components

    It is common practice to refer to the remaining parts of a PV system (besides the modules) as balance of system (BOS) components. Examples of BOS components include:

    It’s also worth noting that many customers are now choosing to install their PV systems with on-site solar batteries for night-time and emergency backup power. Electric vehicle (EV) charging is also increasingly common — especially among homeowners who invest in rooftop solar.

    Of course, this is just a basic overview of the parts of a solar installation and how they fit together. Explore some of our related articles for a deeper dive into the ways that solar panels and inverters can be wired together (i.e. stringing). We also have resources on some of the most popular alternatives to traditional solar inverters, including module-level power electronics (MLPE).

    What factors impact solar PV system efficiency

    Even under laboratory conditions, no solar panel is 100% efficient at converting sunlight into clean electricity. These efficiency losses become even more pronounced once those panels are installed on a user’s actual roof.

    Some of the main environmental factors that can negatively impact solar panel efficiency include:

    • Temperature : Solar panel efficiency is inversely proportional to temperature. This means that the hotter it becomes outside, the less solar energy your modules will generate (with all other factors held equal).
    • Soiling : Material that accumulates on the surface of PV panels can block sunlight from reaching the solar cells, reducing the amount of power they can generate. These energy losses are highly variable and depend both on the type of soiling (i.e. dust, pollen, or snow ) and how frequently the PV panels are cleaned and maintained.

    Soiling, such as dust, on PV modules reduces power output.

    • Shading : Shading is what happens when surrounding trees, buildings, terrain, and other objects partially or fully block sunlight from hitting a PV system. The effect of shading on solar power output is highly variable. To learn more about the causes and consequences of shading, this article and this section of our PV system losses series are great resources.
    • Wiring and connections : Resistance in the electrical connections of a solar installation typically results in energy losses of a few percent.
    • Mismatching : Due to manufacturing variations, modules of the same type can have slightly different electrical characteristics. This mismatch between modules can lead to performance losses.
    • Inverter efficiency : Converting DC into AC via an inverter is typically around 96-97% efficient. Solar inverters typically enjoy improved conversion efficiency rates when the DC input power is high. However, conversion rates take a big hit when the input is much less than the inverter’s rated power.
    • Age : All solar panels degrade with time — producing less energy the older they get. This decrease in performance is typically factored into the PV module manufacturer’s linear 25-year warranty, with most degradation rates hovering around 0.5% per year.

    For a deeper dive into solar panel efficiency losses, see our PV System Losses Series.

    Term Typical Value
    Temperature -0.5%/°C above 25°C
    Inverter Efficiency 96.5%
    Mismatch 98%
    Wiring/Connections 98%
    Soiling 95% (highly variable)
    Age -0.5%/year
    Shading Highly environment-dependent

    Typical solar efficiency values for different PV system loss types.

    System derate factor

    The above variables are combined in a coefficient called the “system derate factor” to represent the overall losses of a solar installation. For instance, PVWatts, an NREL-supported PV system energy production calculator, uses a default system derate factor of 86%.

    However, depending on the PV system design or environmental conditions. this value can be higher or lower. Advanced solar design software like Aurora can ensure that you accurately determine PV system losses and how much energy your customer’s solar installation will actually produce.

    Solar panel (module) efficiency denotes what portion of irradiance a module converts into electricity under standard test conditions (STC; irradiance of 1000W/m2, ambient temperature of 25°C). As a general rule of thumb, you can estimate how efficient a PV system is at converting solar irradiance into electricity (under STC) using the following formula:

    Overall System Efficiency = Module Efficiency x Derate Factor

    It is important to note that these are merely back-of-the-envelope calculations. To get a comprehensive energy production analysis, you need dedicated tools, such as Aurora Solar’s Design Software. that can incorporate all of a PV system’s environmental, mechanical, and electrical characteristics.

    About Solar PV Education 101

    This blog is part of Solar PV Education 101. a six-article series that serves as an introductory primer on the fundamentals of solar. We’re updating each piece in late 2022, so be sure to check back often for the most recent information.

