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Solar Energy Versus the Grid: This Map Shows Where PV Makes the Most Sense

Large corporations are turning into the biggest solar consumers. Last year, 25 of the biggest companies in the U.S. cumulatively installed nearly a half a gigawatt of solar at stores, warehouses and manufacturing plants. 

With solar costs continuing to fall, the technology is a no-brainer for companies looking to do something for the environment, right? Well, it all depends on where they’re located.

The map below, put together by the data crunchers at Energy Points, compares the efficiency of the local grid to the average efficiency of solar, with regional solar resources layered on top.

In the Southwest, which has the best insolation and a heavy dependence on coal, on-site solar beats the grid in efficiency by a significant margin. But in the Northwest, where efficient hydropower is abundant and solar resources are mediocre, the grid beats solar in efficiency. Elsewhere throughout the country, solar performs pretty well — particularly in the regions most reliant on coal:

Of course, there are lots of other considerations for investing in distributed energy: diminishing price volatility, increasing power reliability, or even boosting public relations. But the map provides a useful guide when considering the net energy benefit of installing solar. 

The information comes from Energy Points’ database of source energy, which compiles factors such as resource availability, the local generation mix, environmental conditions and the lifecycle energy use of different technologies. The startup uses that data to help commercial or industrial customers evaluate onsite energy decisions by modeling source energy against a company’s billing and consumption data. The model could also help governments determine where to focus efforts in resource conservation and energy-related programs.

“We see ourselves as a big calculation engine,” said Ory Zik, founder and CEO of Energy Points. “The end goal is to be the calculation that everyone uses in order to know their source energy.”

The map below shows another one of Energy Points’ metrics: electricity per gallon, or EPG. 

The EPG metric pulls together every imaginable resource factor into one, theoretically allowing a customer to know what energy technologies will have the biggest environmental impact. The company also does the same for water resources.

 

Energy Points only has “tens of customers,” but is developing relationships with hotels, consulting firms and manufacturers looking holistically at energy use. It is also working on some white-labeled mobile products that show consumers the energy and resource implications of their buying choices.

“Most companies only focus on what they consume onsite. But the market is tied together,” said Zik. “We bother to do the calculation on the real energy return on energy invested.”

greentech mediaGreentech Media (GTM) produces industry-leading news, research, and conferences in the business-to-business greentech market. Our coverage areas include solar, smart grid, energy efficiency, wind, and other non-incumbent energy markets. For more information, visit: greentechmedia.com , follow us on twitter: @greentechmedia, or like us on Facebook: facebook.com/greentechmedia.

Content Discussion

Jim Stack's picture
Jim Stack on May 23, 2014

The North west has 84% Hydro . If Germany can make use of Solar so can anyplace in the USA.

I have Solar in the Greater Phoenix area and it’s so good the utilties are trying to fight local owners and they want to own and sell it at a 50% extra cost. Mine paid off in less than 3 years.

John Wabel's picture
John Wabel on May 23, 2014

Kudos, one of the best and most usable renewable charts I’ve seen, thank you.

 

John

Geoffrey Styles's picture
Geoffrey Styles on May 23, 2014

“If Germany can make use of Solar so can anyplace in the USA.”

That’s true, if we were willing to subsidize it heavily enough, as Germany has, and tolerate 15:1 swings in monthly output, summer to winter. Fortunately, solar costs are falling fast enough that we should soon be able to end subsidies and see it grow where installations are driven mainly by sense, rather than sentiment.

See:

http://theenergycollective.com/davidhone/383941/two-sides-every-coin?utm_source=tec_newsletter&utm_medium=email&utm_campaign=newsletter&inf_contact_key=3d385537a2861a8c43dc415030b9cd7557696c3ad2da915f04e0e39670ce1916

Math Geurts's picture
Math Geurts on May 25, 2014

About Germany:

“The economic inefficiency of grid parity: The case of  German photovoltaics”

“In order to enhance the overall economic efficiency, we argue that the financial incentive for in-house PV electricity consumption should be abolished. This implies that either the consumption of self-produced electricity should be burdened with taxes, levies and other surcharges, as in the case of the consumption of grid-supplied electricity, or that the residential electricity price should be reduced to the ‘true’ costs of electricity procurement. Moreover, since grid costs are primarily fixed costs, the traditional energy-related network tariff should be replaced by a cost-reflective tariff corresponding primarily to the grid connection capacity. As a result, competition between PV and all other electricity generation technologies would be ensured and inefficient investments avoided”

https://www.econstor.eu/dspace/bitstream/10419/92970/1/775175242.pdf


 
John Wabel's picture
John Wabel on May 25, 2014

Both Jim and George are right on.

