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KING MONGKUT’S UNIVERSITY OF TEHNOLOGY, THONBURI, THAILAND (KMUTT-‐JGSEE) THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, USA (UNC-‐CH)
Shared Profit Building-‐Integrated Photovoltaic Systems in Thailand
Technical, Environmental, and Economic Assessments for an Innovative Enterprise
Morgan Edwards Kelly Anderson Megan Colonel Noah Kittner
Christina Riegel Matt Crane
11/30/2009
This report is the product of a capstone research collaboration of UNC-‐CH students undertaken at KMUTT-‐JGSEE in 2009 as partial fulfillment of a study abroad program, overseen by advisors Dr. Savitri Gharavit (KMUTT-‐JGSEE), Dr. Shabbir Gheewala (KMUTT-‐JGSEE), Dr. Rich Kamens (UNC-‐
CH), and Dr. Pattana Rakkwamsuk (KMUTT-‐JGSEE).
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Acknowledgements Many thanks to all our faculty advisors, teaching assistants, and friends at King Monkut’s University of Technology, Thonburi (KMUTT-‐JGSEE) and the University of North Carolina at Chapel Hill (UNC-‐CH).
Faculty Advisors Dr. Savitri Gharavit (KMUTT-‐JGSEE)
Dr. Shabbir Gheewala (KMUTT-‐JGSEE)
Dr. Rich Kamens (UNC-‐CH)
Dr. Pattana Rakkwamsuk (KMUTT-‐JGSEE)
Teaching Assistants Pornphol Boonnak (JGSEE-‐KMUTT)
Kanittha Kanokkanjana (JGSEE-‐KMUTT)
Sorawit Siangjaeo (JGSEE-‐KMUTT)
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Table of Contents Acknowledgements ...................................................................................................................................... 2
Faculty Advisors ....................................................................................................................................... 2
Teaching Assistants .................................................................................................................................. 2
Abstract ........................................................................................................................................................ 5
Executive Summary ...................................................................................................................................... 5
Technical Assessment of Building-‐Integrated Photovoltaic Systems ........................................................... 6
Technical Assessment Methodology ...................................................................................................... 15
Preliminary System Output Model ..................................................................................................... 16
Comprehensive System Output Simulation ....................................................................................... 23
Results of Technical Assessment ............................................................................................................ 29
Preliminary System Output Model ..................................................................................................... 29
Comprehensive System Output Simulation ....................................................................................... 34
Environmental Assessment ........................................................................................................................ 46
Background Information ........................................................................................................................ 46
Environmental Assessment Methodology ............................................................................................. 48
Assumptions ........................................................................................................................................... 50
System Processes ................................................................................................................................... 52
Life Cycle Assessment Inventory ............................................................................................................ 55
Potential Applications for Monocrystalline Photovoltaic Input Energy Efficiency ................................. 63
End Of Life Scenarios .............................................................................................................................. 64
Results of Environmental Assessment ................................................................................................... 65
Potential Error .................................................................................................................................... 66
Conclusion .......................................................................................................................................... 67
Economic Assessment of Building-‐Integrated Photovoltaic Systems ........................................................ 68
The Thai Housing Market ....................................................................................................................... 68
Renewable Energy in Thailand ............................................................................................................... 70
Business Proposal ................................................................................................................................... 72
Economic Assessment Methodology ..................................................................................................... 74
Financial Assessment Methodology ................................................................................................... 76
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Results of Economic Assessment ........................................................................................................... 77
Conclusion .................................................................................................................................................. 83
Appendix 1 ................................................................................................................................................. 85
Appendix 2 ................................................................................................................................................. 90
Business Plan .......................................................................................................................................... 90
Works Cited .............................................................................................................................................. 101
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Abstract This paper researches the technical, environmental, and economic aspects of a proposed business enterprise based on the premise of selling electricity generated by building-‐integrated monocrystalline photovoltaic modules on residential rooftops in Bangkok, Thailand. The Thai government provides a subsidy adder through an innovative “Very Small Power Producer” program that buys electricity by the kWh. The technical section models and estimates the amount of electricity generated by the proposed system, while the environmental section uses the Life Cycle Assessment tool to estimate the amount of carbon dioxide averted by installing a BIPV system. The economic and business sections create a plan for a shared profit venture. This includes estimating the amount of money potentially generated by this enterprise while also establishing the interested parties as socially and environmentally responsible.
Results indicate that the BIPV system can generate enough electricity, have a short energy payback period, but can not be profitable within a typical thirty-‐year mortgage cycle.
Executive Summary Shared Profit BIPV System in Thailand, an assessment of the technical, environmental, and economic conditions and potential of a proposed BIPV community development project, suggest that there is a profitable way for solar energy to enter the market as a VSPP. Residential houses with monocrystalline photovoltaic modules acting as roofs receive a large amount of incoming solar radiation yearly because of Bangkok’s proximity to the equator. Even with varying system efficiencies, the robust data ensure significant electricity is generated from BIPV installations. Roofs with panels on three of four sides can generate nearly 46 MWh per year.
An interactive Microsoft Excel Spreadsheet allows for users to input various roof type scenarios, which then synchronizes with an environmental impact assessment and economic analyses. The electricity sold back to the grid incurs both environmental and economic gains. The amount of carbon dioxide offset per home is enough to account for several times the carbon footprint of an average Thai citizen. More important from an environmental impact assessment viewpoint, the electricity generated by photovoltaic systems displaces the average Thai electricity mix and potentially reduces the amount of CO2 per kWh by thirty-‐fold.
Financially, the enterprise is profitable, but dependent upon the Thai government VSPP adder. Over the course of a thirty-‐year mortgage cycle, a theoretical investor paying one percent of the startup cost could make 1.7 million THB (nearly $51,000 USD).
The system seems promising, but relies upon government subsidies to remain constant. If the government increased its adder for VSPP’s, investors would earn more profit and the system could expand further. One potential technologically, environmentally, and economically viable way for solar
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electricity to enter the market is through building-‐integrated monocrystalline photovoltaic applications. However, it may be necessary for increased government incentives and policies, focused on clean, renewable technologies, to be created and implemented in order for the business to be economically viable within a time frame attractive to investors.
The results of the assessment confirm the ability for this system to work presently and will improve as technology and Thailand’s infrastructure progresses.
Technical Assessment of Building-‐Integrated Photovoltaic Systems
Introduction to Solar Technology
The sun has been one of the most reliable sources of energy to humans for all of history. The ability for humans to harness the sun’s energy and turn it into electricity began in the 19th century when Alexandre Edmund Becquerel was working with electrodes in solution. When the solution was exposed to sunlight, he observed a voltage between the electrodes. Almost 35 years after Becquerel observed photosensitivity in solution, Willoughby Smith discovered photoconductivity in selenium in 1876. In 1876 W.G. Adams and R.E. Day discovered that selenium can partake in the photovoltaic effect and five years later the first photocell was created by Charles Fritts (Bhattacharya).
Selenium was replaced in mainstream solar technology of the 20th century by silicon because of silicon’s abundance and stability. In 1941, silicon monocrystalline solar devices were first created and in the 1950s, Bell Telephone Laboratories developed a revolutionary solar cell with an efficiency of 4.5%, which was later refined to 6%. The obtained efficiency was extremely high compared to the previous technology that rarely surpassed 1% efficiency. Throughout the first half of the 20th century, there was much growth and development in the field of photovoltaics, but the technology was extremely expensive and energy intensive. Scientists needed substantial monetary compensation from the government and extensive public interest before the technology would be available and affordable to the average person (Bhattacharya).
Solar technology achieved public recognition from an article published by Business Week in the 1950s. The article described a possible future of the United States that included photovoltaics as a main power supply source. The initial buzz of the solar industry died down by the end of the decade because of the cheap price and wide availability of alternative fuels such as oil and coal. The government, through space exploration and the demand for a renewable power source in space, kept the technology in production on a small scale. Then, in 1973 when the OPEC nations significantly increased the price of oil, the demand for a renewable, reliable energy source was revived by the public. Research and development by the United States government increased, and from 1981 to 1990, they spent 569 million dollars on solar technology alone. Based on statistics from Japan and the United States, there is almost a direct correlation between oil prices and amount of money invested by governments in photovoltaic research and development. As oil prices increase, the demand for alternative energy
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sources from the public also increases, and therefore research and development of solar technologies are augmented (Bhattacharya).
Currently, there are many countries extremely invested in solar technology. Germany’s government has taken large initiative to make solar energy affordable and available to all of its citizens. The government subsidies are 25-‐50% of the cost of the systems and almost immediately, applications for the installation of 70MWp of solar technology were submitted. The initiative that Germany has taken is a crucial model for the future of solar technology in the rest of the world. As investment and production increase, price of solar technology will decrease, making the technology widely available, while reducing carbon emissions to the environment at the same time (Erge, Hoffman and Kiefer).
Monocrystalline Silicon
Monocrystalline photovoltaic technology is the oldest and most researched photovoltaic technology in the market today. The elementary technological aspects involved with monocrystalline solar technology production have been known since the development of the Czochralski process by Jan Czochralski in 1916. The technique was not refined to efficient solar cell design capabilities until 1954. The Czochralski process is a method used to create one large silicon ingot that can then be cut into slices and used in photovoltaic arrays for photon capture and transformation (Goetzberger, Hebling and Schock).
Figure 1-‐1. Czochralski Ingot Formation Diagram
*Image taken from the journal of Materials Science and Engineering
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The Czochralski method begins with the melting of highly purified polycrystalline silicon material in a quartz crucible that is contained inside of a graphite crucible. The silicon must be melted in an atmosphere of inert gases because silicon forms oxides easily upon contact with any oxygen source. Even though the silicon ingot is grown an anaerobic atmosphere, impurities of oxygen 1017–1018 cm3 are able to enter the crystal as a result of the quartz crucible that it is grown in (Ceccaroli and Otto). Oxygen impurities can lead to energy conversion inefficiencies over the lifetime of the panel. To avoid this disadvantageous occurrence, boron is added to the molten silicon through a process called doping. The addition of boron to silicon creates “p-‐type silicon,” which is also used when creating an electron gradient later on in the manufacturing process (Ceccaroli and Otto). Boron is usually added to silicon in amounts of 1014 to 1020 atoms per cm3 (Ceccaroli and Otto). A small silicon seed crystal is then dipped into the liquid silicon and withdrawn (while in rotation) for several hours. The seed must be withdrawn at an extremely slow extraction rate because a temperature gradient forms along the silicon ingot. The top end of the ingot cools much faster than the bottom end, making the ingot susceptible to impurities. The rotation of the seed crystal and the crucible containing the liquid silicon proceed in opposing directions, creating one single crystal (Foll). When the seed crystal is drawn out of the molten silicon, an ingot solidifies as part of the seed crystal. Ingots created through this process range widely in diameter, but the smaller ingots are mainly used with solar cells because of design dimensions within photovoltaic arrays. Ingots made through the Czochralski process can have diameters of 300 mm, but ingots used in photovoltaic arrays are usually around 100 mm in diameter (Goetzberger, Hebling and Schock). The smaller size allows for a proper fitting of many ingots on one photovoltaic array (Goetzberger, Hebling and Schock).
Formed ingots must be sliced into wafers in order to be attached to an array. The slicing is done with diamond covered saw blades. Through this process, almost 50% of the silicon ingot is wasted because of sawing (Goetzberger, Hebling and Schock). Finished wafers are usually 0.2-‐0.5 mm thick (Bhattacharya). Because the arrangement of ingots in the photovoltaic arrays is ideally for square shapes, the circular ingot wafers are formed into squares with rounded edges. The shaping process is an additional contributor to waste (Goetzberger, Hebling and Schock).
The wafers must then be doped again with a thin layer of phosphorus on the surface in order to create the p-‐n junction. The phosphorus doped top layer is called the “n-‐layer.” The p-‐type layer is said to have “holes” where electron pairs have left the valence shell, and the n-‐type layer becomes a donator of electrons. The freed electrons are able to flow to the metal contact grid and out of the system, creating a direct electrical current. Once the electrons do work, they come back to the solar cell via the metallic contact grid connected to the solar cell on the top and bottom sides (Energy and the Environment).
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Figure 1-‐2. Isotropic Etching on a Monocrystalline Silicon Ingot
*Image taken from the journal of Materials Science and Engineering
Additional processes must be done to each solar cell before the array can operate. Silicon, by nature, is an extremely reflective surface when grown for use in photovoltaics. An antireflective coating must be added to the surface of the silicon before it is exposed to sunlight. If a reflective coating was not in place, the majority of the photons from sunlight would not be absorbed into the cells. Scientists have developed surface texturing techniques that have reduced photon refraction significantly (Goetzberger, Hebling and Schock). For example, in figure 1-‐2 (above), a surface texturizing technique was used to create inverted pyramids on the surface of a monocrystalline wafer. This was done by pouring a hot alkaline solution over the surface. Isotropic etching is only possible on monocrystalline technology because the extensive network of crystallization on polycrystalline silicon interferes with the formation of even texturization onto the surface of the silicon. The advantage of having inverted pyramids on the surface of the silicon is that light can be coupled into each cell, increasing the overall absorption of solar radiation in the active surface area. Other protective coatings can be added depending on the particular application and location of the final photovoltaic array. Then, the cells are placed in between two plates of glass in order to protect the silicon from stresses of the environment such as dirt and humidity. It is important to take in to account that every additional layer of treatment on top of the silicon will most likely impede the penetration of photons, therefore decreasing overall absorbance and efficiency of the system (Goetzberger, Hebling and Schock).
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Figure1-‐3. Solar Cell Diagram with Electron Pathway
Image taken from Energy and the Environment
Monocrystalline silicon is known to have the highest efficiency of all photovoltaic technologies. It is also the most expensive because of the intricate and high energy requirements of the Czochralski process. Monocrystalline silicon is most often utilized when there are area restraints on available space for the photovoltaic arrays. This technology is particularly advantageous for the area limitations of this project.
Polycrystalline Silicon
Polycrystalline silicon solar cells have been in production since the 1970s. Instead of growing a large single crystal, molten polycrystalline silicon is cast into a square shaped crucible and allowed to cool, creating many large crystals. The block casting method is much cheaper compared to monocrystalline silicon technology, but also has a lower efficiency as a result of the extensive crystallization within each cell. This casting process is also a method of solar cell production that is unique only to photovoltaics (Goetzberger, Hebling and Schock).
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Figure1-‐ 4. Crystalline Formation within Photovoltaic Cells
*Image taken from the journal of Materials Science and Engineering
The block casting method begins with the melting of polycrystalline silicon. The liquid is then poured into a coated graphite crucible. As the silicon cools, large crystals form within each cell. The silicon is then sawn into wafers, much like the monocrystalline wafer sawing process. There are many polycrystalline cell preparation similarities with monocrystalline technology. Once the wafer is sawn, it must be treated with an anti reflective coating to promote photon absorption (Bhattacharya).
With polycrystalline technology, there is much less loss with respect to each solar cell. Once polycrystalline blocks are poured, they are already in the square shape necessary for mounting into the array. The shape of the cast cells allows for nearly 95% coverage of each photovoltaic array. Other advantages of polycrystalline technology come from the fact that the block casting method is a much faster process than the Czochralski process. The Czochralski process takes hours for the ingot to form and the crucible in which the ingot is forming must be kept extremely hot over the formation process. In the block casting method, the silicon must be hot initially, but after the silicon is poured, there are no significant energy or time inputs necessary before the wafers can be sawn. Unfortunately, because of the larger percentage of impurities in the crystals, the average lifetime is somewhat lower than monocrystalline technology. Also, polycrystalline silicon must be cut into thicker wafers than monocrystalline silicon, resulting in a slight increase in silicon use overall between the two technologies (Goetzberger, Hebling and Schock).
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Amorphous Silicon
Amorphous silicon technology exhibits potential in the field of photovoltaics for future applications. It is more versatile than monocrystalline and polycrystalline technologies and can be applied to a variety of surface types and shapes. Because there is no crystalline structure within the modular silicon array, significant differences in shape and efficiency can be observed. In each amorphous silicon array, a significant portion of silicon atoms remain unbonded, when they would normally bond with each other. The addition of atomic hydrogen is required to increase the functionality and efficiency of the system. The material properties of silicon in amorphous arrays are also altered in the process of creating a photovoltaic cell. The band gap of silicon is increased from 1.1eV to 1.7eV, increasing the amount of light that is able to penetrate the cell (Amorphous Silicon Technology).
