Online Course: PV - Application

Online course
PV - application
© Renewables Academy (RENAC) AG

This copyrighted course is part of the series of online study programmes offered by the Renewables
Academy AG. The course materials are provided exclusively for personal or curriculum and course-
related purposes to enrolled students and registered users only. Any further use of this material shall
require the explicit consent of the copyright and intellectual property rights holders, Renewables
Academy AG. This material or parts of it may neither be reproduced nor in any way used or disclosed or
passed on to third parties. Any unauthorised use or violation will be subject to private law and will be
prosecuted.
Berlin, 2019-06-28
Table of content
1. Introduction ..................................................................................................................................... 3
1.1 Learning objectives of the course ........................................................................................... 3
1.2 Introduction to the course ...................................................................................................... 3
2. Application....................................................................................................................................... 5
2.1 PV system categories/application ........................................................................................... 5
2.2 Grid-connected configuration ................................................................................................. 6
2.3 Off-grid configuration .............................................................................................................. 8
3. Components of a PV system .......................................................................................................... 10
3.1 Overview of PV cell types ...................................................................................................... 10
3.2 PV modules ............................................................................................................................ 11
3.3 Introduction to inverters ....................................................................................................... 12
3.4 Introduction to mounting structures .................................................................................... 13
4. Physical aspects ............................................................................................................................. 15
4.1 PV cell power output ............................................................................................................. 15
4.2 Electrical characteristics and the I-V curve ........................................................................... 16
4.3 Factors affecting power output ............................................................................................. 16
4.3.1 Impact of irradiance ...................................................................................................... 17
4.3.2 Impact of temperature .................................................................................................. 18
4.3.3 Impact of load resistance .............................................................................................. 19
4.3.4 Standard test conditions ............................................................................................... 19
4.3.5 Temperature coefficient................................................................................................ 20
4.3.6 Calculation exercise ....................................................................................................... 20
4.3.7 Orientation and inclination (tilt) of PV modules ........................................................... 21
5. Economic aspects of PV ................................................................................................................. 23
5.1 Resource assessment ............................................................................................................ 23
5.2 Definition of Performance Ratio ........................................................................................... 24
5.3 Energy yield calculation and example ................................................................................... 25
5.4 Metering options ................................................................................................................... 26
5.5 Investment cost of a PV system ............................................................................................ 27
5.6 Price tendencies for modules and inverters ......................................................................... 28
5.7 Operating costs...................................................................................................................... 30
5.8 Endnotes ................................................................................................................................ 30
6. Summary........................................................................................................................................ 31
PV – application Page 1 of 32
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6.1 Summary of the course ......................................................................................................... 31
6.2 References ............................................................................................................................. 31
7. Further reading.............................................................................................................................. 32
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1. Introduction
1.1 Learning objectives of the course
Upon completion of this course, participants will be able to
• categorize different PV system applications,

• select the correct system configuration and size the necessary components according to the
chosen application,
• analyse the impact of different parameters on the PV system power output and
• evaluate the economic aspects of PV systems incl. energy yield, metering options and costs.
1.2 Introduction to the course

Learning objectives: Upon completion of this page, you should be able to
• explain photovoltaics in a nutshell and

• describe the use of photovoltaics in principle.
Photovoltaics (PV) is the technology which generates electricity directly from sunlight via the
photoelectric effect. The photovoltaic module, which is made up of photovoltaic cells, transforms solar
energy into DC electricity. Another solar energy technology is solar thermal. Solar thermal uses solar
energy to generate heat rather than electricity.
This unit will solely talk about photovoltaics since solar thermal technology will be covered in a
separate unit. Nevertheless, it is important to make a clear distinction between these two very
different technologies which are often confused since they use the same energy source (solar
radiation).
The electricity generated using PV can be fed into the electricity grid, stored in batteries for later use,
or used directly. As of 2018, the total global installed PV capacity was approximately 390 GW.
This unit will give an overview of PV. The focus will be on the PV module and its characteristics. Other
main components will also be presented and the basic physical parameters to determine power output
of a PV cell will be explained. Finally, an energy yield calculation will be provided.
Photovoltaics (left) – sunlight is converted into electricity; solar thermal (right) – solar energy
generates heat, e.g. hot water (Source: RENAC)
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Residential grid-connected PV system (large array) and single solar thermal collector below PV array
on a roof in Germany (Source: RENAC)
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2. Application
2.1 PV system categories/application
Learning objective: Upon completion of this page, you should be able to
• distinguish between off-grid and grid-connected PV systems.

