CURRENT STATUS AND FUTURE TRENDS IN SOLAR

TECHNOLOGY – A COMPARATIVE STUDY OF TEXAS

AND CALIFORNIA
Prepared by

Somasundaram Essakiappan, Souhib Harb, Armando Solar-Schultz

Department of Electrical and Computer Engineering

for

ECE 689 - 605

Technical Report:

TR-2010-ECE689-Fall Group No. 1

December 10, 2010

Texas A&M University

College Station, Texas, 77843
EXECUTIVE SUMMARY

The United States is one of the leading countries in photovoltaic (PV) installations in the world.
California takes the lead as the state with most installed PV capacity, while Texas has only now
begun to increase its solar PV capacity. In this report a comparative study of Texas and
California in the adoption of photovoltaic (PV) for electricity generation is performed. In doing
this comparison, this report will analyze the technology employed, the economics behind
California’s relative success and Texas’ barriers to the growth of the PV industry. This study will
be divided into three chapters, PV technology, economic feasibility of PV technology, and the
barriers to the growth of PV industry in Texas.
In the technology part, different PV approaches will be presented. The reliability of the PV
system will be discussed, mainly the reliability of new PV approach “AC-Module PV system”.
Then, a potential application to employ it in Texas is presented. In the second chapter the
economic feasibility of PV in the current scenario is studied. The various incentives provided by
the government, the various companies competing in the PV industry and the job creation
potential of PV technology are analyzed. The third chapter demonstrates the barriers to growth of
PV penetration such as competition from other energy sources and lack of public awareness.
A comparative analysis is intended to help us learn from California’s experiences in the growth
of the PV technology. This report makes a recommendation to adopt a distributed-but-centralized
approach to facilitate the growth of PV industry. This will include of installation of AC-Module
PV system and development of medium power level utility PV power plants.

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TABLE OF CONTENTS
Executive Summary ........................................................................................................................ 2

1 PHOTOVOLTAIC TECHNOLOGY ..................................................................................... 5

1.1 Photovoltaic (PV) System Configurations ....................................................................... 5

1.1.1 Centralized PV System ............................................................................................. 5

1.1.2 String PV System ...................................................................................................... 6

1.1.3 AC-Module PV System ............................................................................................ 7

1.2 The cost of AC-Module PV system: ................................................................................ 8

1.3 Reliability of the AC-Module PV System........................................................................ 9

1.4 Capacitor Requirements ................................................................................................... 9

1.5 PV Energy Conversion Opportunities ............................................................................ 11

1.5.1 AC-Module PV System .......................................................................................... 11

1.5.2 PSE&G and Petra Solar Corporation ...................................................................... 11

1.5.3 Texas Potential ........................................................................................................ 12

2 ECONOMIC FEASIBILITY: ............................................................................................... 13

2.1 Many different incentives have been tried, but the most successful have been: ............ 13

2.1.1 Cash Rebates: .......................................................................................................... 14

2.1.2 Feed-in-Tariffs: ....................................................................................................... 15

2.1.3 Tax Cuts or Tax Breaks: ......................................................................................... 16

2.2 Right of Way Authorizations by the Bureau of Land Management .............................. 17

2.3 Jobs Creation .................................................................................................................. 17

2.4 The results of all these efforts: ....................................................................................... 19

3 BARRIERS TO THE GROWTH OF PHOTOVOLTAICS IN TEXAS .............................. 20

3.1 Economic Concerns........................................................................................................ 22

3.2 Existence of A Strong Conventional Fuels Industry ...................................................... 24

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 3.3 Competition from other renewable energy sources........................................................ 25

3.4 Public Awareness and Education ................................................................................... 27

3.5 Photovoltaic Power Solution: Location and Distribution of PV In California And Texas
30

4 CONCLUSION: .................................................................................................................... 32

5 REFERENCES ..................................................................................................................... 33

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1 PHOTOVOLTAIC TECHNOLOGY

The photovoltaic (PV) used in harvesting the solar energy and transferring it to electricity is
being continuously improved and still it is an active research topic. In this chapter, different PV
technologies that have been used will be presented. The PV system consists of two main parts,
the PV module and the power electronics stage (Inverter). The main goal of the power
electronics technology is to convert electrical power from one stage to another stage as efficient
as possible with a high level of intelligence. The PV system could be grid-connected or off grid
(stand-alone) PV system. Off-grid PV system mainly is used for mobile remote area applications.
This type of PV systems requires energy storage which leads to increase the cost and probably
affect the reliability of the system. On the other hand, almost 85% of the PV market is grid-
connected where the generated power is pumped to the grid directly. No need for a back up
energy storage. For grid-connected applications, there are several standards that must be
guaranteed by the power inversion stage in the PV system. The dc-injected currents, total
distortion harmonic (TDH), power factor, detection of islanding operation, and other factors all
of them are governed by standards like IEEE 1547[1], IEC 61727[2] and NEC 690[3]. These
standards aim to guarantee that the inverter injects high quality power to the grid Based on the
inverter used, different grid-connected PV configurations can be used.
1.1 Photovoltaic (PV) System Configurations

1.1.1 Centralized PV System

PV systems start with the centralized multi-string PV system, Figure 1. This system uses one
huge inverter. Each PV string consists of multi-PV panel connected in series where then group of
these strings are connected in parallel forming a high power centralized PV system. [4]
PV-Module

DC Grid

AC

Figure 1: Centralized PV-System.

