Friday, February 11, 2011

Part 2 of 3: A Home Buyer's Guide to Purchasing a Grid-Tied Solar PV System - Evaluating Your Quotes

This is Part 2 of 3.  Please refer to earlier post for Part 1.

I started researching solar over a year ago and got really excited about the opportunities. I started getting quotes from installers in May, put a deposit on a system in September and the installation was completed and we started producing electricity on January 26 , 2011. I hope this Guide will help you with your solar choices.

Steps in the process:
  1. Get a general understanding and overview of solar PV systems for the home. (Detailed in Part 1 post)
  2. Determine a rough estimate for your solar PV system. (Detailed in Part 1 post)
  3. Find installers and request quotes. (Detailed in Part 1 post)
    • Standardize your quotes so you can compare and evaluate them on an apples-to-apples basis.
      • Each installer will probably have slightly different configurations and panels made from different manufacturers. Therefore comparing one quote to another is very difficult since each quote really is it's own customized product. In addition, there are many different numbers and definitions that are difficult to understand and keep straight. 
        • Personally, I got a multitude of quotes and configurations that ranged from 1.84KW to 2.58KW in size, different array directions (South, West and East facing), different shading assumptions, and of course different panels and inverters. There was no way for me to compare the quotes accurately based on what the installers gave me alone. So I found it essential to find a price/performance metric that I could use as a standard benchmark to evaluate my options.
      • Before I get to the metric I found to be most useful, I want to define and describe a lot of the measurements upon which the installers will base their quotes and with which you will need to derive a standard metric.
        • DC Rating STC. This is the name plate rating of your system based on Standard Test Conditions (STC) and this is the size of your system that your installer will quote you. When somebody asks you how big your PV system is, this is what you will give them. I think this has flaws as a benchmark because the performance in real world conditions can vary among different panels.
        • DC Rating PTC. This is the DC size of our system based on PVUSA Test Condition (Photovoltaics for Utility Systems Applications) which is closer to real world performance than STC. Many refer to PTC as "Performance Test Conditions". I think this is better than DC STC.
        • Inverter Efficiency. Solar PV panels produce electricity on a Direct Current (DC) basis but need to get converted to Alternating Current (AC) through your inverter so they can feed back into the grid (your house runs on AC power). This is how well your inverter converts DC to AC. The more efficient, the less electricity loss you have in the conversion.
        • AC Rating (based on PTC). This is the the DC PTC Rating multiplied by the Inverter Efficiency. This is your real standard system size before design factor adjustments. The AC Rating is the base metric you will want to use. Further down, I will describe a variation of this base metric that I prefer to use (based on CSI rating).
        • Shading Derate Factors. The performance of your system will be affected by the shading the panels will receive over the course of the year. When your installer does a site visit, he should do a shade test and provide you with a detailed shading report with his quote. The shading derate factors will be needed to accurately assess your design factor adjustments.
        • Array Tilt. This is the angle that your solar panels are positioned relative to the ground. Your panels will most likely be the angle/slope of your roof. The ideal tilt depends on where you live. In my area in Los Angeles, the optimal tilt is 17 degrees.
        • Array Azimuth. This is the direction that your solar PV system is facing. The array azimuth is shown in degrees with True North being zero degrees and South being 180 degrees. The ideal direction is South facing (180 degrees).
      • As mentioned above, the AC Rating is the base metric you will want to use to compare all of your various quotes, but you will need to further standardize your quotes to compare them on the same basis.
      • I found the CSI Calculator , a utility rebate calculator for the California Solar Initiative, to be the easiest tool to standardize my quotes. Even if you do not live in California, I would still recommend this calculator for you. In addition to ease of use, what I like about this calculator is that it is an official and industry standard calculation rather than an estimate produced by your installer (call me a cynic).