There are significant production cost advantages of amorphous silicon technology. Because silicon used in each array does not require crystallization through the Czochralski, block casting, or any other method, large amounts of energy are saved from extensive heating of materials for these processes. Both monocrystalline and polycrystalline wafers must be sliced, resulting in large percentage material losses. Amorphous silicon requires no sawing, and therefore most of the raw materials are retained. Additionally, while wafers must be sawn thicker than necessary for handling and other purposes, amorphous silicon is usually no thicker than a few microns. Versatility is a more recently noted advantage of amorphous silicon technology. Because photovoltaics are increasingly integrated into the building envelope of new architectural designs, photovoltaics that can be placed on a variety of surfaces are now in demand. For example, amorphous technology can be placed on rounded surfaces or used as a partial shading façade. These design advantages are unique to amorphous silicon and will be helpful in the future as module efficiency is increased to produce larger electrical output (Amorphous Silicon Technology)
Balance-‐of-‐System (BOS)
For a grid-‐connected PV system to function properly, there are numerous components, other than the PV array, fulfilling vital roles of energy conversion and transmission. There are subsystems contained in the BOS that include: energy generation, energy storage, energy conversion, and energy transmission and distribution (Bhattacharya). Not all of these systems are necessary for this project’s application of photovoltaic technology. Because the system in operation for this project is a grid-‐connected system, no energy storage subsystem will be utilized (Bhattacharya). The components of the system in the following diagram include:
a) PV modules b) Charge controller c) Power storage system
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d) Power conversion equipment e) Backup power supplies f) Support and mounting hardware, wiring, and safety disconnects
(Italics indicate elements that are not included in grid-‐connected BIPV systems)
Figure1-‐ 5. Balance-‐of-‐System Diagram
The energy generation subsystem consists of light collecting structures such as the array and all required mounting apparatuses. The subsystem of energy generation is usually the most expensive part of the BOS because the solar arrays include silicon technology, which is extremely costly to produce. The energy conversion subsystem includes a converter to switch the DC current being produced from the solar panels to an AC current. It also includes electronics and housing to protect all of the electrical components from misuse and malfunction due to exposure to extreme weather or other conditions. The energy transmission and distribution subsystem includes any component involved in the transportation of electrical energy. Some of these components include wires, insulators, transmission poles, and cables (Bhattacharya).
Factors Affecting Efficiency
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The efficiency of a system is a significant contributor to the type of technology that will be applied to a particular building or project. Efficiency is defined as, “the proportion of sunlight energy that the solar cell converts into electrical energy relative to the amount of sunlight that is available and striking the PV cell” (Project). For example, if a solar photovoltaic project has a limited area and the highest electrical output is essential, monocrystalline technology would be the best decision because of its high efficiency per unit area. In laboratory testing, monocrystalline photovoltaic modules have reached efficiencies of 30% (Bhattacharya). On the other hand, if architectural design and building integration are the most important considerations, amorphous technology is a good, but less efficient choice. If price and output are important, polycrystalline silicon technology is a quality intermediate option in both efficiency and price. All of these technologies have certain considerations to take into account when choosing a particular module. Orientation, direction, inclination angle, inherent physical properties, deficiencies in silicon properties, location, shading, weather/climate and azimuth must all be taken into account when deciding on a particular module because all of these factors affect efficiency in varying ways (Project).
The external factor that has one of the most extreme impacts on efficiency is temperature fluctuation. There is an inverse relationship between module efficiency and temperature because of the resulting changes in voltage of the system over time. Solar modules are most likely to run at the highest voltage when at low temperatures and lowest voltage when at high temperatures. The temperature to efficiency relationship can be observed in the following graph. The two plots include polycrystalline technology (upper plot) and amorphous technology (lower plot). The polycrystalline array had observed efficiencies of approximately 9.9% at 25°C and 6.9% at 45°C (Meike). Amorphous technology shows a very small decrease in efficiency when temperature is increased. Monocrystalline technology, while not displayed on the graph, also shows decreases in efficiency with increased temperature. The decreases in efficiency found with monocrystalline silicon are not as extreme as the decreases with polycrystalline technology (Meike). Temperature is an especially important consideration when assessing the feasibility of a solar project in Thailand because of the extremely hot conditions for a large portion of the year. The graph also displays that amorphous silicon technology is less affected by temperature, meaning there could be future potential for the further development of amorphous technology in hot climates.
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Figure 1-‐6. Efficiency Versus Temperature in Polycrystalline and Amorphous Silicon Arrays
The losses due to photon energy are substantial due to the fact that the band gap energy of silicon is 1.1eV (Bhattacharya). A large portion of the photons that enter the solar cell have a wavelength that is too long and therefore do not contribute to the overall electricity generation. Additionally, photons with too high of an energy will lose any extra energy as heat upon entering the cell, contributing to additional efficiency losses. Nearly 40% of incident photon energy cannot contribute to the electricity generation of the cell simply because of the wavelength (Bhattacharya). Material characteristics of silicon contribute to more efficiency losses of the system (Bhattacharya).
Silicon is an extremely brittle material when cast and sawed into ingots (Bhattacharya). In the wafer sawing process, 10cm diameter ingots must be cut to 0.30-‐0.35mm in thickness (Bhattacharya). This thickness is required for the additional handling and mounting that must be done. Because of the additional amount of silicon in each wafer, the ideal amount of solar radiation cannot be absorbed into the ingot, resulting in lower conversion efficiency. Other silicon inefficiencies come from the crystalline structure of polycrystalline solar technology. Because of the way the crystals are grown and formed, crystalline barriers form within the ingot. These barriers inhibit electron flow, resulting in a lower efficiency.
Technical Assessment Methodology The technical assessment for the shared profit building-‐integrated photovoltaic electrification enterprise determines the technical feasibility and output of a single building system. This assessment derives its findings from two sources. The first source is a preliminary system output model constructed using solar radiation equations and literature irradiance data for Bangkok, Thailand. The second source
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is a comprehensive system output simulation performed by the program PVSYST Version 4.37. The preliminary system output model estimates the productivity of the photovoltaic system under a broad range of possible scenarios. The model is used to determine the theoretical system output limit and to conduct sensitivity tests on a variety of input parameters. The preliminary system output model is connected to environmental and economic assessment models, both of which are discussed in subsequent sections of this report, to create a unified enterprise evaluation framework. The results of this unified assessment model are complimented by findings from the comprehensive system output simulation, which provides more precise productivity information given expected input parameter values. These input parameter values are constrained by both technical limitations and financial feasibility concerns. The preliminary system output model and the comprehensive system output simulation of the proposed building-‐integrated photovoltaic electrification enterprise are discussed below (Mermoud, Roecker and Bonvin).
Preliminary System Output Model The preliminary system output model first uses literature irradiance data and solar radiation equations to determine the hourly solar irradiance incident on an arbitrarily tilted plane with any given orientation. The model next computes the annual photovoltaic system output based on the previously calculated incident irradiance and variables including roof size and type, solar module dimensions, and combined system efficiency.
Incident Solar Radiation Calculation The incident solar radiation calculation uses variables including location, time, date, irradiance, plane tilt angle, and plane orientation to calculate the total hourly solar irradiance incident on a tilted plane. The equations used in the incident solar radiation calculation are taken from the work of John A. Duffie and William A. Beckman (Duffie and Beckman). The literature irradiance data used in the incident solar radiation calculation are imported from the PVSYST program database (Mermoud, Roecker and Bonvin). The monthly data for global irradiation are taken from the Meteonorm Version 4/5 software database, which aggregates reliable meteorological site data from monitoring stations around the world (Meteotest). The sites for which meteorological data are unavailable employ interpolations between two or three proximate sites, with subsequent corrections for altitude and other regional factors. Synthetic hourly irradiance values are imported from various sources or generated from the monthly irradiation data by means of an algorithm that produces hourly distributions with close statistical properties to real meteorological data (Aguiar, Collares-‐Pereira and Conde, Simple Procedure for Generating Sequences of Daily Radiation Values Using a Library of Markov Transition Matrices) (Aguiar and Collares-‐Pereira, TAG: a Time-‐dependent, Autoregressive, Gaussian Model for Generating Synthetic Hourly Radiation). The monthly and yearly PVSYST global irradiation values on a horizontal plane and a 30 degree tilted plane oriented due south are displayed in Figure 1-‐7 (Mermoud, Roecker and Bonvin). The direct (beam) and indirect (diffuse) irradiance values used in the preliminary system output model are also provided by PVSYST (Mermoud, Roecker and Bonvin).
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Figure 1-‐7. PVSYST Monthly and Yearly Irradiation Values for Bangkok, Thailand (Mermoud, Roecker and Bonvin)
The location of the sun relative to Bangkok, Thailand, the geographical location of interest, depends on both the day of the year and the time of day. This dependence on date and time is reflected in the calculation of the declination angle (δ) and the hour angle (ω), respectively. The declination angle is calculated by first converting the calendar date into the Julian date (n). The Julian date is found by adding the day value of the date of interest to the sum of the number of days in the months preceding this date. The declination angle can then be calculated from the following equation (Duffie and Beckman).
The declination angle describes the orientation of Earth relative to the sun as this relative location changes throughout the year. Similarly, the hour angle describes the orientation of the site of interest relative to the sun as this relative location changes throughout the day. The calculation of the hour angle is performed using the solar time. PVSYST and other meteorological data providers list their irradiance values using standard time measurements. A solar time correction is made in the preliminary system output model based on the longitude of the location of interest (Lloc) relative to the standard meridian for the local time zone (Lst) as well as the Julian date. The hour angle is calculated as follows (Chirarattananon) (Duffie and Beckman).
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Once the location of the sun relative to the site of interest is expressed by the declination angle and the hour angle, the relative orientation and angle of inclination of the tilted plane at this site must be specified. The plane azimuth angle (γp) specifies the orientation of the plane in degrees west and takes on values between -‐180 and 180, with a value of zero indicating a plane orientation of due south. The angle of inclination (β) describes the inclination of the plane from the horizontal and takes on values between 0 and 90 degrees. From the previously-‐calculated information and given the latitude (φ) of the site of interest, the total plane irradiance (Itθ) can be calculated given the beam irradiance (Ib), diffuse irradiance (Id), and albedo (ρ) values. This total plane irradiance calculation is shown below, where θ describes the angle between the direct solar projection and the normal vector to the plane, θz (the zenith angle) describes the angle between the direct solar projection and the vertical, and their ratio (the Rb factor) is therefore equal to the ratio of the flux of direct solar radiation on the tilted plane to the flux of direct solar radiation on a horizontal plane. These variables are diagramed in Figure 1-‐8 (Chirarattananon) (Duffie and Beckman).
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Figure 1-‐8. Diagram of Variables for the Calculation of Total Plane Irradiance (Duffie and Beckman)
Total System Output Calculation The total system output calculation uses the results of the afore-‐mentioned incident solar radiation calculation and variables such as photovoltaic module size, roof type, roof side length, and total system efficiency to determine the annual output of the building-‐integrated photovoltaic system. The photovoltaic modules integrated into the building structure are rectangular in shape and adopt discrete side length values α and μ which depending on the watt peak and manufacturer of the module. It is often unfeasible to cover the entire surface of a roof with photovoltaic modules because the possible photovoltaic module side length values are not continuous. A computation is first performed within the total system output calculation to determine the area that can be covered by rectangular photovoltaic modules of given dimensions for a pitched roof or a hip roof of an arbitrary size. These calculations are discussed subsequently.
The first roof type modeled in the total system output calculation is the pitched roof, a roof with a square base of length L and two rectangular roof panels of height H. The calculation of the total area covered by photovoltaic modules for a pitched roof is shown below. The variables used in this calculation are diagramed in Figure 1-‐ 9.
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Figure 1-‐9. Pitched Roof Design
The second roof type modeled in the total system output calculation is the hip roof, a roof with a square base of length L and four triangular panels of height H. The calculation of the total area covered by photovoltaic modules for a hip roof is shown below. The variables used in this calculation are diagramed in Figure 1-‐10.
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Figure 1-‐10 . Hip Roof Design
Once the total roof area covered by photovoltaic modules is estimated, the annual electrical output of the photovoltaic system is determined given the total hourly solar irradiance values calculated previously and the total system efficiency (η). The calculation of the total annual photovoltaic system output is shown below, where the output of two sides is aggregated for the pitched roof structure and the output of four sides is aggregated for the hip roof structure.
Due to technical and economic constraints inherent in the building-‐integrated photovoltaic installation project, it may not be feasible to install photovoltaic panels on all four sides of the building roof. In this case, the southernmost panel (which receives a greater amount of incident solar irradiation relative to the other three sides) would be given priority for the photovoltaic installation, followed by the easternmost, westernmost, and finally northernmost panel.
The total annual system output figure whose calculation is detailed above establishes the theoretical production limit for the building-‐integrated photovoltaic system under different input parameter conditions. The theoretical production limit and other output variables calculated by the preliminary system output model are manipulated within the environmental and economic assessments to determine the environmental impact and economic feasibility of the proposed shared profit building-‐integrated photovoltaic installation enterprise. The values of technical input parameters including building orientation, albedo, roof type, roof side length, angle of inclination, photovoltaic module dimensions, and total system efficiency are varied systematically to determine the sensitivity of the technical, environmental, and economic assessment results to changes in input variable values. Sensitivity tests are run for both the one-‐panel and the four-‐panel building-‐integrated photovoltaic
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system, with the results displayed together for easy interpretation. A single parameter is varied during each sensitivity test, with all other input parameters set to default values taken from literature data, PVSYST recommendations, and internal assumptions. The sources and values for all default input parameter settings are outlined subsequently.
The default building orientation is set such that the southernmost roof panel has a solar azimuth angle of zero degrees, thereby allowing maximum total output for the single panel building-‐integrated photovoltaic system. The albedo is set to the PVSYST recommended value of 0.2 (Mermoud, Roecker and Bonvin). The roof is assumed to be constructed in the typical Thai hip roof style, with square side lengths of 20 meters and an angle of inclination of 30 degrees. The photovoltaic module dimensions are taken to be the average monocrystalline silicon photovoltaic module length of 1.6 meters and width of 0.79 meters (Advantages and Disadvantages of Monocrystalline Solor Panels). The total system efficiency value is taken from productivity data on the largest photovoltaic power plant in Thailand, which was installed in 2004 by the Electricity Generating Authority of Thailand (EGAT) in Pha Bong, Mae Hong Son. This photovoltaic farm is a showcase project containing 1,680 panels with a total electricity production cost of 13.35 baht per kilowatt-‐hour compared to two to 3.8 baht per kilowatt-‐hour paid by consumers for the conventional Thai electricity mix. The total system efficiency for the Pha Bong photovoltaic power plant is maintained at a fairly consistent figure of ten percent which is illustrated in Figure 1-‐ 11 below (Promoting Renewable Energy in Mae Hong Son Province). This figure of ten percent is adopted in the preliminary model of system output (Promoting Renewable Energy in Mae Hong Son Province).
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Figure 1-‐ 11. Pha Bong Photovoltaic Plant Efficiency and Output (2004) (Promoting Renewable Energy in Mae Hong Son Province)
Comprehensive System Output Simulation The comprehensive system output simulation determines how closely the photovoltaic system output approaches the theoretical value established in the preliminary system output model given certain inherent technical and financial limitations. This simulation employs many more input parameters and has a more diverse selection of output variables than does the preliminary model of system output. Consequently, the comprehensive system output simulation has the potential to be both more accurate and more precise than the preliminary system output model. This simulation is performed by the PVSYST 4.37 software. Although the PVSYST manufacturers do not guarantee the simulation results, the program has been subjected to rigorous tests which suggest that its output data are reliable. The PVSYST tests compare the simulation results generated by the program to measurements taken at seven grid-‐connected systems in Switzerland. The PVSYST simulation results were robust for a wide range of grid-‐connected photovoltaic systems (with the exception of amorphous silicon collectors), with an accuracy of global simulation results on the order of two to three percent. Although these results are encouraging, there are considerable meteorological differences between typical sites in Switzerland and the site of interest for this study (Bangkok, Thailand), especially in terms of average daily temperature and humidity. Further tests must be conducted to determine the potential impact of this discrepancy on the accuracy of PVSYST simulation data for this project. A summary of the results of the comparison between PVSYST simulated data and the measured values at seven sites in Switzerland is provided in Figure 1-‐ 12 (Mermoud, Roecker and Bonvin). Supplemental graphs are provided in Appendix 1 (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 12. PVSYST Simulation Validation Results for Seven Sites in Switzerland (Mermoud, Roecker and Bonvin)
The first phase of the comprehensive system output simulation performed by PVSYST entails the creation of a project design from which multiple simulations called variants can be subsequently performed. The project is defined by the system type, location, and albedo. The project proposed in this report is a grid-‐connected system in Bangkok, Thailand. The system location is linked within the comprehensive system output simulation to PVSYST meteorological data, which is used to determine the total solar irradiation that reaches the photovoltaic panels. The methodology behind the PVSYST meteorological data generation is discussed in a previous section of this report. The albedo values suggested by PVSYST range from 0.14 to 0.22 for urban settings and 0.15 to 0.25 for grass, a combination of which is appropriate for the suburban nature of the project site. The simulations generated in this report employ the proposed PVSYST default albedo value of 0.2 (Mermoud, Roecker and Bonvin).
The second phase of the comprehensive system output simulation involves the creation of four system variants within the PVSYST project, one for each of the four panels of the hip roof structure. The input parameters for all four system variants are equivalent with the exception of the azimuth angle, which takes on a value of 0 degrees for a plane facing due south. A solar azimuth angle of 0 degrees results in a maximum annual electricity output for northern latitude locations including the site of interest for this study (Bangkok, Thailand). The tilt angle of the photovoltaic panels is restricted to the tilt angle of the hip roof structure because the photovoltaic system is building-‐integrated. A typical tilt
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angle of 30 degrees is employed throughout the comprehensive system output simulation, resulting in a 2.9% with respect to optimization for the southern panel, as shown in Figure 1-‐13 (Mermoud, Roecker and Bonvin).