Although no amplification stage is needed but the power losses in the string diodes and the
connection cables deteriorate the efficiency of this type. Furthermore, the mismatch between the

5
module’s tracking systems (maximum power point tracking MPPT) reduces the amount of the
captured power. Therefore, new PV system approaches were used [4].
1.1.2 String PV System

Figure 2 shows two PV system approaches, string and multi string respectively. To overcome the
losses due to the MPPT mismatch and the string diodes, each PV string is assigned its own
inverter. The amplification stage can be avoided if the number of the PV panel is enough to
generate the required DC input voltage, ≈ 190V for US system. Each PV-string has an MPPT
which leads to improve the overall efficiency by increasing the captured energy. However, the
cost of the inverter in this case increased due to the low power level.
PV-Module
DC Grid

AC
PV-Module
DC Grid

AC

Strings PV System
PV-Module
DC

DC

DC Grid

AC
PV-Module
DC

DC

Multi-String PV System

Figure 2: String PV and Multi-String PV Systems.

The other approach is the multi-string PV system. In this case, each PV-string is assigned a
DC/DC converter and all of them are connected in parallel to one inverter. Also here each string
has a MPPT and can be controlled individually. The inverter in this case has a higher power level
like in centralized case with higher efficiency. Yet, in both approaches, there is still some MPPT
mismatch between the modules of one PV string. Consequently, not all available energy from the
sun can be captured by the installed PV system. Hence, the AC-Module PV system becomes the
most efficient approach that guarantees 100% harvesting of the available power [4][5][6].

6
1.1.3 AC-Module PV System

The AC-module PV system is shown in Figure 3; where one DC/AC converter is attached to the
PV panel. The definition of the AC-module is given as:
“An AC-module is an electrical product and is the combination of a single module and a single
power electronic inverter that converts light into electrical alternating (AC) power when it is
connected in parallel to the network. The inverter is mounted on the rear side of the module or is
mounted on the support structure and connected to the module with a single point to point DC
cable. Protection functions for the AC side (e.g. voltage and frequency) are integrated in the
electronic control of the inverter.” [5].
PV-Module

DC Grid

AC

Figure 3: AC-Module PV System.

Figure 4 shows real implementation for the AC-Module PV system [7]. It is believed that this
approach will be the trend for the future PV industry. In this type of PV system, the MPPT
problem is completely solved since each PV module is connected to one inverter that has an
MPPT. The AC-Module PV system offers Plug-N-Play concept. This option gives a high order
of flexibility. This flexibility in the system makes it more common and easy to be used for end
user application. Moreover, the modularity provided by the AC-Module PV system makes the
future expansion of the whole system easier.

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 Figure 4: AC-Module PV System.

1.2 The cost of AC-Module PV system:

Figure 5 shows the cost of each component in the PV system. It is clear that assembling the
whole PV system costs two to three times of the module cost. This consists of the inverter,
cables, connectors, etc. Figure 6 shows that the inverter cost just 15% and 45% is due installation
and balance of system (BOS) [7].

Figure 5: The cost of PV system.

Using the AC-Module PV system will significantly reduce the cost. Primarily, it is meant to be
connected directly to the load (utility-grid). Hence, no cables and connectors are needed between

8
modules. Here, it worth to mention that in order to exploit (benefit) all advantage AC-Module
offers we have to use in the right applications. This will be discussed later in this chapter.

45%

40% PV modules
15%
Grid-tie inverter

Installation and BOS

Figure 6: PV system cost break-down.

1.3 Reliability of the AC-Module PV System

The micro inverters are mounted behind the panel, figure 4. Hence, the life-span of the inverter
should be comparable to that of the PV panel; which is more than 20 years. The micro inverter is
fully exposed to the weather conditions (e.g. high temperature), this will deteriorate its life-span.
The available (commercial) inverters have a life-span less than the PV panel; about 6-10 years.
Although, many researches have been done to solve this issue and find a new inverter with high
life-span, yet this problem is one of the biggest challenges that researchers trying to solve. The
reliability of the inverter is measured by two indices, mean time to first failure (MTFF) and mean
time between failures (MTBF). Inverters nowadays have 5 years for MTFF and 10 years for
MTBF. The most vulnerable parts in the inverter are the power switches and the power
decoupling capacitor; which have a strong negative impact on its life-span [4][8][9][10].
1.4 Capacitor Requirements