There are two general categories of PV systems:
• Off-grid PV systems
• Grid-connected PV systems
The figure “Overview of off-grid and grid-connected PV systems” shows some of the essential
components in both off-grid and grid-connected systems. Off-grid systems produce electricity that is
consumed on site. Grid-connected systems inject electricity into the electricity grid, where it flows to
different points of consumption.
The overwhelming majority of systems will fall into the above categories. Different books will have
slightly different approaches to system categorisation. It is essential that you are clear about which
type of system you are dealing with. The figure “Categories of PV systems” shows that the two main
categories also have further sub-categories. Grid-connected PV systems can feed into different voltage
levels of the grid, depending on the capacity of the PV plant. The higher the power generation capacity,
the higher the voltage level to which the PV plant is connected. Off-grid PV systems can be split into
stand-alone systems with or without batteries for storage of electricity, or mini-grids which combine
PV with other electricity generation and storage technologies in order to secure electricity supply, e.g.
a diesel + PV hybrid system.
In regions with a weak electricity grid, grid-connected PV systems may be installed in such a way that
they can be used as off-grid systems during power cuts.
Overview of off-grid (left) and grid-connected (right) PV systems. (Source: RENAC)
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Categories of PV systems (Source: RENAC)
2.2 Grid-connected configuration

• distinguish, in principle, the difference between distributed and central PV systems and
• name the different components used in grid-connected PV systems
Grid-connected PV systems generally fall into two categories:
• Distributed PV systems, e.g. household or small industry systems, which are connected to the
low voltage distribution grid
• Central PV systems, e.g. large-scale ground-mounted arrays, which are connected to the
medium or high voltage transmission grid.
Distributed PV systems can have various sizes and will be located at different points in a central
electricity grid. Distributed systems are typically constructed on residential, commercial or industrial
buildings. Systems on residential buildings are usually small roof-top systems generating electricity for
private consumption or for sale to the electricity utility. Systems on commercial or industrial roofs are
also used to either offset on-site electricity consumption or to sell electricity to the utility. However,
commercial/industrial systems are often much larger than residential systems. Distributed systems are
usually connected to the low voltage distribution grid.
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Central PV systems are also known as solar farms, solar parks or utility-scale PV systems. Large-scale
PV power generation is concentrated at one specific location. Such plants can take up large areas of
land and feed directly into the electricity grid. The configuration of such plants is more comparable to
conventional power plants, producing 3-phase power. They are connected to medium or high voltage
transmission networks.
In all grid-connected systems, the PV array (sometimes referred to as solar generator, see figure
“Typical residential PV system”) generates DC electricity and is connected via junction boxes to an
inverter, which converts the direct current (DC) into alternating current (AC). The inverter output is
connected to a meter which records the amount of energy being fed into the grid.
Typical residential PV system (Source: RENAC)
Solar farm in Germany (PV tracking system) (Source: RENAC)
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2.3 Off-grid configuration
• name the different components used in off-grid PV systems and
• identify the different applications of off-grid PV systems.
Off-grid PV systems are not connected to the electricity grid. They are also called stand-alone PV
systems. The electricity produced is consumed very close to the location where it is generated. Off-
grid systems usually incorporate battery storage so that electricity can be supplied even when the sun
is not shining. Solar water pumping systems are a major exception to this. Off-grid systems are usually
found at locations where there is no electricity grid available.
The system components differ from grid-connected systems and the array size is typically much
smaller, especially for small off-grid applications like solar home systems.
The PV modules are connected to a charge controller which regulates the charging and discharging of
the batteries. Only DC power is supplied. Many of these systems also have inverters (connected directly
to the batteries) which supply AC power.
Micro- and mini-grids are basically small electricity grids providing electricity to, for example, a small
island or a remote building complex or village. Here we are classifying them as off-grid systems. They
usually have back-up power sources, most commonly a diesel generator. Some larger micro- and mini-
grid systems do not have battery storage.
Electricity is typically produced and stored at a central point from which it is distributed (at AC grid
voltages). A range of types and configurations are possible.
Typical off-grid PV system (solar home system) (Source: RENAC)
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Micro/mini-grid set-up (Source: RENAC)
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3. Components of a PV system
3.1 Overview of PV cell types
• identify the basic differences of PV cell types available.

The PV cell is the core component of a PV system since it generates the electricity. There are many
different types of PV technologies, but the market is dominated by crystalline silicon (c-Si) based PV
cells. Nearly 80% of the cells on the market are c-Si based cells, either monocrystalline or
polycrystalline. The remainder of the market is taken by thin-film (amorphous silicon, CdTe and CIGS)
modules. New technologies with higher efficiencies are emerging; an example is Concentrating PV
(CPV) which is still a niche market due to its current high production costs. The figure provides an
overview of the various technology categories.
Main PV cell technologies:
- Monocrystalline silicon (mono c-Si) – wafer-based PV cells with single-directional crystal
structures with a high degree of order of the atomic structure over the entire PV cell.
- Polycrystalline silicon (poly c-Si) – wafer-based PV cells made from multi-directional crystal
structures with a very short range order of atoms.
- Amorphous silicon (a-Si) and micromorph silicon – both are thin-film technologies. a-Si is a
non-crystalline structure, meaning it has no regular arrangement of atoms. Micromorph silicon
cells have a range of structures, ranging from amorphous to multi-crystalline atoms.
Schematic view of the different PV cell types, in red are the main PV cell technologies. (Source:
RENAC)
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3.2 PV modules
• explain the function of PV modules and
• describe the design of PV modules.
PV modules are formed by connecting PV cells in series and/or in parallel and encasing them in a
protective material. PV modules can also be connected in series and/or in parallel in order to form a
PV array. The connections of cells and modules (series or parallel) are designed in such a way that they
produce the voltage and current required for the application (see figure “PV cells, modules and
arrays”). The number of modules also determines the maximum power generation capacity of a PV
plant.
The number of PV cells in crystalline modules varies typically between 36 and 72 cells. The PV cells are
electrically connected and sandwiched between two very thin transparent layers of vapour-proof
encapsulation material (commonly made of Ethylene Vinyl Acetate or EVA), then placed on top of a
reflective back sheet (commonly made from polyvinyl fluoride), and then sealed with a glass cover in
an aluminium frame (see figure “Cross section of a typical polycrystalline PV module”). The EVA layers
provide weather protection and ensure that vapour does not reach the PV cell, this being one of the
most common causes of module degradation. Electrical contacts are connected in a junction box at
the back of the module, and bypass diodes are soldered across the connections in order to reduce
power output losses due to shading.
PV cells, modules and arrays (Source: RENAC)
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Cross-section of a typical polycrystalline PV module. (Source: RENAC)
3.3 Introduction to inverters

