Solar power on the rise as technology gets cheaper

Photo / Thinkstock

Even if it is cloudy today the thin solar panels on Hubbard Foods' Auckland factory are helping put the morning cereal on the table.

In the United States, a solar station built by Meridian Energy is generating power for the Californian state grid, and the state-owned enterprise is also building a solar station in Tonga.

And throughout New Zealand homeowners are signing up in growing numbers to generate their own power from the sun.

As the price of the technology falls - it has halved in the past two years - it's becoming more popular.

It is estimated solar units in New Zealand generate up to 4MW to 5MW, a tiny fraction of total generation over summer of about 4500MW a day, but it is growing in small steps.

One domestic installer said some of the growing number of householders opting to complement or in a few cases replace grid-sourced power had cited concerns about rising power prices following the part-sale of SOEs.

In June 2010 Hubbard and lines company Vector teamed up to create the largest thin-film solar photovoltaic (PV) installation on a commercial business in New Zealand.

A total of 160 PV panels covering 227sq m on the roof of the Hubbard building in Mangere produce power for warehouse lighting.

It was hoped the panels would generate 29,000kW/h of electricity a year - the equivalent of the power used to produce 169,000 packets of cereal, or the amount of electricity consumed by 3.5 homes over the same time.

The results of the trial have been encouraging. Because of the thin-film technology in these solar PV panels, electricity is generated even in low light conditions on cloudy days.

Although the actual amount of electricity generated has been slightly lower than projected, Vector says it has been an opportunity to refine system tools and project estimates for use on future installations.

During the past 18 months it has generated more than $8000 of power.

In certain applications, like Department of Conservation diesel conversion projects on Great Barrier Island and Raoul Island, solar PV is considered mainstream and economic, compared with the price and transport of diesel fuel.

However, on a purely substitutable, economic basis, mainstream solar could be a number of years off.

A key point to remember is that the reports of high levels of solar solutions adopted internationally are driven by massive subsidies and feed-in tariffs, which are not available in New Zealand.

It was subsidies and guaranteed off-take of power that attracted Meridian to Mendota in California's Central Valley.

In 2009 it bought a local company, Cleantech America, and built a 5MW solar plant that has a 20-year deal with Pacific Gas & Electric to buy power.

The US$25 million cost of the plant, the first solar station to be connected to the grid in California, got a 30 per cent federal government subsidy as part of the Obama Administration's renewable energy push.

Since commissioning about 18 months ago, it has run at capacity for 24 per cent of the time. In comparison, New Zealand windfarms can run at capacity for 40 per cent of the time.

"The great thing about solar is that it's quite predictable ... We're getting pretty much what we expected to see," said Meridian's corporate ventures manager, Peter Apperley.

The company monitors the California plant from its Wellington headquarters.

"We've got a screen where we can see it. On a summer's day it gets a little bit boring."

Meridian is also building and will initially run a 1MW solar station in Tonga that will provide about 4 per cent of the kingdom's annual load, and between 10 per cent and 25 per cent of daily peak demand.

Apperley said utility-scale solar generation in New Zealand was some way off, and more likely to be located in remote northern communities.

"We think solar will have a part to play. In the near term it will be [small-scale] rooftop PV because the cost of land is too high," he said.

"In 10 years there could be smaller-scale solar farms built, especially where there are supply constraints."

On the outskirts of Warkworth, Chip Babbott has spent about $60,000 installing 27 panels on an outbuilding that, during summer, provides 75 per cent of power for his large family home. It drops to about 50 per cent in winter.

The mechanical engineer chose solar because he was worried about the threat to supply and the rising cost of power. He has calculated it will take about 18 years to recover the initial outlay.

"Some people laugh and say I've blown $60,000, but that's what you can spend on a car. I've got secure power."

Babbott is able to sell excess power back into the grid.

He is now building an electric car by dropping an electric motor into an old Toyota, which he hopes can be fuelled from excess power he generates during the day.

His solar setup comes from What Power Crisis, a South Auckland company that says it is experiencing growing demand for its solar PV modules on rooftops and, in some instances, on ground-mounted frames.

Business development manager Henry Cassin said the company had installed close to 200 systems during the past two years. It had hit its 12-month sales target within the past six months.

Many domestic installations, usually used with a wetback hot-water-heating system, could be done for less than $10,000, excluding GST. Most customers were worried about rising power prices.

"It's very much flavour of the month," Cassin said, with the planned partial sell-off of state power companies one reason for demand.

Energy Efficiency and Conservation Authority chief executive Mike Underhill said the cost of solar PV panels had been decreasing worldwide for many years, thanks to economies of scale and improved manufacturing processes.

"Currently, because of a situation of oversupply of PV panels, prices are reduced even further than would otherwise be the case."

This is because of growth in PV manufacturing increasing faster than demand, and depressed demand for PV in markets such as Australia because of the recession.

Suppliers are looking to new markets, and are offering low PV prices in New Zealand.

At an equivalent unit cost for PVof about 26c/kWh, solar is approaching the retail electricity tariff.

Underhill said homeowners considering installing a PV system in order to feed electricity back into the grid for ongoing income should bear in mind that opinions varied on what the tariff should be, and that tariffs on offer now might change in the future.

"Some electricity retailers pay PV owners more than the nominal 8c/kWh, even as much as the full retail tariff, but this may not continue as more and more hobbyists install PV on their homes. It is possible that the price paid for home-generated electricity may fall to about 8c/kWh."

In this eventuality, an investment in PV would make financial sense mainly for those who would use the electricity themselves rather than feeding it back into the grid for payment.

The solar solution

* Solar panels, also known as solar modules, photovoltaic modules or photovoltaic panels, are a packaged, connected assembly of solar cells, also known as photovoltaic cells.

* PV cells turn sunlight into electricity by an energy conversion process.

* In most PV cells photons (light energy) hit the cells, exciting electrons in the atoms of a semi-conducting material.

* Silicon is the most commonly used semi-conductor.

* The energised electrons result in the generation of an electrical voltage - electrons flow producing direct-current (DC) electricity.