While it’s certainly true that photovoltaic (PV) Solar Solutions save their owners thousands of dollars annually over a 30+ year period, and also reduce carbon emissions, there’s another important impact seldom talked about. This is the impact on Grid Capacity Requirements…specifically the peak capacity that must be provided by local utilities.
Most people just turn on a light switch or the TV without thinking about what’s required to support their usage of electric power. Any single device – be it a single light bulb, a chest freezer or a large hot-tub – has a specified demand in terms of current required for it to operate at the design voltage (120VAC, or 240VAC). Small devices such as cell-phone chargers require only tiny amounts of current at 120V, whereas an air conditioning unit or family hot-tub can draw much more power from the grid. The challenge for utility companies is to figure out how much overall demand for electric power they will experience over the long term and build capacity that will handle the maximum or “peak” demand they may face. When a utility is unable to supply sufficient capacity to meet the full peak demand at any specific time, the result is often a brown-out, or even a potential black-out due to overloading of the grid.
Thus, electric utilities build their grids so as to produce sufficient power to handle the peak points in demand over time. But that’s expensive, because the utility essentially needs a network of power plants with the overall capacity to produce energy at that peak level all the time, even if the peak demand only occurs a fraction of the time. In terms of efficiency of electric energy production, the most efficient grid system would be one where peak capacity is utilized almost 100% of the time, yielding the most energy production and utilization possible from a given set of assets (e.g. power plants). But in the real world, most electric utilities operate at an average load factor (percentage of total potential capacity) of much less than that: often just 35-50%. The gap between potential generation capacity and actual production is essentially wasted capacity…much like empty seats on an airplane that just took off. The airline could have carried more passengers in those empty seats at almost zero incremental cost. However, since those empty seats weren’t sold, the plane left the gate, flew its flight plan, and delivered a fewer number of total passengers with less revenue collected, yet at roughly the same costs they would have incurred if they would have booked a full flight. The situation is similar when it comes to energy production from large generation plants — operating at maximim capacity is always the most efficient.
So, how can a utility company boost its load factor when that’s essentially determined by when consumers decide to turn on their oven, range, hot tub, etc? A substantial improvement could be achieved in limiting the need for utilities to build larger plants to cover rare peaks in demand, if more electric power consumers were to deploy a combination of energy efficiency (EE) solutions and distributed renewable energy (RE) technologies that would save energy, reduce carbon emissions and assist in balancing the load by time-shifting some of the demand, while offsetting a good portion. If the use of photovoltaic solar solutions, for example, were more broadly implemented, they would help alleviate some demand, taking demand pressure off of the utility grid and in so- doing, also provide downward pressure on electric utility rates. Since the production of electric power from solar energy solutions would also take place during daylight hours (in alignment with the period of highest demand for electric power), PV solar installations can make a tremendous impact on net demand that’s required from electric power generation plants…and that can help utilities increase their load factor. Something to think about.