When Lovins wrote the above quote, the United States was facing an energy crisis. Four years earlier, oil prices had skyrocketed, lines for gasoline snaked around neighborhoods, gasoline threatened to top a dollar a gallon, and OPEC held the nation's jugular. Lovins argued passionately for a focus on renewable energy as opposed to a continued reliance on foreign oil and nuclear power. During this time, a fledgling solar industry tested its wings with primitive photovoltaics, passive solar-heated houses, and community-college classes teaching homeowners how to build solar panels for hot-water heaters.

Fast-forward a quarter of a century. Oil prices skyrocket, the price for gasoline blasts past the $2/gal. mark, and for the third time in 40 years, the East Coast plunges into a massive blackout that leaves the largest number of people in history literally in the dark. Suddenly politicians describe the electrical generation and distribution system as "third world" and debate about energy policy, reliable electrical service, and reliance on foreign oil. It all sounds like déjà vu.

But unlike a quarter of a century ago, the solar industry has matured. In 1977, the price for a watt of solar electricity was estimated at $16 (Lovins, Soft Energy Paths, p 143). But by 2003, with continuing research and development, that price has cascaded downward like a rolling blackout to an affordable $7 per installed watt before rebates and tax credits—factor those into the equation, and the price might drop to $2/W. In addition, the technology has improved the efficiency and reliability of the systems to the point that 25-year warranties are available. Like whiskey and wine, some things do get better with age.

Rooftop Generating Station
Rising electricity prices at the Van Nuys, CA, headquarters of Energy and Fueling Systems (EFS, formerly AESE) became the driving factor for the company to install a 65-kW solar generating station. "We decided to go into the solar business simply by looking at our bill," says Guido Zemgals, resident architect with the firm. "It was really horrendous because there are a lot of computers and air conditioning."

The 40,000-ft.2 office complex houses up to 120 staff members who are involved in design development, construction, and corporate operations. The firm began 10 years ago, specializing first in environmental cleanups of industrial sites, then expanding into the design and development of large retail fueling stations, and now specializing in the design, development, and construction of liquefied- and compressed-natural-gas fueling stations.
The idea of using solar photovoltaics meshed well with the company's environmental philosophy, and the opportunity to reduce the company's electricity costs, coupled with attractive rebates from both the Los Angeles Department of Water and Power and Southern California Gas Company, pushed the project into gear. "We looked at the partial rebates and tax benefits and decided that if we did the installation and heavy-electrical design, it would be a very good deal," says Zemgals.

EFS turned to Shell Solar Industries in Camarillo, CA, for the engineering and purchase of the photovoltaic panels, inverters, and other hardware necessary to convert the direct-current (DC) output to alternate current (AC). To determine the appropriate size of the system, Zemgals assessed the building's electrical demand, factoring in variability due to personnel fluctuations within the building. "The system we installed is about 150,000 kilowatts a year," he states. "That's in DC, and system peak capacity is 72.9 kilohertz AC. That's at the peak in the hot summer days. Part of the electricity from the solar system turns the meter backward over the weekends, so when we're not using electricity, we are selling it back to the power grid."

Since the system was placed in operation in 2002, Zemgals estimates the company has experienced a 29% reduction in its electrical costs. "It turned out to be a very effective system, and I think it will be paid off in a little over two years."

Planning, Financing
Deciding whether a solar photovoltaic system is appropriate for your particular application begins with a site assessment. "The first thing we do is a site survey to make sure that the site can accommodate it," says Mark Cortez, director of marketing for Shell Solar Industries. "It's not often, but maybe one out of 10 folks that we visit doesn't have the site or facility to accommodate solar. The first thing we do is make sure that there is enough roof space and that structurally it could be done. That's always a big deal—you have to make sure that when you put solar on your roof, the structure supporting it is going to be able to handle it."

Sizing of the system is the next step. "The one big factor we would want from you would be your electric bill," says Cortez. "We would want to look at your usage on a monthly basis and see exactly how solar would integrate into your overall system and be able to calculate what gains you would be able to get. Your money savings is always going to depend on where you're at in the world, your usage, and the size and orientation of the array that we are able to put on your building."

EFS's solar system consists of 7,200 ft.2 of photovoltaic arrays, positioned toward the southern sky at a 15f angle. "The photovoltaic surface area is suspended above the roof so that we can access the roof for repairs," says Zemgals. "It is tilted about 15° toward south, which is the optimal position for the place we are in—a different latitude, you would have a different angle."

Once the site has been assessed and electrical usage has been reviewed, a detailed financial and performance analysis is performed. This analysis will also take into consideration utility-based rebates, tax credits, and other incentives. "California is really leading the charge," states Cortez. He estimates that the cost for an installed watt of solar electricity ranges from $6 to $9, depending on the type of installation and location. Direct rebates from the local utilities can reduce the out-of-pocket cost significantly. For example, Southern California Edison offers a $4.50/W rebate. "That's a check that you would actually get in the mail," says Cortez. "That's the first one."

A federal tax credit on 10% of the remaining balance after the rebates and a state energy tax credit of 15% are also available. "Because this is capital equipment that is an energy-producing type, a new law allows you to greatly accelerate depreciation in the first couple of years," states Cortez. "We will typically say that you could get up to 75% of your money back in one form or another. Through tax benefits and depreciation allowances, a system that might have a sticker price of a million bucks could come out netting a company $250,000. That's not uncommon."

Since many of the rebate programs experience limited budgeting and vary from provider to provider, it's especially important to talk with your local electric company about its particular programs before committing to any kind of investment. In addition, tax credits and depreciation strategies should be reviewed by a qualified tax consultant in order to ensure that these approaches will work in your situation.

