The next step in the evolution of solar PV is the emergence of the Smart PV System with integrated batteries, writes Peter F. Varadi, one of the solar industry’s great pioneers. Germany is leading the trend, which Varadi predicts will be followed globally and will have a profound impact on the structure of electricity markets across the world. Varadi, winner of the 2004 European Photovoltaic Industry Association’s (EPIA) John Bonda award in recognition of his lifelong service to the global PV sector, and author of an upcoming book on the history of the industry, explains what the Smart PV System is and why it is the logical next step in the PV market.
Market researchers are predicting that residential and commercial PV energy storage systems will be one of the big growth sectors first in the German and later in other PV markets. The utilization of these PV systems will be enhanced with the introduction of the “Smart PV Systems”. There are indeed reasons to assume that such systems are the wave of the future. To explain why this is so we need to take a closer look at the historical development of PV systems.
During the first 20 years (about until 1990) of the terrestrial PV business (before that solar cells were mostly used in space applications, e.g. to power satellites) most of the systems were stand-alone, “off grid” applications. In these applications the PV modules were either directly connected to the load, for example water pumping, or a battery was used and the PV system charged the battery and the battery provided the power to operate the load. These were called “Stand alone” (“Off grid”) PV systems.
This was followed by the emergence of “hybrid systems”, in which PV is combined with other forms of generation, usually a diesel generator. Since the reliability of PV was established this system is by now rarely used.
From 2000, “grid connected” PV systems took over the majority of installations. The first grid connected PV system was the “net metering” method. In this application only one electricity meter is used. The electricity produced by the PV array is used by the load or, if the load does not need it, is sold through the meter to the grid. If the PV array is not producing enough, the electronic distribution buys electricity from the grid and the meter turns in the opposite direction.
The Feed in Tariff system (FiT) was started with the “Aachen model” which was approved and published on November 29, 1994 and was passed into law for the whole of Germany on February 25, 2000. This system needed two electric meters. The PV system sells electricity to the grid at a certain price established by the government and if needed buys electricity from the utility at their price.
The introduction of the FiT system had an expected result. Because of the profit one was able to make by installing a PV system the demand was so great that a mass production of PV modules resulted, which led to the very low prices that had been hoped for. But it also caused an interesting but unexpected result. The great majority of the PV systems were sold to individual homes, farmers and small businesses. In Germany of the total number of the 24,700 MWp installed (2011) PV systems, some 81% (20,000 MWp) was installed on private houses. The produced electricity was fed into the grid, and being solar this happened during the peak load periods.
This increasingly started to cause problems for the German large utilities, which had no significant solar power production of their own. For example E.ON, the second largest of the German utilities, had a power production capacity of about 19.5 GW but no PV installations. At the end of the third quarter of 2012, in E.ON’s third quarter report, CEO Johannes Teyssen sounded the tocsin as he stated that: “In most European markets, the gross margin for gas fired units is approaching zero or is indeed already negative. One factor is that the demand for electricity remains very low. But another key factor is that renewable-source electricity is being fed into the grid during peak load periods”.
As a result in 2012 a drastic change occurred in Germany. The large utilities (the Big Four, as they are called in Germay: RWE, E.ON, EnBW and Vattenfall) finally seemed to realize that PV was not just a nuisance that takes away business by powering garden lights, but that it had become a substantial source of electricity which was damaging their peak load business. And they realized this was only the beginning. What then happened is that the Big Four suddenly turned green.
This can clearly be seen from their most recent advertisements. If one goes to a German oriented search engine, for example “google.de”, one can see that all of the four major German utilities now appear “solarized”: there is RWE Solar, E.ON Solar, EnBW Solar and Vattenfall Solar.
Rheinisch-Westfälisches Elektrizitätswerk AG (RWE) the largest utility went one step further. In the spring of 2013 realizing there is a huge market for storage systems in Germany for the already existing over one million homes and farms equipped with PV systems on their roofs feeding their electricity into the grid, decided to start selling to those people an electricity storage system that is designed to make them more independent from the grid!
This is quite an unbelievable development if you think about it. The advantage for the utilities is that this leads to less PV feeding electricity into the grid at peak power time. There is also a risk, though: these mini-utility owners may want to become fully independent, especially as they are able to utilize the German government’s current subsidy for storage of electricity.
On the other hand, RWE may have realized these customers were already lost for the utilities. By offering to make them independent, this will convert them into new but different customers – namely customers of RWE’s “HomePower solar” system. On its website RWE is carrying an advertisement explaining to their electricity customers the advantages of becoming independent from the electric utility in this way: “What you should have is a solar electricity storage that makes it possible to utilize the solar electricity exactly when you need it. This independence offers you as of now the RWE HomePower solar”.
So here we see the next logical step in the evolution of PV systems: the combination of the “stand alone” and the “grid connected” systems. This “Smart” PV system (so-called because the term “hybrid” PV system is used for PV in combination with other forms of electricity generation) is a combination of a PV system with electricity storage an inverter and an “electronic brain”. This is aqctually a combination of the “stand alone” and the “grid connected” systems. The system can operaate as a “stand alone” system but if needed it becomes a “grid connected” system by selling or buying electricity. The decision is being made by the “electronic brtain”.
Market watchers believe that this. The usage of the new “Smart PV system” was recently started and it is envisioned that this new PV electricity storage and “electronic brtain” will be the biggest selling product for the future. It will be used not only for small installations, but also for larger ones for businesses, such as department stores and so on. Below is a schematic of a “Smart PV system controller.
Note that today’s appliances more and more require DC and not only AC (DC and AC). The large German manufacturer Bosch realized this in 2012 and developed the needed “electronic brain” combined with battery storage and inverter (the BTP-S 5 Hybrid). The Smart PV system’s electronic brain supplies DC directly from the PV array to charge the battery. It provides DC to the appliances operated on DC. With an inverter it supplies electricity to the appliances operating on AC. If the battery and the appliances need no power, the system sells the AC electricity through the meter to the grid. Conversely, it buys electricity if the solar array does not produce enough electricity for the load.
The advantages of the “Smart PV System” are such that it is safe to predict that it will be the next step in the PV revolution. According to the German solar association, some 1100 applications for the solar storage subsidy have already been approved and 4,800 are waiting for approval. In addition, the German government is co-funding the development of a 5 MW-hour for surplus renewable energy. Meanwhile, California has also announced a massive rollout of distributed energy storage systems. The future is here already.
Peter F. Varadi escaped from Hungary to the US in 1956 and after a scientific career was appointed head of the Communication Satellite Corporation’s (COMSAT) chemistry laboratory in 1968. In this function he participated on research in photovoltaic (PV) solar cells, which were used to power the satellites. In 1973 he co-founded SOLAREX Corporation, Rockville, MD (USA) to develop the utilization of solar cells (PV) for terrestrial applications. SOLAREX was one of the two companies which pioneered this field. By 1978 it became the largest PV Company in the world. It was sold to AMOCO in 1983. Since then he continued to consult, first for SOLAREX, later for the European Commission, The World Bank, NREL, and many other organizations. In 2004, in recognition of his lifelong service to the global PV sector and his continuing commitment in striving for excellence in the PV industry, he received the European Photovoltaic Industry Association’s (EPIA) John Bonda prize. He is the author of two books and has just completed his third book: “SUN Above the Horizon – Snapshots from the History of the Terrestrial Solar Photovoltaic Industry”, which will be published in the first quarter of 2014.
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