telecom network.
http://www.electroiq.com/articles/pvw/2011/10/a-solar-roof-on-every-us-resid
ence.html
By David Anthony and Tao Zheng
October 17, 2011 -- Who ever thought that every home in America would have a
radio, a television, a phone, a computer, and now a solar rooftop? If it can
be imagined, then it can be done.
As crude oil price fluctuates between $70 and $110 a barrel in the past year
and nuclear power expansion has been restricted after Japan's Fukushima
nuclear disaster, renewable energies such as photovoltaic (PV) could fill
the void. Let's imagine if every residential home in the US had a solar
roof. It is our interest to estimate the maximum potential of rooftop PV
capacity in America, assuming 100% market penetration.
Before the market size estimation, let's review the current trend of the US
solar markets. Recent report from Interstate Renewable Energy Council shows
the solar installed base of PV in 2010 doubled compared to the solar
installed base in 2009, while installed capacity for other solar
technologies such as concentrating solar power (CSP) and solar thermal
collector also increased significantly. Based on a study by Solar Energy
Industries Association, cumulative grid-connected PV in the US has now
reached over 2.3GW, with top seven states (such as California and New
Jersey) having installed 88% of all PV in Q1 2011. However, US solar
penetration falls behind some European countries, most notably Germany. In
2010 alone, Germany installed 7.4GW of PV systems and currently has an
install base of 14.7GW, more than 6x that of the US. Germany's solar market
is traditionally driven by residential installations, supported by generous
government incentives. The primary barrier stopping American homeowners from
PV installation is cost.
Historically, the US PV market has been driven by the non-residential
sector; 42% of total installation in 2010 was commercial, public sector, and
non-profit. However, residential and utility sectors have been gaining
ground steadily with market share of 30% and 28%, respectively. Distributed
rooftop represents the largest segment of the US PV market. It is fueled by
declining PV prices, government incentives, retail electricity rate earning,
and lack of transmission losses.
To simply estimate rooftop PV total available market, start with total roof
space available. Based on data from US Census Bureau, total US housing units
were 127.7 million in 2009. According to the National Association of Home
Builders, the average home size in the US was 2,700 square feet in 2009. If
we assume average number of floors per building is two, the total
residential roof space available is 172.4 billion square feet. In a more
detailed rooftop PV market penetration scenario analysis, Navigant
Consulting Inc. (NCI) used PV access factor and PV power density to estimate
technical rooftop capacity for both residential and commercial buildings.
The PV access factor takes into account shading, building orientation, roof
structural soundness, as well as cooler and warmer climates in different
states. The resulting PV access factors for residential and commercial
buildings are 25% and 60%, respectively. The PV power density is calculated
with a weight-averaged module efficiency using market share for the three
most prevalent PV technologies today: crystalline silicon (c-Si), cadmium
telluride (CdTe), and copper/indium/gallium/selenide (CIGS). The resulting
PV power density is 13.7MW/million ft2, assuming an average module
efficiency of 18.5% in 2015. The total rooftop PV technical potential can be
calculated as:
Rooftop PV technical potential = Total roof space available * PV access
factor * PV power density
Based on the NCI study, the combined US rooftop PV technical potential,
independent of economics, for both residential and commercial building will
reach 712.2GW in 2015. Figure 1 represents the state-by-state results of the
technical potential:
Figure 1. U.S. rooftop PV technical potential in 2015, estimated by Navigant
Consulting Inc.
National Renewable Energy Lab (NREL) applied a different approach, the Solar
Deployment System (SolarDS) model, to estimate that the technical potential
of residential and commercial rooftop PV market are approximately 300GW each
by year 2030. In the NREL model, shaded roofs and obstructed roof space were
eliminated, and customer adoption rate was considered to cover economic
factors, such as PV cost, policy incentive, and financing.
Based on above potential market size analysis, the current cumulative
grid-connected PV installation only represents 0.3% of total U.S. rooftop PV
technical potential, which indicates a huge market potential. In addition,
the rooftop PV system has to be replaced every 15 to 20 years, which
represents another market opportunity. If we use the NCI estimated US
rooftop PV technical potential of 712.2 GW in 2015, assuming 100% market
penetration, we can estimate how much electricity energy can be generated by
such power. If we assume 10 hours/day and 200 days/year with sunshine, the
total rooftop PV-generated electricity energy will be 1,424 billion kWh, or
1,424TWh. Compared to the total US electricity generation of 3,953TWh in
2009, the technical potential of electricity generation from rooftop PV can
take over 1/3 of US electricity demand. As indicated Figure 2, from US
Energy Information Administration (EIA), total solar generated electricity,
from both solar thermal and PV, only represents less than 0.1% of total
electricity generation in 2009. Rooftop PV has a huge market capacity to
grow, and the dramatic installation cost drop will accelerate penetration.
