New Studies Find Significant Declines in Price of Rooftop and Utility-Scale Solar; Onerous Local Regulatory Processes Can Impact System Prices

Allan Chen (media contact): (510) 486-4210, a_chen@lbl.gov

Mark Bolinger (technical contact): (603) 795-4937, MABolinger@lbl.gov

Galen Barbose (technical contact): (510) 495-2593, GLBarbose@lbl.gov

Ryan Wiser (technical contact): (510) 486-5474, RHWiser@lbl.gov

Berkeley, CA — The price of solar energy in the United States continues to fall substantially, according to the latest editions of two annual reports produced by the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab)

A third Berkeley Lab report, written in collaboration with researchers at Yale University, the University of Texas at Austin and the U.S. Department of Energy (DOE), shows that local permitting and other regulatory procedures can significantly impact residential photovoltaic (PV) prices.

According to the second edition of the Utility-Scale Solar report, larger utility-scale solar projects in the United States have made great strides in delivering competitively priced renewable electricity in recent years.

“The price of electricity sold to utilities under long term contracts from large-scale solar power projects has fallen by more than 70% since 2008, to just $50/MWh on average within a sample of contracts signed in 2013 or 2014 and concentrated among projects located in the southwestern United States,” explains Mark Bolinger of Berkeley Lab, one of the report’s authors.

Meanwhile, the average, up-front installed price of utility-scale PV projects dropped by more than one-third since the 2007-2009 period, and average project-level performance has also increased recently.

The report tracks data on installed project costs or prices, operating costs, capacity factors, and power purchase agreement prices. It focuses on ground-mounted solar projects larger than 5 MW in size, and covers both PV and concentrating solar power.

“With the growth in this segment of the solar market in recent years, we are now able to systematically review actual market data to directly observe what large-scale solar projects cost to build, how they are performing, and at what price they are selling electricity,” notes report co-author Samantha Weaver.

According to the latest edition of Tracking the Sun, an annual PV cost tracking report produced by Berkeley Lab, installed prices for residential and commercial PV systems completed in 2013 fell by roughly $0.70 per watt (W) or 12 to 15 percent from the prior year.

“This marked the fourth consecutive year of significant price reductions for residential and commercial systems in the U.S.,” explains Galen Barbose, one of the report’s authors. Within the first six months of 2014, prices for such PV systems in many of the largest state markets have continued on their downward trajectory.

The continued decline in PV system pricing is especially noteworthy given the relatively steady price of PV modules since 2012. In recent years, reductions in the installed price of PV systems have been driven largely by the falling price of PV modules, but that dynamic appears to be shifting.  In particular, the report points to the increasing importance of reductions in soft costs – which include such things as marketing and customer acquisition, system design, installation labor, and the various costs associated with permitting and inspections.

As module prices have fallen, industry and policymakers have increasingly targeted soft costs for further reductions. As Berkeley Lab’s Naïm Darghouth, another of the report’s authors, notes, “The fact that system prices have continued to fall, despite the flattening of module prices, suggests that the various initiatives targeting soft costs are beginning to bear fruit.”

The two Berkeley Lab cost-tracking reports released today also highlight the wide variability in PV system pricing, detailing the installed price differences that exist across states and across various types of PV applications and system configurations.  For example, roughly 20 percent of all residential systems installed in 2013 were priced at or below $3.90/W, while an equal proportion was above $5.60/W.

Based on a third Berkeley Lab report released today, How Much Do Local Regulations Matter?, some of this variation in residential PV pricing is driven by differences in local permitting and other regulatory procedures.

In particular, based on data from Vote Solar and Berkeley Lab, variations in permitting among cities can drive differences in average residential PV prices of as much as $0.18/W, or $900 for a typical residential PV installation. Based on data from DOE, meanwhile, variations in not only permitting but also a wide range of other local procedures (interconnection, planning and zoning, net metering and financing) can drive even-larger PV price differences among cities: two different statistical models estimate maximum city-level average price differences of $0.64/W and $0.93/W, or approximately $3,000 for a typical PV system.

