SERI PHOTOVOLTAIC VENTURE ANALYSIS: LONG TERM DEMAND ESTIMATION Richard D. Tabors, Susan Finger with Allen Burns, Paul Carpenter, Thomas Dinwoodie, Jesse Tatum and Gerald Taylor Energy Laboratory Report - MIT-EL-78-032 July 1978 ABSTRACT This report presents the results of a sectoral demand analysis for photovoltaic power systems used in the residential sector single family homes], the service, commercial, and institutional sector [schools] and in the central power sector. The results described are the output of a set of three normative modeling activities carried out by the MIT Energy Laboratory, They are based on the assumption that the actors, i.e,, the utilities, schools, and homeowners, will switch to photovoltaic power systems when they are cost-effective relative to the competition, that is, centralized power generation using conventional fuels. In each case the assumption is made that the market for photovoltaic power systems will be a new market, not a retrofit market. As a result the annual (total for utilities) sales potential at a given price is estimated for each. sector assuming a specific level of new installations in that sector, i.e., new single-family homes, new schools, and additions to utility stocks, As such.,the results presented are maxima for a given application. While the methodology presented does not allow for any early acceptors, it does assume that once economic all new homeowners, school-builders, and utilities will buy to a fixed level. SERI PHOTOVOLTAIC VENTURE ANALYSIS Long Term Demand Estimation I. Introduction This report presents the results of a sectoral demand analysis for photovoltaic power systems used in the residential sector [single family homes], the service, commercial, and institutional sector [schools] and in the central power sector. The results described are the output of a set of three normative modeling activities carried out by the MIT Energy Laboratory. They are based on the assumption that the actors, i.e. the utilities, schools, and homeowners, will switch to photovoltaic power systems when they are cost-effective relative to the competition, that is, centralized power generation using conventional fuels. In each case the assumption is made that the market for photovoltaic As a result the power systems will be a new market, not a retrofit market. is estimated at a given price annual (total for utilities) sales potential for each sector assuming a specific level of new installations in that sector, i.e. new single-family homes, new schools, and additions to utility stocks. As such, the results presented are maxima for a given application. While the methodology presented does not allow for any early acceptors, it does assume that once economic all new homeowners, school-builders, and utilities will buy to a fixed level. Each of the three sectors analyzed will be discussed in greater detail below. The methodology used for both the school and the residential analysis is a modification of that developed by Carpenter and Taylor in An Economic Analysis of Grid-Connected Residential Solar Photovoltaic Power Systems. This methodology measures the "worth" of a photovoltaic power system to the owner of the system. The worth is measured against the alternative available energy system, the purchase of electric power from a utility grid. Analysis of the value of photovoltaic power systems to a utility was carried out using a more detailed utility systems operating model, SYSGEN. The SYSGEN methodology allows the MIT Energy Laboratory to parallel the developmental work carried out by General Electric Electric Utility Systems Engineering Department for EPRI, in 1977. In the utility analysis we have looked at the value of a range of penetrations of photovoltaic power systems - 2 to 12% - into specific regional synthetic utilities as developed by EPRI. This analysis utilized the solar planning regions developed by Tabors and Carpenter.l Figure 1 shows the region so defined. It should be noted that throughout the analysis which follows there is no consideration of the Northwest region. This region appears to have minimal potential for photovoltaic power systems as alternative power sources are relatively inexpensive, solar insolation is poor and the region as a whole is predicted to have only marginal growth in population. The city of Omaha, Nebraska has been used as a surrogate for the North- 1 1* .I0 -c C 1=LL E C L ( ¢o 2 central region. This location was chosen because of utility cooperation, data availability, and similar weather conditions to much of the Northcentral region. As such it offers a fair surrogate for the analysis undertaken in this region. On the whole it is somewhat warmer and sunnier than such population areas such as Chicago and Detroit. The utility system load is similar to an industrial center with summer air conditioning and therefore is a good match with much of the load shape for the Northcentral area. II. Single-Family Residences It has been argued that single-family residences would offer an early potential market for photovoltaic power systems. The major advantages of this market to photovoltaics are 1) favorable financial borrowing power on the part of the homeowner; 2) if constructed as a portion of a new building, photovoltaic systems do not require specific support structures and are able to take advantage of a credit for roof material not utilized. 