There are two basic measures commonly used to describe the overall real world performance of solar PV technology. The efficiency of the underlying technology indicates how much of the solar energy that directly reaches the materials or finished panels will be converted to electricity. Average installed costs represent the comprehensive value of the technology and give a first indication of how a solar energy system investment will work for the buyer. These measures may be too simple to tell the full story, even though they are easy to use. For anyone considering whether you should buy now or wait until later, we think a brief look at technology and the current activity can help inform your decision.
Making a Long Term Decision
We aren’t suggesting that choosing to become more energy independent is a simple matter of looking at a few numbers. There are many ways to improve your home for personal satisfaction and comfort. Adding a solar energy system may be one of the more complicated decisions a homeowner may make, because of the amount of technology involved and the rapid pace of evolution in a short time frame. By comparison, a home HVAC system is also a fully engineered collection of various technologies. But, in the last century the significant improvements in efficiency and effectiveness came early. Small improvements in design and materials occur now on the scale of decades. Some would argue that there are few opportunities left to bring costs down. However, a buyer can still evaluate their purchase options by looking at performance ratings and cost per output. Energy Star ratings may be a popular way to compare how effective the design is, and cost per ton of cooling may be a way to decide the most economical route to go.
Choosing between solar energy system options is similar. However, there are also complicating factors for rooftop solar in particular due to architectural and environmental limitations. We can study the current state of technology relatively easily. But it can be misleading to simply look at the purchase costs independent of other factors. The good news is the current rate of adoption of solar PV technology and the ability for YellowLite to provide each individual homeowner with a specific performance estimate for their unique conditions and needs is a good substitute.
The State of Solar Technology
You don’t need to know all the details of past research and development to get an accurate snapshot of where the technology stands and to understand the potential of new developments. Because of the way solar PV is manufactured, you will mostly see cell efficiency ratings used to describe lab results for new technology and panel efficiency ratings for technology in the commercial market.
Cell efficiency is measured as the percentage output of energy to the theoretical amount of energy supplied by the Sun (hitting the cell). So if 100 Watts hits the cell, and it puts out 16.8 Watts, then the cell efficiency is 16.8%.
A solar panel is a collection of tens or hundreds of cells, with framework, interconnections, and other needed components. Panel efficiency is a similar measure of input to output, but it compensates for all of the design and manufacturing impact on efficiency. So, by definition, panel efficiency will always be lower. Sometimes it is much lower than the individual cell efficiency. And a part of the evolution of new technology is improving the design and manufacturing efficiency and not just the cell efficiency.
When we consider technology, there are a number of areas targeted by research and development. All may be considered exotic technologies, and so far none can get past niche markets. The most basic distinctions are the use of thin films and of non-silicon materials. Most every panel sold today is the standard design (not a thin film), using crystalline silicon. We are optimistic about the future of materials and their application. We have shared the status of one new, exotic material before.
But today, crystalline silicon cells leave everything else far behind with around 90-95% of commercially manufactured PV being of that design. Silicon as a material is easy to work, it’s technologically mature, and has a giant industry behind it which drives costs down. Today’s single layer cells typically register above 15% conversion efficiency, and substantially higher efficiencies are achieved in more expensive yet profitable multi-junction cells used at utility scale in solar concentrator designs. Although this chart is very busy, it shows that crystalline silicon (blue lines) performs quite well – above the middle of the pack – when compared to materials that still require a lot more research and development. While some of the newest materials and applications show promise, there are still wide gaps between the research level performance and the real world performance. The patch from lab to commercial scale production can take years or even a decade.
Cost Effective Solar Measured by Its Use
Because we cannot effectively compare two solar projects by simply looking at the bottom line purchase price per unit of rated output ($/kW), we think the recent past and current level of activity is a good substitute. Instead of describing a few projects in detail, we simply present a number of indicators that solar energy systems at the distributed, or home scale and at larger scales has fully caught on. That is perhaps partly because of social drivers. But it is mostly due to the economics. Solar PV systems not only reduce utility costs; they also add value to most every real property where they are installed.
Here are just a few select points of interest:
- In the U.S. alone, records are being made for solar PV installations. Residential solar energy systems represent almost a third of the over 7 GW of activity.
- Solar companies and their stock continue to boom despite the drop in fossil energy prices.
- Experts still see current silicon technology as being the best investment, even with brutal manufacturing competition. New technology needs more time.
- SunPower, one of the more successful panel manufacturing leaders has made significant investments that so far have paid off.
- New markets are becoming more viable. In agriculture, there are a number of ways that solar PV can be used beneficially, and even local farmers are eager to explore it. Many states are actively pursuing community solar projects and devising policies to support them. Ohio may not be far behind.
The Message
We recognize it is a very personal decision to solarize your home and become more energy independent. The current state of technology is more than adequate to realize your financial and energy goals. We have previously shared with you how a solar energy system increases the sales and appraisal values of your home. And the current booming market benefits every investor by not only creating a thriving industry with solvent players and mature technology, but it also means that public perception is growing more positive. An investment may not longer look like a risk but simply an accepted choice for social and economic reasons. Buyers are increasingly aware and value solar energy. When you are ready to determine how solar PV can work for you, we are ready to provide you a custom evaluation.
Interested in learning more about YellowLite’s renewable energy solutions? Reach out to us today to learn more.