Figure 1-‐ 13. Annual Output Optimization for a Plane Facing Due South (Mermoud, Roecker and Bonvin)
The losses with respect to optimization for the eastern, western, and northern panels are due to both the tilt angle and the angle of orientation, whereas the losses for the southern panel are due exclusively to the tilt angle. The optimization losses for the western panel (with a solar azimuth angle of 90 degrees) total 10.0% and are displayed in Figure 1-‐ 14 below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 14. Annual Output Optimization for a Plane Facing Due West (Mermoud, Roecker and Bonvin)
The optimization losses for the northern plane (with a solar azimuth angle of 180 degrees) total to 20.5% and are illustrated in Figure 1-‐ 15 below (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 15. Annual Output Optimization for a Plane Facing Due North (Mermoud, Roecker and Bonvin)
The optimization losses for the eastern plane (with a solar azimuth angle of -‐90 degrees) total to 10.0% and are displayed in Figure 1-‐ 16 below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 16. Annual Output Optimization for a Plane Facing Due East (Mermoud, Roecker and Bonvin)
Once the orientation and tilt angle of the photovoltaic panels are defined, the types of shading incident on the tilted panels must be determined. There are two types of shadings simulated by PVSYST, near shadings and far shadings, both of which are assumed to be negligible for the comprehensive system output simulation. Near shadings are created by small objects (such as chimneys or trees) in close proximity to the photovoltaic system that cast a partial shadow on the solar panels which changes depending on the time of day and the day of the year. Far shadings, also called horizon points, are created by large objects (such as mountains) that are located at a distance of over twenty times the size of the photovoltaic array. The default PVSYST settings are employed in the comprehensive system output simulation, with no near shadings and a free horizon with one hundred percent of the albedo taken into account in the irradiance calculations. The horizon line drawing referenced in the PVSYST variants for a plane facing due south is provided in Figure 1-‐ 17 below (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 17. Free Horizon Line Drawing for a Plane Facing Due South (Mermoud, Roecker and Bonvin)
The area behind the plane, for which shading values are not used, is outlined in blue in each of the horizon line drawings. The location of this area changes depending on the azimuth angle. The horizon line drawing for a plane facing due west is shown in Figure 1-‐ 18 below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 18. Free Horizon Line Drawing for a Plane Facing Due West (Mermoud, Roecker and Bonvin)
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The horizon line drawing for a plane facing due north is illustrated in Figure 1-‐ 19 below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 19. Free Horizon Line Drawing for a Plane Facing Due North (Mermoud, Roecker and Bonvin)
The horizon line drawing for a plane facing due east is provided below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 20. Free Horizon Line Drawing for a Plane Facing Due East (Mermoud, Roecker and Bonvin)
At this point in the comprehensive system output simulation, all environmental and structural input data are determined, including meteorological statistics, photovoltaic array orientation and tilt
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angle, and both near and far shading patterns. Before the PVSYST simulation variants are completed, the specific modules and inverter that installed in the building-‐integrated photovoltaic system must be selected. The photovoltaic module type and brand are selected so that its annual output approaches as closely as possible the theoretical limit established by the preliminary system output model without becoming prohibitively expensive for potential investors. The module chosen for the comprehensive system output simulation is a monocrystalline silicone module with a 170 Watt peak operating at 30 volts and manufactured by Suntech. The inverter chosen for the simulation is a 13 kilowatt 250 to 800 volt inverter operating at 50 Hz and manufactured by Danfoss. The Danfoss inverter is used to simulate the output of each of the four sides of the hip roof structure but cannot handle the entire system load for all four sides combined. The issue of inverter sizing is discussed in greater detail in the economic assessment section. The results of the comprehensive system output simulation are discussed in a later section of this report (Mermoud, Roecker and Bonvin).
Results of Technical Assessment
Preliminary System Output Model
Figure 1-‐ 21. Total System Output at Different Albedo Input Values
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The total system output over a range of albedo values shows a slight correlation of increased output as a result of an increased albedo. This direct correlation is consistent with expected output values because any increase in reflection off of the surface of the earth will result in an increased absorption of solar radiation on to the surface of the photovoltaic array. The output calculated by PVSYST at an albedo value of 0.14 for the southern facing side was 25525.4kWh/year and at an albedo value of 0.26, the output was 25734.7kWh/year.
Figure 1-‐ 22. Total System Output at Differing Module Side Length Values
As the side length of each module increases, the total system output declines because of limited surface area and module orientation on the roof. At a module side length of 0.5m, 431 modules are able to fit on one side of the roof, resulting in a total system output of 28099.7kWh/year. When the module side length is increased to 2.5m, the number of modules decreases to 325 with a resulting total output of 21188.9 kWh/year.
The relationship of module side length to total system output is non-‐linear because of the roof style. The traditional Thai hip roof style creates surface area limitations as module side length increases. Because each side of a hip roof if triangular, as the module side length increases, the number of solar modules able to fit on each side decreases at an increasing rate. The active surface area becomes smaller because there is more of a square module offset at the edges of the triangular roof.
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Figure 1-‐ 23. Total System Output with Variable Roof Side Length
As the side of a square roof increases, the total system output also increases, but in a non-‐linear relationship. It was assumed that the tilt of the roof remained at a constant 30 degrees. At smaller roof side lengths, significantly fewer modules are able to fit on the roof because of the triangular roof shape. Then, as the side length increases, the number of modules able to fit on the roof increases at an increasing rate because each solar module is a smaller percentage of the total roof area.
Figure 1-‐ 24. Total System Output at a Changing Angle of Inclination (4 roof sides)
As the angle of inclination (angle of roof) increases, total system output also increases for most of the ranges of increasing inclination angle. Different factors are acting simultaneously when total system output is calculated. The number of modules is at a continuous rate of increase over all ranges of increasing inclination angle. The output per unit area is at a constant decrease as the angle of
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inclination increases. The total system output increases from the range of inclination angles from 10-‐20 degrees and from 25-‐35 degrees. There is a slight decrease in total system output from roof angles of 20-‐25 degrees.
The number of modules as part of the roof constantly increases as a result of angle of inclination increases. Even though the house dimensions remain constant, the roof area increases. The output per unit of area constantly decreases as inclination angle increases because of the different orientations of the sides of the roof and the angle at which the sides are built. The ideal roof angle for optimal output per unit area in Bangkok is between 12 and 16 degrees (Mermoud, Roecker and Bonvin). As the inclination angle increases above that range, the modules are no longer at the ideal angle, resulting in lower output. From the inclination range of 10-‐20 degrees, the increased total output is a result of the increased roof area, and therefore increased number of modules able to fit on the roof. From the 20-‐25 degree change in angle of inclination, the increased output from additional modules is overcome by the decreases in output per unit area of each module as a result of increasing angle of inclination. The range of inclination angles from 25-‐35 degrees shows another increase in total output because the number of modules is increasing at an increasing rate, resulting in larger numbers of panels on the roof from the same proportional increase in inclination angle.
Figure 1-‐ 25. Total System Output at a Changing Angle of Inclination (south facing side)
As angle of inclination increases on the south facing side of the hip roof, total system output continuously escalates over every increasing range of inclination angle. The number of modules increases as a result of roof surface area enlargement, allowing for the installation more modules. The output per unit area constantly decreases because as the modules are at a higher angle, less solar radiation is absorbed on the surface of the panel. Total system output also increases over the entire range of inclination angles. This is a result of the increased efficiency from the modules being installed on the south side of the roof. Even though the decreses in efficiency from increased inclination angle
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are significant, they are not substantial enough to overcome the increased output from the larger number of modules installed on the most efficient side of the roof.
Figure 1-‐ 26. Total System Output for Optional Roof Orientations
The total system output for a pitched style roof would ultimately give the largest output for the total system. The additional output that the pitched roof has over the hip roof comes from the roof shape. On a pitched roof, there are only two rectangular sides to install solar modules. Because the shape of the modules is also rectangular, modules can be packed more efficiently on the pitched roof than on the triangular sides of the hip roof.
Figure 1-‐ 27. Total System Output at Increasing System Efficiencies
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The total system output increases as the total system efficiency increases. There is a direct correlation between these two values because as modules use the radiation absorbed from the sun more efficiently, a larger proportion of that radiation will eventually be turned into electrical energy that can then be sold to the grid.
Figure 1-‐ 28. System Output Resulting from Solar Azimuth Angle
Solar azimuth angle has a small impact on total system output for the southern oriented panels. As the azimuth changes from -‐100 degrees to 0 degrees, the resulting output from the solar array increases. Then, as the azimuth angle changes from 0 degrees to 100 degrees, the total system output decreases. This change in output is caused by the angle of the sun hitting the panels, and does not affect the four panel system because no matter where the sun is, the system as a whole will receive the same amount of solar radiation.
Comprehensive System Output Simulation The theoretical output limit and input variable sensitivity analysis provided by the preliminary system output model are supplemented by the precise, product-‐specific results generated in the comprehensive system output simulation. Four PVSYST simulations are performed with an identical set of input parameters, the specifics of which are discussed previously, except for the panel orientation, which is set to due south, due west, due east, and due north depending on the simulation variant. The results of these four variants provide expected output figures for a one-‐ panel (south panel), two-‐panel (south and east panel), three-‐panel (south, east, and west panel), and four-‐panel (south, east, west, and north panel) shared profit building-‐integrated photovoltaic installation enterprise, as outlined below. The figures provided throughout this section are taken from predefined tables and graphs provided by PVSYST Version 4.37 (Mermoud, Roecker and Bonvin).
One-‐Panel System Simulation
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The comprehensive system output simulation indicates that, given the input parameters outlined previously in this report, a south panel system with a solar azimuth angle of zero degrees will have an annual output of 16,228 kilowatt-‐hours with an average annual system efficiency of 9.44 percent. The main monthly and annual results of the comprehensive system output simulation for a photovoltaic array with a due south orientation are summarized in Figure 1-‐ 29 (Mermoud, Roecker and Bonvin).
Figure 1-‐ 29. South Panel System Final Balances and Main Results (Mermoud, Roecker and Bonvin)
The daily output energy available at the inverter for the photovoltaic system with a due south orientation is displayed graphically in Figure 1-‐ 30 (Mermoud, Roecker and Bonvin). The considerable variation evident in the figure is explained by daily meteorological variations as well as yearly seasonal
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trends.
Figure 1-‐ 30. Daily South Panel System Output Energy (Mermoud, Roecker and Bonvin)
The annual efficiency losses for the photovoltaic system oriented due south are summarized in Figure 1-‐ 31 below (Mermoud, Roecker and Bonvin). The greatest cause of efficiency loss is a 10.2 percent photovoltaic energy conversion efficiency loss due to temperature. Efficiency losses due to temperature are a high concern for this enterprise due to the low latitude and high ambient air temperatures of the site of interest (Bangkok, Thailand) and the unventilated nature of the building-‐integrated modules.
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Figure 1-‐ 31. Annual Loss Diagram for South Panel System (Mermoud, Roecker and Bonvin)
The monthly collection loss, total system loss, and produced useful energy of the building-‐integrated photovoltaic system are summarized graphically in Figure 1-‐ 32 (Mermoud, Roecker and Bonvin).
Figure 1-‐ 32. Normalized South Panel System Production per Kilowatt Peak Installed (Mermoud, Roecker and Bonvin)
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Although a photovoltaic module orientation of due south (corresponding to a solar azimuth angle of zero degrees) produces the highest annual electricity yields, this orientation is not always feasible for a building-‐integrated photovoltaic system. The choice of building orientation within the luxury community is dominated by aesthetic concerns and requirements to construct a set number of houses within a limited geographical area. As a result, the actual orientation of the building-‐integrated photovoltaic modules for the south panel installation can vary between buildings, with solar azimuth angle values ranging from -‐90 to 90 degrees. Given that the due east and due west plane orientations possess solar azimuth angle values of -‐90 and 90 degrees, respectively, the due east and due west comprehensive system output simulations also represent lower bounds on the total output of the south panel system.
Two-‐Panel System Simulation The two-‐panel system output results are found by aggregating the south panel system results
summarized above with the east panel system results discussed below. The photovoltaic system with an orientation of due east is estimated to generate an annual output of 15,151 kilowatt hours and operate under an average system efficiency of 9.46 percent. The main monthly and annual results of the comprehensive system output simulation for a due east orientation are summarized in Figure 1-‐ 33 (Mermoud, Roecker and Bonvin).
Figure 1-‐ 33. East Panel System Final Balances and Main Results (Mermoud, Roecker and Bonvin)
The daily output energy available at the inverter for the east panel photovoltaic system is summarized in Figure 1-‐ 34 below (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 34. Daily East Panel System Output Energy (Mermoud, Roecker and Bonvin)
The annual efficiency losses for the photovoltaic systems oriented due east are summarized in Figure 1-‐ 35 (Mermoud, Roecker and Bonvin). As with the south-‐facing photovoltaic system, the greatest cause of efficiency loss is due to temperature, with loses of 9.3 percent.
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Figure 1-‐ 35. Annual Loss Diagram for East Panel System (Mermoud, Roecker and Bonvin)
The monthly collection loss, system loss, and produced useful electricity of the east-‐facing system are summarized graphically in Figure 1-‐ 36 below (Mermoud, Roecker and Bonvin).
Figure 1-‐ 36. Normalized East Panel System Production per Kilowatt Peak Installed (Mermoud, Roecker and Bonvin)
Based on the output figures provided for the south panel and east panel photovoltaic systems, the annual system output for the two-‐panel photovoltaic system is predicted to be 31,379 kilowatt hours (Mermoud, Roecker and Bonvin).
Three-‐Panel System Simulation The three-‐panel system output results are found by aggregating the two-‐panel output provided
above and the west panel photovoltaic system output calculated below. The photovoltaic system oriented due west is estimated to generate 14,987 kilowatt hours annually under an average operating system efficiency of 9.35 percent. The main monthly and annual results provided by comprehensive system output simulation for a due west orientation are summarized in Figure 1-‐ 37 (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 37. West Panel System Final Balances and Main Results (Mermoud, Roecker and Bonvin)
The average daily electricity available at the inverter for the west panel system is summarized in Figure 1-‐ 38 (Mermoud, Roecker and Bonvin). While the daily system output energy patterns are similar for the east panel and west panel, slight daily output differences account for a yearly east panel orientation advantage of over 1,500 kilowatt hours relative to the west panel orientation.
Figure 1-‐ 38. Daily West Panel System Output Energy (Mermoud, Roecker and Bonvin)
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The annual efficiency losses for the west panel system are diagrammed in Figure 1-‐ 39 (Mermoud, Roecker and Bonvin). As with the south panel and east panel systems, the greatest efficiency loss for the west panel system is due to temperature, with an average annual loss of 10.4 percent.
Figure 1-‐ 39. Annual Loss Diagram for West Panel System (Mermoud, Roecker and Bonvin)
Produced useful electricity for the west panel photovoltaic system is displayed graphically in Figure 1-‐ 40 along with the collection and system losses (Mermoud, Roecker and Bonvin).
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Figure 1-‐ 40. Normalized West Panel System Production per Kilowatt Peak Installed (Mermoud, Roecker and Bonvin)
Based on the output figures provided for the south panel, east panel, and west panel photovoltaic systems, the annual system output for the three-‐panel photovoltaic system is predicted to be 46,366 kilowatt hours (Mermoud, Roecker and Bonvin).
Four-‐Panel System Simulation The output for the four panel system simulation is found by aggregating the results of the three-‐panel system simulation discussed previously with the output from the north panel system outlined below. The output for the north panel is summarized in Figure 1-‐ 41 (Mermoud, Roecker and Bonvin). The total annual north panel system output is estimated to be 13,205 kilowatt-‐hours, with a total system efficiency averaging 9.25 percent.
Figure 1-‐ 41. North Panel System Final Balances and Main Results (Mermoud, Roecker and Bonvin)
The daily energy available at the inverter for the north panel system is summarized in Figure 1-‐ 42 (Mermoud, Roecker and Bonvin). Due to the inefficient orientation of the north panel system relative to that of the other three systems, the seasonal variation in output is much more extreme than that observed for the south, east, and west panel systems.
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Figure 1-‐ 42. Daily North Panel System Output Energy (Mermoud, Roecker and Bonvin)
The efficiency loses for the north panel photovoltaic system are summarized in greater detail in Figure 1-‐ 43 (Mermoud, Roecker and Bonvin), with the greatest efficiency loss due to orientation at 17.6 percent followed by the 9.0 percent efficiency loss due to temperature.
Figure 1-‐ 43. Annual Loss Diagram for North Panel System (Mermoud, Roecker and Bonvin)
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The collection loss, system loss, and total useful energy produced for the north panel photovoltaic system are summarized in Figure 1-‐ 44 (Mermoud, Roecker and Bonvin).