3) The load is co-terminus with the generation source and as a result there are no transmission and distribution losses. The analyses which follow have utilized the methodology developed by Carpenter and Taylor to evaluate the worth of photovoltaic power systems to a residential user. The Carpenter and Taylor work, and that by Tatum which preceeded it, utilizes a simulation model of a residence with fixed appliance load and operating characteristics, as shown on Table 1. The photovoltaic power system provides electricity to the load when there is sufficient insolation. When insufficient insolation exists, the load is supplied from the grid in whole or in part. Because electric power is more expensive to generate on peak than it is on base, the analysis utilizes a modified marginal cost system or time-of-day pricing with which to value the electricity not purchased from the utility by virtue of the existance of a photovoltaic power system on an individual's roof. In addition, the homeowner is able to provide power back to the utility when he has excess capacity relative to his own demands. Within the analysis, the value of power bought back by the utility is set at three levels for parametric analysis. The first level is zero percent buyback, i.e. no credit for excess generation. The second level is at fifty percent buyback, i.e. that the utility is willing to buy from the homeowner at half the time-specific price that the utility charges that homeowner for his electric power; and third, one hundred percent buyback, i.e. that the utility is willing to pay the homeowner exactly what they charge the homeowner (the California model). We believe that the middle of these three options is the most reasonable upper bound for the economic behavior of a utility. Furthermore, an analysis is required on a utility-by-utility basis to justify the precise value of excess electric power to the utility itself. In the absence of that complete analysis, a 50% buyback rate represents a fair approximation of the split between fuel and operating costs. The resulting values for the worth of photovoltaic power systems to an owner range between $.80 and $.20 per watt(peak) module at a fifty percent buyback rate. These values represent a conservative estimate of the value of photovoltaic systems to residential owners. Table 2 summarizes the system configuration and efficiency assumptions used in this analysis. Table 3 summarizes by region the worth of photovoltaic systems in the residential market. The system net present value given in Table 3 is found by comparing the homeowner's electric bill with and without the photovoltaic system. The net present value of the difference in these electric bills is the amount that the homeowner would be willing to pay for the entire system. The second 3 TABLE 1 APPLIANCE USE AND BEHAVIORAL ASSUMPTIONS Load Appliance Rating Yearly Consumption Comments 1 Refrigerator 615W 1829kWh Unit is on continuously but draws load (i.e. is running) only one-third of the time to maintain proper temperature (runs only 20 min. each hour). 2 & 3 Dryer 4850W 1008kWh Eight half-hour loads. May be run at any time during day/night but four loads must be run in each half of each week. 4 & 5 Washer 500W 103kWh Same as dryer. 6 Water 2500W 4270kWh Unit is on from 6 a.m. to midnight but runs only one-fourth of each hour to maintain temperature. 1205kWh Meal loads represent different combinations of oven, broiler, and range-top burners that might be used for each meal. Each load is 30 min. in duration. Breakfast, lunch, and dinner start times are 6-7:30 a.m., 11:3012:30 p.m., and 6-8 p.m., respectively. heater Range loads 7. Dinner 8. Lunch 9. Breakfast 9100W 2400W 2700W 4 TABLE 1 continued APPLIANCE USE AND BEHAVIORAL ASSUMPTIONS (continued) Load # Appliance Rating 10 TV 200W Yearly Consumption 44OkWh 11 Dishwasher 1250W 363kWh Runs consist of two 30-min. or one 1-hour cycle each day. May be run after either breakfast or dinner. 12 Lighting 2400W 1314kWh Lighting for a 6-7 room home. Roughly one-fourth of the lights are on at any time during evening lighting hours. 