# Presentation: 492218

## PV as a Major Source of Global Electricity

**Ken Zweibel**
**NREL**
**Presented at University of Toledo**
**February 24, 2004**

## What Are the Issues?

- Cost: Can PV Be Economical Enough?
- Sunlight:
- Is there enough and in the right places?
- What about intermittency (clouds, night)?

## What I Will NOT Discuss

- Will it happen?
- When will it happen?
- Why it might or might not happen?
- Ins and outs of energy policy and tradeoffs.
- Why I won’t discuss them:
- Cloud the issue : and the issue is “IS PV A VIABLE, POTENTIALLY ECONOMICAL SOURCE OF GLOBAL ELECTRICITY?”
- My OPINION: It WILL happen and it will start happening SOON.

## PV Can Be the Source of Most Energy Worldwide

- We can establish that:
- PV can be inexpensive enough to provide cheap, daytime electricity for up to 10% of US/global needs
- PV has a chance to be inexpensive enough to supply cheap *energy (electricity day or night, and portable fuels)* via energy storage, long distance transmission, and hydrogen production for fuel
- Sunlight availability and land use are actually a relative ADVANTAGE for PV (over any other renewable energy source) and not an impediment at all to PV use on a global scale

## “No Place Like Home”

- An example I will refer to in order to establish physical viability is cadmium telluride (CdTe) thin film technology, a technology practiced by a local company, First Solar, of Perrysburg, OH
- A company founded (as Solar Cells Inc.) by local technology pioneer, recently deceased, Harold McMaster, and originally supported by numerous local investors
- Others could be used as examples, but CdTe is a good, specific technology to examine

**First Solar R&D100 CdTe Vapor Transport Manufacturing Line**

## Next Steps

- Establish Cost Viability
- Goals
- PV system costs
- PV module costs
- Pathways
- Examine sunlight and land issues

## Establishing Cost Goals

- PV systems do not use fuel
- O&M costs can be nearly zero, especially for fixed, flat-plate systems
*Initial capital cost is the key*
- Capital cost is in $/Wpeak (cost divided by output)
- Translation of $/W to ¢/kWh is straightforward and depends on local sunlight, cost of money
- $1/W is about 6 ¢/kWh (average US location)
- Average retail US electricity price is 8 ¢/kWh; typical conventional *generation* costs are about half that, with the rest being transmission, overhead, profit, taxes, etc.

## PV Cost Goals

- Market Tiers:
- Daytime electricity (intermittent):
- Retail: 7-12 ¢/kWh
- Wholesale: 4-6 ¢/kWh
- Daytime peak demand electricity (intermittent):
- Retail: 12-15 ¢/kWh
- Wholesale: 6-12 ¢/kWh
- Baseload electricity (dispatchable): 3-5 ¢/kWh
- Needs to be cheap to pay for storage and/or long-range transmission
- Portable fuels: 2-4 ¢/kWh
- Needs to be cheap to pay for generation of hydrogen (splitting water) and perhaps transmission of hydrogen
- PV Goals:
**Intermittent electricity – 6 ****¢/kWh (about $1/Wp)**
**Baseload and portable fuels – 3 ****¢/kWh (about $0.5/Wp)**
- Does not take into account likely escalation of conventional costs with time

## What Are the Components of PV System Cost?

- Module (cost and sunlight-to-electricity conversion efficiency)
- Support structures for module and wiring
- Wiring modules together and back to a power-conditioning unit/inverter
- Power conditioning and inverter (to turn DC to AC)
- Design and Installation
- Miscellaneous: land, marketing, transportation, other

## Nearly 500 kW of First Solar CdTe at Tucson Electric, Springerville, AZ

## Uni Solar Products

**Uni Solar Products**

## Dollars per watt and per m2

- PV system cost typically in $/W
- Just add up all the costs of the components and divide by the system output
- There is about 1000 W of sunlight incident on 1 m2 of PV module
- If the sunlight-to-electric efficiency of the system is 10%, then 10% of that is output, or 100 W/m2
- If the system costs $100/m2, then the $/W cost is ($100/m2) / (100 W/m2) = $1/W .
- Some costs scale with area ($/m2), others with system output ($/W)
- Modules, wiring between modules, installation, and supports ($/m2)
- Inverters with $/W