The output instantaneous power of a single-phase inverter is given by (1). This equation shows
that the power consists of two terms, the first term represents the average power and the second
one is a time varying AC power.
𝑃𝑃0 (𝑡𝑡) = 𝑉𝑉0 𝐼𝐼0 𝑠𝑠𝑠𝑠𝑠𝑠2 (𝜔𝜔0 𝑡𝑡) = 𝑃𝑃0_𝑎𝑎𝑎𝑎 + 𝑃𝑃0𝑎𝑎𝑎𝑎 (𝑡𝑡) (1)
Assuming lossless inversion process, the output power from the PV panel will be equal to the
average AC output power. The remaining time-varying term Po ac (t) will deteriorate the MPPT

9
performance; and as such, this pulsating power must be handled by an energy storage device
(power decoupling capacitor), whose size is determined by:
𝑃𝑃𝑖𝑖𝑖𝑖
𝐶𝐶𝐷𝐷 = (2)
𝑤𝑤0 𝑉𝑉𝐷𝐷𝐷𝐷 ∆𝑣𝑣�
where Pin is the rated power of PV panel, VDC is the DC level voltage across the decoupling
� is the maximum allowable peak-to-peak ripple, and ω0 is the line frequency.
capacitor, ∆v
Usually, a capacitor is connected in parallel with the PV panel, which results in a very large
capacitance since the allowable voltage ripple must be held to very low values (<1%) to realize
an efficient MPPT performance. For a typical PV-Module with the following ratings: Pin= 200W
and VC D (DC) = 35V and assuming a voltage ripple ∆VC D = 2V, the minimum value of the decoupling
capacitor is 7.6mF in order to achieve a 98% PV utilization factor [11]. Electrolytic capacitors
are typically used due to their large capacitance. However, the life-span of electrolytic capacitors
is relatively short compared with the life-span of the PV panel, namely 1000~7000 hours at
105oC operating temperature [12]. It was found in literature that the electrolytic capacitor is the
most vulnerable device in the inverter. Reducing the capacitance value can allow for other long
lifespan capacitor technologies to be used, e. g. film capacitors. Unlike the electrolytic capacitor,
the film capacitor said to have longer life-span (better reliability). The lifespan of different types
of capacitors varies greatly, e.g. electrolytic capacitors typically have a limited lifetime, namely
16,000 hours at 75oC operating temperature. Assuming that the PV system has an average
operation of 8 hours/day, then the actual life-span of the capacitor is less than six years. While
life-span of film capacitors is about 80,000 hours at the same operation temperature. Then, it will
last 27 years almost providing 8 hours/day operation [12]. Using film capacitors instead of
electrolytic ones seems to be a viable solution. In order to be able to use film capacitors as an
energy storage device in the inverter, the inverter topology must be modified to accommodate it
with no constrains on the voltage across its terminals. Many new topologies have been proposed
in literature where a film capacitor is used. Some researchers have explored various ways to
reduce the size of the required capacitance so as to allow for other longer life span capacitor
technologies, such as film capacitors, to be used [13-23]. These techniques have been presented in
[24].

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1.5 PV Energy Conversion Opportunities

The way the PV system is used has a strong impact on the overall system efficiency. It is not
enough to have high efficient inverter. Figure 5 shows that combining the PV system costs more
than the inverter. One way to reduce the installation cost we want to reduce as much as we can
the need for professional labors and try to use the existent infrastructures. AC-Module PV
system has a high potential to reduce the cost.
1.5.1 AC-Module PV System

As it was mentioned before, AC-Module PV system is meant to be connected directly to the load
in order to benefit from all the advantages it provides: Plug-N-Play: flexibility, Modularity and,
Safety. A potential application could be installing an AC-Module PV system on each electricity
pole, Figure 7, where it will be connected to the utility grid. It is a distributed approach with
mass production opportunity.

Figure 7: A potential Application for AC-Module PV System.

1.5.2 PSE&G and Petra Solar Corporation

The new jersey’s largest utility, PSE&G and PetraSolar will work together to generate 40 MW of
power through the PetraSolar’s solar system “SunWave” installed on up to 200,000 poles in New
Jersey. The new PV technology is comprised from the PV module and the inverter which is
called an AC PV-Module. In addition to DC/AC power conversion, the attached micro-inverter
is also responsible for a communication process. This communication helps the utility to improve
power quality and grid management. AT&T wireless network is used for this purpose. Figure 7
shows PSE&G employees installing Petra Solar system [25]. This cooperation between these
three companies where each one of them represents a specific technology (or industry) sector
makes the PV penetration (or employment) more feasible, cost effective, and attractive.

11
Exploiting the utility’s installed infrastructure reduces the installation cost. This kind of
cooperation will create a good number of jobs in all levels, from highly skilled labors to PhDs.

Figure 8: PSE&G installs the Petra Solar SunWaveTM system on a utility pole in New Jersey
[petrasolarwebsite].