13 Central Air Conditioning 5000W Variable A/C mode is triggered by two days with temperatures greater than 25.5 0 C. Once in A/C mode unit is turned on when temperature reaches 2 1.90 C and runs continuously until house is cooled to 20.90 C. 5 Comments Unit runs for 6 hours per day beginning in the late afternoon or early evening. TABLE 2 Residential Simulation (SOLOPS) Assumptions Array Size 33M 2 Array Tilt Angle Latitude Encapsulated Cell Efficiency .12 Wiring and Mismatch Efficiency .95 Inverter Efficiency .88 Packing Factor .80 Storage NONE Utility Rate Structure Time of Day Cell Degradation Rate 5% years .7% years Less 100 1 and System Lifetime 20 years Discount Rate 3% (Real) Fuel Escalation Rate 3% (Real) Balance of System Cost $500 Fixed $11/m2 Variable 6 2 3 to 20 O r PC) I- - k L' r- I00 LD - cO 4O. O. c?) I C CiM C O tO to rV) or- O I co C, NO 00o r-co CM a) (- r- C1 a) C o-0 kO0 C') C\J P~I a1) O _ O OL Co4 co I a) x (A co _L.. co < I- -r- 4-) S LO :0 0a) a) r LL. - 3~ rI CD U) V: +3a) E a).. -0e (nO) C C >) a rw 5T LL LO *- CO 0>r -r r a) 0) 4:) r-CO .9- -a C r c- CS1 LO * r-Q-o C10 C~j C) C\j CY) 0 CO nC I-0': co 4 C a) O 4) C a) a n CD a). O a) a) a) r- C C) N E - a) CO 4- C\J tO 0 S- cn - r 4- r-- O0 V) 3 c- us ss-C O 0Z Z ao 4- X ac 0 O S.- Co O a) r ) 'r 3a) 4. -C 0 CO X L a) F- 0) v) 7 30 a) -o 3 0 OI n1 :2m .I column in Table 3 gives the net present value of the difference in the electric bills per peak module watt. This gives the value of the entire system per peak module watt. (To evaluate the worth for an individual homeowner, this number should be converted into delivered watts since the homeowner would be concerned with the delivered power rather than the power available from the module.) The third column in Table 3 has the rest of system costs (fixed and variable) subtracted out to give the net present value of the array per module watt. The analysis of potential market size for photovoltaic power systems in residences is based upon a normative model of economic behavior. In this model it is assumed that when a photovoltaic power system is cost effective in lifecycle cost economic terms, it will be purchased. As such it represents an upper bound on demand. To calculate the total demand re- quires both an estimation of the value of the photovoltaic power system to its owner at a specific location or within a specific region, and the number of annual housing starts in a given region. Once again the analysis takes into account only new housing starts as potential markets for photovoltaics. It does not utilize retrofits because it is felt that these will be economic later in each region. The analysis of new housing starts is based on estimates made by CONAES as reported in "Macroeconomic Scenarios" prepared by Donavan, Hamester, and Rattien, Inc. (DHR) for SERI's Photovoltaic Venture Analysis. DHR reports a total housing stock for the United States in the year 1990 of 93 million units. This is compared with a housing stock of 70.4 million housing units in 1975. Using OBERS projection of population to 1990 by region in the United States, we were able to allocate the total housing stock across the U.S. Single family homes were then allocated within regions as a proportion of the existing housing stock in single families. Table 4 shows the resulting number of single family homes by region in the United States. The annual additions to stock were taken as the geometric rate of increase in housing stock, 1970 [the last date for which we had region housing stock] to 1990. Table 4 contains the resultant annual increments to stock in the year 1990. Assuming a normative behavioral pattern on the part of residential consumers, the early penetration of photovoltaics into a southwest market would account for an annual market for photovoltaics of 360 megawatts at module prices of $.81/Wp or less given the system configuration in this analysis. The second regions to be cost-effective for photovoltaics will be the northeast and the south. Again assuming conservative parameter values and a fifty percent buyback rate, these become economic at 44 cents per peak watt. The total annual demand at 44 cents a peak watt is then calculated to be the summmation of the Southwest plus the South plus the Northeast regions, or roughly 1650 megawatts. The final point on the curve shows a value of photvoltaics of 28 cents per peak watt and the addition of the Northcentral region expanding the potential market to 2250 megawatts. These data are summarized in Figure 2. In summary, then, it can be seen that using the assumptions contained in this analysis, the value of photovoltaic power systems in the hot dry climate of the southwest is roughly 81 cents per peak watt assuming a 50 percent buyback rate. The market potential for the Southwest at this price in annual sales to new dwelling units would amount to approximately 114,000 housing units out of a total of 706,000 single family housing units estimated to be added to the national housing stock per annum in the year 1990. The 8 TABLE 4 Regional Distribution of New Housing Starts 1990 (Values x 103 ) 19701 1990 Single Family Housing Total Housing 19902 Single Family Housing Annual 3 Additions to Single Family Housing (Housing Units) 11,470 21,101 15,485 234 2,633 4,122 2,948 17 11,900 23,063 15,190 187 IV. Northeast 9,615 26,715 12,567 169 V. 5,992 12,838 7,972 114 3,010 5,162 3,837 47 44,620 93,000 58,000 766 I. South II. Northwest III. Northcentral Southwest VI. Texas Total 1 Source: 2Source: 3 Bureau of Census, 1970 CONEAS as reported in Donavan, Hamester, and Rattier for SERI Venture Analysis. Values proportional to OBERS Series E Population Projections (State) for the U.S. Assumed uniform geometric growth 1970 to 1990. 