##                    Cost-Competitive Goals ($/Wp)

|  | Now:
Rooftop | Now:
Ground-mount | Future: Electricity
Rooftop | Future: Electricity
Ground | Future: Energy |
| --- | --- | --- | --- | --- | --- |
| Module | $2.5 | $2.5 | $0.4 | $0.4 | $0.15 |
| Supports | $0.2 | $0.4 | $0.1 | $0.1 | $0.1 |
| Wiring | $0.5 | $0.5 | $0.2 | $0.15 | $0.1 |
| Power Conditioning | $0.8 | $0.5 | $0.25 | $ 0.15 | $0.05 (DC) |
| Design & Installation | $0.8 | $0.3 | $0.2 | $ 0.1 | $0.05 |
| Land | 0 (rooftop) | $0.02 ($4000/acre) | 0 | $ 0.03 | $ 0.03 |
| Miscellany
 | $0.3 | $0.3 | $ 0.05 | $ 0.05 | $0.02 |
| Total | $5.3/Wp | $4.5/Wp | $1.2/Wp | $1/Wp | $0.5/Wp |

## Cost Reductions

- Technology improvement (efficiency,  design simplifications, process cost reductions)
- Higher volumes (less overhead, lower marketing and installation, bulk discounts)
- Manufacturing experience (process optimization, ‘learning by doing’)
- Product standardization and infrastructure development (installers, system designs)

## Key Cost Drivers

- Module
- Efficiency
- Manufacturing cost
- Power conditioning and inverter
- Design and installation
- Wiring and support structures

## The Module

- Biggest component cost
- Biggest overall system cost-driver through efficiency (half the module efficiency means double the system cost/W)
- Most challenging, technically (large-area semiconductors, cheap!)
- But very clear technical pathways to needed improvements
- Enabling Technology!

## Module Cost Components

- Efficiency (must improve despite cost reductions)
- Materials
- Active
- Semiconductors
- Contacts
- Inactive
- Substrate
- Busbars and leads/j-box
- Encapsulation
- Capital (for a given throughput)
- Front end (active materials)
- Back end (monolithic interconnection and encapsulation)
- Labor
- Utilities
- Facilities

## Thin Film Module Goals

|  | Current Status (estimated) | Future Electricity (goals) | Future Energy (goals) |
| --- | --- | --- | --- |
| Module Efficiency | 10% | 14% | 16% |
| Active Materials | $15/m2 ($0.15/W) | $5/m2 | $2/m2 |
| Inactive Materials | $35/m2 ($0.35/W) | $20/m2 | $8/m2 |
| Front-end capital | $0.1/W ($0.5/W ÷ 5 year depreciation) | $0.05/W | $0.02/W |
| Back-end capital | $0.1/W | $0.05/W | $0.02/W |
| Labor | $10/m2 ($0.1/W) | $5/m2 | $2/m2 |
| Heat, electricity, water, maintenance | $5/m2 ($0.05/W) | $4/m2 | $3/m2 |
| Rent and Factory Overhead | $5/m2 ($0.05/W) | $4/m2 | $3/m2 |
| Total | $0.9/W | $0.37/W | $0.15/W |