    Utility-scale solar PV: From big to biggest

    By Dana Olson Bent Erik Bakken

    The world is electrifying. The share of electricity in the total energy mix will more than double to 45% by 2050. Renewable energy, led by solar photovoltaic (PV), will supply that growth and replace much of today’s fossil-fuel generated electricity. The reason? Cost.

    Bent Erik Bakken

    Senior Principal Scientist

    The powerful economies of scale in PV are likely to see costs in 2050 at half of today’s levels – enabling additional investments in grid expansion and integration technologies such as storage, connectivity, and demand-response that increase the value of solar assets.

    Owing to the low costs of solar PV, we predict that global PV capacity will increase by a factor of 65 from 2016, to 19 000 GW in 2050, representing almost half of all installed electricity capacity globally at that time.

    Although other commentators emphasize the role of distributed generation over large centralized installations, we do not share that view. We foresee utility-scale PV dominating electricity generation because of its favourable economies of scale, outweighing the savings in transmission costs brought by decentralized microgrid installations.

    In this article we distinguish between five classes of PV installations – from utility scale to off grid micro-installations.

    Across all of these classes we expect to see sharp cost reductions – indeed, by 2050 these will amount to savings (relative to today’s costs) of between 43% and 54% in all world regions.

    Due to their expected continued cost-learning rates of 18% per capacity doubling, PV panels will become an ever-smaller share of installation costs. This places utility-scale installations, where PV panels are a high proportion of costs, at an advantage vis-à-vis microgrids – within the next decade, utility scale will move to being generally three times more cost efficient than smaller microgrids (albeit with significant regional differences related to, for example, costs of labour). In the longer run, utility scale, will see its cost advantage decline, but will still be more cost effective vis-à-vis microgrids by a factor of two by 2050. This pattern of utility-scale dominance will characterize all world regions, with the exception of Sub-Saharan Africa, where inexpensive off-grid PV solutions will prevail over the next two decades.

    Exponential growth

    Solar photovoltaic (PV) system investment costs have declined sharply over a long period – so much so that forecasters and modelers have struggled to keep pace with developments over the last two decades. At DNV, we estimate system cost will continue to decline by another 50% resulting in installed capacity costs for utility scale PV of between 0.42 and 0.58/W (depending on region) by 2050, with increasing value in these assets coming from corresponding expenditures in storage and grid integration technologies.

    This remarkably low capacity cost will enable solar PV to grow 65-fold from 1% of total electricity generation in 2016 to 40% in 2050, becoming the single largest provider of electricity in less than two decades. The trajectory we envisage for utility-scale PV generation, in particular, is exponential for almost another two decades – in contrast to the annual capacity additions anticipated by the IEA’s New Policies Scenario, which are held almost constant at present levels.

    This change in the magnitude of solar deployment sets up a potential bonanza for financial institutions competing effectively for clean-tech business. By 2050, capex for renewables and grids will be some 47% of global expenditures, up from 17% in 2016. Grid and non-fossil capex taken together will likely exceed fossil capex before 2030 (see Figure 1). And the interesting takeaway for the project finance community is, as we detail below, that the projects will be heavily skewed to large-scale solar installations, despite the attention currently enjoyed by small, distributed PV generation.

    Five PV classes

    Investors, developers, operators, and regulators will need to understand the future prospects of various PV classes, in particular growth rates and integration strategies for decentralized systems as well as for centralized utility-scale systems that may require investment in transmission and distribution. DNV has defined five PV classes, from centralized to off-grid. These differ on typical installation capacity, learning rates, investment and operations costs, and allotted bespoke storage.

    • Utility-scale
    • Commercial and industrial
    • Residential
    • Microgrid
    • Off-grid

    All classes will require system flexibility measures, such as energy storage and demand-response, whereby demand is shifted to match electricity supply. However, there is little or no dependence on transmission grids for microgrid and off-grid systems. This sets up a key question: will the superior economies of scale enjoyed by the large-scale classes outstrip the savings afforded by the smaller-scale micro- and off-grid PV?

    To answer that question, we have investigated the impact of cost differences in ten global regions.

    Three of these are well-developed industrial regions – North America, Europe and OECD Pacific (Japan, South Korea, Australia and New Zealand) – while the other seven are a mixture of less developed regions with less-mature grid infrastructure.