9 Values are 1990 increment, Figure 2 .80 .70 .60 .50 -0 0 4,- .40 0 0) 69 .30 .20 .10 I 500 I I 1000 1500 I 2000 Potential Megawatts of Annual Sale 71 I 2300 demand curve produced is downward sloping to the right, indicating an increase in demand as a function of price decline. The steepness of the slope indicates the likely sensitivity of the analysis contained herein to the regional setting and the number of potential homes in each region. Because the Southwest represents a major growth area in the United States, as does the South, these areas require considerable further analysis if more accurate demand projections are to be made. III. Service/Commercial/Institutional Sector, School Buildings in the United States The analysis of a representative building type (a school) from the service/commercial/institutional sector in the United States was undertaken using an abbreviated version of the SOLOPS model for residences described above. Schools offer a potential early market for photovoltaics given their relatively light daylight loads and their generally flat roofed structure. Schools have been chosen as surrogates for the highly heterogeneous building stock in the service/commercial/institutional sector. The simplifying assumptions made were the following: 1) Four weekly runs were used to simulate longer periods of time during the year. 2) These four weekly runs were then expanded into a yearly estimate of energy savings. 3) Loads modeled were only lighting, light appliances, and circulating fans. No account was made for potential energy requirements for compressors for air conditioning or any resistance heating. 4) The load curve for schools was adapted from that prepared by Educational Services, Inc. 5) The area of the school was 100,000 square feet. 6) The area of the array was 5,400 square meters. 7) The angle of the array was latitude minus 10 degrees. 8) The assumed utility buyback rates were set at zro and fifty percent. 9) Rest of system costs were set at 82,000 and $18/m variable. All other assumptions are the same as those that apply to residences as described above. While the simplifying assumptions made above limit the precision of the simulation model as it is run for school buildings, the baseline results are expected to be ordinally correct. Table 5 summarizes the results of the school analysis for the five case areas, Phoenix, Boston, Omaha, Fort Worth, and Miami, for both a zero percent buyback rate and a fifty percent buyback rate. As can be seen from Table 5, Phoenix has the highest value; and Omaha and Miami the lowest value for photovoltaic power systems in solar applications. The estimation of the number of school buildings constructed annually in the United States was done in a manner similar to that discussed above for residences. Estimates of total school enrollment in 1990 were available from the Census Bureau. These numbers were then allocated to the six regions of the United States as a function of OBERS projections of total U.S. population by state to 1990. Given the number of anticipated students in 1990 relative to 1970, it is possible to calculate an average annual increase in school-age population. The final step in the estimation procedure was to assume that all students would be housed in schools of 100,000 square feet at a density no greater than 87 square feet per student, the average for school building in the U.S. in 1975. As can be seen from Table 6, there are a relatively small number of schools expected to be built annually in the six regions. If we assume, however, that these schools will switch to photovoltaics when it is cost-effective within that region, it is possible to develop 11 an annual demand curve as shown in Figure 3 O o CO CO O C.J .CO LO CO - .- C\J C LO CO I-- C tO O ~ rI-a, =3 -0 Z:0 LO I CL ·tA ) L0 w- - I OJ - O c) C :: J Cn I t. O E o a, -O 0 LL O r-. 0) LOn I I ' O . LC) . o LO O r- 4- 00 CO00 CEL >a, ur L I LO C - ) f c CY) 3 >,-L 0*J a Y I >"Z:D: '--I0 O *r Ln, CO C 0, rl- .-n CY) C) L LO : CO In 4-- a, Ce CD CD , CO O c0 C O a- CM C CM O LO O O -in s cn LC CO .- CY) n .0 Ln E. O a, o CM CO CM Ln 1 -. - CCM C CO .0 . D.0 O. LO O O 40 4J in 4J 3 4J C u 4 C a 4J CO 3 0 o In o o o o In a, F-v z 12 a, a, a, 0 a) O0 a, 0 aa) TABLE 6 Regional Distribution of New Schools, 1990 I. South II. Northwest 19741 School 19902 Estimated Building Stock School Building Stock Annual3 Additions to Stock 1990 20,936 24,102 125 8,146 9,430 49 III. Northcentral 22,941 27,855 138 IV. Northeast 20,214 25,338 121 V. Southwest 10,522 12,164 63 VI. Texas 5,287 5,994 32 Total 88,046 108,645 528 Source: United States Department of Health, Education and Welfare; National Center for Education Statistics. Digest of Education Statistics, 1976 Edition 2 Source: Department of Commerce, Bureau of Census; Demographic Projections of the United States, CPR, P-25, No. 476, Feb. 1972. Distributed according to OBERS Series E Population Projections. 