“A variety of efforts are underway to make local procedures less onerous, and more conducive to solar market growth,” explains Ryan Wiser of Berkeley Lab. “These results highlight the magnitude of PV price reductions that might be possible through streamlining burdensome local regulatory procedures.

The three reports, along with related summary slide decks, two-page fact sheets and data files (as applicable), are available for download at:  http://emp.lbl.gov/reports/re. Upcoming webinars on these reports will be announced in the near future.

This research was supported by funding from the U.S. Department of Energy SunShot Initiative. The SunShot Initiative is a collaborative national effort that aggressively drives innovation to make solar energy fully cost-competitive with traditional energy sources before the end of the decade. Through SunShot, DOE supports efforts by private companies, universities, and national laboratories to drive down the cost of solar electricity to $0.06 per kilowatt-hour. Learn more at energy.gov/sunshot.

Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 13 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science. For more, visit www.lbl.gov.  DOE’s Office of Science is the single largest supporter of basic research in the physical sciences in the United States, and is working to address some of the most pressing challenges of our time.  For more information, please visit science.energy.gov.

Berkeley Lab Develops Kit to Help HVAC Contractors Bring Energy Management to Small Commercial Buildings

In the commercial buildings sector, there is no shortage of opportunities to improve building performance and energy efficiency. According to U.S. Energy Information Administration statistics from the Commercial Buildings Energy Consumption Survey, 95 percent of commercial buildings in the United States are 50,000 square feet or less. These small buildings account for 44 percent of all commercial buildings energy use.

Because large commercial buildings and multi-building facilities are more likely to have dedicated energy or facilities managers, large buildings are most likely to benefit from the considerable growth in energy management systems, and commissioning and building energy performance services—the industry that has grown up around improving both the bottom line of the energy bill, and the operations and comfort of commercial-sector facilities. However small buildings are unlikely to have dedicated building operations staff, who know how to take advantage of these services. The average energy bill of a small commercial building is about $23,000 annually. Often, the decision to implement energy saving measures is based on simple payback period: if energy savings are 10 percent, the budget for energy efficiency services at these sites may only be $2,000-5,000.

Now, scientists at the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) have developed a package of simple analytical steps—and a strategy—designed to bring better energy management and efficiency improvements by way of the service providers who are already taking care of these buildings: the HVAC contractors.

The Energy Management Package (EMP), developed with the help of contractors and small building owners, is now available for free at this website. The EMP can help HVAC contractors expand the business they do with small building owners by providing a simple step-by-step guide to provide basic energy management services. The selling point to small commercial building owners is lower energy costs, with minimal financial investment. The package focuses on offices, retail, food service and food sales buildings, where large opportunities for low-cost energy savings exist. The project targets three to five percent energy savings per building through low-and no-cost measures.

 

Scoping study reveals needs

Erin Hult, Jessica Granderson and Paul Mathew of Berkeley Lab’s Environmental Energy Technologies Division (EETD) conducted R&D for the Commercial Buildings Integration Program in the Department of Energy’s Building Technology Office to develop a better approach to bringing energy management into small commercial buildings. They began by listening to the voices of those involved in this market segment for a scoping study. They talked with contractors, utility energy efficiency program managers and vendors of energy information systems (EIS), the technology used in commercial buildings that helps managers understand real-time consumption patterns and monitor building energy use.

“We found that while some small building owners want to reduce their energy use, there are very few energy management tools and services specifically targeted to this market. Many of the existing tools are too complicated and expensive for small buildings,” says Hult.

The scoping study also discovered that there is no single tool that provides a simple, systematic way for anyone—contractors or knowledgeable owners—to complete the key energy analysis steps for small commercial buildings recommended by the research team. Owners need simple easy-to-understand information about their buildings that is actionable. “Two of the contractors we spoke to suggested that a one-page report for owners would be more effective than an online tool in motivating them to take action,” says Hult.

The research team considered several different approaches to creating a process for expanding energy management to small commercial buildings that would succeed in the marketplace, ranging from providing software for building owners to buy, to using utilities as the delivery channel. They settled on developing a package for HVAC contractors that shows them how to expand their existing services to the small commercial market to include energy management to improve whole-building energy performance.