• explain the function of PV inverters and
• name different types of inverters.
An inverter converts direct current (DC) input from the PV array or battery into alternating current
(AC) output. PV modules produce only DC. However, electrical energy is usually transmitted and
distributed in AC form and most appliances consume AC power. Therefore, inverters are essential in
grid-connected PV systems. Further inverter functions are maximum power point tracking (MPPT)
which ensures that the array produces the maximum possible power under fluctuating conditions,
monitoring of power generation from the PV array, and provision of electrical safety.
There are two main types of inverters: single- and three-phase inverters. Single-phase inverters deliver
AC to one phase of a power transmission line, whereas three-phase inverters deliver AC to all three
phases of a power transmission line. PV systems above 5 kWp require three-phase inverters because
one line cannot absorb all the power delivered.
There are three different sizes of inverters with respect to their power capacity:
- Module inverters which are directly connected to a PV module (e.g. up to 300 W)
- String inverters which are connected to one or a few strings of PV modules. Each string can
have e.g. up to 20 modules.
- Central inverters which are used in large PV parks of several megawatts, because many strings
can be connected to the inverter.
For off-grid applications different inverter types can be used, e.g. battery inverters (power input from
batteries only) or inverter-chargers with integrated solar charge controllers.
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Principle of DC/AC conversion (Source: RENAC)
String inverters with a capacity of maximum 3 kW (Source: RENAC)
3.4 Introduction to mounting structures

• identify the different types of PV mounting structures and
• understand the fundamental requirements of mounting structures.
There are many different types of commercially available mounting structures for PV systems. These
can be classified as follows:
- Roof-top systems:
o Sloping roof
o Roof integrated (tiles and slates)
o Flat roof (free-standing, usually held in place by weights, not fixed)
- Systems for building facades
- Systems for open areas:
o Ground mounting structures (free standing, no tracking)
o Tracking systems (manual or automatic, single or double axis)
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The fundamental requirements of mounting structures are that they must support the weight of the
PV modules, they must distribute the load evenly onto the roof/ground below, and they must
withstand expected extra loading, e.g. from wind or snow. Since large array structures (including
modules) are heavy it is necessary to seek the advice of a structural engineer prior to roof mounting.
The structure should have optimum orientation and tilt angles to maximise power output and all
shading should be avoided. The structure will typically be made from aluminium or galvanised steel.
Painted steel and wood are also options though such structures will probably require more
maintenance over the 20+ year lifetime of the system.
Earthing/grounding as well as lightning protection may be required (see your local codes). Correct
earthing/grounding is a difficult issue and needs special attention by electrical experts.
Mounting system for sloping roof used for training purposes at RENAC (Source: RENAC)
Ground mounting structure, galvanised steel, front and rear view (Source: RENAC)
Tracking system at solar farm, inverter on the rear, Germany (Source: RENAC)
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4. Physical aspects
4.1 PV cell power output
• explain the basics of the photoelectric effect,

• calculate the output of a PV cell and
• name the main factors influencing the output of a PV cell.
The photoelectric effect is the phenomenon that converts electromagnetic radiation (such as from the
photons of solar irradiation) into electricity in certain materials. A PV cell is designed in such a way that
the energy from these photons is transferred to the electrons in the cell, causing them to become
mobile. When these electrons are all channelled together to run through conductive materials, such
as copper cables, they produce useful direct current (DC) electricity. (A more physical explanation is
provided in ‘PV Fundamentals II’.)
Thus, a PV cell produces current and a voltage is created across it. The electrical power P for DC
systems, measured in Watts [W], is the product of voltage V measured in Volts [V] and current I
measured in Amperes [A]:
𝑃 =𝑉 ×𝐼
Under normal sunlight conditions the PV cell’s voltage remains fairly constant. However, the cell’s
current is very sensitive to sunlight intensity. High solar irradiance will produce a high electrical
current; low solar irradiance will produce a low electrical current. The surface area of the PV cell also
affects the electric current output. A cell with a large surface area will produce more electric current
than a cell with a small surface area.
Thus, the two main factors that affect the output of a PV cell are the intensity of the sunlight falling
on it and the size of the cell. Other factors are also important and will be discussed in the following
sections.
PV cell exposed to sunlight (Source: RENAC)
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4.2 Electrical characteristics and the I-V curve
• name the basic electrical characteristics of a PV cell and