    We use the DNV Energy Transition Outlook forecast for overall PV growth and capacity in each of these regions as a base case of the total PV in each region, and split those forecasts into the five PV classes, based on hard cost data and market expertise.

    The PV pie from 2016 to 2050

    On a global level, utility-scale installations will account for about two thirds of global capacity in 2050. Other grid-connected categories will make up roughly a further 30%. i.e. commercial industrial (±15%) plus grid-connected residential (±10%). Microgrid installations will have approximately a 15% share, while off-grid installations (a reserved category for the Indian Subcontinent and Sub-Saharan Africa regions) will amount to less than 1% of installed capacity.

    However, that 1% will be invaluable to these communities in providing hundreds of millions of people with access to clean and resilient electricity they currently lack.

    There are differences between the relative costs and merits of the various PV classes in the ten regions. But these differences do not alter our key finding: that each of the regions differs little from a global PV picture in 2050, showing utility scale on top, with between 40% and 60% of capacity, and commercial industrial or microgrids each assuming between 10% and 30% of the total PV capacity. Sub-Saharan Africa is the exception to this picture. There, off-grid installations will serve as the second largest installed category with just over 15% of its regional PV capacity in 2050, allowing many millions of households to leapfrog into a clean, low-cost energy future.

    Regional developments. China

    China will experience ‘peak energy’ in the 2030s, and from that point to 2050 its total energy consumption will fall by one quarter. However, the region’s electricity consumption will grow uninterruptedly, reaching some 18 PWh by mid-century. Almost 60% of that power will be PV generated – a result of China installing more PV than any other region.

    While, China will lead the way with PV, the Indian Subcontinent will catch up rapidly. That region will have installed at least 50% of the capacity installed by their Chinese neighbours by 2050. As can be seen from the chart below, China and India will together possess 60% of global PV capacity by 2050, primarily due to their increased electricity consumption and large populations now and in the future. 1

    Regional developments. Sub-Saharan Africa

    Sub-Saharan Africa will see a unique dynamic unfold over the next two decades. During this time, off-grid PV installations will be the dominant solar segment. Electricity requirements in a large fraction of very poor households will remain limited and will be well-served by very inexpensive and small capacity off-grid installations, thus enabling access to clean and affordable energy – in line with the UN Sustainable Development Goal #7.

    However, as standards of living continue to improve, the combination of higher household energy requirements, and changing relative costs, will be best served by the cost effectiveness of utility scale PV resources. By 2040, utility scale capacity will displace off-grid and take over the role as the dominant PV class in Sub-Saharan Africa, just as in all other regions.

    Competing for capital

    The sheer magnitude of the coming PV revolution is hard to comprehend. As stated, we estimate that between now and mid-century, the world will see a 65-fold increase in PV installations relative to 2016. We foresee no significant spatial or resource-related limitations to this spectacular growth.

    But how will PV grow? In the eyes of many, distributed solar is the way of the future. However, DNV’s analysis finds that economies of scale will continue to outstrip distributed power cost advantages such that utility-scale power will provide between 40 and 60% of PV capacity in 2050.

    So, the outlook is very bright for the growth of solar and supporting assets. However, an important challenge to consider is the ability of the solar industry to attract the substantial financial capital required to support this acceleration and growth across diverse markets and categories around the globe. There may be a limit to the speed and volume at which financial capital will be available to support this acceleration of development and deployment. We, as an industry, are actively working to improve the transparency and efficiency of financial transactions and due diligence, thereby lowering project and financial risk to investors.

    Very substantial PV projects are going to be increasingly available as investment targets for the financial community in the decades to come. This runs counter to the belief that the renewables sector is fatally fragmented. In addition, the Rapid growth of large-scale projects will help to concentrate and accelerate the diffusion of the solar industry’s combined technical expertise – helping to move the energy industry towards the future we predict.

    1 The regions referred to in this article as ‘China’ and ‘India’ denote Greater China (mainland China, including Hong Kong, Macau and Taiwan) and the Indian Subcontinent (India, Pakistan, Afghanistan, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives).

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