“Contractors have existing relationships with small commercial customers,” says Hult. “They regularly visit these buildings to provide maintenance.” This keeps the transaction cost of providing energy management services low—something that emerged in the scoping study as a high priority.

 

Package emphasizes benchmarking, operational efficiency opportunities

With guidance from the study, the research team developed the Energy Management Package, and recruited a group of 16 contractors nationwide to participate in a demonstration study to determine how well the package worked, and what improvements were needed. Contractors have identified 24 demonstration sites totaling over 400,000 square feet. Participating contractors included AAA Air Care, Advanced Energy Efficiency, Air Comfort Corporation, Bay Air Systems, Burch Corporation, Cooper Oates Air Conditioning, Dynamic Air Services, Eric Kjelshus Energy HVAC, Energy Conservation Pros/Syntrol, Johnson AC, Gilbert Mechanical Contractors, Marina Mechanical, Mid MO Inspectors, Murphy & Miller Inc., Peterson Service Company and Zero Energy Associates. The demonstration program is ongoing; results should be available early in 2015.

“The package provides step-by-step guidance to contractors to minimize required training. For analyzing energy data, it leverages existing, free software tools. There are guidelines, worksheets, a simple reporting tool, and a business model for the user,” says Hult.

The process consists of five steps: benchmarking the energy use of the target building against similar buildings; analyzing from 3 to 12 months of hourly or sub-hourly electric interval data (two to three hours of contractor time); performing a walkthrough of the building (one hour); discussing findings with the owner; and checking results (every 6 to 12 months).

The package shows the user how to get the building’s total and monthly energy use from utility bill data, and how to use an existing online program such as ENERGY STAR Portfolio Manager to determine how well or poorly the building performs compared to others of its type. It explains how interval data can reveal spikes in a building’s energy usage that they can use to diagnose problems with equipment. The data can reveal opportunities to use temperature setpoints, overnight setbacks and other strategies to actively manage energy costs.

The EMP user is guided through the building walkthrough process by a checklist of what to look for, learning how to find simple low- or no-cost measures such as adjusting thermostat setpoints and lighting controls that can lower energy use with little impact on activities within the building.

The package’s focus on communicating with the customer helps demonstrate the bottom-line advantages of energy performance improvement, as well as other benefits such as better indoor environmental quality, and lower maintenance costs. Its model for incorporating energy management into a contractor’s business is designed to help make this a successful service offering that adds to the contractor’s business success. The model provides a detailed approach to calculating costs and benefits to the contractor and the customer.

Initial feedback from the demonstration indicates that contractors are deriving value from deploying this approach at small commercial buildings. Obtaining access to clients’ energy data can be a challenge for contractors, however, according to Hult. She believes that wider implementation of the Green Button data formatting standard and Green Button Connect data transfer protocol, in conjunction with utility smart meter deployment, are critical to enable the broad adoption of energy management strategies in the small commercial sector.

The free Energy Management Package is available now to all interested users at the website below. The project team plans to explore other channels for delivering the EMP to users, including the Architecture 2030 Small Commercial Toolkit (currently being developed with funding from DOE’s Building Technologies Office), and to work with building software vendors to better tailor their products to the small commercial sector.

—Allan Chen

Small Commercial Energy Management Package

http://eis.lbl.gov/smallcomm.html

 

New Study Finds that the Price of Wind Energy in the United States Is at an All-Time Low, and the Competitiveness of Wind Has Improved

Wind energy pricing is at an all-time low, according to a new report released by the U.S. Department of Energy and prepared by Lawrence Berkeley National Laboratory (Berkeley Lab). The prices offered by wind projects to utility purchasers averaged just $25/MWh for projects negotiating contracts in 2013, spurring demand for wind energy.

“Wind energy prices—particularly in the central United States— are at an all-time low, with utilities selecting wind as the low cost option,” Berkeley Lab Staff Scientist Ryan Wiser said. “This is especially notable because, enabled by technology advancements, wind projects have increasingly been built in lower wind speed areas.”

