The cost of solar is steadily dropping. By 2021, solar will likely be cheaper than coal in China, India, Mexico, the United Kingdom, and Brazil, according to Bloomberg New Energy Finance.
However, solar energy continues to confront regulatory headwinds. In the US, for example, President Trump recently enacted tariffs on imported solar panels, which could cause an industry slowdown.
For now, however, the increasingly attractive economics of solar energy seem to be outweighing the uncertainties.
To provide a better understanding of the industry, we’ve put together this explainer.
The solar industry is capital intensive, specialized, and encompasses everything from utility energy agreements to installing large-scale solar projects. Below we specify some of the most common — and often confusing — aspects of the industry.
Key Terms:
Upstream solar: Upstream solar describes the segment of the industry that produces solar products. This includes the research and development arms of major companies as well as their distribution arms. In 2016, end-to-end solar company First Solar reportedly passed $1B in R&D spending its production arm.
Historically, upstream solar has been capital intensive because of large manufacturing and installation costs. However, thanks to price wars across the globe, producing prices for solar have gone down drastically. Subsequently, upstream companies have become cheaper to operate.
Downstream solar: Downstream solar includes firms that install solar technologies, finance themand distribute the product to consumers. Including solar financing companies, solar monitoring companies, and those that maintain solar technologies at utilities. This part of solar is largely service-oriented and frequently less high-tech compared to upstream segment.
As the cost war for solar technology proceeds, many upstream companies have fought to remain profitable. On the other hand,downstream solar companies have flourished off the rising affordability of solar technologies.
Web metering: Net metering enables homeowners with solar panels to send extra energy they’ve produced to a grid where it could be saved. They could then pull energy from it when needed, or market the energy to others in their community who are also connected to the grid.
Utility companies pay the solar manufacturer retail cost for returning this energy to customers, which is often priced significantly greater than if these companies were to purchase this energy independently. Known as a Feed-in Tariff (FiT), they’re expected to pay back clients for any electricity that has been fed back into the grid but has gone unused. These policies are aimed at supporting solar uptake.
However, in order to maintain service reliable and consistent, non-solar customers also end up shouldering parts of the cost. These prices also include the expense of preparation, building, and maintaining the electrical grid. This funding model has generated controversy — many complain that despite not utilizing solar energy, they’re still required to opt in the system. It’s also put pressure on utility companies. If a substantial number of solar energy is created, utility companies must manage between paying high prices to buy back electricity and increasing costs for all of their customers.
As of 2017, 43 American states, such as Washington D.C., have coverages for net metering. One of the states that have no net metering policies set up are Texas and Alabama. The issue remains contentious in many states. As of November 15, 2017, the Rocky Mountain Power territory in the state of Utah stopped allowing retail-rate net metering.
Gross metering: Unlike web metering, which only transmits a certain percentage of energy to the grid, gross metering sends all of the solar energy produced at a house directly to a shared grid. From that point, residents pay for the energy that they take back from the grid, usually at a price that is lower than what they’ve sold it for.
While solar Feed-in Tariff prices for gross metering were formerly very high so as to promote the usage of solar energy, these numbers have dropped. Net metering’s installation, where utility businesses buy back electricity at high prices, has ended up being more profitable for people. In net metering, every solar energy-producing home theoretically acts as its own self-sufficient, independent electricity company, creating, using, and selling its own electricity.
Power purchase agreement (PPA): At a PPA, a solar company pays to install and maintain a solar system at a home or business. Rather than paying a utility, customers pay the company that develops, designs, and permits the solar energy system. These companies generally charge lower prices than a local utility’s retail rate.
Front of the meter: “Front of the meter” describes energy storage technology that is installed to operate with utilities and electrical grid operators to meet supply and need for the grid as well as maintain voltages.
Behind the meter: “Behind the meter” systems produce energy that is meant to be utilized in the home, workplace, or some other commercial facility. These are usually net-metered.
If needed, this energy is converted to electricity.
Passive solar systems: Passive solar systems use solar thermal energy to control a building’s temperature without the use of specific solar technology like solar panels.
1 method utilized by passive systems is direct gain, which describes the direct sunlight that enters a building via windows and is then saved in walls or floors. Thermal energy stored in walls or floors is known as a building’s thermal mass. It is the substance that catches sunlight throughout the day and releases it through the evening. Examples of the material include adobe, brick, concrete, and rock. Materials with higher density can store more heat.
The direct sun hitting the building is controlled by designing and angling walls, windows, and floors to better collect renewable energy. Depending on how much heat a building wants to keep, increasing or decreasing the region that windows occupy in a building is one way of controlling this guide sunlight, another is the way a window is placed.