Figure 1-‐ 44. Normalized North Panel System Production per Kilowatt Peak Installed (Mermoud, Roecker and Bonvin)
The total annual system output for the three-‐panel system is combined with the north panel system output discussed above to determine the total four-‐panel annual system output of 59,571 kilowatt-‐hours. The annual output figures for the one-‐panel, two-‐panel, and three-‐panel systems represent maximum values that would result from ideal building orientation. However, the results of the preliminary system output model indicate that building orientation does not impact the annual system output for a four-‐panel system. The results of the one-‐panel, two-‐panel, three-‐panel, and four-‐panel system output simulations are employed within the economic assessment to determine the number of photovoltaic panels installed that will result in the most viable shared profit enterprise (Mermoud, Roecker and Bonvin).
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Environmental Assessment
Background Information Throughout the world, private enterprise, governments, and individuals are realizing the
importance of using a variety of energy sources, mixing fossil fuels with the use of renewables. Global issues arising from fossil fuel consumption, including concerns over regional energy security and the consequences associated with global warming, are a few of the major reasons why governments seek to install renewable technologies.
Figure 2-‐1. Diagram of Thailand’s Energy Mix in 2008 (EGAT).
Thailand’s energy mix largely depends on natural gas, and in 2008 accounted for approximately 103,770 million kWh, 70.02% of the resources used for electricity generation. Imported coal and lignite accounted for 8.23% and 12.60%, respectively, while solar technology made up less than 1% of Thailand’s energy (EGAT).
Solar photovoltaic technology has significant promise among renewable energy sources due to the nearly unlimited natural presence of sunlight. LCA studies have evaluated the environmental impact factors of photovoltaic technologies and their uses, as well as evaluating energy costs and benefits throughout the life of a photovoltaic cell. Early studies in the 1970s found negative energy balances in purifying silicon ingot and condemned photovoltaic cells for consumption of toxic materials, as well as exploiting silicon, aluminum, and heavy metal resources. However, solar companies are constantly changing and developing new processes to manufacture solar cells, and environmentalists are beginning
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to find solar energy a potentially viable alternative to fossil energies. Today, largely optimistic studies describe the potential benefits of integrating solar photovoltaics into electricity generation systems. Studies show that they reduce greenhouse gas emissions and displace negative impacts of fossil fuel use, especially in countries who consume disproportionate amounts of fossil energy (Krauter and Ruther). This study focuses on building-‐integrated monocrystalline solar photovoltaic technology (mc-‐Si).
Innovative monocrystalline photovoltaic installations by the building sector allow photovoltaic modules to serve as the roof, instead of placing cells on the existing roof structure.This study will assess a building-‐integrated monocrystalline photovoltaic module replacing conventional cement tile roofs specifically in Thailand. Building integrated photovoltaics (BIPV) can be designed for rooftops, shading devices, building facades, and window glazings. BIPV is increasing in popularity across the world, where government incentives and energy subsidies promote photovoltaic research and integration. Using a balance of system and inverter, BIPV systems can sell electricity to the grid, which lessens the demand for traditional fossil energy sources.
It has not been as widely integrated in developing nations, although there is more to gain for developing countries that typically have dirtier electricity compositions. The effects of solar electricity generation may be more pronounced due to Thailand’s natural gas dominated electricity mix. However, as part of the King’s plan for a self-‐sufficient energy economy, incentives are in place to encourage very small power producers (VSPPs) to sell renewable energy to the grid. Biofuels from rice straw feedstocks has garnered much attention domestically, but solar photovoltaics should also be considered. Due, in part to increased government awareness and incentives for renewable energies, there has been increasing interest in the development of solar technologies, and subsequently the creation of businesses seeking to enter the energy sector.
The building-‐integrated module connects to the electricity grid as a Very Small Power Producer in an urban setting, in this case Bangkok. Evaluating the environmental impacts and benefits of selling electricity to the grid will help this business understand ways to reduce greenhouse gas emissions, improve air quality, and consider alternative ways to design buildings that are more environmentally friendly. Current studies are largely focused on more temperate climates, so further academic studies that more specifically concern Thailand’s unique climate may be required for better, more comprehensive understanding and integration of photovoltaic technology into the Southeast Asian business sector.
Monocrystalline photovoltaic modules have an expected lifetime between 30-‐50 years, depending on environmental conditions and the quality of the manufacturer. Many studies suggest that energy payback time for solar modules are substantially less than their lifetime, and estimates range from the cutting edge technology of 36 months to 5years (Varun, Sherwani and Usmani). Conventional roofing materials in Thailand primarily consist of concrete (Kofoworola and Gheewala), and studies have also shown that concrete consumes considerably more energy than other standard roofing materials (Reddy and Jagadish). This study aims to look specifically at how mc-‐Si technology, instead of a
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conventional roofing system, could reduce carbon dioxide emissions in the atmosphere for residential housing communities in urban Bangkok.
The average electricity mix in Thailand is critical to the study as a determinant in the displaced amount of electricity. Due to time and resource constraints, the data collected will be a compilation of related published journal articles. The building-‐integrated system is not prevalent in Thailand, thus European models serve as a general guideline for the system processes. The use of different environmental and geographical considerations, including latitude, will attempt to guide the business assessment.
The degradation of air quality and contribution to global warming of developing countries, such as Thailand, requires mitigation and efforts to control development in an environmentally responsible manner. The study specifically focuses on a new technology that could provide answers on how to make Thailand’s urban environment cleaner.
Environmental Assessment Methodology Goal and Scope Definition
The main objective of this study will compare the environmental impacts of monocrystalline BIPV with conventional roof structure using the standard energy sources of Bangkok, Thailand. The intended purpose is to help develop an environmental basis for a business model integrating BIPV into luxury housing developments, in conjunction with the King’s plan for energy efficiency in Thailand. The results of this study are geographically limited to Thailand.
The intended audience is contractors and development investors, those involved in the design, construction, and marketing of housing developments. By illustrating the environmental impacts of mc-‐Si BIPV, it may be useful for policy makers and planners to aid in the creation of building codes and in community design focusing on the use of renewable technologies.
The technological limitations of this study include the process of creating mc-‐Si solar panels, which has stayed constant for the past thirty years (Ignacio, del Canizo and Alonso). We are using 2008 data for Thailand’s energy mix in impact calculations. The technological results are limited by past studies, as data has been compiled from various journal articles and released databases, instead of by primary data collection.
Mercury emissions are not considered in this particular study because of a lack of reliable information. Without collecting the data from Thailand specifically, this compound exceeds the scope of this project. The purpose of this study guides potential investors or policy makers to consider building alternatives and ways to decrease air and greenhouse gas emissions. While mercury may be emitted, data accurately comparing the two alternatives will require further study. A priority in this study is reducing greenhouse gases that contribute to global warming in choosing non-‐fossil energy sources, so this life cycle assessment can not adequately compare the effects of global warming to the toxic effects
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of mercury, because the different compounds in question are radically different. Based on peer-‐reviewed journal articles that account for mercury in photovoltaic modules, the data suggest that some emissions exist, but that photovoltaic system building integration should primarily be supported as a clean way to reduce air and greenhouse emissions.
Building integrated photovoltaics have two functions, to act as an energy production system as well as a roof. Therefore, there will be two components of the functional unit: building protection and energy generation. The scope of the system used within the study will take into account the production of materials through the use phase. In order to compare the distinct functions fairly, the functional unit will consider a specific area of roof which generates a determined amount of electricity. This functional unit assumes that the lifespan of both the building-‐integrated module and conventional concrete tiles will be the same. This seems reasonable, considering the BIPV module is designed with the same purpose as concrete: to protect a building. Both products are assumed to remain intact without damage throughout the study.
Functional Unit
Figure 2-‐2. Diagram of functional unit
Serve as a roof and generate 800 MWh of electricity across a roofspan of 387 m2.
Based on the dynamic Excel spreadsheet, there are several scenarios for this study. Alternative scenarios require multiple functional units. Thus, for the “South Facing Only”, “East Facing Only”, “West Facing Only”, and “North Facing Only” scenarios, the study will compare 200 MWh of electricity across a roof span of 100m2. The “South and East”, “South and West”, and “South and North” scenarios will compare 400 MWh across a roof span of 200 m2.
System Boundary
This particular study considers the production and use phase of the photovoltaic system’s life cycle. Assuming the functional unit of 800MWh will not exhaust the lifetime of a BIPV system, the disposal phase of solar roof in Thailand is a relatively unexplored phenomenon. Thailand lacks proper recycling infrastructure to process the remaining silicon or concrete past the life, the study can assume that the disposal phase of the concrete roof and photovoltaic roof tile will be similar, both being demolished and sent to the landfill. The disposal phase will be considered in the study, but both solar photovoltaic roofs and the displaced concrete roof will undergo similar waste management cycles. Recent studies suggest the feasibility in the United States for recycling monocrystalline photovoltaic modules. A changing infrastructure in Thailand could potentially make recycling feasible within thirty years, when the photovoltaic modules’ lifetime expires (Fthenakis). However, this study will only consider current available technologies in Thailand.
System Function Monocrystalline BIPV Conventional Roofing Monocrystalline PV Concrete tile Electricity Generation PV/Inverter/Other Requirements
to Hook Up to Grid Average electricity generation of mix in Bangkok, Thailand
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Data Requirements
This study will require the following data:
• Production process of monocrystalline photovoltaic cells (energy and resources)
• Production process of concrete tiles (energy and resources)
• Emission from the average electrical mix
Specifically, the data will come from peer reviewed journal articles and published databases. A published literature review of current monocrystalline embodied energy contributed to the main data sources. Photovoltaic data comes primarily from a previous study that details the general industrial process of manufacturing mc-‐Si cells, not specific to one particular manufacturer. The concrete data was obtained from Embodied energy of common and alternative building materials and technologies (Reddy and Jagadish) and Environmental life cycle assessment of a commercial office building in Thailand (Kofoworola and Gheewala). Data for Thailand’s average electrical mix and emissions came from the Department of Alternative Energy Development and Efficiency, Ministry of Energy’s 2008 annual report entitled Thailand Energy Situation. The data obtained by the journal articles are subjected to the assumptions made for the photovoltaic and cement processes. This study assumes the journal data remains consistent with the data requirements.
Assumptions Assumptions in this study include geographical limitations to Bangkok urban area. A rooftop of
387 m2 is chosen to represent a typical residential roof area as calculated in the technical assessment. In order to compare a concrete rooftop with a photovoltaic array, the 387 m2 roof will equate to a 50 kWp capacity solar array, which accounts for nearly 21,000 cells. We are assuming a uniform production process for each cell, as well as a uniform production process for concrete tiles as outlined in the data requirements. Production includes silicon purification, crystal production via the Czochralski Method, wafer sawing, etching, doping, and assembly.
Assumptions for transportation in the mc-‐Si BIPV system include three different scenarios, each imported to Thailand via freight container ship. The default scenario is from Shanghai, China and alternate scenarios are computed for Germany and Japan. The manufacturing of concrete tile is assumed to take place in Thailand. The delivery process has five different steps with four 100 km routes. It is assumed that all transportation is by a heavy duty diesel engine truck. This minimal transportation value avoids allocation and is a reasonable method in which a Thai business would obtain the necessary components, because of the small solar sector in Thailand.
The balance of system and inverter are included in the module processes. The energy contributions of an urban-‐centralized grid-‐connected inverter and balance of systems are quite small in comparison to the purification of silicon ingot (Knapp and Jester). Typically for stand-‐alone systems, the balance of system implies a battery structure which accounts for a higher energy intensity. This study
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concerning grid-‐connected systems will assume no battery storage. The photovoltaic array requires an inverter, which converts the electricity to alternating current.
This study will use the current electricity average mix of Thailand, the estimated saved emissions will assume no change to Thailand's mix, which, optimistically, would provide an overestimate of the savings. Alternative energy scenarios that describe a cleaner energy mix will be examined later in the study.
We have estimated the average size of the roof and time frame based on a peer reviewed journal article (Halwatura and Jayasinghe, Influence of insulated roof slabs on air conditioned spaces in tropical climatic conditions—A life cycle cost approach). The estimated life of a concrete roof is 30 years, and we are assuming that 800 MWh equates to 10 years of building use. One-‐third of the energy and emissions associated with producing one concrete tile will be considered in the study.
Cement mortar consumes more energy than other types of roofing materials (Reddy and Jagadish). We have chosen this as a conventional material in Thailand, as it is the most popular building material used in roof construction (Kofoworola and Gheewala). If other materials had been evaluated, the effects of PV substitution would not be as pronounced.
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System Processes
Figure 2-‐3. Production Process of Silicon Cells
Silicon must be prepared before any photovoltaic module can be produced. Monocrystalline photovoltaic modules require pure silicon crystals, which must first be purified. Silicon dioxide becomes silica (Si) and carbon (C) in a furnace. The mixture of oxygen and chlorine is dumped and blown into the furnace to solidify the solar-‐grade silicon. The monocrystalline production process follows the Czorchalski method. Raw silica sand is purified and made into ingot. The ingot must be sawed into wafers that are 300 μm thick with a sawing gap of 200 μm. The average wafer for this study weighs 6.99 g, and is typically shaped as rounded squares. The wafers must be etched with NaOH, and this process requires a high temperature at nearly 80°C. Phosphorus is then added to dope the silicon, which also
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demands a high temperature. Procedures to diffuse the phosphorus incorporate Quartz Furnaces or Belt Furnaces. This study considers a Quartz Furnace, the cleaner of the two choices, as ambient air can enter the Belt furnaces. After diffusion the p-‐n junction must be isolated and Titanium dioxide is used to encapsulate the cells. Both the front and back sides of the cell are printed and dried to create contacts, and subsequently the metal-‐contacts are co-‐fired. This step requires high temperature denoting an energy intensive step. The individual cells are aligned along a panel, which is then laminated. The step demanding the most energy is the initial purification denoted by CZ Method in Figure 2-‐ 3 (Ignacio, del
Canizo and Alonso).
Figure 2-‐ 4. Transportation diagram of mc-‐Si BIPV system
The study assumes all production will occur in a factory in China and then a container freight ship will bring the finished solar cell ready for installation to a specific site in Bangkok. The transportation is allocated using the mass of the solar panels on the container ship. Alternate scenarios are also modeled for product shipments from Japan and Germany. The shipping routes are estimated in kilometers using Google Earth.
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Figure 2-‐5. Transportation Pathways
Figure 2-‐ 6. Steps of cement manufacturing
Limestone is mined in a quarry and transported to the factory for processing. First, it is ground and blended. It is then transported to a preheater, which heats the raw material to 1450°C in preparation to move through the rotary kiln. After being processed in the rotary kiln, the hot clinker passes through a cooling system and is stored before being ground into the final state of the product. This process is diagrammed in Figure 2-‐6 above.
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Figure 2-‐ 7. Tile manufacturing process
The tile production process, shown in figure 2-‐7, begins with sand, water, and cement being combined together in the mixer. The mixed concrete moves to the extruder where it is molded into the desired tile shape. Once shaped, the concrete moves into the curing chamber, where it dries for approximately 24 hours at 30°C-‐ 34°C, at a relative humidity of 95%. The concrete is demolded, and then ready for the market.
Figure 2-‐ 8. Transportation steps in cement tile production and utilization
The overall transportation scenario of cement tile production begins with limestone mining. Limestone is transported from the quarry to the cement factory, where it is processed and packaged. It is distributed to the tile manufacturer, after which is sold to a wholesaler. Considering this study is aimed towards larger business plans or authorities, contractors would buy directly from the wholesaler rather than at a retail location, meaning the concrete tile would travel from the wholesale location to the construction site directly.
Life Cycle Assessment Inventory Data from this section are broken down into three distinct categories. Photovoltaic production,
cement production, and the energy displaced by the grid. It is reasonable to assume that the use phase of the BIPV module produces clean energy without greenhouse gas or air emissions.
As an appendix to the document, the data all stem from the Dynamic Excel Spreadsheet. The module of consideration is industry average monocrystalline silicon.
Data also are produced in five forms. The aggregate avoided CO2 emissions with multiple scenarios, the grams of CO2 per kWh of electricity generated, the Net Energy Ratio, Energy Payback Time, and Carbon Dioxide Repayment.
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The Dynamic Excel Spreadsheet contains several variables.
The spreadsheet contains the following input variables:
(α) = roof side length
(β) = angle of inclination
(χ) = orientation of south side (degrees west)
(ρ) = albedo
(δ) = expected lifetime of panel
(ε) =system efficiency
These variables estimate the amount of incoming solar radiation, which varies the amount of CO2 avoided.
Scenarios were also created to analyze the effect of system efficiency on CO2 per kWh of electricity generated, Energy Payback Time and Carbon Dioxide Repayment. Net Energy Ratio was considered across varying expected system life expectancies. These are standardized parameters affecting the life cycle assessment of photovoltaic systems and allow comparison between photovoltaic electricity generation with other types of electricity generation systems. One of the most important considerations is the ability to fairly compare photovoltaic electricity production with different countries’ average electricity production. For this grid-‐connected application, the results completely justify the production of solar panels as an effective means in reducing CO2 emissions.