      • The PVWatts Calculator is also another good calculator (can be used for any place in the world) developed by the National Renewable Energy Laboratory. Most calculators, including CSI, are based on the PVWatts calculations of solar radiation (how much annual sun). Again, like the CSI calculator, you can estimate your annual and monthly PV production and savings. If you live outside of California, you may want to use this to get your final estimated production. You will need to provide (or use their defaults) additional design factor adjustments, so it is a little more complicated than CSI. Also note that the dollar savings may be understated if you use their cost per KWH for your area because this is based on the total average and not at the higher tiers which your solar PV system would likely offset.
      • Steps to standardize your quotes:
        • I would suggest using your most preferred quote or the system setup that you think you are likely to purchase. Make sure you have an accurate shading report for this quote because that will be one of the critical assumptions you will use. Using the CSI Calculator, you will use the same assumptions for the following inputs/factors:
          • Shading Derate Factors (monthly percentages from the shading report from your installer)
          • Array Tilt (degrees)
          • Array Azimuth (degrees)
          • Also use the same basic information including Utility, Customer Type, Incentive Type and Mounting Method.
        • The only variables that are not standard will be the make of the panels/modules, number of modules, make of inverter, number of inverters and quoted cost of the system.
        • After inputting the assumptions into the CSI Calculator, you will have a report that will tell you your estimated Annual Production (Annual kwh), AC Rating (CEC-AC Rating) and CSI Rating. I like the CSI Rating because this is the performance rating (AC Rating multiplied by the Design Factor adjustment). You can save PDF versions for the reports you run for each of your standardized quotes. You will now have the performance for all of your quotes based on the same assumptions.
        • Click this link for a step-by-step guide with screen shots for using the CSI Calculator.
    • Evaluate your quotes and your options.
      • After you have standardized the quotes and created various scenarios through the CSI Calculator, you can now start to compare and evaluate the different quotes.
      • The first step is to determine how the installers stack up against each other. Even though most installers will quote you based on Cost per DC Watt Installed (STC), I think the better metric is Cost Per AC Watt because this captures the conversion to AC and real world inefficiencies. Personally, I like using the Cost Per CSI AC Rating because that captures all of the design factors including direction of your array in case you are deciding between different roof placements. Using Cost Per AC Watt as your price/performance metric, you can now compare the installer costs for all of your quotes irrespective of system size, direction, etc. You can go back to your installer and question the system cost and see if they come back with a better price.
      • The next step is to determine the best position of your PV system. The ideal position is South-facing, but the shading of your roof and other factors may make it less ideal. Using the CSI Calculator, you can run another scenario with your top quote choice by changing the direction and shading derate factors while keeping all other assumptions the same. This will calculate your estimated Annual KWH production with the new array direction that you can compare to your top quote choice.
      • At this point, you will be able to determine which installer is offering you the best price and what direction/configuration will produce the most solar energy. Click link for Solar Quote Comparison Spreadsheet. Note - Google Docs tends to distort spreadsheets making it a little difficult to read. If you Save the file to your computer, you can see it in plain Excel.
    • Evaluate your financials. (Detailed in Part 3 post)
    • Select an installer. (Detailed in Part 3 post)
    • Other factors to consider. (Detailed in Part 3 post)
    • Go solar and enjoy the sunshine. (Detailed in Part 3 post)
    Below is a summary of my home PV system:

    System Size DC (STC): 2.28KW
    System Size AC: 1.93KW
    System Size AC (California CSI rating): 1.63KW
    Panels: 10 Sunpower Serengeti 228 Watt
    Inverter: 1 Sunpower 3000M (SMA Sunny Boy 3000 rebranded under Sunpower)
    Estimated Annual Production: 2,781 KWH
    Direction: East facing

    Cost of System Before California Utility Rebate (Installed Cost): $13K
    Cost of System After California Utility Rebate: $10.5K
    Cost of System After Federal Tax Credit: $7.4K

    Cost per DC (STC) Watt: $5.73
    Cost per AC Watt: $6.77
    Cost per AC CSI Watt: $8.01

    Installer: Martifer Solar (Matt Rakocija)

                                            Mortgage                Electric Bill           Total Mo. Pmt
    With Solar                         $1,050            +           $ 54             =         $1,104
    Without Solar                  $1,000           +          $100             =         $1,100
    Difference                                 $50                         $(46)           =           $       4
    It costs me only $4 more per month to have clean energy.

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