These systems only start operating once a certain amount of energy has been built up. While they may reduce the total size of an energy bill, these systems are not full overhauls to solar power.
Historically, passive solar systems have been popular, with homes built out of rock and clay in order to retain heat and stay warm after dark.
Active solar systems: Active solar systems are solar thermal systems made up of gear that could adjust efficiency, store energy, and operate pumps and detectors. They convert the sun’s irradiance, or the sun’s rays, into electricity that then moves air or a liquid via a solar collector. Afterward they distribute heat through a building. These systems utilize comparatively tiny amounts of energy to harvest a great deal of heat.
This is the technology connected with solar panels.
The difference between the two types of energy is that solar uses sun directly or as a source of heat. On the flip side, photovoltaics convert sunlight to electricity. Without added options like storage or alternative electricity generation mechanics, solar photovoltaics only operate when the sun is shining, and which is why these systems of solar panels are increasingly paired together with additional electricity storage technology.
At its essence, photovoltaic energy is composed of photovoltaic cells, which absorb light to make an electrical charge.
Photovoltaic cells: Photovoltaic cells are the building blocks of panel-based solar systems. The cells are made up of thin layers of semi-conducting material, usually silicon. Light that’s absorbed by this semiconducting material generates an electrical charge. By using metal contacts, this charge is then conducted away as a direct present.
Source: Wikipedia
Solar module: When many photovoltaic (PV) cells have been assembled into a package, they form a module.
Array: Stacked modules are subsequently arranged as arrays. Arrays are set on roofs and will power everything from houses to complete grids that encourage utilities.
They are produced by rotating one silicon crystal as it’s slowly removed from liquid nitric oxide.
Monocrystalline-based cells have high efficiency rates and take up less space than other solar products, making them popular among consumers with limited space.
But, they are also the most expensive type of solar panel and are easily influenced by snow, dirt, and temperature shifts.
Polycrystalline cells are somewhat cheaper, simpler, and less wasteful to produce than monocrystalline cells. However, because these cells are structurally inconsistent at the places where cells match, they are not as efficient at harnessing solar energy. They’re ideal for solar installations without any constraints on space, and for those looking to save upfront installation costs.
Thin film (amorphous) PV cells: Thin film cells make up panels which are thinner and cheaper to buy than conventional solar panels. They have solar cells with mild absorbing layers which are nearly 350 times smaller than that of a regular silicon panel. They’re the lightest PV cell on the market which manage to retain durability. But they are not very efficient.
Solar thermophotovoltaic (TPV) cells: Solar TPV cells directly convert heat energy to electricity with the use of photons, the elementary particles that maintain mild. They contain multiple layers, one of which will be a carbon nanotube absorber that can take in a large portion of the sun’s spectrum and convert it into heat.
Even though PVs can only convert a small part of sun’s energy spectrum into electricity, TPVs have access to a far wider part of it, which makes them highly effective.
Multi-junction solar cells: These cells achieve some of the highest degrees of efficiency among solar cells, with one reaching a 44.5% increase rate of this energy that strikes it. They do so by stacking many layers of solar power into a solar cell. Each of these layers absorbs another section of the solar spectrum, so opening up more capacity.
By comparing the output of these panels to the voltage of the battery, the system figures out the perfect amount of power that a panel can place out to control the battery. Grid-tie systems (described below), which are grid-connected solar electric systems that produce their own electricity and save what’s left over to the utility grid, generally have built-in MPPT controls.
Parallel connections: Parallel connections, or circuits, happen when the positive terminals of all of the solar panels are linked and the negative terminals of all the solar panels are connected. The panel’s wires are then connected to a centralized wire that leads from the roofing. These types of circuits are usually utilised in small, basic systems.
Series connections: Series connections, or circuits, are created when the positive terminal of the first solar panel is connected to the negative terminal of the next one. Each panel is connected to the next in what is called a”series” All the different voltages of the panels are inserted together, but the amps which measure electrical current remain the same.
Many grid-connected houses utilize series relations for their panels. Because the present remains the exact same in string connections, they require fewer wires, which may bring down the cost and effort of installation. Series connections are frequently utilized in smaller systems alongside an MPPT controller.
Considering that MPPT controllers can convert high voltage solar panel outputs into lower voltage DC necessary to control batteries, they could connect to a system with high outputs and continue to charge batteries.
One downside of series links is that if one panel goes outside or is shaded in sun, it may diminish overall generation significantly.