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Figure 2-‐ 9. Grams CO2 per kWh (BIPV discounted)
The graph exhibits the potential savings in CO2 generation by grid electricity in Thailand across differing system efficiencies. Monocrystalline photovoltaic modules can create electricity that is nearly 30 times cleaner than Thailand’s electricity mix. The data clearly suggest a reduction in carbon emissions, especially when concrete, and the discounts associated with using concrete as the standard construction material, are considered. Non-‐integrated monocrystalline photovoltaic modules are nearly 10 times cleaner than Thai’s mix, implicating significance especially for grid-‐connected systems that displace electricity from power plants.
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Figure 2-‐ 10. CO2 per kWh with and without BIPV discount.
Figure 2-‐10 compares the carbon dioxide generated by the production of monocrystalline panels made in different countries. Since monocrystalline photovoltaic modules are not currently manufactured in Thailand, the data is a hypothetical scenario. China’s panels are dirtier than other countries because of the larger proportion of coal power in the average electricity mix (World Wildlife Fund for Nature). From a business standpoint, China may provide the cheapest panels, but the environmental benefits of photovoltaic modules may reduce threefold. Error bars were computed by estimating different electrical outputs over a ten-‐year period. Building integrated photovoltaic modules provide an environmental benefit of 300 % compared to normal monocrystalline modules.
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Figure 2-‐11. Net Energy Ratio versus the expected lifetime of the photovoltaic module.
Net Energy Ratio (NER) is computed by the following formula.
NER =
NER is a valuable tool used to compare photovoltaic electricity generation with the conversion of other renewable technologies such as biomass or wind energy. The ratio in Figure 2-‐11 denotes the net amount of energy converted by the photovoltaic electricity generation system, weighing its output to its input. Because the NER is applied to a renewable energy source created by the inputs of fossil fuels, this ratio provides a comparison for the leveraging capacity for BIPV modules. Fossil energy inputs are “up-‐converted” to create seven-‐to-‐eight times as much energy per unit of primary energy (Pacca, Deepak and Keoleian).
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Figure 2-‐ 12. CO2 and Energy Payback Periods are calculated versus efficiency.
The energy payback period is higher than CO2 because of the BIPV discount in CO2 emissions produced by the cement. The energy payback period does not consider the energy displaced by concrete tiles. However, the graph suggests that photovoltaic cells produced in China take significantly longer to pay themselves back in CO2 costs. The energy payback time is not different based on electricity mix. The graph illustrates the pronounced effect of differing average electricity mixes and aligns with past studies that suggest when photovoltaics are created in an area with a cleaner electricity mix, that it requires less time to payback the CO2 emitted. This implicates that panels will also produce less CO2 per kilowatt-‐hour. Even with low efficiencies of outputs, the estimated payback period is robust and can pay itself back energetically in 5 years.
South Side Scenario CO2 offset per year
Per House 11.1 MT Per Development (200 houses) 2.2 MT Bangkok Potential (if all 40,000 new houses built in 2008 were to have approx 90 m2 of BIPV)
444 MT
Bangkok Potential- Ten Years 4.4 GT
Figure 2-‐13. Large Scale Potential Application for BIPV as a CO2 reducing agent (within Bangkok): South Side Scenario
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All Sides CO2 offset per year
Per House 45 MT Per Development (200 houses) 9 MT Bangkok Potential (if all 40,000 new houses built in 2008 were to have approx 378 m2 of BIPV)
1.8 GT
Bangkok Potential- Ten Years 18 GT
Figure 2-‐14. Large Scale Potential Application for BIPV as a CO2 reducing agent (within Bangkok): Four Side Scenario
Thailand emitted 2x 109 tons of CO2 in one year. Average Thai citizens emit 3 tons of CO2 per year. As results show, a family could offset a good portion of their per capita CO2 emissions by having building integrated solar photovoltaic modules acting as roofs in their homes (EGAT).
If monocrystalline modules are integrated onto the south side of the roof as the economic section suggests could be feasible, then 11.1 metric tons of CO2 could be offset each year per house. The business plan for 200 homes in one development would thus offset nearly 2.2 megatons of carbon per development. This suggests a large potential for carbon remediation in Bangkok. However, further economic analyses could determine whether this is a cost-‐effective approach at reducing carbon dioxide emissions.
To place a maximum upper bound on the potential carbon dioxide that could be offset in Bangkok, a hypothetical policy has been created. This hypothetical policy forces all new homes to contain BIPV installations on the south facing roof, 444 megatons of carbon dioxide could be offset over the course of one year. While this is unrealistic, it provides contextual data to understand how the BIPV application can fit within Thailand’s goal of reducing climate change.
Parameters
A previous study suggests that increasing efficiency in producing the photovoltaic module has the most pronounced effect in reducing the embodied energy requirement for creating monocrystalline photovoltaic modules. The parameters considered included input energy, life expectancy, module efficiency, and insolation. Bangkok has a higher estimated incoming solar radiation than Southern Europe, the leading region in solar applications, with a latitude of 13.7° N of the equator (Pacca, Deepak and Keoleian).
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Figure 2-‐ 15. NER and E-‐PBT for PVL and KC modules based on the ranges of parameters tested (Pacca, Deepak and Keoleian).
The modules considered in this diagram are polycrystalline and amorphous silicon, however the parameters altering life cycle performance for polycrystalline cells and monocrystalline cells are similar, and can therefore be used for analysis (Pacca, Deepak and Keoleian).
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Potential Applications for Monocrystalline Photovoltaic Input Energy Efficiency
Figure 2-‐ 16. Production Steps and Energy Intensity
CZ Step
The Czorchalski Process consumes the most significant portion of production energy to create monocrystalline silicon modules. The streamlined process remains the same as when it was first practiced in the 1970s. As embodied energy has not significantly changed over these thirty years, room to improve efficiency is fairly limited. Other aspects of embodied energy should be explored to improve energy and carbon dioxide payback times. Since the Czorchalski Process will not change much, modeling the future potential environmental impacts for monocrystalline cells becomes less ambiguous.
Wafer Sawing
The wafer sawing gap dictates the amount of silicon needed to create a photovoltaic solar cell. Up to sixty percent of raw silicon ingot consumed during wafer sawing is wasted. Efficient gap space maximizes the raw silicon per wafer and minimizes the quantity of wasted material. Composing nearly six percent of the embodied energy in the monocrystalline photovoltaic production process, future photovoltaic systems can maximize both energy and material use by changing the sawing gap to perform as few cuts as possible.
Panel Process Energy
The composition of metals and variable components to encapsulate the solar cell contributes to the process energy, and aluminum plays a role as one of these component materials. If used, it increases the amount of energy required to make a panel. While this study assumes aluminum has been used,
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future modules may contain a resource that is more environmentally abundant and possibly less polluting.
Inverter + Balance of System
The inverter and balance of system vary with the brand, type, and size of the module. Typically, the inverter can consume between 1-‐10% of the primary energy inputs. The inverters and components rely on grid technology in place of interest, and some inverters work more efficiently than others. The system chosen in this study reflects Thailand’s lack of smart grid infrastructure compared to Southern Europe or the United States. The implications of this assumption are also reflected in the technical assessment, modeling differing system efficiencies. The inverter’s life expectancy is standardized across life cycle assessments of photovoltaic modules and assumed to be 10 years (Fraile, Alsema and Frischknecht).
End Of Life Scenarios Currently, technological and economic feasibility studies suggest that the recycling of aluminum capsules and photovoltaic grade silicon is possible in the United States (Larsen). However, a lack of infrastructure and technology available in Thailand relegates the exhausted roofs to landfills. The potential for recycling and recovery of materials not only will reduce the carbon payback period, but also will lessen the burden of abiotic resource depletion. Aluminum and silicon materials are scarce resources, and the proliferation of solar technology potentially may further the demand.
The technology for recovering used silicon from photovoltaic panels has been developed for the past ten years (Fthenakis). Recycling metal from framed modules exists without changing collection strategies, however a cradle-‐to-‐cradle approach to photovoltaic manufacturing could provide the environmental facelift scientists need to restore the sustainable image of photovoltaic production. The associated cost of recycling silicon is not considered excessive when compared to existing recycling technologies. Thus, while the infrastructure in Thailand may be present in five-‐ten years, the environmental advantages for the business could be modified.
Fthenakis asserts that the viability for photovoltaic recycling programs relies on the geographic proximity of modules to recycling facility centers. Therefore, grid-‐connected systems are more likely to lie in urban centers that can handle the additional and unconventional recyclable materials. A case study for Bangkok would support these claims; a residential housing community with utility waste management services may be able to handle these goods in the future.
The responsibility of recycling lies with the end-‐users, namely a large utility company. This shared-‐profit enterprise could potentially ensure the disposal phase of the product sells back to the producers of the panel, creating a closed-‐system feedback that offsets some virgin material. Demand-‐side management is another approach to recycling modules, however, strong statements through responsible businesses are necessary to jumpstart such a program (Larsen).
To project the feasibility of recycling in Bangkok, the large presence of metal smelting and refining facilities hints at a potentially viable system. While there is not the infrastructure to support the
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collection and subsequent management of such materials, the future is bright, and would make the environmental aspect of building-‐integrated photovoltaic modules in Thailand brighter. Policy mechanisms by the Ministry of Energy would potentially expedite the process to become a reality.
Results of Environmental Assessment The implementation of building-‐integrated monocrystalline photovoltaic modules on rooftops in homes in Thailand will significantly offset carbon dioxide produced by Thailand’s energy grid. The displacement of a cement roof will produce electricity nearly 30 times cleaner than Thailand’s current electricity generation mix.
Thailand is currently seeking to be economically independent and self-‐sufficient in a way similar to the Japanese model, and has a great opportunity to explore ways to reduce its carbon footprint by supporting projects that create grid-‐connected BIPV modules. The data exposes the effects of a 100, 200, and 378 m2 monocrystalline roof, and policy-‐makers can consider further studies to develop the economic feasibility of a project incorporating a mc-‐Si BIPV roof. The environmental data strongly supports cleaning the energy mix, and potentially, as carbon dioxide emissions become increasingly important in proposing and developing carbon credit incentives worldwide, Thailand can potentially profit from reduction strategies. The world’s follow-‐up meeting to Kyoto in Copenhagen in December, 2009 could provide the foundation for a global carbon credit market. Due to increased attention and concentration on reducing carbon dioxide emissions, surely governments seeking to potentially sell carbon credits will pursue policies that easily reduce emissions leading to global warming. This study provides the groundwork for supporting a business utilizing mc-‐Si BIPV for the reduction in negative environmental impacts shown with this particular system. It also provides the Thai government, or other planners and policy makers, an option to consider when discussing ways to reduce carbon dioxide emissions. Even with a cap and trade market, Thailand’s disproportionate amount of imported energy warrants further inquiries into building codes and policies that aid the selling of solar electricity back to the grid. Inadequate mercury emissions data was found, and comparing toxicity to global warming impacts is subjective. BIPV seems promising to try and reduce Thailand’s global warming potential, but it is important to recognize the importance of reducing the need for materials before implementing new, more expensive, technological strategies. If companies fail to find ways to make BIPV economically viable, it becomes merely an expensive technological solution to a larger problem. Conservation should be the first step to reducing the demand for fossil energy, however in a modern society, especially in a growing country like Thailand, alternatives must be explored. A combination of reduction and solar integration could prove very beneficial in carbon reduction strategies. Small producers over the life of one solar cell on a roof could provide large savings.
Concrete is noted as the most energy intensive material for a roof (Reddy and Jagadish). Further research should consider alternative building materials and the net results of using them as opposed to concrete. BIPV may not achieve such drastic savings in global warming potential because more eco-‐friendly materials may lessen their dependence of fossil fuels in the production phase. For example, in the United States, concrete tiles are not the average roof structure, and thus a BIPV grid-‐connected
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model may not look as enticing as other “green roofs.” It would also be interesting to compare BIPV modules with other “environmentally friendly” options, like green roofs that capture carbon and rainwater, while simultaneously serving as a roof and lowering the energy consumption necessary within the building itself. Acidification is reduced considerably when less CO2 enters the atmosphere. Acidification potential harms all ecosystems, and is especially relevant to Thailand. Tourism is susceptible to the negative effects of acidification, such as ocean acidification. Highly regarded islands off the coast of Thailand generate millions of baht in tourism every year, mostly for the reef life. The air-‐water interface interaction when CO2 dissolves into the ocean forms carbonic acid that destroys the limestone structures of coral reefs facing extinction. Without concern for CO2 emissions, Thailand faces the mass habitat degradation of a valuable natural resource, both environmentally and economically.
The results for Thailand distinguish China’s photovoltaic production from the other countries considered. Three times less CO2 is displaced from panels made in China than those made in Japan or Germany. China’s panels are made from electricity generated from higher proportions of coal power, unlike Japan or Germany. Also, despite economic reasons that may support building photovoltaic modules in Thailand to spur the local economy, cleaner electricity comes from imported modules.
The wide gap between the carbon emissions from Thailand’s energy mix and monocrystalline photovoltaic electricity production highlights the opportunity for Thailand to clean its electricity generation, rather than imply the feasibility for monocrystalline modules to take root as the primary driver for CO2 reduction. Solar photovoltaic electricity generation is an option, however the economic feasibility for the expansion of photovoltaic generation beyond a VSPP level remains to be determined. If grid parity can be reached within the next 5 years, solar electricity generation can become cost competitive with fossil fuel polluting alternatives.
The results defy misconceptions that solar photovoltaic modules provide an unattractively low net energy ratio and that the energy packback time for modules is quite high. Building-‐integrated modules incorporate better building efficiency and provide a better environmental service than conventional panels from an environmental perspective. The net energy ratio is quite high.
Potential Error The nature of this report based on other studies’ data rather than gathering data firsthand requires the attention to notice potential sources of error. Much of the concrete data is based on a study from India, which is similar to Thailand’s production in many ways, but could vary based on technologies available.
Any LCA study based in Thailand that lacks primary data research will encounter errors because Thailand lacks environmental data. Most will come from other countries that have different circumstances and environments. While monocrystalline cells are expected to last at least 30 years in most countries, Thailand’s tropical rainy and hot climate differs greatly from Germany or Switzerland, where a significant amount of solar research is concentrated.
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Solar data collected for the study is mostly from the year 2005, which in a rapidly developing technology sector could vary from the most current technology. Also, because the data contains industry averages rather than a specific product, the values should serve as a rough guide for the comparison of roofing systems.
Valid data for balance of system and inverters are scarce because the requirements to connect a solar panel to the grid vary greatly across different grid-‐systems. The studies considered for this project consider the balance of system and inverter energy requirements. However, they fail to provide exact values, and claim that considerations of BOS and inverters are made within the data provided by the study.
Assumptions for transportation are subjective and would change depending on the location of the BIPV module. However, transportation values contribute very small amounts of emissions compared to the process energies for both solar panels and concrete. The similar distance values used in the study nearly negate the effect.
Further research will help validate the assumptions made for this model and create a better estimate of the true environmental burdens associated with building-‐integrated photovoltaic modules.
Alternatively, as Thailand decreases its reliance on fossil energy, the pronounced effect of solar electricity replacing natural gas and coal decreases.
Conclusion The greenhouse gas emission and acidification savings by implementing a BIPV module
connected to Thailand’s electricity grid justify pursuing this technology as a substitute for traditional roofing materials. Further research is necessary in order to understand the full potential of BIPV for Thailand, but business leaders and policy makers can use this preliminary survey of existing peer-‐reviewed journal articles to make informed decisions regarding the environment. Thailand’s dirty electricity mix primarily contributes to the large savings of carbon dioxide emissions, therefore the location and materials used represent the most volatile factors of the study.
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Economic Assessment of Building-‐Integrated Photovoltaic Systems
The Thai Housing Market The housing market in Thailand has experienced multiple ups and downs over the past few decades, but the current national and global recessions coupled with recurrent political tensions have resulted in yet another decrease in residential property prices. Within the first two quarters of 2009, housing prices fell 3.7% in nominal terms (Bank of Thailand). While accounting for inflation, one can see that Thailand’s housing prices were at their highest in 1992. Although housing prices declined 2.4% in the succeeding five years, the Asian Crisis of 1997 caused a rapid decrease of 3.9% during 1998 and 1999. Following these years, there was an upward trend with regards to housing prices in the residential market, showing an average increase of 4.8% between 2000 and 2006. At this same time, Thailand’s GDP swelled by an average of approximately 5.1%. However, in 2006, there was yet another drop in property prices. This time, the market declined by 1.4% in real terms due to the political insecurity and corruption the country was experiencing due to Prime Minister Thaksin Shinawatra. After his deposition in a military coup, political turmoil remained a national problem, and residential housing prices continued to decline, falling 6.4% and 13.9% in real terms, in the years 2007 and 2008 respectively (Global Property Guide).
Figure 3-‐1. Annual House Price Change
This substantial economic recession has extended to areas outside of the residential housing sector. For instance, between the months of January and July of 2009, national exports declined 23.1% from the previous year, while imports fell a drastic 35.1% due to global credit issues and an overall diminishing confidence by businesses (Global Property Guide). Yet another effect of the country’s political upheaval is that its residential housing market has become less attractive to international buyers. Foreign demand for residences in Thailand decreased between 80-‐90% by June of 2009 (Suebsukcharoen). On the whole, the Thai market is expected to continue in its weakened state even with the two new stimulus packages initiated by the government in 2009 (Global Property Guide).