• interpret an I-V curve.
The I-V curve describes an important electrical characteristic of a PV cell. At any given time, a PV cell
is operating with a specific current and voltage which lies along its I-V curve (red curve in the figure).
This line shows the current I which is produced over a range of voltages. ISC represents the short circuit
(SC) current, i.e. the value at which the current is at a maximum and the voltage is equal to zero. VOC
represents the open circuit (OC) voltage, i.e. the value at which the voltage is at its maximum and the
current is equal to zero.
The power curve of the PV cell is shown by the blue line. This line shows the electric power produced
over a range of voltages. Under normal operating conditions the curves grow and contract along both
the current and voltage axis. The maximum power point (MPP), the point at which the cell produces
the maximum power, occurs at the ‘knee’ of the power curve where the product of voltage and current
are greatest. The maximum power is thus:
𝑃𝑀𝑃𝑃 = 𝑉 𝑀𝑃𝑃 × 𝐼𝑀𝑃𝑃
I-V curve and power curve of a PV cell (Source: RENAC)
4.3 Factors affecting power output

• learn how irradiance, shading, temperature, and module orientation and tilt angles influence
voltage, current and power output of a PV cell
• identify power output reductions on an I-V curve.
There are three critical factors which affect the instantaneous output of a PV cell or module. They are
the solar irradiance incident on the surface, the temperature of the PV cells, and the electrical load
resistance connected to the PV cell or module.
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4.3.1 Impact of irradiance
• identify the impact of irradiance on PV cell or module voltage, current and power and
• describe how the I-V curve changes with changing irradiance levels.
The output power of a PV cell or PV module directly depends on the solar irradiance incident on its
surface. As irradiance G increases, the current I increases due to an increase in the level of the
photoelectric effect. Voltage output V, on the other hand, varies only slightly with changing irradiance
(see figure). This means that as soon as the sun illuminates the surface of the cell/module, the voltage
rises to a value that is close to VOC. Regardless of a change in solar irradiance, such as shading from
passing clouds, the voltage will fluctuate only slightly below that VOC range. The current, however, will
increase in direct proportion to the irradiance, only reaching the module’s full current under strong
irradiance conditions, such as 1 kW/m2. For this reason, current produced by the photoelectric effect
in a PV cell is referred to as photocurrent. Passing clouds or people, which cast shadows on the PV
modules, will cause a drop in current output. Since current is directly proportional to power, shading
has a significant effect on power output.
To summarise, an increase/decrease in solar irradiance causes:
• only a small increase/decrease in voltage output;

• an almost linear increase/decrease in current output;
and therefore an almost linear increase/decrease in power output.
Solar irradiance dependent I-V curve (Source: RENAC)
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4.3.2 Impact of temperature
• indicate the impact of temperature on PV cell or module voltage, current and power and
• describe how the I-V curve changes with changing temperature.
The performance of PV cells also varies with temperature. Since PV cells and modules cannot convert
100% of the absorbed light into usable electricity, some of this energy is lost in the form of heat, which
causes the temperature of the cell to increase. This is a normal part of the operation of a PV cell and
cannot be avoided. As the cell gets hot, its power output drops. This is because the open circuit
voltage VOC decreases significantly when the internal cell temperature rises (see figure). The short
circuit current ISC increases slightly with increasing temperature but not enough to compensate for the
large drop in VOC.
Under normal conditions, the PV cell will always operate at a temperature higher than the ambient
temperature. The ideal operating state for maximising power output is high irradiance with low
temperatures. Such conditions are rare, e.g. high up in the mountains in winter on a clear day.
To summarise, an increase in cell temperature causes:
• only a slight increase in current;
• a significant decrease in voltage;
• and therefore, a significant decrease in power output.
Temperature dependent I-V curve (Source: RENAC)
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4.3.3 Impact of load resistance
• illustrate the relationship between voltage, current and load resistance.

An electrical load connected to a PV module will determine the point on the PV module’s I-V curve
where the module will operate. An electrical load could be a light bulb, a pump, the grid or a battery.
If there is less sunlight available, then the load will pull less current.
The voltage across the load and the amount of current that the load pulls from the module is
determined, for a given irradiance and therefore for a given I-V curve, by the equation:
𝑉
𝐼=
𝑅
where I is current in Ampere, V is voltage in Volts and R is load resistance in Ohms.
Note about batteries: if batteries are connected to the PV modules, as in an off-grid system, the
batteries will determine the voltage at which the PV modules operate. The module output current will
then correspond to the module’s I-V curve at that voltage.
4.3.4 Standard test conditions