Putting the System Together
One of the challenges EFS faced in putting together its solar system was that the Los Angeles Department of Water and Power (DWP) required that the solar panels be manufactured within Los Angeles County. "The rebate that DWP was offering was 50%, but the firm had to generate the panels here in the county," recalls Zemgals. "We looked around and there are quite a few people who do manufacture panels, but the best at the time were Shell Solar. They're not the cheapest, but they are good-quality panels with a 25-year warranty."

Another challenge was to get the designed system through the permitting process. "It had to be permitted by three different groups in the city of Los Angeles," says Zemgals. "They had never seen one, so every inspector was up here on our roof at one time or another. The first was from [DWP's] solar panel group, which essentially instigated this program and was interested in getting it done and was supportive. The second group was the city's building inspectors that dealt with safety. The third group was the electrical department, which was interested in getting its fair share for the electricity it sells and [making sure] the meters were tied in and operating in a proper manner."

EFS's system is tied into the electrical grid and uses and generates electricity at various times of the day. Of particular concern to the DWP is that the electricity that EFS generates meets the same standards and power curves. "The normal meter works only one way," states Zemgals. "We had to replace that meter with a meter that turns both ways, so when we are generating electricity and selling it back, all that happens is that the meter turns the other way. We are essentially selling it back to [DWP], so they [DWP] had to have special systems that make it work, and it had to be clear to all their people how it functions."

Because the system both generates and receives power, special cut-off systems had to be installed to protect utility workers from shocks from electricity flowing from the other side of the line in the event of a grid outage. "When you have normal electricity, you have to shut it off in one place in order to deactivate it and work on it," says Zemgals. "When you have solar, you have power coming from both sides so every piece of equipment that you work on, you have to deactivate it at two locations. It's a little more complex than normal electrical systems, but it's fully automatic."

The solar system consists of 140 panels mounted in five rows along the roof, with the number of panels per row varying based on other equipment and accessibility needs. The panels are connected in series and generate a peak output of 72.9 kWh at approximately 800 V DC. The power is funneled to two collection points off the array. The collectors go into a disconnect system that allows the arrays to be disconnected from the main system. "DC is pretty serious electricity," states Zemgals. "If you touch AC, it will pulsate and shock and even kill you, but it's a pulsating current. If DC grabs hold of you, that's it—you become part of the system."

The system then feeds into two inverters that convert DC to AC. "They're fairly sophisticated machines," states Zemgals. "For instance, if there is a power failure, it shuts off the solar system automatically. When the system power comes back on, it turns back on five minutes later and makes sure it reads the cycles on the outside power grid and matches the cycle that comes from the solar system to that so that [it is] in phase. In other words, you are not giving dirty electricity or creating some other wave form. From the inverter, it goes into two, two-way transformers that can work in both directions and convert the AC that comes out of there, which is a different voltage, into the 120-volt AC that we use in the building."

One of the advantages Zemgals sees with the generation of solar electricity is that peak generation is occurring at approximately the same time that peak-demand rates are in effect. "We use electricity like many other people during the peak hours," he says. "Metering is set up in such a way that you pay a premium during the peak hours when the day is hottest and you're using the most air conditioning and machinery. At nighttime, when there is no input from the solar system, the rates are fairly low. So we are getting the benefit at the peak-hour period, which is the most expensive."

EFS's system has been in place for two years, and Zemgals is pleased with the low maintenance. "After the system is in place, really the only concern is keeping the panels as dust-free as possible so that they work at their optimum. The only really unfortunate thing is that we have a city paving yard next door, and in that process they generate a lot of dust." Zemgals has considered installing a wash-down system that could be activated more frequently in order to reduce this dust, but as of yet he hasn't installed it. "We're trying to talk the city into going somewhere else, but they are not too interested," he adds.

A Bright Future
The renewed debate about decentralization of electrical generation operations has taken on new urgency, and solar photovoltaics appear to be poised to provide some of the answers within this debate. With the centralized grid's demonstrated vulnerability to both infrastructure failure and terrorist threats, the lack of funding to rebuild and expand the generation and distribution systems, and the rising cost of electricity, solar photovoltaics offer a pathway toward security and sustainability.

"It's very clear that it's relatively very inexpensive energy compared to any other source," observes Zemgals. He sees incorporating solar photovoltaics into the design and construction of new buildings becoming a trend in the future. "We just stuck them on top, and that's what we do now. But many architects are beginning to integrate the panels as part of the building surfaces, whether it's in the roof or the walls. Some of the panels may not be as efficient as the optimal angle, but they still are providing a lot of power to high-rise buildings or buildings with large roofs. You can design them in such a way that they become part of the building, and they are cheaper to install simply because they are designed as part of the roof or wall system."

Zemgals cautions that solar photovoltaics can supply only part of the total energy usage of a building. "Don't expect to get 100% to cover the entire power load that you need. There's nighttime when you need lighting, and you have to store electricity in batteries. That's not very efficient, and it's also an expensive way of doing it." Recently, Zemgals proposed a design for providing 100% of the electrical needs for a customer's design center, only to determine it was not feasible. "[Solar] is just one of the things that augments your peak-hour power demand," he states.

"The solar industries grow at about 20% per year," states Cortez. "That's in total production and volume. The costs of solar systems have come down easily 100% in the past five to 10 years. So the costs continue to go down, and the rebate environments are definitely doing what they are supposed to, which is provide seed capital for markets, encourage manufacturers to come into these markets, and encourage competition. Competition is good for the industry because we are encouraged to add features; squeeze costs out of the product. The end result is a cheaper and better, more reliable product and more choices for the consumer, which strengthens the industry."

LYNN MERRIL is director of public services for the City of San Bernardino, CA.

DE - Nov/Dec 2003