Year
Percen
t
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Figure 3-‐2. New Housing Supply in Metropolitan Bangkok
A final point to address concerning the current housing market in Thailand is the recent decline in the construction of new residences. As shown in Figure 3-‐2, the construction of homes in Bangkok reached a high point in 1996 with the creation of about 175,000 homes, apartments, and condominiums. However, this number declined sharply over the successive three years, finally beginning a slow, yet noticeable, rise again in 2002 and eventually leveling off around 2006. By 2008, the construction of new residences had risen to its highest level in twelve years; however, this was still approximately 55% below 1996 levels. Yet another trend to notice is that while the amount of residences being built is indeed on the rise, albeit slowly, there is quite a large increase in the number of condominiums being built and much fewer houses entering the market. This could be the result of few national rental laws, favoring landlords in Thailand due to their abilities to name their own rent prices and evict tenants if necessary. This influx of condominiums and apartments has led to an overall decrease in the number of stand-‐alone houses constructed over the past few years in the Bangkok metropolitan area (Global Property Guide).
Thailand’s economic recession in 2009 is the result of many factors, two main ones being the country’s political unrest and the ongoing global credit crisis. The nation’s rising unemployment may also play a role, as the number of unemployed citizens increased from 1.7% in the first quarter of 2008 to 2.1% in the first quarter of 2009 (Global Property Guide). While two stimulus packages have been enacted by the national Thai government, it is difficult to predict whether these will make any significant economic differences. The first stimulus package was presented in January of 2009 with the goal of helping consumers cope with the effects of the recession. This included tax reduction measures in the real estate division in order to promote consumer spending. The second stimulus package was a grand sum of 1.4 trillion THB given to housing and other infrastructure projects within the country (Global Property Guide). In general, the government is taking strides in order to increase consumer confidence and reduce the reluctance of buyers to make large purchases, such as apartments and houses (Suebsukcharoen). Once the political situation is thoroughly resolved and the global credit crunch is lessened, one may expect to see rising economic conditions in Thailand, including housing purchases and construction projects.
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Renewable Energy in Thailand The Department of Renewable Energy Development and Efficiency of Thailand is currently launching a program to increase the nation’s investments in the exploration and development of biomass, wind, solar, and other renewable energy sources. This 15-‐Year Renewable Energy Development Plan (REDP), announced in February of 2008, focuses mainly on particular tax breaks and other incentives for electrical power produced by various renewable sources, including biodiesel, ethanol, wind, and solar. There are multiple steps that the Thai government plans to take in order to put this plan into action. The first step is the promotion and of production and use of alternative energy sources. These energy sources will be promoted by new financial measures that take into account the added purchasing price of power derived from alternative energy, as well as tax and investment measures to incentivize renewable energy to operators (Chandler and Thongek). It is also important that the government promotes local production of alternative energy in order to reduce industry costs and augment the proportion of energy produced locally. A second step on the path to large increases in the alternative energy infrastructure is the promotion of energy research and development. The Thai government plans to allow for this by involving all concerned sectors, increasing known justifications for research, and surveying possible energy sources throughout the nation. This second step also includes the education of locals and the creation of a society that understands the value of renewable energy sources in today’s market. The final step is publicity or raising awareness among the nation’s people. It is imperative that the Thai government campaign to increase the current knowledge of alternative energy, the energy security of the country, and the economic importance of alternative energy development. This education may also include holding workshops and seminars in order to educate and train personnel in the energy industry (Chandler and Thongek). If all of these proposals can be implemented, the 15-‐Year REDP brought about by The Department of Renewable Energy Development and Efficiency in Thailand will have a large effect on the position played by alternative energy sources in the nation’s future.
In addition to the government-‐enacted, 15-‐Year REDP, the occurrence of another, yet gradual, evolution in Thailand’s energy sector must be noted. Small power producers (SPPs) and very small power producers (VSPPs) are springing up all over the nation, thanks to new government subsidies and soft loans for renewable energy projects. By the end of 2007, there were already nearly 265 proposals to the Energy Ministry from SPPs and VSPPs focused on producing renewable energy totaling a prospective 1716 MW with 1116 MW to be sold to the grid (Mahabir). Particularly with solar energy, the country has seen that while investment costs may be high, overall costs are decreasing with the emergence of new solar farms throughout the nation. As of February 2008, there were 87 solar projects responsible for selling a total of 123 MW to Thailand’s electricity grid (Mahabir). It is projected that the renewable energy should reach 9% of final energy consumption for the country by 2011 (Mahabir). This has the potential to reduce the percentage of oil with regards to overall energy consumption from 41% in 2007 to 34% in 2011 (Mahabir). In short, the policies enacted by the Thai government regarding renewable energy production and usage, such as soft loans, tax breaks, and the 15-‐Year REDP, are just a few steps that are being taken in order to lead the country to a more sustainable and energy-‐independent future.
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Very Small Power Producers
A very small power producer, or VSPP, is a generator of a state-‐owned enterprise, state agency, private entity, or individual with a private generating unit who sells less than 10 megawatts (MW) of electricity to Thailand’s Distribution Utility, the Metropolitan Electricity Authority (MEA) and/or the Provincial Electricity Authority (PEA). The Thai government buys electricity from VSPPs in order to encourage their assistance in the overall electricity generation of the country, as well as to promote the use of domestic natural energy resources and decrease Thailand’s dependence on foreign fuel sources (EPPO). This also lessens the import payments on fuel shipments from other nations and cuts back on the environmental impacts associated with these imports. In addition, this government policy, in favor of VSPPs, gives the country’s rural population a chance to contribute to the nation’s electricity generation (Webber). Finally, and perhaps most importantly when considering government motives, VSPPs help to reduce the amount of money the Thai government must invest in electricity production and distribution, especially in remote locations (EPPO).
The Distribution Authority of Thailand will buy electricity from a number of VSPPs, as long as their processes of generation are either from renewable energy sources, certain specific types of fuels, or from energy obtained by the fuel production process, transportation, or utilization. Electricity generated from renewable resources is classified by the Thai government as electricity that is produced from wind, photovoltaic systems, hydroelectricity, waves from large bodies of water, biogas, and geothermal energy (EPPO). The Distribution Authority of Thailand also accepts electricity produced from agricultural residues, waste from agricultural or industrial manufacturing processes, products converted from wastes, municipal waste, and wood from tree plantations specifically for fuel (dendrothermal energy). Any VSPP is allowed to use non-‐renewable, commercial fuels, such as natural gas or coal, as a supplementary contribution to their electricity production as long as the overall thermal energy produced by the commercial fuels annually is not larger than 25% of the overall thermal energy used for their electricity generation in that same year (EPPO). Finally, VSPPs are allowed to sell electricity that they generate from energy left over from the processing, utilization, or transportation of fuel production. This can include energy remaining from industrial and agricultural production methods, such as waste steam (Webber). Lost energy, such as heat from engine exhaust or heat processes, and energy as a by-‐product, such as mechanical energy produced from the decline of natural gas pressure, are other examples of energy that can be used for electricity generation supported by Distribution Authority of Thailand (Webber).
In order to become a VSPP, one must undergo a lengthy application process. The prospective electricity generator must submit an Application for Sale of Electricity and System Interconnection to their MEA or PEA and then wait for the Distribution Utility to consider buying their electricity, taking into account the possibility of power purchases on a case by case basis if the prospective VSPP has a capacity of over 6 MW. Within 45 days, the Distribution Utility will notify the candidate as to whether or not their power production will be accepted by the government, and within fifteen days after that, if the VSPP has been accepted, the utility will present the producer with the particulars regarding interconnection costs. After the notice of acceptance, the VSPP has 60 days to sign a power purchase agreement and send it to the Distribution Utility or else their application will become void. Once the
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Distribution Utility has tested the VSPP’s power system and inspected their specific equipment, the VSPP is finally considered a patron of the utility. The final step for the VSPP is to purchase a license and notify the Distribution Utility of its existence. Once this has been finalized, the VSPP may begin their sale of electricity to the government of Thailand (EPPO).
The Energy Ministry of Thailand has received increased interest by potential VSPPs since the addition of the renewable energy adder (Thongrung), introduced in February of 2007 (Webber). This adder payment lasts for seven years from the start of the VSPP’s power production. However, the government has the right to change future rates. Currently, Thailand’s Energy Ministry is on schedule to acquire 2800 MW of electrical power from biomass power plants, 115 MW from wind-‐powered plants, and 55 MW from solar-‐powered plants between the years 2008-‐2011. In addition, during the first quarter of 2009, over 1200 VSPPs proposed selling approximately 6300 MW of electricity to the Energy Ministry, made up of 3352 MW from biomass, 2947 MW added on by solar power, and 841 MW supplied by wind power. Presently, the ministry is of the opinion that the Thai government would be capable of purchasing this entire amount of proposed electricity, although they must keep the country’s fuel tariff in mind while making such a decision, as the adder payment for this electricity proposal would cause a fuel tariff increase of 3 satang per unit or the equivalent of 4 billion THB annually (Thongrung).
Business Proposal The purpose of the proposed business is to introduce renewable energy into the lives of luxury home owners in Thailand by aiding housing developers in home power production through the use of building-‐integrated photovoltaic systems. As a means of addressing the problem of global climate change and adopting environmental responsibility, the aim of this venture is to contribute to the reduction of Thailand’s dependency on fossil fuels and promote the reduction of greenhouse gas emissions. Therefore, the main goal of this organization is to become a profitable leader in small scale, community-‐based solar power production. Our business will partner with a local, luxury housing developer in order to install building-‐integrated solar panels on the roofs of one of their communities.
The driving philosophy behind this proposed business venture is that environmental and social responsibilities do not necessitate drastic changes, but can be achieved incrementally on a community level. Small changes can have a large impact. By building solar communities, one can hope to show that environmental responsibility, such as reducing carbon emissions and promoting renewable energy technologies, does not require radical lifestyle changes. This business will be created to promote solar technology by affixing it to luxury residences. Such a decision is due to the ability of affluent communities to pioneer new technologies and promote the example of sustainable living due to specific income levels. It is important that this business maintains a socially responsible status by giving back to the community, as specified in its formal corporate social responsibility policy. The importance of positive environmental and social business changes will be addressed in order to gain the consumer vote in today’s market.
To achieve this goal of a subsidy-‐free project, the solar housing development will be marketed towards high income consumers who will be less sensitive to the added costs of the building integrated system. In addition, affluent consumers tend to have a higher willingness to pay for renewable energy
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sources, making them the prime marketing group based on annual income levels. The proposed business would be that partner of a housing developer, play a part in constructing a Bangkok community, and pay a portion of the roofing costs of the houses, as well as the full cost of the photovoltaic system that will be integrated into the building. The developer will be able to sell the housing unit for a higher price and we will be able to make a profit by selling the electricity generated by the photovoltaic system back to the grid. The consumer has an incentive to buy the house due to the fact that a portion of their community fees will be paid for the length of their stay in the house. In addition, the eco-‐friendly solar system will attract environmentally-‐conscious buyers with an understanding of renewable energy and its importance to the energy market in Thailand.
Marketing Strategy – For the developer
When pitching the idea of such a community to a developer, it is necessary to focus on the increased positive attention that this sort of project will bring to their development and homes and the decrease in roofing costs they would have to pay for home construction. First of all, the addition of solar panels to a luxury home community is a status statement. Not only will the developer be projecting a “green” image and helping to reduce Thailand’s dependency on fossil fuels, but the houses will have a more modern look due to the building-‐integrated panels on the roofs.
In a time of rising environmental awareness, eco-‐friendly communities are becoming increasingly popular, especially in urban areas, such as Bangkok. The addition of building-‐integrated photovoltaic systems has the immense potential to increase the customer base of such a development. In addition to an environmentally responsible image, the altered community will also act as a socially responsible icon as well. By partnering with us, the developer can take advantage of the corporate social responsibility plan associated with the new company when marketing their houses to potential customers. As a socially responsible business, it is specified that charitable contributions be given to the local and global communities as funding for renewable energy promotion and development, in addition to other noteworthy organizations and funds.
Another central point when marketing to the developer is the decrease in building costs that they would gain if they choose to partner with this business. Currently, this proposed business intends to pay for the installation of the solar panels and 50% of the roof construction costs on any sides that photovoltaic cells are to be employed. This is a financial incentive for the developer to keep these photovoltaic systems in mind when they are marketing their houses and for letting this business produce clean energy from the roofs of these houses. In this manner, not only is the developer gaining the positive attention for integrating renewable energy into their housing community, but they are also making a slight profit in the construction of the house.
Marketing Strategy – For the consumer
This housing project will cater to the high-‐income home owner and should be viewed as an affordable accompaniment to a luxury housing development. The addition of building-‐integrated solar cells will differentiate this community from other similar developments. Solar cells will create the appearance of a certain lifestyle for customers, reflecting both environmental and social responsibility.
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In a time of rising environmental awareness due to the current problems of increasing carbon emissions, depletion of fossil fuel resources, climate change, and planetary warming, this is an eco-‐friendly community that utilizes solar power production to combat these issues. In addition, a commitment to renewable energy will help reduce Thailand’s dependence on dirty energy mixes and increase the country’s overall energy independence.
This community is considered “environmentally friendly” due to the home designs that include building-‐integrated photovoltaic systems and rooftops that are designed and oriented in an optimal manner for maximizing energy production. Another community advantage is the elimination of the typical community fees that are residents are required to pay for community upkeep. This business will cover 100% of the community fees for all residents as an incentive to live in the community and maintain proper care of their homes and their roofs. Finally, while money is being made in increments by community fee savings, there is also an increase in the property values of homes with building-‐integrated photovoltaic systems. This could constitute large monetary gains in the future if a customer is contemplating the sale of his or her home. As shown in the methodology of the economic assessment of this project, a non-‐discounted economic assessment was performed in order to provide values to environmentally-‐aware, potential customers. It has been calculated that the homeowner will have a discounted repayment period of about 11.5 years in order to recoup the costs spent on an energy efficient home. They will get this money back in the form of 100% of their community fees being paid by this proposed enterprise, amounting to a total sum of approximately 24,000 baht per year.
Another important consideration when marketing this community to consumers is socially responsible strategies of the proposed business. These strategies range from charitable contributions to the local community to funding for small scale solar power projects in rural areas. Simply by residing in this community and choosing to live in a house equipped with solar panels, community members are contributing to the betterment of their local communities and the expansion of renewable energy. For example, the corporate social responsibility policy of the company is the 4-‐ones model in which it is planned to set aside 1% of company product, 1% of profit, 1% of employee time, and 1% of equity in order to give back to the local and global communities. It is therefore important for future community members to be aware of these socially responsible business practices, as a main marketing scheme for the product.
Economic Assessment Methodology The economic assessment of building-‐integrated photovoltaic systems in Thailand is divided into two sections. The first section consists of a non-‐discounted economic assessment that evaluates the payback period of the photovoltaic system given the grid-‐buyback adder without taking into account the time value of money. The second section consists of a discounted economic assessment that factors calculations of the time value of money into the evaluation of the photovoltaic system payback period. The non-‐discounted and the discounted economic assessments are performed both with internal costs only and with internal and external costs combined. The external costs value can represent either the
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price of carbon credits in a hypothetical future carbon market in Thailand or the avoided costs due to the negative environmental impacts of carbon dioxide.
The economic assessment of building-‐integrated photovoltaic system derives its data from a report on the costing of BIPV systems released by the Florida Solar Energy Center (Ventre, Farhi and Szaro). The publication provides a cost range for module, inverter, maintenance and operation, and balance of system costs. While the paper was published in 2001 they produce comparable results to the IEA report on solar system costing (IEA Photovoltaic Power Systems Programme). The IEA report was not used for this study because it does not separate the components of a building-‐integrated photovoltaic system and reports only the total system costs. The results of the economic assessment also depend on the data and input values used in the technical and environmental assessments. The methodology of the economic assessment is described in more detail in the subsequent sections.
Non-‐Discounted Economic Assessment
The non-‐discounted economic assessment begins with a calculation of the net cost of the photovoltaic system based on the total system cost and the replaced roof cost. This calculation is outlined below.
The internal costs calculation of the revenue per year is determined by multiplying the Thailand average grid sale price for peak hours and non peak hours by the calculated peak and non peak output calculated in the preliminary technical assessment (citation VSPP website). Then the total output predicted by the technical assessment is multiplied by the grid buyback and added into the revenue from the sale of electricity during peak and non peak hours. This calculation is shown below.
The combined internal and external costs calculation of the revenue per year accounts for both the photovoltaic system output and the avoided carbon dioxide emissions from the traditional mix of electricity fuels in Thailand. This calculation is shown below.
Given the revenue per year calculated for the internal costs calculation and the combined internal and external costs calculation and taking into account the average photovoltaic system maintenance costs, the non-‐discounted payback period can be calculated as outlined below.
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The non-‐discounted payback period varies depending on whether only internal costs are included or both internal and external costs are included.