• name the standard test conditions (STCs) for PV cells/modules and
• understand why such STCs are required.
Due to the variability of power output of the PV cells depending on parameters such as irradiation and
temperature, the performance of different cells operating under different conditions cannot be
compared easily. In order to enable meaningful comparisons between PV cells (or PV modules), the
rated output of a cell or module is always measured under specific conditions. These conditions are
standardised across all testing facilities worldwide and are called Standard Test Conditions (STC).
STC parameters are:
• Light spectrum: AM 1.5
• Irradiance: 1,000 W/m²
• Cell temperature: 25 °C
Each finished PV cell (or PV module) leaving the production line undergoes a flash test: it is exposed to
a flash of light under careful control of the STC parameters, lasting only milliseconds, and the output
performance is recorded. Subsequently, the cells or modules are sorted and sold according to their
rated power. The rated power is measured in units of Watt-peak [Wp] or kilowatt-peak [kWp] and
refers to the rated power under STC.
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4.3.5 Temperature coefficient
• identify the temperature coefficients and how they can be used to determine PV cell voltage,
current and power at different temperatures.
The temperature coefficient shows how voltage, current or power output of a PV cell or module change
with changing temperature. Module datasheets give temperature coefficients (TC) for open circuit
voltage VOC under STC, short circuit current ISC under STC, and power at the maximum power point PMPP
under STC. The voltage temperature coefficient is the most common one used. Inverters (and other
devices, such as charge controllers) can be damaged by module/string voltages that exceed the
specified input voltages of these inverters (and other devices). Conversely, if the voltage is too low,
this can cause system underperformance.
Voltage temperature coefficients are given in the form of e.g. -0.156 V / °C or -156 mV / °C or as % /
⁰C (e.g. +0.45% / ⁰C).
Current temperature coefficients are given in the form of 0.0029 A / ⁰C or 2.9 mA / ⁰C or as % / ⁰C (e.g.
+ 0.45% / ⁰C).
Power temperature coefficients are given in the form of -0.42 W/ ⁰C or as %/ ⁰C (e.g -0.42% / ⁰C).
4.3.6 Calculation exercise

• use temperature coefficients to calculate PV cell voltage, current and power at different
temperatures.
Assume the following data: The yearly daytime temperature at a location ranges from -10⁰C to +45⁰C.
A PV module is being installed which has:
- a VOC of 43.24 V at STC,
- a VMPP of 35.35 V at STC, and
- a temperature coefficient TC (VOC) of -0.168636 V / ⁰C.
Note: temperature coefficient Tc (VMPP) is slightly different than TC (VOC). In this case, for the
calculations, the difference will be neglected.
This means that for every C temperature drop below 25⁰C, the module voltage will rise by 0.168636
V. Similarly for every C temperature rise above 25⁰C, the module voltage will drop by 0.168636 V.
What will be the maximum VOC produced by the module?

The maximum VOC will be produced at the lowest ambient temperature, -10⁰C. So the lowest cell
temperature will be - 10⁰C.
𝑉
𝑉𝑂𝐶 (−10°𝐶) = 43.24 𝑉 + [(25°𝐶 − (−10°𝐶)) × 0.1686 ] = 49.14 𝑉
°𝐶
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What will be the maximum VMPP (voltage when the module is operating at its maximum power point,
i.e. in full sun) produced by the module?
𝑉
𝑉𝑀𝑃𝑃 (−10°𝐶) = 35.35 𝑉 + [(25°𝐶 − (−10°𝐶)) × 0.1686 ] = 41.25 𝑉
°𝐶
What will be the minimum VOC produced by the module?

The minimum VOC will be produced at the highest ambient temperature, 45⁰C. But the cell temperature
of roof-top or open field PV systems can be 25⁰C higher than the ambient temperature, so this will be
70⁰C
𝑉
𝑉𝑂𝐶 (+70°𝐶) = 43.24 𝑉 + [(25°𝐶 − 70°𝐶) × 0.1686 ] = 35.65 𝑉
°𝐶
What will be the minimum VMPP (voltage when the module is operating at its maximum power point,
i.e. in full sun) produced by the module?
The minimum VMPP will be produced at the highest ambient temperature, 45⁰C. But the cell
temperature of roof-top or open field PV systems can as a rule of thumb be 25⁰C higher than the
ambient temperature, so this will be 70⁰C.
𝑉
𝑉𝑀𝑃𝑃 (+70°𝐶) = 35.35 𝑉 + [(25°𝐶 − 70°𝐶) × 0.1686 ] = 27.76 𝑉
°𝐶
To summarise: The highest voltage VOC will be at -10⁰C, i.e. 49.14 V. And the voltage range at the MPP
will be between 27.76 V and 41.25 V.
Similar calculations can be performed to estimate voltages at different temperatures for series strings
of PV modules.
4.3.7 Orientation and inclination (tilt) of PV modules