1.5.3 Texas Potential

Fortunately, Texas has this AC-Module PV system technology. ExelTech is a company located
in Fort Worth, Texas that has this technology [26]. More than 100MW PV system could be
installed if 200W AC-Module PV system is installed on 10% of Texas electric poles. This
distributed PV system is very efficient for Texas. Since the high insolation levels areas are in
west Texas while most of the population is in the east. This means, installing PV systems at the
high insolation areas to increase the amount of harvested energy will result in an energy
transformation problem. The generated energy needs to be transferred to east part to be
consumed, which leads to high installation cost due to all required transmission lines as well as
high power losses. But, there are some barriers that prevent such projects to happen. These
barriers will be discussed in chapter 3.

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2 ECONOMIC FEASIBILITY:

The adoption of a new technology ultimately has to be price competitive with the technologies
that it is aimed to replace. For PV to become a real solution to the energy demand problem, it has
to be cost effective and guarantee a reasonable ROI (Return on Investment) to the companies and
individuals investing in this technology. The return on investment for the governments comes in
the form of jobs creation, positive environmental impacts and reduction in fossil fuel
dependence.
Every technology has to reach a point where the volume of products sold is such that the
manufacturing costs get reduced to their minimum (economies of scale [27]). In a concerted
effort to introduce the use of renewable energy sources for the benefit of our environment and to
avoid depleting the planet of its non-renewable reserves, governments all around the globe have
been implementing incentives to help renewable technologies to lift off. These incentives tend to
help during the initial stages of introduction to the market to make them reach the desired
volumes such that the “economies of scale” process brings the prices down to a point where they
can become competitive by themselves without the need for any more incentives.
California was an early adopter of many of these incentives for the installation of PV, at the
residential scale as well as at the industrial and utility-scale. Some European countries and Japan
have reached the point where they have already started to remove these incentives given the
impressive success they have had in the acceptance by the general public of these “green
technologies”.

2.1 Many different incentives have been tried, but the most successful have been:

I. Cash rebates for the installation of a complete PV system.

II. Feed-in-Tariffs
III. Tax cuts or tax breaks.
IV. Right of Way (ROW) authorizations by the Bureau of Land Management (BLM) for big
Photovoltaic projects. (California and other states /not Texas).

13
2.1.1 Cash Rebates:

Texas:
There are many different rebate programs both at the state level as well as at the local level, both
in California and Texas. The rebate basically applies to the installation of a full PV system with
different limits in power for the residential and non-residential units. The rebates are relatively
easy to obtain and in most cases the installer will help with the paperwork. For example we have
the Texas rebate program for the year 2010 [28].
• Residential: $2.25/W DC (STC)
• Non-residential: $1.75/W DC (STC)
Maximum Incentive:
• Residential: $22,500
• Non-Residential: $175,000

Total (2010): $14.6M

Through April 2010: $3,536,796 (residential), and $4,151,891 (non-residential)
June 2010 addition: $3,449,121 (residential); and $3,449,121 (non-residential)

California:
On January 12,2006, the California Public Utilities commission (PUC) approved the California
Solar Initiative, which authorized the state to invest $2.167 billion for consumer rebates in small-
scale solar electric power systems over 11 years and established a statewide goal of building a
million solar electric roofs, or 3,000MW of solar electric power, it provides incentives for solar
system installations to customers of the state’s three investor-owned utilities (IOUs): Pacific Gas
and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas and
Electric (SDG&E). The investment was funded from a small surcharge on electric and gas
customers within the utilities regulated by the PUC [29]. Eight months later, Gov. Arnold
Schwarzenegger signed SB 1 into law, establishing policies that complement the California Solar
Initiative and that the PUC did not have authority to establish on its own. SB 1 expands the
Million Solar Roofs plan to customers of municipal-owned utilities over which the PUC does not
have jurisdiction, increases the state’s net metering cap to 2.5 percent, allows approximately
500,000 new solar energy systems into the program, and requires developers of more than 50

14
new single family homes to offer the option of a solar energy system to all customers beginning
January 1, 2011. The California Energy Commission also manages a 10-year, $350 million
program to encourage solar in new home construction through its New Solar Homes Partnership.
The California Solar Initiative Offers: Photovoltaic incentives starting at $1.90 per watt for
systems up to one megawatt in size.

2.1.2 Feed-in-Tariffs:

A feed-in-tariff is a policy mechanism designed to encourage the adoption of renewable energy

sources and to help accelerate the move toward grid parity.
It typically includes three key provisions.
• Guaranteed grid access.
• Long-term contracts for the electricity produced.
• Purchase prices that are methodologically based on the cost of renewable energy
generation and tend towards grid parity.
Under a feed-in tariff, an obligation is imposed on regional or national electric grid utilities to
buy renewable electricity (electricity generated from renewable sources, such as solar power,
wind power, wave and tidal power, biomass, hydropower and geothermal power), from all
eligible participants. In a dramatic display of the power feed-in tariffs have in driving markets,
Italy installed more solar (PV) in 2009 than the entire US. Moreover, within the first quarter of
2010, Italy's total installed solar PV capacity was expected to exceed that of the US [30].
Table 1 is a representative sample of the prices available for the purchase of renewable
generation under the tariffs filed by the major IOUs. These prices would be for a 15 year contract
at a facility that starts operation in 2008. The fixed MPR would be $0.09383/kWh, and this
would be adjusted for actual time of delivery according to the schedule in the tariff under which
service was requested.

