Solar Power Generation

Creating electricity from the sun’s rays will work only with the backing of industry and government

Canadian Industrial Machinery November 2010
November 1, 2010

Solar power expert Joshua Pearce, Queen's University, explains the future of solar in Canada.

Solar Panels on roof

Photovoltaic technology is becoming competitive in a number of markets, especially in larger grid applications.

For many years solar power generation has been utilized on a small scale. Farmers and cottagers have used this technology either to augment power from the traditional grid or to generate power in areas far from power lines where electricity transmission can be cost-prohibitive.

However, as the technology evolves, these may no longer be the only instances in which the use of the sun as a power source is plausible. And this, ideally, will lead to long-term manufacturing production of the necessary parts and modules in Canada.

Solar photovoltaic (PV) devices convert sunlight into direct-current (DC) electricity, the same type of power that can be stored in batteries. Today these PV systems also can be tied directly to the grid via an inverter to produce alternating-current (AC) electricity that can be used directly or sent back to the grid.

“Solar photovoltaic power generation is finally starting to live up to its enormous potential to be a major contributor to the world’s electricity needs,” explained Queen’s University Mechanical Engineering Professor Joshua Pearce.

Last year, according to Pearce, global PV production eclipsed 10 gigawatts (GW), which is equivalent to roughly 10 coal-fired power plants. This year 16 GW of production is possible.

“As more factories and larger factories come online, the costs of PV will continue to decline and open up new markets,” said Pearce. “PV can no longer be brushed off as a niche player. In a century when environmental externalities can no longer be ignored, PV will play a larger and larger role in world electricity supply.”

Until very recently most PV systems were off-grid and attached to batteries to provide power in remote locations. Today in these types of applications, PV can provide the least costly supply of electricity. Because of a combination of technological evolution and economies of scale, PV is becoming competitive in a number of markets, and for much larger grid applications.

Types of Solar Systems

Historically, most of the small-scale solar PV systems used in off-grid applications tended to produce expensive per unit power because of the high costs of the necessary batteries. Larger solar farms were then developed in sunny regions and were traditionally owned by utility companies. These facilities served the grid directly in a traditional centralized power plant arrangement.

Now there is a third choice: grid-tied systems that both generate power for local use and distribute unused power back to the grid.

In this type of setup the PV system provides a percentage of electricity needs, but also is attached to the grid.

solar electrical grid

The electrical grid must now be able to handle more electricity and more generation points.

“In this way the PV owner gets the benefit of the grid and a much lower-cost system, while the grid benefits from lower transmission losses and other technical benefits of having generation located right near, or on the roof of, the electricity user,” Pearce said.

Barriers still exist, however, to solar power generation despite the benefits.

In the case of solar farm installations producing large amounts of electricity, the primary barrier is grid capacity. Electricity transmission systems are created on a model that takes electricity from centralized plants out to users.

To make the best use of solar generating systems, the grid must be able to handle more electricity and also handle more generation points.

“A secondary barrier that we will face this century is the penetration limit, or the percentage of solar that can make up our energy supply,” said Pearce. “Solar cells do not work at night and only intermittently on cloudy days. Thus, without a dispatchable source of electricity to back it up, or a method to store solar energy, the amount of solar we can put on the grid is very limited.”

Historically, less than 10 percent of the total generated power that enters the grid each year comes from solar power.

Pearce’s research has shown that this penetration limit can exceed 25 percent by coupling PV systems with commercially available combined heat and power (CHP) units and modest battery storage. 1

“To go further we must couple solar with other sources of power, for example, hydroelectricity, or improve energy storage from batteries, supercapacitors, and hydrogen generation plus fuel cells,” said Pearce. “Ideally you also want the generators as close to the users as you can get to cut down on transmission costs and losses. The distance away from the existing grid that you can put a solar farm is highly dependent on economics and thus variable.”

Why Solar?

According to Pearce, the true cost of electricity should include the negative environmental variables that arise during the generation process, including pollution, health costs, and the cost of climate change.

“Solar electricity generation is a truly sustainable source of electricity that erases the negative externalities from traditional sources,” said Pearce. “By shifting more of our electricity generation to solar now, we are cushioning ourselves from future costs as environmental externalities are brought into the cost of electricity, radically increasing them.”

Professor Joshua Pearce

When grid-connected, solar electric generation also can replace some of the highest-cost electricity used during times of peak demand, such as a hot summer day. This can reduce the load on the grid and eliminate the need for other local backup during blackouts. Power from grid-connected PVs can be used locally, which will also reduce transmission losses.

The Bottom Line

“If we are careful about it, we can also use this fundamental transition to a new source of electricity as an economic engine, generating thousands of good jobs,” said Pearce.

Solar PV actually creates the most jobs per electricity output unit of any technology. In the U.S., an average of 0.87 total job-years per GWh (26 jobs per MW) are created by solar PV, compared to 0.11 total job-years per GWh for coal (8.7 jobs per MW). Another study estimated 22.4 jobs per MW of solar PV is possible, which includes component manufacturing done in the U.S. 2

There are two fundamental reasons to support local manufacturing of photovoltaic technology in Canada, the first of which is the easily understood environmental impact. The second reason is economics. Pearce and his group recently completed a financial analysis for an investment in a turnkey PV manufacturing plant producing 1 GW per year that showed the benefits of investing in this technology. 3

“The financial benefits for both the provincial and federal governments were quantified for a number of scenarios ranging from a modest loan guarantee for construction, to a full construction subsidy,” explained Pearce.

Revenues for the governments were derived from taxation; sales of panels in Ontario; and saved health, environmental, and economic costs associated with offsetting coal-fired electricity. In the study, both the federal and provincial governments enjoyed positive cash flows from these investments in less than 12 years, even in the most radical scenario, and in many of the scenarios both governments received a return on investments of more than 8 percent.

“The results showed that it is in the financial best interest of both the Ontario and Canadian federal governments to implement aggressive fiscal policy to support large-scale PV manufacturing,” said Pearce.

Impact on Manufacturing

In the previous scenario, the single-GW solar PV fabrication facility will create hundreds of jobs in the construction of the facility, and once it is operational, it could permanently employ several hundred people. Many of these jobs require similar skill sets as current manufacturing jobs in other sectors.

“This is just one plant, and we really need many such plants if Canada is going to provide enough PVs to meet the capacity and future demand just for our own country,” said Pearce. “We have a well-trained, highly skilled work force in Canada. It is a deplorable waste not to have our people employed when we desperately need exactly this type of person to help continue to grow the PV industry. If we do not support the PV industry now, we will have missed a prime opportunity. Our economy will suffer and, in 10 years, the solar cells on the roof of your house will have a ‘made in China’ sticker on them.”

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  1. J. M. Pearce, “Expanding Photovoltaic Penetration with Residential Distributed Generation from Hybrid Solar Photovoltaic + Combined Heat and Power Systems,” Energy Policy 34, (2009), pp. 1947-1954.
  2. For a recent review of the job numbers for solar for Canada, see: K. Branker and J. M. Pearce, “Financial Return for Government Support of Large-Scale Thin-Film Solar Photovoltaic Manufacturing in Canada,” Energy Policy 38 (2010), pp. 4291–4303.
  3. Ibid.