• identify the impact of PV module orientation and inclination on energy yield and
• understand that the optimum orientation and inclination are dependent on latitude (i.e.
number of degrees north or south of the equator).
The PV module’s orientation and inclination (tilt) significantly affect the amount of irradiation that the
surface receives, and hence the amount of energy that the module produces. In the northern
hemisphere, the PV module should be facing south; in the southern hemisphere it should be facing
north. This guarantees the maximum irradiation level on the PV module throughout the year. In regions
close to the equator, the orientation is less important.
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The optimum tilt angle of the PV module depends strongly on the location. As a rule of thumb, the
module should be tilted to an angle equal to the latitude of the installation site. Roof mounted modules
are usually simply installed at the same angle as the roof since the extra cost of adjusting the tilt angle
exceeds the benefit of the extra energy that would be generated. In regions close to the equator the
most solar irradiation is captured if the PV module is flat. However, in practice a minimum tilt angle of
10-15 is recommended to allow for self-cleaning.
The figure shows a building located at a latitude of around 50N. It depicts the proportion of solar
radiation received at different orientations and inclinations compared to a reference PV module placed
at the optimum orientation (due south) and inclination (30) for this particular location.
Solar radiation received on PV modules at different orientations and inclinations (Source: RENAC)
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5. Economic aspects of PV
5.1 Resource assessment
• describe the area of use for colour-coded resource maps and their limitations and
• explain the need for resource studies conducted by independent site assessors.
In order to assess or calculate the energy yield (output) of a PV system, one has to know about the
available resource (input) to the PV system, meaning the solar irradiation. Colour-coded solar resource
maps show how irradiation is distributed in the target area. They provide a first indication of the
available solar energy production (AEP) potential in a certain region. The input data are usually
provided as an average annual sum in kWh/m² (the darker the colour, the better the resource
potential).
Solar irradiation maps are well-suited for relative valuation of different regions or siting areas. They
are, however, not well-suited for absolute determination of the energy yield potential of a specific
project site. The main reason is that the maps do not contain enough information regarding other on-
site conditions, such as roughness, shading and temperature at the micro site investigated.
Solar resource maps are not a substitute for detailed PV resource assessments prepared by certified
PV resource assessors. Rather, they serve to focus investigations and indicate where on-site
measurements would be merited. During a bank or investor’s due diligence, two independent PV
resource assessment studies are usually required, which take into account individual site
characteristics and the project-specific technology.
Global Horizontal Irradiation of Turkey (Data source: Data source: SolarGis and the World Bank
Group)
24/02/2017
5.2 Definition of Performance Ratio
• define the factors influencing energy yield and
• calculate the Performance Ratio and describe its use.
The economic feasibility of a PV plant critically depends on its electricity yield, which in turn depends
on both the meteorological conditions at the location and the performance of the plant itself.
As the electricity yield is heavily dependent on solar irradiation levels, it is essential that accurate and
long-term climate data are available for the given location. Solar irradiation at a site is often stated in
terms of the Peak Sun Hours (PSH) over a certain period.
Furthermore, component quality, plant design and layout as well as the maintenance plan will affect
the performance and consequently the energy yield of the plant.
The Performance Ratio (PR) is one of the most important parameters for assessing the performance
of a PV plant. It is the ratio of actual plant output to nominal plant output. It is determined by
monitoring the actual plant output over a defined period (e.g. one year) and dividing this by the
nominal plant output in that same period. The PR will change from period to period depending on
environmental and technical conditions at the plant.
A low PR is indicative of high system losses, for example due to high module temperature, reflection
of solar irradiation from the module, soiling of the front glass, shading, component failure, mismatched
module outputs, etc. Therefore, higher PR values are desirable.
In contrast, PR is also used with common reference values in the planning stage of a PV system. For
example, a PR of 0.75-0.80 is used for grid-connected PV plants and 0.65 for off-grid plants. This means
that the expected gross energy production potential would have to be multiplied by the performance
ratio value or reduced by (1-PR) to reflect the expected production after system losses.
Once the energy yield of a PV system has been estimated, the revenue from electricity sales can be
calculated in order to evaluate the profitability of a project.
Principle of Performance Ratio (Source: RENAC)
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5.3 Energy yield calculation and example
• calculate the energy yield for a given setting.
The following equation provides a quick and simple way to estimate the energy yield of a PV plant
over a particular period of time:
𝐸 = 𝑃𝑆𝐻 × 𝑃𝑃𝑒𝑎𝑘 × 𝑃𝑅
Where,
E: Energy yield of the PV plant over a period of time (e.g. over one year) [kWh/year]
PSH: Peak Sun Hours at the location of the PV plant over the same period of time [h/year]
PPeak: Peak nominal power of the PV plant [kWp]
PR: Performance Ratio of the PV plant, normally between 0.65 and 0.85
The Peak Sun Hour (PSH) is an imaginary case, where the sun shines at a constant irradiance of 1000
W/m² for one hour. We can visualise the PSH by looking at the area below the solar irradiance curve.
This area must be similar to the area of a rectangle with a “height” of 1000 W/m². The width of the
rectangle determines the PSH.
Visualisation of Peak Sun Hours (Source: RENAC)

Examples
A PV plant developer is planning two PV plants, one in Northern Europe and the other in the Southern
USA, and wants to estimate the energy yield of each to gauge their economic feasibility.
System in Northern Europe: rated power 1,000 Wp; 1,200 PSH; PR of 0.8
𝑊ℎ 𝑘𝑊ℎ
𝐸𝐸𝑢𝑟𝑜𝑝𝑒 = 𝑃𝑆𝐻 × 𝑃𝑃𝑒𝑎𝑘 × 𝑃𝑅 = 1,200 ℎ × 1,000 𝑊𝑝 × 0.8 = 960,000 = 960
𝑎 𝑎
System in the Southern USA: rated power 1,000 Wp; 1,900 PSH; PR of 0.7:
24/02/2017
𝑊ℎ 𝑘𝑊ℎ
𝐸𝑈𝑆𝐴 = 𝑃𝑆𝐻 × 𝑃𝑃𝑒𝑎𝑘 × 𝑃𝑅 = 1,900 ℎ × 1,000 𝑊𝑝 × 0.7 = 1,330,000 = 1,330
𝑎 𝑎
Although the system in the Southern USA has a lower estimated PR due to higher ambient
temperatures, the output is higher because more solar irradiation is available. Once the PV plants are
operational, the actual plant outputs can be monitored and thus the actual PRs calculated.
5.4 Metering options

• distinguish between the two basic metering options for PV systems.