Do solar where it competes (Arizona) cost-effectively. 

Investing in someone elses solar installation in Arizona is highly more cost-effective than for me to put modules on my home in Seattle. 

Germany should have been building their systems in Spain this whole time, think what their volume of installation would be worth with 1/3 more sunlight.

Bas Gresnigt's picture
Bas Gresnigt on May 26, 2014

John,
“…Germany should have been building their systems in Spain … 1/3 more sunlight.”

You raise an interesting idea others also had. They started Desertec; check their short video.

Originally the idea was to start in south-Tunesia, which seemed political stable and has significantly more sun than Spain. But since the revolution, the Sahara region is less stable.

So now South of Spain seems worthwile.
Some issues:
1- will the costs of electricity transport to Germany take away all profit / benefits of the whole operation?
Don’t know the answer.

2 – will the political climate in Spain allow such operation for a long time (at least four decades)?
The second question will create big doubts in Germany, considering the way Spain changed its attitude towards PV-panels after the right-wing party won the elections. They changed conditions in such a way that all private PV-solar became loss-making (the grid connection became exceptional expensive for housholds having solar, and big fines if one had/created solar without grid connection).

I think that it is more sure for Germany to stick to the import of Russian gas.
They have deep underground gas storage faciliies with enough gas to stand a Russian export stop for at least half a year (probably a year). And Russia needs the German money…

Jim Stack's picture
Jim Stack on May 26, 2014

John,  You are correct. In fact I invest in local Solar Energy projects here in Phoenix and it pays off very well. I help the community and World and make super returns of over 30%. Jim

John Wabel's picture
John Wabel on May 26, 2014

Jim,

30% over what period of time? 

Can you enlighten your fellow reads what the annual return is on your solar investment(s)? 

Jim Stack's picture
Jim Stack on May 26, 2014

John,

    Sure I bought a system for a non-profit and get the return over a 20 year period that is 30%. Depending on what you can take in tax incentives and other things it can pay even better and the non-profit saves too along with helping the environment.

Jim Stack

  

John Wabel's picture
John Wabel on May 26, 2014

Steve Lacey,

Definition please: Grid efficiency– 

Are all HVAC units included in that category?

Math Geurts's picture
Math Geurts on May 27, 2014

“The economic inefficiency of grid parity: The case of German photovoltaics”

“The cost savings demonstrate that despite the costs of installing and operating the PV and battery storage systems, households are economically better o if they meet part of their electricity demand using self-produced PV electricity instead of completely using grid-supplied electricity. This is due to the fact that the consumption of self-produced PV electricity – in contrast to the consumption of grid-supplied electricity – is exempted from the payment of taxes, levies, surcharges and network taris.”

“As a consequence of the in-house consumption of self-produced PV electricity, the average share of the household’s annual electricity demand met by grid-supplied electricity decreases (from 100 %) to 38 % – 57 %. However, the maximum (peak) amount of electricity purchased from the grid (within a single hour) decreases by only 2 – 4 %. If we assume that the single household’s gridconnection capacity was originally dimensioned to meet the household’s peak demand, then the installation of the PV and battery storage capacity would not allow for the grid connection capacity to be reduced.”

 

“Moreover, we find that the single household’s optimization behavior leads to redistributional effects that may be undesirable from the overall economic perspective. Specifically, the single household’s optimization behavior raises the financial burden for the (residual) electricity consumers by more than 35 billion € € 2011 up to 2050. In addition, it yields massive revenue losses on the side of the public sector and network operators of more than 77 and 69 billion € 2011, respectively”

 
Bas Gresnigt's picture
Bas Gresnigt on May 27, 2014

Math,

The idea to impose taxes, etc on self produced value by consumers would revolutionize the system.
So an house owner also should pay a tax if he/she:

– improves the isolation of his house as that implies less electricity / gas consumption. And the gas / electricity grids are designed for standard/big consumption?

– installs intelligent thermostats in all rooms that decrease his gas / electricity consumption?

Those taxes may greatly increase the numbers of households that go off-grid (in Germany ~25% of consumers said the would before 2020).
If governemt then installs same taxes/obligation as in Spain (obliged to connect to the grid and pay a big monthly fee because you have PV-solar), it will stop the installation of PV-solar and even create de-installation of rooftop solar (as in Spain).

Such actions will also stop the development towards a more advanced grid, which benefits all (more reliable as German experience showed).
And the Energiewende may not reach its goals; 55-60% renewable in 2030.

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