Discounted Economic Assessment
The non-‐discounted economic assessment provides valuable figures to present to philanthropists or concerned citizens who value the building-‐integrated photovoltaic system for the environmental benefits or environmentally-‐friendly image that it provides. The discounted economic assessment, in contrast, is more useful for potential investors who see a business providing building-‐integrated photovoltaic systems as a promising profitable enterprise. The premise of the discounted economic assessment is that a true measure of the payback period must take into account not only the variables introduced in the non-‐discounted economic assessment but also the interest rate (r) and the number of years in the future (n) the incremental output revenue is received. The calculation of the discounted payback period is outlined below.
The discounted payback period varies depending on whether only internal costs are included or both internal and external costs are included. The discount rate used for the assessment is 3.25% (CIA World Fact Book) for the Central Bank of Thailand.
Financial Assessment Methodology The financial assessment follows a similar methodology as the economic assessment with the
exception that other input values are included. The goal of the financial analysis is to account for the cost of running a business centered on the sale of the generated electricity to the distribution grid. The costs incumbent on such a business are included in the financial analysis, along with the internal costs previously discussed as part of the economic assessment.
The solar modules to be used in the business are manufactured outside of Thailand, thus the import duty is factored into the repayment period. The sample business model for a company seeking to profit from the generated electricity provides an estimate of salaries, legal fees, and operational costs that are incorporated in the initial investment cost and in the annual system costs (Ventre, Farhi and Szaro). Also the financial model accounts for the revenue generated from sale of a home with building-‐integrated photovoltaic roofing. With respect to the values used in both the economic and financial
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analysis only the model price varies. The financial assessment uses a real product cost rather than an industry average. The module used in the scenarios is the MSK-‐170 manufactured by Suntech Power, a solar technology company based out of China (Whitaker and Tyron).
Several assumptions are made in financial assessment calculations. Firstly, the housing community is assumed to consist of 200 homes. The individual home sales price is assumed to be 6 million baht before the additional cost of building-‐integrated photovoltaics. The housing community fees are considered to be 2000 baht per month per home, and it is also set that the business will pay for the entirety of these fees.
The results and analysis of the financial assessment also differ slightly from the economic portion. Since the financial statement aims at determining whether a profitable business can be created, the results also compare the profit margins and return on investment for each of the involved parties, along with a flat and discounted payback period. The rate of return is derived from the total discounted revenue and the percent of investment over a 30 year time period. The 30 year time period is used because it is assumed to be close to both the lifetime of the solar panels and the time frame for the average mortgage. The calculation for the return on investment is pictured below.
Using this methodology the business decisions, such as the number of sides to install BIPV roofing on and the structuring and estimation of profit sharing among the invested parties, can be made to based on the monetary outputs.
Results of Economic Assessment Business Decisions
The financial assessment revealed that installing photovoltaic cells on only the Southern side of the roof resulted in a negative return on investment with a non-‐discounted payback period of 33.5 years. Installing BIPV panels on all 4 sides resulted in the highest return on investment at 10.0%, however the startup cost associated with this plan amounts to over 2 billion baht for the entire project. Both scenarios of mounting solar modules on two and three sides of the home result in a positive return on investment netting an investor who supplies 1% of the initial capital costs with 0.5 and 1.7 million baht respectively. Figure 3-‐3 displays the corresponding changes in net revenue provided to an investor with the addition of another BIPV array on the roof.
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Figure 3-‐3. The effects of the amount of installed BIPV on Return on Investment
These figures are based on a standardized input value where the land developer repaid 50% of the price of the offset roofing cost and the house sale price is 3% greater than its starting amount. Setting these values as constants allows for a comparative analysis of the benefits of mounting BIPV on each additional roofing side.
Alterations in the added cost of the homes and the percent of the offset roofing repayment have marginal effects on investor payback period, but drastically affect the payback to the homeowners and land developer. Figure 3-‐4 demonstrates the effect of increasing the added sale price of the homes on both the homeowner and investor. The payback period for the investor ranges between 16.3 and 17.3 years resulting in negligible shifts in the discounted total revenue. However for the homeowner, changes of even 1% result in a dramatic increase in the payback period. The return on investment for the homeowner reacts similarly to variations in the additional home costs. With a sale price increase of roughly 3.8% the homeowner receives 455,000 Thai baht in revenue, which is nearly double the amount of the initial investment.
Figure 3-‐4. Impact of home sales price on payback period
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The land developer profits come from the savings from the offset roofing cost. The critical variable for the developer’s savings is thus the percent of the offset cost that they pay to the business funding the installation of the building-‐integrated photovoltaics. Unless the housing developer pays all of the offset roofing cost, they will post positive savings from the project. Additionally the investor receives a positive return on investment under all circumstances. Under these conditions an equitable repayment of the offset roofing cost of 50% is a reasonable conclusion as both parties stand to benefit.
The ROI remains constant regardless of the initial capital that an investor raises for project; however the amount of startup capital supplied and repayment differ. Figure 3-‐5 shows the corresponding initial investment size and total revenue generated.
Percent of Startup Supplied
Initial Capital Invested(Thai baht)
Net Revenue(Thai baht)
1% 18,744,463.29
1,700,572.35
5% 93,722,316.46
8,502,861.77
10% 187,444,632.93
17,005,723.54
15% 281,166,949.39
25,508,585.31
20% 374,889,265.85
34,011,447.08
25% 468,611,582.32
42,514,308.85
30% 562,333,898.78
51,017,170.62
35% 656,056,215.25
59,520,032.39
40% 749,778,531.71
68,022,894.16
45% 843,500,848.17
76,525,755.93
50% 937,223,164.64
85,028,617.70
Figure 3-‐5. Percent of Investment and Net Revenue
Figure 3-‐6 compares the amount of revenue that all parties involved receive assuming an initial investment of 5%.
Total Discounted Revenue (Thai baht)
Investor/Entrepreneur
8,502,861.77
Land Developer
18,256,830.00 Homeowner 455,566.02
Figure 3-‐6. Total net revenue for all parties
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These results support the plausibility of undertaking a business venture, such as the one outlined previously. All partners in the business stand to gain from the construction of the solar housing development. While the payback period is relatively high it is important to remember that homes are considered a long term and generally stable investment. Additionally, these results assess only the monetary benefits of the business and do not account for the positive social and environmental impacts.
Policy Suggestions
While the previous results suggest that financial gains are possible through the proposed business plan, they remain low when compared to other investment opportunities. Since the Thai government claims to prize renewable energy projects, testing various inputs that the government can tweak to enhance the competitiveness’ of the business. The subsidy adder and the import tax play an important role in the revenue generation and initial startup cost. Improved government policies can help generate more revenue and force down initial capital costs.
Testing with the subsidy adder currently provided by the Thai government for the sale of solar energy reveals that without the 8 baht/kWh adder the business plan would yield a negative return for an investor. Adjusting the subsidy dramatically decreases the discounted payback period initially; the gains decrease as the subsidy is increased. Figure 3-‐7 shows the relationship of the subsidy adder and the discounted and nominal payback period. The graph indicates that increasing the subsidy adder beyond 8 baht/kWh yields only marginal improvements.
Figure 3-‐7. Subsidy adder versus payback period
However, when viewing the impact of augmenting the subsidy adder on the ROI and investor net revenue the gains from the subsidy adder are much greater. Figure 3-‐8 shows the relationship of the
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subsidy adder and the ROI and investor net revenue. Merely adding an additional 2 baht/kWh to the subsidy adder produces a dramatic increase in the return, indicating that additional government support could make such a business venture highly profitable.
Subsidy Adder (baht/kWh) Return on Investment Investor Net Revenue(million Thai baht)
0 -65.63% -12.3 2 -46.96% -8.8 4 -28.28% -5.3 6 -9.60% -1.8 8 9.07% 1.7
10 27.75% 5.2 12 46.43% 8.7 14 65.10% 12.2 16 83.78% 15.7
Figure 3-‐8. Subsidy adder and net revenue
In Thailand the import tax on commercial goods is extremely high at 50% of the products value. Thus another government policy change that could impact the performance of the business would be to reduce the import tariff on renewable energy technologies. Also analyzing the impact of import costs can yield a rough estimate of how the proposed business would fare if the production of the solar modules took place within Thailand. Figure 3-‐9 displays the relationship between the import tax and the ROI for an investor. Even small deductions in the import tax generate substantial gains in returns.
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Figure 3-‐9. Import tax versus return on investment
Reducing the import tax produces greater yields in the ROI, however the costs absorbed by the government is much higher as well. Figure 3-‐10 and figure 3-‐11 compare the government losses due to increases in the subsidy adder and reduction in the import tax.
Import Tax Government Spending (Thai baht)
0
1,010,905,168
0.1
808,724,134
0.2
606,543,101
0.3
404,362,067
0.4
202,181,034
0.5 0
Figure 3-‐10. Cost to government with various import duties
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Subsidy Adder (baht/kWh)
Government Spending(Thai baht)
Government Spending (US dollars)
8 0 0
10 2,766,420 86,451
12 5,532,840 172,901
14 8,299,260 259,352
16 11,065,680 345,803
Figure 3-‐11. Government spending with increased subsidy adders
A minimal decrease in the import tax to 40% of the products value and a slight increase in the subsidy adder to 10 baht/kWh would cost the Thai government approximately 204,947,454 Thai baht ($6,404,608 US dollars) over the 30 year time period. These changes would lead to an increase in the ROI for an investor from 9.1% to 43.2% with an increase in final revenue of approximately 5.5 million Thai baht ($171,875 US dollars). Government support for this renewable energy project is vital to producing a feasible business.
Conclusion For the Shared Profit BIPV System in Thailand as a whole, the technical, environmental, and economic results, suggest that there is a profitable way for solar energy to enter the market as a VSPP. Residential houses with monocrystalline photovoltaic modules acting as roofs receive a large amount of incoming solar radiation yearly because of Bangkok’s proximity to the equator. Even with varying system efficiencies, the robust data ensure significant electricity is generated from BIPV installations. Roofs with panels on three of four sides can generate nearly 46 MWh per year.
An interactive Microsoft Excel Spreadsheet allows for users to input various roof type scenarios, which then synchronizes with an environmental impact assessment and economic analyses. The electricity sold back to the grid incurs both environmental and economic gains. The amount of carbon dioxide offset per home is enough to account for several times the carbon footprint of an average Thai citizen. More important from an environmental impact assessment viewpoint, the electricity generated by photovoltaic systems displaces the average Thai electricity mix and potentially reduces the amount of CO2 per kWh by thirty-‐fold.
Financially, the enterprise is profitable, but dependent upon the Thai government VSPP adder. Over the course of a thirty-‐year mortgage cycle, a theoretical investor paying one percent of the startup cost could make 1.7 million THB (nearly $51,000 USD).
The system seems promising, but relies upon government subsidies to remain constant. If the government increased its adder for VSPP’s, investors would earn more profit and the system could expand further. One potential technologically, environmentally, and economically viable way for solar
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electricity to enter the market is through building-‐integrated monocrystalline photovoltaic applications. However, it may be necessary for increased government incentives and policies, focused on clean, renewable technologies, to be created and implemented in order for the business to be economically viable within a time frame attractive to investors.
The results of the assessment confirm the ability of this system to work presently and improve as technology and Thailand’s infrastructure progresses.
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Appendix 1
All figures in Appendix 1 are provided by PVSYST Version 4.37 (Mermoud, Roecker and Bonvin).
Figure A-‐1. Measurement-‐Simulation Comparison for Incident Irradiation, Marzili Daily Values
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Figure A-‐2. Measurement-‐Simulation Comparison for Incident Irradiation, Marzili Hourly Values
Figure A-‐3. Comparison of the Measured Temperature with Respect to the Model, Marzili
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Figure A-‐4. Simulation-‐Measurement Comparison for PV Field Output, LESO-‐sheds Daily Values
Figure A-‐5. Simulation-‐Measurement Comparison PV Field Output, LESO-‐sheds Hourly Values
Figure A6. Comparisons for Amorphous Collectors of LESO-‐USSC, Strong Beam
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Figure A-‐6. Comparisons for the Amorphous Collectors of LESO-‐USSC, Purely Diffuse Irradiation
Figure A-‐7. Inverter Response with Standard Available Inverter Specification, Marzili
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Figure A-‐8. Inverter Response After Manual Adjustment, Marzili
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Appendix 2
Business Plan General Company Description
Mission Statement: Our mission is to introduce renewable energy into everyday life by aiding housing developers in home power production through the use of building-‐integrated photovoltaic systems in order to promote the reduction of greenhouse gas emissions and increase Thailand’s energy independence.
Goals and Objectives:
• As a means of addressing the problem of global climate change and adopting environmental responsibility, the aim of this venture is to contribute to the reduction of Thailand’s dependency on fossil fuels. As such, the main goal of our organization is to become a profitable leader in small scale, community-‐based solar power production.
• Our objective is to build a housing community in which solar cells are completely building-‐integrated on the roofs of the homes, in order to generate carbon free energy for sale into the energy grid.
• Finally, it is important that we maintain a constant status as a socially responsible business, adopting policies and programs that contribute to the welfare of the local community and making sure that our business has a positive impact on people and the environment.
Business Philosophy: The driving philosophy behind our business venture is that environmental and social responsibilities do not necessitate drastic changes, but can be achieved incrementally on a community level. Small changes can have a large impact. By building solar communities, we hope to show that environmental responsibility, such as reducing carbon emissions and promoting renewable energy technologies, does not require radical lifestyle changes. Our business was created to promote sustainable living through photovoltaic technology while providing luxury residences. This decision is due to the ability of affluent communities to pioneer new technologies and promote the example of sustainable living due to specific income levels.
Our philosophy extends beyond our products and services as well. It is important that we maintain our status as a socially responsible business by giving back to the community, as specified in our formal corporate social responsibility policy. We will institute a corporate social responsibility structure that is referred to as the 4-‐1s plan. While adhering to this policy, our business will set aside 1% of company profit, 1% of employee time, 1% of our product, and 1% of our equity to give back to the local community. We believe in the importance of positive environmental and social business changes in order to gain the consumer vote in today’s market.
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To achieve our goal of a subsidy-‐free project, the solar housing development will be marketed towards high income consumers. Higher income consumers will be less sensitive to the added costs of the building integrated system. In addition, affluent consumers tend to have a higher willingness to pay for renewable energy sources, leading us to believe that this is the prime marketing group based on annual income levels.
The energy market in Thailand is a rapidly growing industry as the country continues to industrialize. The renewable energy sector is beginning to demand a larger portion of the energy growth as the Thai government attempts to promote its own energy security by decreasing its dependence on foreign fuel sources. The housing sector also continues to show growth in Thailand despite the global financial crisis.
Our business will register as an Ordinary Partnership with Thailand’s Ministry of Commerce and as a Very Small Power Producer. The liability of the company will fall equally upon its establishing members.
Products and Services
The nature of our business requires that we provide a wide range of services. Initially, our business will partner with a land development firm to create a high end housing community equipped with building integrated photovoltaic cells. In this capacity, we will facilitate and fund the procurement and installation of the BIPV modules. We will raise the capital for the added cost of the solar modules versus using standard roofing practices.
The solar modules chosen to be integrated onto the rooftops of our community are the Suntech Power 170 Wp cells in the MSK line (Whitaker and Tyron). These were chosen due to their maximum output and efficiency, taking module cost and payback period into consideration.
Monocrystalline cells, while more expensive, have proven to be a more reliable technology, providing a larger energy output when compared with polycrystalline and amorphous silicon solar cells. Monocrystalline photovoltaic solar energy panels are among the most dependable, efficient, and commercially viable options in building-‐integrated solar technology. A single silicon crystal is used to make each module, leading to higher module efficiency. This can be compared to the option of multiple crystals fused together, as seen in polycrystalline technology, which has a lower efficiency.
However, due to the high efficiency increase, there is also a corresponding price increase. Essentially, the increase in cost is buying the additional efficiency, an important consideration due to the limited rooftop space available on the homes in our prospective community. Generally, monocrystalline solar cell technology is the best type to use when space is a concern, as it usually is with building-‐integrated projects. This type of technology allows more wattage per square foot to be produced. In addition, the lifespan of a monocrystalline cell can range from 25-‐ 30 years at least, proving them to be an advisable investment for long-‐term power production.
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Using a building integrated photovoltaic system instead of standalone or attached panel arrays provides several advantages. Firstly, the net cost of building integrated cells is much less as they replace the cost of roofing materials. Because the solar panels themselves serve as a roofing material, they eliminate the need to purchase standard concrete roofing tiles. Essentially, the building-‐integrated photovoltaic system acts as multi-‐functional building material, serving as a roof and as an electricity-‐generating system. There is a financial value to the displaced building materials and reduced installation costs. In addition, there is also the value of the electricity generated. Most building-‐integrated systems are made up of highly efficient solar cells in order to maximize energy and profit obtained from a small amount of space.
After the housing project is completed, we will take ownership of the BIPV cells and register with the Energy Distribution Authority as a Very Small Power Producer (VSPP) to sell the generated electricity to the grid. The Energy Distribution Authority buys energy from a VSPP at the same rate at which they purchase power from the government run Energy Generating Authority of Thailand (EGAT). In addition to the retail price, the Thai government has instated a subsidy adder for VSPPs providing renewable energy. The subsidy adder increases the profitability of renewable energy projects and reduces the payback period. In comparison with other renewable energy sources, solar energy receives the highest subsidy adder at 8 Thai baht/kWh (Master Power).