15
 Table 1: Time Dependent Value for kWh Sold Under the Feed-In Tariffs in California. ($/kWh).

Elec.Corp. Summer Weekday ($/kWh) Winter Weekday ($/kWh)

IOU Peak Shoulder Off-Peak Peak Shoulder Off-Peak

PG&E $0.18 $0.08 $0.06 $0.14 $0.10 $0.07

SCE $0.31 $0.12 $0.06 $0.10 $0.08 $0.06

SDG&E $0.15 $0.10 $0.08 $0.11 $0.10 $0.07

By comparison we show the feed-in-tariff offered by CPS in San Antonio,TX. The CPS program
also will use 20-year contracts instead of the 10-year contracts found in the Midwest. Industry
analysts suggest that 20-year contracts are probably the minimum necessary in North America.
CPS Energy Program Summary
• Contract term: 20 years
• Solar PV tariff: $0.27 USD/kWh
• Pilot program length: 2 years
• Launch: January, 2010
• Project size cap: 500 kW
• Project size threshold: 25 kW
• Program cap: 10 MW
• Targeted rate of return: 3-5%

Like Indianapolis Power & Light's proposed program, the San Antonio municipality specifically
excludes homeowners and small businesses through a high threshold of 25 kW. In contrast, the
San Antonio municipality's release said the company is developing 41 MW of solar PV in large,
central-station plants outside the city [31].

2.1.3 Tax Cuts or Tax Breaks:

These incentives are less known and in the case of home installations can take the form of a
residential tax cut, but only of the amount that the value of the property increases by the
installation of the PV system. This tax break has to be specifically requested and is not very well

16
known. This brings up an interesting point: What is the appreciation value on a property due to
the installation of a PV system? We have surveyed this issue without success, some installers
claim in their brochures and WebPages that the installation of a PV system in a home increases
the value of this property by 20 dollars for every dollar saved in energy per year. There is no
support for such claim. Even in California there is no way to sustain such a claim, data is still
too recent to be able to extract solid conclusions on this subject, even in Europe with a longer
history and broader installed base, this claim is unsustainable.

2.2 Right of Way Authorizations by the Bureau of Land Management

These have resulted in a good incentive for bigger investment projects in California. Even when
it has been controversial (Solar Push By U.S. Producing No Power, Just Squatters by Jason
Dearen, Associated Press) many PV companies have made use of the right of way incentives
established by BLM in California. The final results of this initiative are still pending [32].

2.3 Jobs Creation

The Solar Energy Industries Association (SEIA) estimates that “every megawatt of solar power
currently supports 32 jobs, with 8 of these jobs in system design, distribution, installation and
service created where the systems are installed.” [33].
The installation, maintenance and service of renewable source power stations create more than
200 types of jobs, according to the Texas Workforce Commission report. The project aims to
study the influence of job creation potential on policy decisions by the government. Education
and training in photovoltaic technology and its relation to the growth of PV industries will be
studied. The number of jobs the government aims to create with PV technology installation, past
trends and projections for the future will throw light on this aspect of the photovoltaic industry.
This is a very important aspect of the introduction of any new technology, its power as a jobs
generation “machine”. However, the number of jobs generated is very directly related with the
part that a given state or locality has in the full technological cycle, in this case you will find
more jobs being generated in those areas where manufacturing of the new devices takes place.
Industry analysis of job creation related to these capacity targets focuses on PV manufacturing.
However, the reality is that in general, U.S. manufacturers have lost their leadership position in

17
photovoltaic manufacturing while Japanese and European manufacturers enjoy 40% or better
annual growth rates. For this reason, this job summary focuses on the job opportunities in the
installation of PV systems regardless of where those systems are produced.
The Renewable Energy Policy Project (REPP) published a January 2005 report that analyzed the
potential impact of achieving SEIA’s targets on jobs and investment growth on a state-by-state
basis. According to REPP, Texas will capture more than 13% of all new jobs created and more
than 13% of all new investment. However, most of this growth is predicted to be in
manufacturing. Given the erosion of U.S. PV manufacturing over the last several years, it is
possible that these estimates exaggerate the impact of PV manufacturing on economic growth
and job creation in Texas.
When we compare the PV manufacturing activity in Texas with that in California, we find that
there is really a big difference in the interest for Solar Technologies. We find six companies
manufacturing PV modules and three more manufacturing other kind of materials related to the
PV industry in California while there is only one company manufacturing PV modules in Texas,
Table 2. It is interesting to see that some companies in Texas showed an interest in Photovoltaics
in the 90’s by doing some research and getting some patents. This is the case with Texas
Instruments (TI) and the Spheral Solar technology within the PVMAT project [34].
ATS Automation Tooling Systems Inc. in Canada is commercializing this technology as an
“Innovative method of producing solar cells”. The technology—based on tiny silicon beads
bonded between two sheets of aluminum foil was developed by TI in the early 1990s. But
despite U.S. Department of Energy (DOE) funding, TI dropped the initiative.
By 2015, Texas is expected to create only 361 PV installation jobs, which is relatively high
nationally, but well below California’s anticipated 3,578 PV installation jobs. The estimated
wages for solar technicians is $15 to $20 per hour and $20 to $25 per hour for solar technician
foreman.