Key findings from the U.S. Department of Energy’s latest “Wind Technologies Market Report” include:

  • Wind is a credible source of new generation in the United States.  Though wind power additions slowed in 2013, with just 1.1 gigawatts (GW) added, wind power has comprised 33% of all new U.S. electric capacity additions since 2007. Wind power currently contributes more than 4% of the nation’s electricity supply, more than 12% of total electricity generation in nine states, and more than 25% in two states.
  • Turbine scaling is boosting wind project performance.   Since 1998-99, the average nameplate capacity of wind turbines installed in the United States has increased by 162% (to 1.87 MW in 2013), the average turbine hub height has increased by 45% (to 80 meters), and the average rotor diameter has increased by 103% (to 97 meters).  This substantial scaling has enabled wind project developers to economically build projects in lower wind-speed sites, and is driving capacity factors higher for projects located in given wind resource regimes. Moreover, turbines originally designed for lower wind speeds are now regularly employed in higher wind speed sites, further boosting expected capacity factors.
  • Low wind turbine pricing continues to push down installed project costs.  Wind turbine prices have fallen 20 to 40% from their highs back in 2008, and these declines are pushing project-level costs down.  Based on the small sample of 2013 wind projects, installed costs averaged $1,630/kW last year, down more than $600/kW from the apparent peak in 2009 and 2010.  Among a larger sample of projects currently under construction, average costs are $1,750/kW.

• Wind energy prices have reached all-time lows, improving the relative competitiveness of wind. Lower wind turbine prices and installed project costs, along with improvements in expected capacity factors, are enabling aggressive wind power pricing.  After topping out at nearly $70/MWh in 2009, the average levelized long-term price from wind power sales agreements signed in 2013 fell to around $25/MWh.  This level is lower than the previous lows set back in the 2000-2005 period, which is notable given that wind projects have increasingly been sited in lower wind-speed areas.  Wind energy prices are generally lowest in the central portion of the country. The continued decline in average wind prices, along with a bit of a rebound in wholesale power prices, put wind back at the bottom of the range of nationwide wholesale power prices in 2013.  Wind energy contracts executed in 2013 also compare very favorably to a range of projections of the fuel costs of gas-fired generation extending out through 2040.

• The manufacturing supply chain has experienced substantial growing pains in recent years, but a growing percentage of the equipment used in U.S. wind projects has been sourced domestically since 2006-2007. The profitability of turbine suppliers rebounded in 2013, after a number of years in decline. Five of the 10 turbine suppliers with the largest share of the U.S. market have one or more manufacturing facilities in the United States. Nonetheless, more domestic wind manufacturing facilities closed in 2013 than opened. Additionally, the entire wind energy sector employed 50,500 full-time workers in the United States at the end of 2013, a deep reduction from the 80,700 jobs reported for 2012.Despite these challenges,trade data show that a decreasing percentage of the equipment used in wind projects has been imported, when focusing on selected trade categories. When presented as a fraction of total equipment-related wind turbine costs, the combined import share of selected wind equipment tracked by trade codes (i.e., blades, towers, generators, gearboxes, and wind-powered generating sets) is estimated to have declined from nearly 80% in 2006–2007 to approximately 30% in 2012-2013; the overall import fraction is higher when considering equipment not tracked in wind-specific trade codes. Domestic content has increased and is high for blades, towers, and nacelle assembly; domestic content is considerably lower for much of the equipment internal to the nacelle.

  • Looking ahead, projections are for solid growth in 2014 and 2015, with uncertain prospects in 2016 and beyond.  The availability of federal incentives for wind projects that began construction at the end of 2013 has helped restart the domestic market, with significant new builds anticipated in 2014 and 2015. However, as noted by Mark Bolinger, Research Scientist at Berkeley Lab, “Projections for 2016 and beyond are much less certain. Despite the attractive price of wind energy, federal policy uncertainty—in concert with continued low natural gas prices and modest electricity demand growth — may put a damper on medium-term market growth.”

Berkeley Lab’s contributions to this report were funded by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.