## The Best One-of-a-Kind LaboratoryCell Efficiencies for Thin Films(Standard Conditions)

**Efficiency (%)**

**CuInSe****2**
**CdTe**
**Amorphous silicon (stabilized)**

**Univ. of Maine**

**Boeing**

**Boeing**

**Boeing**

**Boeing**

**ARCO**

**AMETEK**

**Photon Energy**

**NREL**

**Boeing**

**EuroCIS**

**Univ. of So. Florida**

**Univ. of So. FL**

**BP Solar**

**Kodak**

**Kodak**

**Monosolar**

**Matsushita**

**12**

**8**

**4**

**0**

**2000**

**1995**

**1990**

**1985**

**1980**

**1975**

**United Solar**

**16**

**20**

**NREL**

**The Best One-of-a-Kind Laboratory****Cell Efficiencies for Thin Films****(Standard Conditions)**

**02658722**

**2005**

**RCA**

**ECD**

**NREL**

## Reasons for Improvements

|  | Now (but at full capacity) | For Electricity | For Energy |
| --- | --- | --- | --- |
| Module Efficiency | 10% exists | 14% (16% cells exist) | 16% (steady improvement) |
| Active Materials | $18/m2 ($0.18/W) – thick layers, low materials utilization | $5/m2  Thinner layers, improved materials use, recycling on-site | $2/m2 thinner layers |
| Inactive Materials | $35/m2 ($0.35/W) Low volumes, unoptimized | $20/m2 better designs, volume discounts | $8/m2 eliminate one piece of glass; higher volumes |
| Front-end capital | $0.1/W ($0.5/W ÷ 5 year depreciation) | $0.05 higher efficiency modules, faster, simpler processes; thinner layers | $0.02/W higher efficiency modules, faster, simpler processes; thinner layers |
| Back-end capital | $0.1/W Totally unoptimized | $0.05 higher modules, better scribing and lamination | $0.02/W higher modules, optimized designs, fewer steps |
| Direct Labor | $10/m2 ($0.1/W) | $5/m2 automation | $2/m2 fully automated |
| Heat, electricity, water, maintenance | $5/m2 ($0.05/W) | $4/m2 higher modules, lower cost eqpt | $3/m2 higher modules, lower cost eqpt |
| Rent and Factory Overhead | $5/m2 ($0.05/W) | $4/m2 volume |  $3/m2 volume |
| Total | $0.93/W | $0.37/W | $0.15/W |

## Simpler Summary of Cost Reductions

- Thin films have been overwhelmed with so many tasks just to get started, they have not optimized any of them
- Companies are in ‘survival mode’, trying to get through first-time manufacturing and initial product introduction
- True low costs don’t show up in prices until manufacturing volumes get close to manufacturing capacities, which takes 1-3 years
- Running a plant at one-eighth capacity turns a ‘cheap’ capital cost into a huge, short-term fiscal stress – multiplies it by 8
- Once commercial levels are reached, time and money can be devoted to better module efficiencies, optimized processes, improved encapsulation designs, etc.; costs will drop swiftly
- Higher sales volume ‘raises all ships’ by lowering marketing, sales, and overhead costs per unit
- There is nothing physically impossible – or even very hard! – about reaching the module cost goals.

## ‘Active Materials’

| 3 microns CdTe @ 25% materials use: $4.32/m2 | 2 micron @80% use: $0.9/m2 |
| --- | --- |
| 0.2 microns CdS: @ 25% materials use: $0.1/m2 | 0.1 micron @80% use: $0.01/m2 |
| Cadmium chloride heat treatment: $3/m2 | Thinner CdTe means less cadmium chloride to process it; improved utilization: $1/m2 |
| Tin oxide cost: $10/m2 (retail: on glass from glass maker) | Tin oxide: ‘Make/Buy decision: – use $2/m2 for in-house process |
| Back contact metals: $1/m2 | Back contact metals: $1/m2 |
| Total: about $18/m2, or $0.18/W (@10% module efficiency) | Total: about $5/m2 or 3.5 ¢/W (at 14% module) |

## Inactive Materials

- Glass superstrate: $10/m2
- Bussbars: $3/m2
- Wires out and connectors: $5/m2
- Back adhesive (EVA) and edge seals: $5/m2
- Back glass: $10/m2
- Miscellany: $2/m2
- Total: $35/m2 (or $0.35/W at 10% module)

- Glass superstrate:   $4/m2
- Bussbars: $1/m2
- Wires out and connectors: $2/m2
- Back adhesive (EVA) and edge seals: $2/m2
- Back glass: $4/m2
- Miscellany: $1/m2
- Total: $14/m2 (or $0.1/W at 14% module)

## PV Costs: Conclusions

- Thin films provide a successful way to get to the intermediate goals (daytime electricity) and good probability to the long-term *energy* goals
**No physical/technical show stoppers are known to exist; indeed, a clear path can be discerned**
- The potential of thin films is currently camouflaged by their challenging transition to commercial status
- First-time manufacturing
- Product introduction

## Land and Sunlight: What We Hear!

- “Pave the world with PV to make enough energy.”
- “It may work in Tucson, but not here in Ohio.”
- “Sunlight is so dim, the modules never pay back their energy costs.”
- “Because it’s intermittent, it doesn’t help offset real energy costs because you still need all the rest of the capacity as back-up.”

## “Pave the world...”

- PV is the most land-efficient way to turn sunlight into electricity compared to any renewable
- PV can be put on roofs, above parking lots, on farm set-aside land, on rights of way, on walls...
- Without any rooftops, about 10 million acres would provide every kWh of annual US electricity; and about 30 million acres, all of our annual energy (0.4% and 1.2% US land area)
- 30 million acres in farm set-aside programs
- 30 million acres of military bases
- 140 million acres of suburban/urban real-estate
- Land: Not a problem – an advantage!