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 Table 2: PV related Manufacturing in California and in Texas

PV Manufacturers in Technology PV Manufacturers in Technology

California: Texas:
Solartech Power, Inc. Monocrystalline Heliovolt Corp. Thin-Film
Photovoltaic Photovoltaic
Innovalight, Inc. Thin-Film Photovoltaic
Miasole Thin-Film Photovoltaic
XsunX, Inc. Thin-Film Photovoltaic
Solexant Thin-Film Photovoltaic
DayStar Technologies, Inc. Thin-Film Photovoltaic
Other Materials in Other Materials in
California: Texas:
Solaicx Photovoltaic cell Applied Materials Tools to produce
materials silicon and thin film
PV cells
SolarFlex Technologies, Photovoltaic cells, MEMC Electronic Manufacture of Si
Inc. photovoltaic cell Materials wafers
materials, flexible and
lightweight plastic
substrate solar cells.
Unisil Corporation Photovoltaic cell
materials, silicon
wafers
2.4 The results of all these efforts:

California stands out among the states in promoting renewable energy. It leads the nation in
setting energy standards and in both venture and public capital investment in “clean tech.”
California installed 250 MW in 2010 to reach a total of 1,018 MW.
For Texas we have this data from the Texas State Energy Conservation Office's (SECO):
“This year, our shared monitored systems have converted sunlight into 61.690 MW of energy”.
Still, Texas has the sunshine, manufacturing base and research institutions needed to become a
leader in the development of solar energy. The state is well positioned to compete with other
states and countries in a global solar energy market worth $10.6 billion in 2006. One study
estimates that Texas could capture about 13 percent of all new jobs and investments related to
solar photovoltaic technologies by 2015, primarily in manufacturing.

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3 BARRIERS TO THE GROWTH OF PHOTOVOLTAICS IN TEXAS

Photovoltaic power systems were introduced in the United States four decades ago. While
photovoltaic cells had already been used in space applications, it was only in the 1970’s that PV
was beginning to get consideration as a potential energy conversion technology. The Solar
Energy Research Institute (SERI) was formed in 1977 and the institute, in its current form as the
National Renewable Energy Laboratory (NREL) has been doing research in solar photovoltaic
energy. While the United States is currently one of the leading countries in PV, the growth of
this technology has not been uniform in all the states. States such as California and New Jersey
have made PV development and installation one of their top energy priorities, but Texas, the case
study for this project, has yet to adopt and implement a comprehensive photovoltaics program.
In this report we have been comparing the current and future trends of photovoltaics in Texas
and California. California is the industry leader in the United States with 768 MW while
photovoltaics in Texas account for just 8.6 MW as of 2009 [34]. While it is worth noting that
California was an early adopter of PV and that might be the biggest reason for such an increase
in installed capacity, it does not explain the virtual non-existence of PV in Texas. Figure 9 shows
the growth in installed PV capacity in the past decade in California and Texas.

Installed PV Capacity
900
800
700
Capacity in MW

600
500
400 Texas
300 California
200
100
0
1998 2000 2002 2004 2006 2008 2010
Year

Figure 9: Growth in Installed PV capacity in Texas and California, 1999 – 2009

20
This section of the report will attempt to understand the possible reasons for the steep uphill
climb that Texas PV has faces. Texas consumes 10% of all the electricity consumed in the US.
One must be cautious and take note the reasons for such a high rate of electricity use: (1)
Growing large population (2) hot climate and (3) a well-established industrial sector. But that
would not explain the difference in the sources of electricity, in terms of percentage as shown in
figure 10.
60 56.7
California Texas
49
50

40 36.54

% 30

20
15.3 14.2
11.9
10.3
10
3.5
1.8
0.03 0.44 0.165
0

Figure 10: Sources of energy in Texas and California[35][36]

Texas and California have quite different electricity production-consumption profile. While
Texas is an electricity-surplus state, California imports about 30% of its electricity consumed. As
the figure demonstrates, 36% of Texas’ in-state production of electricity is from coal and 49%
from natural gas giving a total of 85% fossil fuel electricity. The figure for California is 58.5%.
On the other hand, the difference in hydro electricity and other renewables swings in favor of
California. Renewables account for three times as much as they do in Texas.