3 Assumes a uniform geometric growth 1974 to 1990. 13 Values are 1990 increment. Figure 3 Annual Potential for Photovoltaics on New School Buildings A ssum ptions: * I) Lighting (and Circulating Load .ondition ing ige Meters 50 Rate 0) 40 · Northeast ~0 :E 0 - Texas 0 4-- - {) 3c -Z a 30 South 20 _ 10 _ Nort h Central · 25 · 75 50 I· 100 I· 125 Megawatts *Calculations therefore cover specific weekly periods through seasons and are not full simulation runs. 14 for schools in the United States. The Southwest region shows the largest potential benefits to photovoltaic-powered schools at a value of $.56 per peak watt. The Northcentral region, represented by Omaha, has the lowest potential for photovoltaic systems. In summary, while schools do not offer a large potential market for photovoltaics, they do offer, as do residences, a bridge between the dispersed non-grid interconnected applications and the centralized central power applications. IV. Central Power The U.S. central utility market represents the major potential long-term market for photovoltaics as it does for all other non-conventional electric power generation systems. The level of infrastructure currently invested in transmission and distribution systems make it unlikely that the utilities will lessen their role in-provision of energy to U.S. consumers; the discussion which follows is focused on long-term utility use of photovoltaic power systems. Throughout this analysis it is assumed that the photovoltaic systems are located on utility-owned property and as a result are charged a land-cost as well as other area and land related costs not required by schools or residences. There is no specific assumption concerning the size of individual generating units or their location, only that they are utility-owned and that they gain no credit by being located on a building. The analysis which follows calculates the value of photovoltaic power systems to a given utility as a function of the operating system of the utility and the level of photovoltaic penetration into that utility. The hypothesis in this work is that with decreasing cost to the utility, photovoltaic power systems will become more attractive in larger quantities within a given system. As a result, a "utility demand curve" will be downward sloping and to the right. The analysis requires the use of a detailed utility-operations simulation model, SYSGEN, a set of assumptions concerning the operating characteristics of the photovoltaic power systems, and a matched data set of hourly loads and hourly solar insolation. There are a set of critical uncertainties associated with this analysis. The most significant of these is the total dollar requirements for the systems costs. The second critical uncertainty in this analysis is the rate of real escalation of capital costs of conventional generation equipment. Capacity costs are required in calculation of the worth of photovoltaic systems to the regional utilities. As little information is available on future capital costs, we have assumed that the capital costs available for new installations in 1976 fairly represent those anticipated over the nest decade and a half, i.e, that there will be no real escalation costs of capital. Again, these results and underlying assumptions are reported for ease in parametric analysis. The methodology employed in estimation of the value of photovoltaic power systems to central utilities is centered on the use of the utility operating simulation model, SYSGEN, developed at the MIT Energy Laboratory. SYSGEN is a production costing/reliability model that assumes a fixed generating capacity for the utility. The version of SYSGEN used in this analysis has been adapted to incorporate photovoltaic, weather-dependant, generation sources into an operating system of a traditional utility. The SYSGEN model 15 was applied to four of the six synthetic utilities developed by EPRI.4 The synthetic utilities represent scaled, simplified utilities developed by EPRI for the purpose of general systems analysis. These synthetic utilities can be modified for use in any given region within the United States without the need to gather specific operating characteristics for individual utilities. Because of the nature of photovoltaic power systems, it is desirable to analyze their effectiveness within a specific utility power system by detailed hourly simulations which match the electrical demand for such services as air conditioning with the provision or availability of electric power from the photovoltaic arrays. As a result, our work has matched data for loads on specific utilities with solar insolation data taken from the SOLMET data series. The load data was scaled to match the generating capacity and operating