## “...not here in Ohio”

- Annual sunlight varies less than we feel; PV is not a ‘sunburn’ technology
- PV energy production is linear with sunlight
- Average sunlight varies by only about ±20% from an average level in Kansas City (1700 kWh/m2-yr) – so if PV costs 6 ¢/kWh in Kansas, it will cost 20% more in Buffalo and 20% less in Tucson (conventional energy prices vary more)
- Sunlight peaks when air-conditioning demand peaks – and that’s the most expensive electricity for a conventional utility to produce.

## “Never payback their energy...”

- Today’s wafer silicon PV modules take about 3-4 years to pay back their energy
- Today’s ground-mounted and rooftop balance of systems pay back in 1-2 years, respectively.
- Today’s systems pay back in 4-5 years (measured data published)
*Critiques of PV energy payback date back to 1970s, when PV was 100 times more expensive, with processes like ‘jewelry making’*
- Studies of thin films say thin film modules have 2 year pay back now, expect 1 year in the near future (maybe already)
- Expect ongoing progress to reduce total energy payback for roof and ground mounted thin film *systems* to be 0.5-1 year once thin films reach large volumes
- Typical energy payback times for conventional energy sources (coal, oil, natural gas, nuclear) are about the same (for mining, transportation, refining, construction) as PV

## “Doesn’t help offset real energy costs...”

**Always saves *****fuel*****, and natural gas is expensive**
**Near term (up to 10% impact): think of PV as a demand reduction – “turning off an appliance”**
**Mid-term (over 10% impact): Implement small, local storage to smooth production/demand; implement some movement of electricity from one time-zone to another**
**Long-term (dispatchable plus fuels): Storage, fuel production, and transmission (perhaps day-night transmission, if we are creative)**
**Bottom line -> PV COST drives every aspect of its ultimate ability to provide electricity, energy, and fuel**

## The Possibilities...

- Isn’t it good news that there exists a whole new way to make electricity that should become economical on a grand scale?

- Isn’t it nice that Ohio and Michigan have two of the top three thin film PV companies in the world?
- Though we still see pitfalls and challenges, this could be the onset of a new age, where we can make our own energy locally, in a clean, sustainable way!
- Jobs
- Energy security & reduced global tensions
- Clean & sustainable

## Slide 31

## EXTRAS

- Following slides are for specific questions, if they occur

## Federal Budget Issues

**R&D budget is first priority (way too low); leverages technology innovation, which is changing the whole PV cost structure with thin films**
- Emphasis should be on EXISTING PV options, especially those thin films that already demonstrate most of the qualities needed to meet AGGRESSIVE goals
**System subsidies are crucial to the transition to cost-effective PV **(since we already have cheap electricity from fossil fuels) – they should be *SOLAR PV-specific to stimulate PV*
***Arizona has a PV portfolio standard for utilities that could be emulated***
- Scope subsidies in either dollars per peak watt (say $4/W going down to $0.5/W over some period, say to 2020) or cents/kWh for each kWh of generated electricity – *NOT as a percentage of total system cost, which only encourages vendors to raise prices to get the most subsidy*. Fixed dollar-per-watt subsidies encourage vendor and *technology* competition, since the *cheapest* ones get the most subsidy percentage.
- Perspective: Our ‘Balance of Trade’ in energy goods is running about minus $160B annually

## Cadmium Issue

- Perception issue with users
- Recycling and worker safety issue with governments
- Cd in modules: such a small amount (a few grams/m2 or less in the future) and so well protected from the environment (CdTe semiconductor that melts at 1100 C and held between sheets of glass) that it is actually the best way to *sequester* Cd FROM the environment (esp with module recycling)
- Since the trend is to have all electronics waste be collected and recycled, we do not think CdTe PV modules will be any different from any other PV option in terms of disposal.
- Since Cd WILL ALWAYS BE WITH US since it is a by-product of Zinc mining (so it will be on the slag heap if unused), sequestering Cd in PV modules would actually REDUCE the amount of Cd in the environment.
- No matter how many gigawatts of CdTe PV is made, no more than 2000 MT/yr of Cd is ever likely to be used (since tellurium is a rare material), and this is about 7% of EXISTING annual Cd use – mostly for batteries for toys (not changing the world)
- See our website on this issue: _[http://www.nrel.gov/cdte/](http://www.nrel.gov/cdte/)_

## PV as a Major Source of Global Electricity

**Ken Zweibel**
**NREL**
**Presented at University of Toledo**
**February 24, 2004**