The current crystalline solar module price has dropped to $1.25/watt,
compared to $2.80/watt two years ago.
Figure 2. U.S. electricity generation mix in 2009. (Source: EIA Electric
Power Monthly, October 2010)
There are two ways to assimilate PV arrays with rooftops: either integrated
into them, or mounted on them. Mounting PV panels on rooftop requires more
dangerous labor practices and is not aesthetically pleasing.
Building-integrated photovoltaics (BIPV) are photovoltaic materials used to
replace conventional building materials in roof, skylights, or facades. The
advantage of BIPV over conventional roof-mounted PV panels is that the
initial cost can be offset by reducing the amount spent on building
materials and labor. BIPV also appears unobtrusive on a building structure.
Current innovations have led to increasing diversity of BIPV products on the
market, including rigid BIPV tiles and transparent BIPV glass. Advances in
thin-film PV technologies have led to flexible solar tiles and shingles.
BIPV market competition has shifted from module provider to construction
site. The fight for BIPV leadership in building and construction has begun.
A recent article from Greentech Media points out the only way to realize
BIPV is to be active in the architecture and early design of the building,
consulting on matters as integral as the compass orientation of the
building. For example, OneRoof Energy, a California-based residential BIPV
provider, established strategic alliance with a national network of roofing
contractors. The exclusive integrator relationship, as well as its
innovative financing program to reduce homeowner installation cost, provides
strong competitive advantages for the company to gain market share
nationwide. Please excuse our shameless self-promotion as David Anthony one
of the authors of this article is an investor and board member of OneRoof
Energy.
Figure 3. Residential BIPV installation.
By comparing residential and commercial market for BIPV, residential sector
has more advantages using standard-sized BIPV materials. Many commercial
buildings require custom size panel, due to specs from the building
designer. It is impossible for BIPV makers to prepare a variety of
custom-sized modules in a mass production line. In addition, landlords of
commercial building in many cities have no incentive to install BIPV. For
example, in New York City, the electricity bill is paid by the tenant, not
the landlord. Therefore, the real BIPV opportunity stays with residential
sector, not commercial buildings. Residential rooftop PV market has a bright
future with huge market potential, and already shows strong growth in recent
years. The BIPV market could reach $5.8 billion in 2016, based on a report
from Pike Research.
Beside electricity generation, the rooftop PV market could also have
potential to create millions of job opportunities for America. For a typical
0.5 MW solar installation, it will take 6 contractors for installation and
another 3 full-timers for maintenance per year. We assume rooftop PV market
will take 20 years to reach 100% penetration. In the past 10 years, the
average number of annual new home construction is 1.47 million units.
Considering recent housing market slow down, we can assume the new home
construction will be 1 million units per year over the next 20 years, which
is 0.78% growth of US total housing units. Therefore, the total U.S. rooftop
PV technical potential will reach 800GW in 2030. For a simple estimation, we
assume 40 GW/year for the next 20 years. Each year, we assume the rooftop PV
market will create 480,000 jobs for installation. In addition, it will
create 240,000 jobs per year for maintenance service, with total 4.8 million
jobs for the next 20 years. Therefore, the rooftop PV market could generate
more than 5 million jobs domestically, if we assume 100% market penetration
by 2030. This "back of the envelope" excludes the re-roof market, which
could add to both employment and BIPV installation.
With potential to create over 5 million jobs and one third of US electricity
energy, the rooftop PV system will become more lucrative for investors,
government and US home owners. As PV electric rates are approaching grid
parity, there is no reason for the US to lag so far behind Germany, if
government provides enough inventive and infrastructures for PV market
development. Given the upcoming US presidential elections, now is the time
to be talking about new energy.
David Anthony is the managing director of 21Ventures, LLC, a VC management
firm that has provided seed, growth, and bridge capital to over 40
technology ventures across the globe, mainly in the cleantech arena. Anthony
is an investor and on the board of directors of OneRoof Energy, LLC. He
holds an MBA from The Tuck School of Business at Dartmouth College and a BA
in economics from George Washington University.
Tao Zheng is a material scientist in advanced materials and cleantech
industry. He has 20+ patents and patent applications, and has published many
peer-reviewed papers in scientific journals. Tao Zheng has a BS in polymer
materials sciences from Tsinghua University in China, and a PhD in chemical
engineering from University of Cincinnati. He obtained his MBA degree with
distinction in finance and strategy from New York University, Stern School
of Business.
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