Additional Information:

The full report (“2013 Wind Technologies Market Report”), a presentation slide deck that summarizes the report, and an Excel workbook that contains much of the data presented in the report, can all be downloaded from:

http://emp.lbl.gov/publications/2013-wind-technologies-market-report

The Department of Energy’s release on this study is available at:

http://energy.gov/articles/energy-department-reports-highlight-strength-us-wind-energy-industry

Ryan Wiser (510) 486-5474, RHWiser@lbl.gov (technical contact)

Mark Bolinger (603) 795-4937, MABolinger@lbl.gov (technical contact)

Optimizing Residential Ventilation with RIVEC

Tighter housing envelopes help homeowners maintain thermal comfort but also require continuous mechanical ventilation to maintain healthy indoor air quality. While that tighter envelope can reduce homeowners’ heating and cooling energy use and costs, the required mechanical ventilation and the need to condition air brought in from outside cuts into those savings.

Three maxims are key to designing a superior mechanical residential ventilation strategy: use minimal energy, avoid peak electricity costs, and minimize infiltration of outdoor pollutants. To ensure an economical ventilation system that provides healthy indoor air quality and occupant comfort under the residential ventilation rates recommended by the widely used ASHRAE 62.2 standard, all of these factors must be addressed. Energy recovery ventilators can help, but they can be expensive and installation can be complicated.

For years, Lawrence Berkeley National Laboratory (Berkeley Lab) researchers Iain Walker, Darryl Dickerhoff, and Max Sherman have focused their attention on the problem, to simplify the solutions and reduce costs. The result is the Residential Integrated Ventilation Controller (RIVEC)—a control algorithm that is incorporated into heating, ventilation, and air conditioning (HVAC) controls to optimize fan energy use, costs, and indoor air quality. This work has been funded by the U.S. Department of Energy (DOE) and the California Energy Commission’s Public Interest Energy Research Program (PIER).
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Researchers Will Advance Hybrid Energy Modeling in New Department of Energy-Funded Project 

The U.S. Department of Energy is funding research aimed at improving the accuracy of building energy simulation through an approach known as hybrid modeling.

“Traditional physics-based energy modeling for existing buildings relies on user inputs among which some are unknown or difficult to measure, such as air infiltration rate and interior thermal mass that can vary significantly by time and by buildings,” says Tianzhen Hong, a Computational Research Scientist in the Environmental Energy Technologies Division of Lawrence Berkeley National Laboratory (Berkeley Lab).

The inaccuracy of these inputs is a major reason for the uncertainty in building simulation models of energy use. In the newly funded research, Hong and team members will develop a new hybrid approach to energy modeling that will avoid using difficult-to-measure parameters. Instead, they will use the measured data of space temperature as new inputs, and reformulate the EnergyPlus model’s space heat balance equations to improve the accuracy of simulation results.

EnergyPlus is DOE’s flagship whole-building energy simulation engine. It takes a physical description of a building’s geometry, construction materials, HVAC systems, operations and control schemes, occupancy schedules, and prevailing weather conditions and calculates the energy and water used to maintain occupant thermal and visual comfort. The model is widely used by architects and engineers to design comfortable, energy-efficient buildings, and demonstrate buildings’ compliance with codes and standards. The research team will incorporate the new modeling algorithm into EnergyPlus by 2017.

Download EnergyPlus for free at:

www.energyplus.gov

 

 

New research assesses energy balance of large-scale photoelectrochemical hydrogen production

In the search for clean energy solutions to displace greenhouse gas emitting fossil fuels, few technological options are as alluring as directly producing hydrogen from sunlight. If hydrogen, the most abundant element in the universe, could be produced on earth economically and with a minimum overall environmental impact, it could provide energy to both stationary and transportation applications with very low overall carbon footprint and climate impact. For example, hydrogen could be the fuel input in fuel cells to generate electricity, or feedstock for producing liquid transportation fuels.

Today however, the most economical way to make hydrogen is by reforming fossil fuels such as natural gas—with the nearly same negative impact to the climate as direct combustion. Hydrogen production via electrolysis—splitting water into hydrogen and oxygen using electricity—can in principle use renewable electricity, but it is currently much more expensive.