For grid-connected PV systems where all of the energy generated is fed into the grid, a grid meter
measures the total feed-in and the plant owner is remunerated by the utility or grid operator at a fixed
price per kWh. This is the feed-in tariff system. At the same time, a second meter measures the
consumption of electricity at the plant site, which the plant owner pays for at a different rate to the
feed-in tariff he is receiving. Thus, two meters are required to measure feed-in and consumption
separately. This first option is more economical for the plant owner/operator than the second option
explained below (net metering) if feed-in tariffs are higher than the electricity price paid to the utility.
Net metering, on the other hand, only uses one meter which runs forward and backward: forward
when electricity is consumed from the grid and backward when PV electricity is injected into the grid.
The PV generation supplies any on-site loads first, thus allowing the plant owner to save what would
normally be paid to the grid operator for that electricity. All excess PV generation is then exported to
the grid. This option is more economical for the plant owner/operator if feed-in tariffs are lower than
the electricity price paid to the utility.
Technical set-up for metering option with feed-in tariff (Source: RENAC)
24/02/2017
Technical set-up for net metering option (Source: RENAC)
5.5 Investment cost of a PV system

• explain the investment cost structure of a PV project and
• identify the most important CAPEX items.
PV systems have high investment costs (also referred to as CAPEX) and low operating costs (also
referred to as OPEX), provided that the design, installation and operation are carried out properly.
Systems with high investment costs are sometimes considered to be high risk by lending institutions,
which means that raising capital can be challenging. Support mechanisms (such as feed-in tariffs) are
introduced to reduce the risk to the lenders, by guaranteeing a fixed price for electricity sales for a
period that extends beyond the estimated financial payback period of the upfront CAPEX costs of the
system (typically several years for PV).
The table below highlights the sample investment budget of a 5.0 MWp ground-mounted PV system.
In this case, more than 85% of the overall CAPEX comprises of hardware, whereas 4-5% are allocated
to service, labour and miscellaneous costs respectively. It should be noted that the most important
cost components in this budget are the PV modules and inverters. Together, they represent more than
70% of the total investment costs and are therefore important drivers of the project’s electricity
generation costs.
The specific investments costs (in this example 1,030 USD/kWp) is a typical parameter for comparing
different projects or different technologies.
24/02/2017
Sample investment cost budget for a 5.0 MWp PV installation (Source: RENAC)
5.6 Price tendencies for modules and inverters