21
These points and those considered in the previous section, lead one to list the possible reasons
for the differences:
• Economic concerns
• Existence of a strong conventional fuels industry
• Competition from other renewable energy sources
• Lack of public awareness and education

3.1 Economic Concerns

Any new technology faces economic hurdles in the early stages of its introduction. Solar PV has
only recently been included in the energy portfolios of governments around the world. Also to be
considered is the fact that the industry and the technology themselves are on a fast growth
trajectory. This has led to varying estimates on when the levelized cost of electricity (LCOE) for
solar photovoltaics will achieve grid parity. Texas is a state which produces 85% of its electricity
from fossil fuels. From the US data, (nationwide, the share of coal electricity is less than that for
Texas) it can be seen that there is a strong positive correlation between the price of coal and the
price of electricity, as evidenced by figure 11.

Coal and electricity prices

16 70
14
Electricity prices (c/kWh)

60
Coal prices ($/ton)

12 50
10
40
8
30
6 Electricity prices
4 20 Coal prices
2 10
0 0

Year

Figure 11: Correlation between prices of coal and electricity in United States, 1960-2005

22
The price of electricity, normalized to the year 2005, has only fluctuated within a narrow band in
the past fifty years. To determine the year of grid parity, the price of solar electricity is to be
compared with the market price of grid electricity, as done in figure 12.

25
Real price of electricity
Real price of Solar Electricity
20 Solar with incentives

15
$ / kWh

10

0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
Year

Figure 12: Grid parity of solar electricity

The analysis methodology is as follows: The real prices of market electricity, normalized to year
2005, are obtained from the U.S. Energy Information Administration [37]. A cone of uncertainty
is assigned for the future, with slopes similar to the slope of the curve in the past. The price of
solar electricity corresponds to industrial producers of solar power, taken from Solarbuzz. This
price includes production and installation costs. To predict the prices in future, a 2% inflation
rate is assumed. Two curves are drawn, the first one, assuming that solar PV will not receive any
subsidies. It can be seen that the two curves intersect at a point corresponding to the year 2024.
This presents the best-case scenario for grid parity, the point could be further into the future if
the market price of electricity follows the negative slope of the cone of uncertainty. The second
curve is drawn with the assumption that solar PV incentives are maintained at 2010 levels. This
curve intersects with market electricity prices in the year 2018, showing PV technology is far
from achieving grid parity in US.

23
Resolving the US average price of electricity into individual states [38], we find that solar is cost
competitive in Connecticut, New York and Hawaii. In California, the market electricity price is
90% of solar electricity and the figure for Texas is only 57%. Solar PV in Texas is less costs
competitive than in California.

3.2 Existence of A Strong Conventional Fuels Industry

Texas has a base of coal, oil and natural gas production. There are 12 coal mines in East and
South-Central Texas. The state also is home to a well-established oil and natural gas industry.
For this reason, Houston is dubbed as the “Energy Capital of the World”. The industry forms
15% of the Gross State Product and employs more than 312,000 in Texas, accounting for 3% of
the workforce. In comparison, the fossil fuels industry in California is weaker in the oil and
natural gas sectors and coal is non-existent.

Figure 13: Fossil fuels production Texas and California (2009) [39]

The existence of a strong coal industry has led to the installation of 19 coal based power stations
with a total capacity of 21 GW, compared to 561 MW in California. All these factors have
rendered solar PV without the critical mass required to influence any policy decision to introduce
more of the technology. The number of jobs created by a particular technology and the longevity
of such jobs are critical for the government to support it. The number of jobs solar PV is
expected to create by 2015 is about 361, which is a far cry from the number of jobs in the fossil
fuels industry.

24
The US Department of Energy approved a $350 million grant to develop a 400 MW clean-coal
plant in West Texas [40]. The plant will capture 90% of the carbon dioxide emitted and it will be
used to increase the pressure inside oil wells to improve oil production. The government has had
to fund such projects when looking at environmentally friendly energy production rather than
increase subsidies for renewable energy sources such as solar.

3.3 Competition from other renewable energy sources

The Texas Energy Report was released in 2008 by the Office of the Texas Comptroller of Public
Accounts [energy report]. This report mentions the following as the main sources of renewable
energy:
i. Wind
ii. Hydro
iii. Biomass
iv. Landfill gas
v. Solar
vi. Geothermal
A huge majority of all the renewable energy produced in Texas is from wind while solar is
barely noticeable, as seen in figure 14 below.

Solar, 0 Landfill
Hydro, 7.8 gas, 2.6
Biomass, 11.
1

Wind , 78.5

Figure 14: Renewable energy generation in Texas by source

25
Among the renewable energy sources mentioned, landfill gas has limited potential at 70 MW and
so does hydro, at 1 GW. Biomass and Wind are the dominant renewable sources in terms of
growth.
Texas has been a front runner in the country in wind energy installations. It has almost three
times as much wind power capacity as the second state, Iowa. The growth of wind has been
exponential in recent years, as seen in figure 15.