Scientists are pursuing a promising pathway to generating large-scale amounts of hydrogen for clean energy production directly by splitting water using sunlight, a process called photoelectrochemical (PEC) production. Instead of splitting off the hydrogen from hydrocarbons and being left with carbon, which is typically oxidized and emitted into the atmosphere as carbon dioxide, photoelectrochemical production splits off hydrogen from water, leaving clean oxygen gas.  Researchers have accomplished PEC on a small scale in laboratories, but scaling up the process into hydrogen generating plants capable of supplying enough to meet the needs of industrial societies requires considerably more research and technology development.
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EETD Microgrids Researchers to Collaborate with MIT and IIT-Comillas University

Lawrence Berkeley National Laboratory (Berkeley Lab) announces the signature of a collaboration license with the Massachusetts Institute of Technology and IIT-Comillas University (Madrid) for the Utility of the Future Program. DER-CAM, software developed in the Microgrids Group at the Environmental Energy Technologies Division (EETD), will play a key-role in this project, which is part of the MIT Energy Initiative.

Greater utilization of local energy resources, increasing use of natural gas (NG), and integration of renewables (solar photovoltaic and wind) into electricity supply are prominent in contemporary discussions of energy policy both in the European Union and the U.S. The deployment of distributed generation (DG) and renewable energy sources is expected to grow in coming years, and significant impacts on the operation and planning of distribution grids and, more generally, the sustainability of energy systems, are expected.
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Department of Energy’s FLEXLAB Opens Test Beds to Drive Dramatic Increase In Building Efficiency

Berkeley, Calif. – July 10, 2014 – The world’s most advanced energy efficiency test bed for buildings is open for business, launched today by U.S. Department of Energy Deputy Secretary Daniel Poneman. DOE’s FLEXLAB at Lawrence Berkeley National Laboratory (Berkeley Lab) is already signing up companies determined to reduce their energy use by testing and deploying the most energy efficient technologies as integrated systems under real-world conditions. The facility includes a rotating test bed to track and test sun exposure impacts, and other high-tech features.

In addition to Deputy Secretary Poneman, University of California President Janet Napolitano, Genentech Vice President Carla Boragno, Webcor CEO Jes Pederson, and PG&E Vice President Laurie Giammona joined event host Berkeley Lab Director Paul Alivisatos to speak about the power and potential of this facility to help California, the nation and the world reduce energy use, curb greenhouse gas emissions and save money.

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Lignin’s role in reducing life-cycle carbon emissions explored in new research paper

Cellulosic biofuels are the focus of intense research aimed at developing transportation fuels that are significantly lower in carbon intensity than those derived from petroleum. Biofuels have the potential to reduce the impact of the transportation sector on the climate—cellulosic ethanol, by some estimates, may reduce the carbon emissions relative to gasoline by up to 80 percent. While researchers have developed technologies capable of converting many components of wood and other plant material into liquid fuels, lignin, a chemical in plants that gives their cells rigidity, has proven difficult to break down.

Current models of the refining process for biomass-to-transportation fuels assume that the lignin component is burned onsite to meet the plant’s process heat and power needs. Onsite combustion offsets some of the plant’s energy costs, and provides the plant with offset credits for greenhouse gas emissions.
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2014 ITRI-Rosenfeld Fellowship Winners Announced

Zhenhua Liu and Chinmayee Subban were recently announced as the winners of the 2014 ITRI-Rosenfeld Postdoctoral Fellowship. The fellowship honors the contributions of Arthur H. Rosenfeld, of Lawrence Berkeley National Laboratory’s Environmental Energy Technologies Division (EETD), for his work toward the advancement of energy efficiency on a global scale. The selection process includes scrutiny of the applications by a selection committee, presentations by the finalists, and panel interviews. The award enables the applicants to engage in innovative research that leads to new energy-efficiency technologies or policies, as well as the reduction of adverse energy-related environmental impacts. It is made possible through a gift from the Industrial Technology Research Institute of Taiwan (ITRI) and with EETD support.

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