• describe recent market price trends for PV modules and inverters.
Prices for PV systems have been decreasing drastically during the last decades, especially in the
last 8 years. . The investment costs for a typical 10 to 100 kWp PV rooftop system have decreased
75% over the last decade, i.e. from ~5260 USD /kWp in 2006 to ~1300USD/kWp in 2017 [5].
The so-called “learning curve” shows a price reduction between 20 and 25%% for PV modules with
each doubling of cumulated module production in the last 37 years. Drivers of such a cost
reduction include economies of scale as well as technological improvements. [1; 4]
The chart below shows that module prices continue declining from 2017 to 2018, from approx. €
0.32 - € 0.58 per Wp in 2017 to the level of € 0.42 - € 0.24 per Wp in 2018.
According to the 2018 Photovoltaics Report by the Fraunhofer ISE, the market share of string
inverters is estimated at 52%, with costs ranging from € 0.07 - € 0.19 per Wp. These inverters are
mostly used in residential, small and medium commercial applications. The market share of central
inverters, with applications mostly in large commercial and utility-scale systems, is about 44%. The
specific net retail price of central inverters is about € 0.06 per Wp based on data from the German
market.
A small proportion of the market (about 3%) belongs to micro-inverters (used at module level).
Furthermore, it is estimated that 3 GWp of DC/DC converters, also called “power optimisers”, were
installed in 2017.
24/02/2017
Development of module prices 2017 – 2018 in € per Wp (Data source: PVMagazine 2018)
Inverter market details 2018 (Data source: Fraunhofer ISE, 2018, p. 37 based on various
sources)
24/02/2017
5.7 Operating costs
• overview the operating cost structure of a PV project and
• identify the most important OPEX items.
Operating costs (OPEX) for PV systems are very low. However, in order to maximise energy yield and
hence revenues, OPEX will never be zero and should be looked at carefully. The OPEX for PV projects
predominantly include operations and maintenance (O&M) costs, land lease payments and insurance
costs.
O&M costs can consist of different sub-costs, such as fees payable under full service agreements for
the modules and/or inverters, costs for regular cleaning services for modules, and maintenance staff
(personnel in charge on-site). O&M costs are project-specific and have to be estimated in detail based
on existing contracts. In the initial evaluation phase, a rough first estimate of 2.0% of the total CAPEX
is often used.
Land lease contracts are also negotiated individually and their costs can vary from project to project.
A market-oriented estimate might, for example, be USD 1,000 per MWp. Insurance costs for PV projects
have meanwhile been standardised by most insurance companies.
Additionally, more general costs should be taken into consideration, such as costs for electricity
consumption by the production facility, grid connection and/or balancing energy and costs for
commercial administration and auditing of the project company. The OPEX budget should further
include a cost reserve for the dismantling of the project (and module recycling, if not provided by the
equipment manufacturer) once the operating period ends.
Operating expenditures of a sample 5 MWp PV system (Source: RENAC)
5.8 Endnotes
[1]: Fraunhofer ISE (2016), Photovoltaics Report, p.9
24/02/2017
6. Summary
6.1 Summary of the course
This first unit on PV systems provided an introduction to PV applications and components, explained
some physical characteristics of PV modules relating to power generation, and explained the basics of
yield estimation and economics of a PV plant.
The two general categories of PV systems were discussed, i.e. grid-connected PV systems and off-grid
PV systems. Grid-connected PV systems were further categorised into distributed and central PV
systems; off-grid PV systems into stand-alone systems (with or without batteries) and mini- or micro-
grids.
The heart of a PV system is the PV module which consists of many PV cells connected in series and/or
parallel. An inverter converts the direct current from the PV modules into alternating current which
can be injected into the grid. Off-grid PV systems with batteries require a charge controller to protect
the batteries against over or under charge.
The underlying physical principle of PV systems is the photoelectric effect whereby the energy of
photons (quants of light) causes electrons to move in a specific material. Thus, the intensity of solar
radiation and the size of the PV cells have an impact on the current produced. In addition, the
temperature has an impact on the voltage of the cells. Current and voltage determine the power
generation of the cell or module.
For investment decisions and revenue projections it is important to carry out an energy yield estimate
of a PV system prior to development. The energy yield can be estimated using Peak Sun Hours, peak
power capacity of the PV system and the estimated or known performance ratio.
6.2 References
Fraunhofer ISE (2016): Photovoltaics Report, Dr. Simon Philipps, Fraunhofer ISE und Werner
Warmuth, PSE AG; available online at
https://www.ise.fraunhofer.de/de/veroeffentlichungen/studien/photovoltaics-report.html (last
access 02.06.2017)
GHI Solar Map © 2014 GeoModel Solar, Wikimedia; available online at
https://commons.wikimedia.org/wiki/File:SolarGIS-Solar-map-Philippines-en.png (last access
02.06.2017)
Solarserver – Global Solar Industry Website: PVX Spot Market Price Index soler PV moules; available
at http://www.solarserver.com/service/pvx-spot-market-price-index-solar-pv-modules.html (last
access 02.06.2017)
24/02/2017
7. Further reading
James P. Dunlop; Photovoltaic systems; ISBN: 978-1-935941-05-7; American Technical publisher
Comprehensive guide to the fundamentals and principles involved in the planning, design and
installation of solar photovoltaic (PV) systems. It covers the key steps in project development and
specific requirements for installations.
Trends 2017 in photovoltaic applications; IEA

This document presents the recent trends in PV technology and applications in 7 different chapters.
Building integrated photovoltaics as a core element for smart cities; ETIP

The targets and opportunities of integrated PV systems for year 2030 are discussed in this paper
provided by ETIP.
The true competitiveness of solar PV; ETIP

Important electricity value parameters for the LCOE calculation are here described and in the sixth
chapter competitiveness results of different PV systems are analyzed.
24/02/2017

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© Renewables Academy (RENAC) AG

• categorize different PV system applications,

1.2 Introduction to the course

• explain photovoltaics in a nutshell and

• distinguish between off-grid and grid-connected PV systems.

Overview of off-grid (left) and grid-connected (right) PV systems. (Source: RENAC)

2.2 Grid-connected configuration

Typical residential PV system (Source: RENAC)

Solar farm in Germany (PV tracking system) (Source: RENAC)

Typical off-grid PV system (solar home system) (Source: RENAC)

• identify the basic differences of PV cell types available.

PV cells, modules and arrays (Source: RENAC)

3.3 Introduction to inverters

String inverters with a capacity of maximum 3 kW (Source: RENAC)

3.4 Introduction to mounting structures

• explain the basics of the photoelectric effect,

PV cell exposed to sunlight (Source: RENAC)

• name the basic electrical characteristics of a PV cell and

I-V curve and power curve of a PV cell (Source: RENAC)

4.3 Factors affecting power output

• only a small increase/decrease in voltage output;

Solar irradiance dependent I-V curve (Source: RENAC)

Temperature dependent I-V curve (Source: RENAC)

• illustrate the relationship between voltage, current and load resistance.

where I is current in Ampere, V is voltage in Volts and R is load resistance in Ohms.

4.3.4 Standard test conditions

4.3.6 Calculation exercise

What will be the maximum VOC produced by the module?

What will be the minimum VOC produced by the module?

4.3.7 Orientation and inclination (tilt) of PV modules

Principle of Performance Ratio (Source: RENAC)

Visualisation of Peak Sun Hours (Source: RENAC)

5.4 Metering options

• distinguish between the two basic metering options for PV systems.

5.5 Investment cost of a PV system

5.6 Price tendencies for modules and inverters

Operating expenditures of a sample 5 MWp PV system (Source: RENAC)

Trends 2017 in photovoltaic applications; IEA

Building integrated photovoltaics as a core element for smart cities; ETIP

The true competitiveness of solar PV; ETIP

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