characterisitics of the synthetic utilities. Load data was provided to the MIT Energy Laboratory by four utilities: Omaha PUblic Power District, Florida Power and Light, Arizona Public Service, and Boston Edison, whose assistance in this effort is gratefully acknowledged. The capital stock of each of the synthetic utilities represents roughly seven thousand megawatts of installed capacity. For each region, a specific synthetic utility was chosen for analysis and for load matching; the synthetic utility matched as nearly as possible the regional generating mix within which each case study utility was located. It should be pointed out that because the purpose of this analysis was regional estimation, not estimation of the operating characteristics of a specific utility, system generating characteristics were matched to regional characteristics rather than those of a specific utility, This was done more nearly to reflect an average or regional total system worth, It is felt that the results of this analysis are more valid across the region than would be the results of detailed analyses of only specific utilities. The modeling process begins with the running of SYSGEN for a specific load as a base case. The loss-of-load probability generated in this run is held constant for all future runs with photovoltaic systems in place, The second step is to install a fixed capacity of photovoltaic power systems in the utility structure, re-run SYSGEN, and balance the loss-of-load probability resulting from the introduction of the photovoltaic power systems. The result is a decrease in the requirement for conventional generating capacity and a decrease in use of conventional fuels. Fuel savings are calculated directly by SYSGEN. Capacity savings are calculated from the final reliability curve produced by SYSGEN, using a variation of the standard methodology for computing the effective load carrying capability of a plant. The effective load carrying capability of the photovoltaic plants represents the amount of generation that the photovoltaics can replace without changing the reliability of the system. The value of a megawatt saved is then evaluated parametrically as a function of four types of conventional capacity: oil, coal, nuclear, or a weighted average of all systems. While it is possible to calculate the precise capacity savings given the simulation run, the sensitivity of the results to specific values for capacity types was seen to be great enough to require that this be handled parametrically. 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The system load taken was that for Florida Power and Light for 1975; it was matched against Miami weather data for 1975. The nameplate capacity for the syste as a whole was 6,550 megawatts. As can be seen in Table 7, the dollars per watt peak of system operating costs decreased as additional capacity was added from 200 through 1200 megawatts. Photovoltaic generation additions represented an increase from roughly two percent of total capacity to twenty percent of name plate capacity. The effect of the addition of photovoltaic systems was primarily to decrease the required capacity of oil-fired intermediate generation through 800 megawatts of photovoltaics. At roughly 800 megawatts of installed capacity, the photovoltaic power systems became complementary with pumped hydro in the system, thereby decreasing other oi-fired plants and showing an increase in the overall value of the system. (See Figure 4.) The same pattern was seen at 1,000 and 1,200 megawatts of photovoltaic power systems, though here the value of the total system per peak watt was less than had been the case at 800 megawatts of installed capacity. Table 8 summarizes the worth calculations for an oil scenario for the Northeast region. In this scenario, photovoltaics replaces intermediate and peaking oil and other fossil systems. As was the case in the South region, at roughly 800 megawatts of installed photovoltaic systems, photovoltaics becomes complementary with pumped hydro and as a result there is an upward swing in the value of the photovoltaic system brought about primarily by a major increase in use of hydro and photovoltaics relative to oil-fired systems. This increase is quite striking both in operating cost savings and in capacity credit. The Southwest region synthetic utility chosen was Scenario B. This was run utilizing Arizona Public Service load data for 1975 and SOLMET Phoenix 1975 weather data. The nameplate capacity for the system was 10,700 megawatts. This is a typical structure for a southwest utility though less so for Arizona Public Service. The impact of photovoltaics on such a system is to replace initially the intermediate oil systems, some peaking combustion capacity, and some hydro. As shown in Table 9, the value of the photovoltaic power systems remains relatively even and high through the range of penetration levels. Photovoltiacs replace intermediate oil and conventional hydro to the point at