In addition to selling energy to the grid, we will pay to maintain the housing community, by not requiring that residence pay the customary community fee. The aim of this service is to entice prospective home buyers with reduced monthly costs and create an incentive for home owners to practice good stewardship of their roofs. Our offices will be located on site in the community offices, and since we will be funding part of the community, our rent and utilities will be covered as part of our contribution to the community. Over time, we can decrease the amount of the community cost we provide as efficiency of the solar cells decline and the subsidy adder is removed.
Marketing Plan
Economics
The structure of our business plan requires us to look at two different markets and assess the potential of each one. The Thai real estate market will determine the initial cost and payback of the solar community and the willingness of land developers to undertake such a venture. Secondly, the energy market will determine the future sales price of energy and overall generated revenue of the company.
The 2008 global credit crisis severely hampered the growth of markets worldwide. The demand in the real estate market increased in 2008 from the previous year, but by the end of the fourth quarter, the impact of the financial crisis had resulted in a weakening in consumer demand (Land and House PCL). In March of 2008, the Thai government instituted a real estate stimulus plan which reduces taxes on property transfers and mortgage registration fees. These measures, along with the government’s
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general stimulus plan, falling construction costs, and lower interest rates, have allowed the real estate market to continue its positive growth into 2009 (Bank of Thailand Monetary Group).
The financial crisis has also impacted the supply side of the real estate market as credit institutions have strengthened their lending standards. Larger development firms remain strong, but the small to medium sized firms have suffered from lack of investor confidence (Bank of Thailand Monetary Group). Real estate trends also indicate a decline in large housing developments in favor of condominiums. Rising gas prices have created a demand for condominiums located near public transit (Land and House PCL). The changing demand creates an unfavorable environment for a detached housing development. However, as our development is aimed at attracting high income customers, our customer demand for housing near public transit will be fairly inelastic with regards to gas prices.
The global economic crisis in 2008 also affected the energy sector. Energy demand for 2008 dropped for the first time in decade as a result of the economic situation (EGAT). The slow economic growth in major markets translated into a decreased energy demand. However, the climate differential between 2007 and 2008 also accounts for the dip in electricity demand. In 2008, Thailand experienced an unusually short summer and lower average temperatures (EGAT).
The Electricity Generating Authority of Thailand (EGAT) makes up approximately 50% of Thailand’s energy generating capacity providing 15,020.96 MW of the total 29,891.65 MW (EGAT). In comparison, small power producers accounted for a capacity of 2,079.10 MW (EGAT). However, the rising global price of oil creates a favorable situation for the growth of the renewable energy industry and for small power producers. The Thai government also has made a commitment to bolstering the renewable energies sector.
Even with favorable government support and economic conditions, we will have to face several barriers upon our entrance into the solar energy market. Firstly, solar cells have yet to become widely used enough for production costs to have decreased significantly. As such, high initial capital cost will be incurred early on. Also, the Thai solar industry is not developed enough to completely support our endeavors. Therefore, we will need to ship in solar modules from overseas. Thailand is an export-‐ based economy and thus has higher tariffs on imported goods. However, once installed, solar technology requires little in the way of operational and maintenance costs. Thus, the major of the capital needs will come during start up. Another potential barrier is consumer acceptance. For our project to succeed, customers must accept the aesthetic changes to their homes with the integration of PV modules.
As a technology centered business, changes in solar cell technology greatly impact our strategy. Currently, our business plans to install monocrystalline solar cells, as they are a mature and reliable technology with a high output. As amorphous thin film technology progresses and matures, we may utilize such technology in future projects. The lower cost of thin film solar modules may allow us to break into a wider market and build home developments for all income levels.
Currently, the government policies in Thailand are favorable to renewable energy producers and to VSPPs. Changes in these regulations may increase the payback period of our projects and drive away potential investors. Also the Thai government continues to struggle with stability. As the government
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turmoil increases, investor and consumer confidence wanes, causing weakened economic conditions. EGAT sited government instability and consumer lack of confidence as a reason for the slow growth in 2009 along with the global financial crisis. The probability of continued political upheaval remains high.
Despite the constant fluctuations in the Thai political environment, the bureaucratic framework has remained intact, allowing for businesses to continue functioning and keeping foreign investment flowing into the country. The Thai government has also continued to remain in support of renewable energy as it has the political incentive to reduce the nation’s dependence on foreign fuel sources.
As previously discussed, the real estate market is changing and moving toward higher density accommodations, such as condominiums, with easy access to public transit. If this trend continues, our business model will need to adapt to the changing housing demand. Building integrated photovoltaic cells can and have been incorporated into large single structures. While roof space may decrease, façades may be utilized to generate solar energy. The flexibility of building integrated photovoltaic cells should insulate us from shifting consumer preferences.
Product
Our housing project will cater to the high-‐income home owner and should be viewed as an affordable accompaniment to a luxury housing development. The addition of building-‐integrated solar cells will differentiate our community from other similar developments. Solar cells will create the appearance of a certain lifestyle for our customer, reflecting both environmental and social responsibility. In a time of rising environmental awareness due to the current problems of increasing carbon emissions, depletion of fossil fuel resources, climate change, and planetary warming, we are an eco-‐friendly community that utilizes solar power production to combat these issues. In addition, our commitment to renewable energy will help reduce Thailand’s dependence on dirty energy mixes and increase the country’s overall energy independence.
Our community is considered “environmentally friendly” due to the home designs that include building-‐integrated photovoltaic systems and rooftops that are designed and oriented in an optimal manner for maximizing energy production. Another community advantage is the elimination of the typical community fees that are residents are required to pay for community upkeep. Our business will cover the community fees for all residents as an incentive to live in the community and maintain proper care of their homes and their roofs. In addition, the home owners will be earning a monthly percentage of the money made from the energy that is produced by their roof and sold to the grid. Finally, while money is being made in increments by community fee savings and rooftop energy production, there is also an increase in the property values of homes with building-‐integrated photovoltaic systems. This could constitute large monetary gains in the future if a customer is contemplating the sale of his or her home.
Another important consideration when marketing our community to consumers is our socially responsible business strategies. These strategies range from charitable contributions to the local community to funding for small scale solar power projects in rural areas. Simply by residing in our community and choosing to live in a house equipped with solar panels, community members are
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contributing to the betterment of their local communities and the expansion of renewable energy. For example, our corporate social responsibility policy is the 4-‐ones model in which we plan, as a company and a very small power producer, to set aside 1% of company product, 1% of profit, 1% of employee time, and 1% of equity in order to give back to our local and global communities. It is therefore important for our future community members to be aware of our socially responsible business practices, as a main marketing scheme for our product.
Customers
Our company must market to three separate groups. First, we will partner with a land developer to create our solar housing community. Post-‐production, we must market the houses to prospective home owners. Finally, we will sell electricity to the Energy Distribution Authority, either the Provincial Energy Authority or the Metropolitan Energy Authority.
Due to the lack of confidence of financial institutions in small to medium sized development firms, our target costumer/partner in the building and development phase will be the larger well established developers. We will aim to partner with one of two Thai land developers; Land and House, or Noble Development. These developers operate in the Bangkok metropolitan area and have large existing financial assets. Our optimal partner would be the largest of these firms, Land and House LTD. In 2008 Land and House Public Company Limited, accrued 10.382 billion baht from the sale of single detached houses alone (Land and House PCL). Along with their subsidiary companies, Land and House brought in 16.008 billion baht in total revenue. Noble Development Public Company Limited in comparison posted the second highest total revenue during 2008 bring in roughly 2.345 billion baht (Noble Development).
As a luxury housing development our target home buyers earn higher incomes. Our target demographic will consist mainly of well educated professionals. The home buyers will range from families with children to single occupants. The concept of our environmentally responsibility community will entice individuals who care about the environment, but do not wish to dramatically alter their lifestyles.
Competition
Our major competitors will be the other development companies, who open new luxury housing communities in a similar time period. Depending on which development firm agrees to partner with us, our major competition will be the other large development firms that build luxury residences. Considering the current trend of condominiums replacing detached housing units, one of our largest competitors in attracting high income home buyers shall be Major Development Public Company Limited. Major Development focuses on building high-‐end, luxury residential condominiums. Their condominiums are ideally located around Bangkok in some of the most prime real estate areas. Major Development posted substantial earnings in 2008 with 1.298 billion baht of total revenue (Major Development).
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While Major Development will compete for our customer base, they are focused more on developments in the middle of the Bangkok metropolitan area and thus will not compete with us for land. Other land developers which do build residential communities, however, will compete for customers and for land. For this reason, our best option will be to partner with Land and House as they are the largest firm and have the assets to procure land and the reputation to attract customers.
While not a direct competitor, the Electricity Generating Authority of Thailand (EGAT) is responsible for the sale price of electricity. If EGAT continues to rely on fossil fuels for electricity generation, then the sale price will rise in conjunction with the global rise in fossil fuel prices.
Marketing Strategy :
Our marketing campaign shall be targeted at the home buyer and the development firm that we partner with rather than at the Distribution Authority to whom we sell electricity. As part of our services provided to the development company, we will actively engage in promotion of our new solar housing community. As our community is targeted at people with a high income level, we will distribute our promotional materials along appropriate distribution channels. This includes measures such as providing brochures and pamphlets to high end realtors. We plan to design and operate a website that will promote our solar community and provide a forum for potential buyers to ask questions and take a virtual tour of a model housing unit.
Our pitch to the land development firm will include the revenue gains that are possible. The developer will save by not paying for the construction and material costs of the roof. As part of our agreement with the housing developer we will request that the offset roofing cost is evenly divided. Under this plan the housing developer still stands to save approximately 18 million dollars for the entire community. We will also stress to the land developer how our services will differentiate the housing community from their competitors. The main source of income for the housing developer is from the sale of the homes and thus by partnering with us they stand to gain an edge on their competition and sell their homes faster.
Yet another element of our marketing strategy is our corporate social responsibility (CSR) policy. We have chosen to use the 4-‐ones plan, a model in which we will set aside 1% of company profit, 1% of employee time, 1% of our product, and 1% of our equity to give back to the local community. We believe in the importance of positive environmental and social business changes in order to gain the consumer vote in today’s market. A main part of our marketing strategy includes advertising our social and community efforts to show our residents that while living in our specific neighborhood, not only are they having an impact on important environmental changes, but they are also contributing to the betterment of their local and global communities. In general, people believe in “doing the right thing” and ethics play a large role in people’s daily lives. A high-‐quality, distinct social responsibility structure can influence consumer decision if they believe that investing in this product is supporting a business built on integrity, public responsibility, and ethical values. Finally, a complete CSR policy is important when presenting our business proposal to stakeholders, as it can be a key selling point to potential investors and shareholders who value companies with responsible behaviors.
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Operational Plan
Production
The design and production of the individual housing units and the community offices will be primarily the undertaking of the development firm. As a well established company the developer will have contacts in the construction industry and can determine which firm to use.
The installation of the BIPV roofing will be our responsibility. The product we have chosen to use, has a simple installation procedure and thus the installation can be contracted out to a standard roofing installer. The wiring and technical aspects however will be supervised be an experienced electrical engineer with previous exposure to solar arrays.
Location
The location of the community will be chosen at the discretion of our partner development firm. Since the developer will be the major stakeholder in the project, the design and planning decisions will fall upon them. However, we have selected to work with a firm that operates in the Bangkok metropolitan area. The level of development in the Bangkok area has led to a larger population of high income individuals and families, our target customers.
The location of the main offices would ideally be located on site as part of the community office building. Our location in the community office is essential so that residence and easily walk in and report problems or issues, and so that our metering devices are easily accessible to company personnel.
Considering that we provide a portion of the community cost, our rent and utilities will be covered. Small amounts of space are required for operation of the solar cells, with the office serving a dual purpose of monitoring output and providing customer service.
Legal Environment
Prior to selling energy into the grid, an application for VSPP status and grid connection must be filed with the local Distribution Authority, either the Provincial Electricity Authority or Metropolitan Electricity Authority. The application requires a complete technical write-‐up of the system from the mode of generation i.e. solar module specifications to the grid interconnection point (See Appendix 1).
Once the application has been filed with the Distribution Authority, notification of acceptance is sent within 45 days. The costs for interconnection are then sent to the VSPP within 15 days of acceptance. The VSPP firm is then required to undertake and pay for the gird interconnection and sign a contract with the Distribution Authority within 60 days of acceptance. When the interconnection is complete, the Distribution Authority requires an inspection of interconnection point before the VSPP can begin feeding energy into the grid.
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Personnel
The working personnel will remain low due to the passive nature of the energy production and the low maintenance requirements of solar cell technology. The office and monitoring station will require at least one person to run during normal operating hours. Our business will employ three full-‐time office workers who will be responsible for a variety of tasks. These employees will be expected to conduct customer service, handle the business financials, and engage in strategic development and expansion plans.
Aside from the day to day tasks of running the company, laborers may be required every few months to perform routine maintenance of the solar panels. A specially trained technician will be required to conduct basic maintenance and to address system problems. Considering the size and scale of the project, two technicians may be required; however, one will be kept on permanent retainer. Additional labors and technicians will be contracted on a case by case basis.
Inventory
Little inventory will be kept considering the high cost and special nature of replacements. The most common significant maintenance issue with solar arrays is the inverter breaking before the normal 25 year replacement period. However inverters are specialized and costly, thus will not be kept in inventory. Also since our business is technology based waiting for newer and cheaper products to enter the market instead of keeping older products in inventory would be wise. The majority of inventory will consist of maintenance equipment and simple repair products. These products will be kept in storage on site.
Supplier
We will purchase our solar panels from Suntech Power, a solar energy products company based out of China (Whitaker and Tyron). They will supply us with their MSK line BIPV solar module products in the “Just Roof” line. We will install 72 panels per side totaling 216 panels for each house. For the entire community we will require 43200 solar panels. The cells we have chosen to use are the MSK 170 module. Suntech Power has the production capabilities and reliable product for a reasonable cost. Suntech successfully installed their “Just Roof” panels on over 500 homes in Japan, demonstrating the capacity to supply our endeavor (Whitaker and Tyron).
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Financial Plan
Startup Expenses
Startup Construction Costs Cost (Thai baht) Solar Modules 1,015,098,480 Inverter 250,894,908 Balance of System 24,476 Installation 4,953,375 Offset Roof Price 18,256,830.00 Total Construction 1,252,714,409 Import Costs Import Duty 507,549,250.00
125,447,464.00 Excise Tax 681,782,588.06
56,170,528.66 Interior Tax 68,178,258.81
5,617,052.87 VAT 159,082,603.88
30,669,100.25 Fees 50.00 50.00 Total Construction w/ Import Costs
1,634,496,846.52 217,904,145.77
Total Adjusted Construction Cost
1,872,112,775
Figure A2-‐1 Startup construction costs
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Capital Office Equipment List Cost Furniture
116,550.00 Equipment
753.26 Other
500,000.00 Total Capital Equipment
617,303.26 Location and Admin Expenses Legal and accounting fees
200,000.00 Prepaid insurance
- Pre-opening salaries
720,000.00 Total Location and Admin Expenses
920,000.00
Opening Inventory Office supplies
3,300.00 Basic Replacement Parts
489,951.00 Total Inventory
493,251.00 Advertising and Promotional Expenses
Advertising 200,000.00
Printing 20,000.00
Travel 3,000.00
Total Advertising/Promotional Expenses
223,000.00
Figure A2-‐2. Capital office equipment list and cost
The majority of the startup costs are come from the price of the solar modules and from the inverter. The high import tax compounds the enormous cost of the modules and inverters.
The other startup costs are nominal when compared to the cost of the solar array. The advertising costs are low as the land developer will also engage in their customary advertising campaign with our business acting as a complimentary resource. The administrational expenses account for the second largest source of startup cost followed by office supplies such as desks, computers, printers, phones, paper, pens, etc.
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While these startup expenses are quite high it is important to view the housing community as a long term investment. The life time of the cells are quite high and even with a long payback period plenty of revenue can be generated in the lifetime of the solar panels. Assuming a 30 year lifetime for the solar cells an investor who supplies 1% of the initial costs can receive 1.7 million baht with a return of investment of 9.1%.
Testing with the increase in house sale price, offset roofing price repayment, and installation of BIPV on various sides of the roof yielded plausible realistic estimates of profits for the home owner seen in the figure below. These are modest paybacks; however with increased government support the revenue possible for an investor can grow dramatically
Total Discounted Revenue (Thai baht)
Investor/Entrepreneur
8,502,861.77
Land Developer
18,256,830.00 Homeowner 455,566.02
Figure A2-‐3. Total discounted revenue
A minimal decrease in the import tax to 40% of the products value and a slight increase in the subsidy adder to 10 baht/kWh would cost the Thai government approximately 204,947,454 Thai baht over the 30 year time period. These changes would lead to an increase in the ROI for an investor from 9.1% to 43.2% with an increase in final revenue of approximately 5.5 million Thai baht. Government support for this renewable energy project is vital to producing a feasible business. However the loss or reduction of the government subsidy adder creates negative return on investment for an investor.
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