12

10
Capacity in GW

8
Texas
6 California

0
1999 2001 2003 Year 2005 2007 2009

Figure 15: Installed wind capacity in Texas and California, 1999-2009

Texas surpassed California in wind energy installations in the year 2005 and after four years it
has four times the capacity of California. This represents a willingness on the part of the industry
to increase investments in wind energy. The price of wind electricity is much less than market
electricity [41] making it very easy for the wind energy companies to sell the generated power.
The higher power density of wind is also a reason for the growth of wind. Production of one MW
of power through wind only takes the foot-print of one wind turbine while PV solar requires a
great extent of land.

26
3.4 Public Awareness and Education
Public awareness of any technology is critical for growth in a distributed market. In order to
understand the public awareness of the technology and the economic aspects of PV, a survey was
conducted among the students at Texas A&M University. The sample size was 100, giving a
sampling error of 10%. The details of the sample were as follows:
Sample description: Students at Texas A&M University
Sample size: 100
Science, Technology, Engineering and Mathematics (STEM): 49
Non-STEM: 51

Questions:
The respondents were asked the following questions:
1. Do you know about Solar Photovoltaic (PV) energy?
2. If you know of any other renewable energy sources please mention them.
3. Do you know about government subsidies to install solar panels in your house / business
property?
4. You can help the environment and reduce dependence on fossil fuels by one of the
following ways:
• Buying your own solar electricity system for you roof which will reduce the bills
20% and is going to cost $15,000.
• Buying electricity from solar farm which will increase the electricity bill by 16%.
What would you do?
a) Buy own solar electricity system.
b) Buy electricity from solar farm
c) None.
Distribution of responses:
1. To the question of whether they knew about solar photovoltaic energy, one-third of STEM
students and three-fourths of non-STEM students responded negatively. The results are
shown in figure 16.
2. The awareness of wind energy amongst students was found to be 45%. The knowledge of
other renewable energy sources are as given in figure 17.

27
3. Amongst the respondents, 68% were not aware of the availability of government subsidies to
install solar PV on residential or business properties.

Response from STEM

No
33%

Yes
67%

Response from Non-STEM

Yes
25%

No
75%

Figure 16: Knowledge of Solar PV amongst respondents

28
 Wind 45

Hydro 31

Geothermal 10

Biomass 10

Tidal 5

Hydrogen 4

Algae 1

0 10 20 30 40 50

Figure 17: Knowledge of other renewable energy sources amongst respondents

4. A big majority of respondents would choose to buy their own solar electricity system even if
they had the option to buy electricity from a solar farm at a 16% higher price. The fact that
the system would initially cost $15,000 was not a deterrent, as long as it was going to reduce
the electricity bill by 20%, as confirmed by one respondent as a follow-up.

80

70

60

50

40

30

20

10

0
Buy own PV Buy from solar farm None

Figure 18: Majority of respondents choose to buy their own solar PV system

29
While a majority of respondents would choose to buy their own PV system, there are practical
difficulties such as maintenance of the system. It is also interesting to note that 19% of the
respondents choose not to do either of the options. This would be a significant barrier if utilities
choose to install megawatt scale power plants and advertise to sell the power. In a deregulated
market such as Texas it would be difficult for the utilities to sell their product when a majority of
the public (87%) would not buy solar electricity.

3.5 Photovoltaic Power Solution: Location and Distribution of PV In California And

Texas
The following maps present the hybrid of solar potential, population center distribution and
location of utility scale PV power plants in California and Texas. It can be seen that in both
states, the majority of population lives away from the regions with the greatest potential. 80% of
Texas population lives in 20% of the land area. That would mean that the PV power stations
located in the remote regions have to transmit all the power over long distances to the load
centers.

Figure 19: Population distribution, solar PV plants and solar potential in Texas

30
 Figure 20: Population distribution, solar PV plants and solar potential in California

The utilities would prefer to install their stations in the high potential regions because they are
paid by the kWh they feed into the grid. But because of transmission losses, the total efficiency
of the system is affected. The successful approach in California has been to install medium
power (up to 1 MW) level utility PV plants located close to the load centers [42]. Such an
approach, which is a Distributed-centralized approach, will be suited for the densely populated
regions in the region known as “Texas Triangle”.

31
4 CONCLUSION:

The report analyzed the current and future trends in solar photovoltaic energy in Texas and
California. As reported, Texas already has the technology and capital required to give solar
photovoltaic technology the boost that it needs to grow as an industry. Texas also has the solar
potential required to make the industry viable. But there are numerous social, political and
economic barriers that photovoltaics have to overcome before becoming a mainstream
alternative to fossil fuel based electricity. There are multiple possible strategies proposed to
overcome these barriers for growth. This report proposes a distributed-but-centralized approach,
advocating the installation of medium power level PV plants close to the load centers. While
solar PV is inevitably on course to become an important source of electricity generation, this
approach would accelerate the process by bringing more players into the industry. The result
would be that solar PV would make a significant impact on the Texas energy scene.

32
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