which the competition with hydro ceases. Given that there is no operating advantage to replacing hydro, it is only when photovoltaics replace in the more expensive fuel systems such as coal and oil that one sees an increase in the value of photovoltaics. Table 10 summarizes the utility worth calculations for Omaha which has been used as a surrogate for the Northcentral region. As can be seen the worth to the utility is almost entirely in terms of fuel savings. A careful analysis of Omaha peak demand periods and potential power provided by the phtovoltaic systems showed little overlap between photovoltaic availability and the peak accounting for the extremely small capacitycredit. Table 11 summarizes the potential for total generating capacity in the UinitedStates to the year 1990. The table; contains the regional distribution uf installed capacity in 1975; it shows the total capacity projected to exist 21 .I0 ha I, - 10 _ 5- , OD 30 Figure 4 I _ 25 OVUIIIWOVi U n_ v .1' 20 ~X 15 Southeast ~ _ 10 -- North Cent ra I 5 I I I I II II 200 400 600 800 1000 1200 Installed Megawatts of Photovoltaics 22 Rest of System Cost 50¢/wp 5 _ 0 m Figure 5 30 /wp PhotovoIta ic Demand Uti I it ies 20 _ 18 _ 16 _ 14 _ a a) Q. c3 _ 10 _ 12 a) c 4- a) 0 20 40 80 60 Total Potential Megawatts 23 Demand Peak 100 in 1990 by Electric World in their 28th Annual Electrical Industry Forecast and the predicted level of new capacity additions in 1990. Using 1990 as a baseline for analysis of photovoltaic penetration, Figure 5 presents a composite of regional demand calculations at specific prices for photovoltaic power systems. The values on the y-axis of Figure 5 are ranged from $.30 to $.50 rest-of-systems cost, showing the sensitivity of the results to the assumptions made concerning other than photovoltaic power systems costs. Total demand ranges from 25,000 to 70,000 MW at module cost of 0 to $.70 per peak watt. In summary, the potential for photovoltaics penetration into the central power sector appears to be highly sensitive to the assumption one makes concerning the types of capacity that will be displaced in the future, the costs of that capacity and the non-array systems costs. V. Summary The simulation work carried on by the MIT Energy Laboratory has focused on measurement of the estimation of the worth of photovoltaic power systems to owners in the residential, commercial, and central power sectors. This analysis has focused on the benefits of load and weather-matching on an hourly basis throughout the year. The analysis has shown the value of residential systems to be greater than those of either school or central power systems. All analyses are highly sensitive to assumptions concerning the non-modular system costs. In addition, results are sensitive to fuel escalation, discount rate, and assumptions concerning future costs of alternative capital stocks. One significant result which emerges from this analysis is that while the potential for storage at the dispersal site appears minimal, centralized storage in the form of pumped hydro as a complement to photovoltaics appears to have a highpotential. Complementarity of these two potential sources requires additional analysis. 24 LO C. O S O CD C C') L C )C - LO N n I.C C. . CD.. "-, ..C) 4-) 0 CO-.) 00 In co CD CM CD cOco 04 U1o n~,i 0, a, U) ..- ' O" {cS 3> ) to0 o C4 O- o o . cI - - r - ,- +4-) 'rrc' -o '" 00 C 00 'C LF - 00 CI CC -- 0 CMOO L- U~ :E 4J co E~_ O U'~-U) ~- I-- -. ,;J. n~ ,~~- - _-4L u* 4 P- c 4-) C 0 e rl_ X-)Q C3 CO 44) )Coo D LOm C C * *o 4 *r(/-C-Doe-- c-Q' - C o = 40 F Co4 -QO, m C c 25 U) FOOTNOTES 1 Richard Tabors and Paul Carpenter. Methodology and Definition of Solar Photovoltaic Planning Regions, Massachusetts Institute of Technology Energy Laboratory. Technical Report Forthcoming. 2 jesse Tatum. "Photovoltaic/Hybrid Simulation Model for Grid Interconnected Residential Applications", April 1978, forthcoming. 3 U.S. Department of Commerce, Bureau of Census. Demographic Projections Of The United States, CRR P-24, No, 476, February 1972. 4 EPRI, Synthetic Electric Utility Systems for Evaluating Advanced Technologies EPRI EM-285 February 1977. 26 APPENDIX I Methodology for Calculation of Capacity Credit Values For Photovoltaic Central Power Applications The value of capacity replaced (effective capacity) for photovoltaic power systems used in Central Power Applications has been calculated using 1976 average cost of capital figures for small-scale plants (500 MW) taken from Electrical World. To equate the photovoltaic generation capacity to the actual quantity of megawatts replaced requires consideration of the forced outage rate of the conventional system as well. Capital costs were: $/KW* Forced Outage Rate** Cost Comparison ($/KW) Base/Intermediate Oil 212 .835 254 "All Stations" 275 .833 230 Coal 387 .835 463 Nuclear 450 .736 611 *Source: **Source: Electrical World, "20th Station Cost Survey," November 15, 1977. 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