Series-parallel connections: These use a combination of the two and are often used for larger systems in order to remain within amperage and voltage parameters.
Grid linked: Also called a grid-tied system, a grid-connected solar electrical system generates its own electricity and saves what is left over into the utility grid.
Off-grid system: An off-grid system, also known as a stand-alone system, generates energy and then stores it in batteries for later usage. Off-grid systems are not connected to the utility grid.
Hybrid system: Hybrid systems combine solar energy with other energy resources.
Peaking power plants: Also known as peakers, these power plants only run when there is high, or summit, need for electricity. These peak times can be at night, or perhaps during a natural disaster. Since energy is only taken occasionally from peakers, it is billed at a much greater speed.
Sometimes these plants have been paired with solar plants in order to allow clients to receive access to energy even after dark at a competitive cost.
Concentrator photovoltaics (CPV): CPV systems utilize carefully angled mirrors and lenses to direct sunlight into a single beam that is then reflected on the little surface of a solar cell. This allows for usage of little high-performance solar cells.
These cells may also be transferred throughout the day to angles which expose them to the greatest amount of sun. CPVs can only convert direct sun into energy, meaning they’re inefficient with the substantial part of sunlight that shines through the air.
CPVs function best in areas which have high levels of direct normal irradiance, such as the United States’ Sun Belt area and Southern Europe’s Golden Banana.
Concentrating solar power (CSP): Similarly to CPVs, CSP systems utilize mirrors and lenses to concentrate massive swaths of sun onto small areas. But once the concentrated sunlight is converted into heat, it’s used to power a heat engine, like a steam turbine, that is connected to a power generator.
Contrary to CPVs, these plants are made up of 2 parts: one which turns solar energy to heat and yet another that turns that heat into electricity. CSPs can create large amounts of solar energy, making them useful for utility-scale projects.
In September 2017, Dubai Electricity and Water Authority (DEWA) awarded China’s Shanghai Electric along with Saudi Arabia’s ACWA Power with the world’s largest single-site CSP job. The project is the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, which is situated about 50 kilometers south of Dubai.
GENERAL SOLAR TERMINOLOGY
Watt-hours or kilowatt-hours: Watt-hours (Wh), or because they’re generally known in cases with larger quantities of energy, kilowatt-hours (kWh) are used to measurethe total quantity of energy consumed or generated over time.
Capacity: Capacity typically refers to the best output of a solar system. This is measured in Watts (W) or kilowatts (kW). It can also refer to the magnitude of a system.
Load: This is the quantity of energy that an electrical device or unit uses at a given time.
Meter: This device can capture the production of photovoltaic (PV) energy at any time.
Solar irradiance: Solar irradiance is the pace at which solar energy falls on a surface. It’s measured by both unit and power place and quoted as w/m2 (g per square meter).
Grid parity: This is the moment where the cost of solar becomes lower than that of a conventional energy form, such as coal.
Growing efficiency: Conversion efficiency is the amount of available sun that can be transformed into electricity through photovoltaics.
Direct current (DC): The DC is a present that has a single directional flow of energy, beginning in one spot and ending in another. It is the present that forces a flashlight, for example. It’s also the type of current that’s generated by a solar panel.
Alternating current (AC): The AC switches direction periodically and is the kind of electric power which is used by offices and houses. It’s the present that’s released when you plug something to the outlet in your home, for example.
Rectifier: Rectifiers connect AC power to DC electricity. There are a few use cases for rectifiers, including channeling AC power into devices that use DC, like sensors or computers that control electricity generation.
Because DC is a more efficient movement of energy, rectifiers can be used to transfer solar energy from one geography to another. The solar energy is converted back into AC on the other end when it is delivered to clients .
Inverter: Used in grid-connected solar energy systems, the inverter converts direct current (DC) into alternating current (AC).
Micro-inverter: All these are smaller inverters connected to individual solar panels, so optimizing energy generation for each solar panel.
Incident light: Incident light is the light which shines onto a solar panel.
Angle of incidence: This is the angle between an object’s surface and also the management of sun. The maximum amount of energy is generated when the surface of a solar panel is exactly perpendicular to the direction of the sunlight.
Some technology help adjust the position of panels to match together with the angle of sunlight in the skynonetheless, various studies have revealed this not always the most efficient method of capturing solar energy, and that it is more economical to simply build more out solar panels.
Energy payback time: The amount of time required for an energy-producing system or device to create exactly the same quantity of energy which was required to manufacture it. Most solar electrical panels take 16-20 weeks to achieve this.
