Summary
Ben and James are joined by Carl Lenox from Sunrun and Spencer Fields from EnergySage to shed light on all things solar. They start by diving into solar’s history with a special nugget on Albert Einstein’s pioneering work on the photoelectric effect which netted him a Nobel prize back in 1921. Then Ben stokes the flames of a hardware jam session that covers the solar system, Christmas light string inverters and a three minute face melting solo on maximum powerpoint tracking 🤘. The episode wraps with a rundown on buying rooftop solar and solar ducking utility bills.
Episode chapters:
(1:05): 👋 Carl and Spencer
(2:07): Ice breaker #1: How do you learn about clean energy?
(6:01): Ice breaker #2: What energy topic are you currently most interested by?
(16:06): Solar’s history
(19:15): Solar efficiency
(25:04): Cost down and manufacturing
(32:20): Types of solar
(39:27): Solar PV hardware
(43:59): Holiday season & micro-inverters
(50:36): Ben “MPPT is essential”
(53:31): Rooftop project steps
(1:00:53): Financing & utility bill savings
Help us out!
Subscribe, share and rate the show wherever you’re finding this podcast!
Give us feedback: We’d love to hear from you via email, inDERmediate@gmail.com
Follow us on social media
Relevant links we found helpful
General resources mentioned as helpful for learning
F-150 Lightning: Ford Intelligent Backup Power | F-150 | Ford
Solar basics
A guide to the energy transition by Tsung Xu does a good job on historical cost curves of solar and other technologies
https://www.nobelprize.org/prizes/physics/1921/einstein/biographical/
Interesting state specific utility tariffs for solar
Music
Our incredible intro/outro music is the song Ticking, by artist TIN
You can stream the whole song and the rest of their catalog here:
Episode transcript
What are those things that we have now available that are renewable that can be worked in quite a different way into the economy of the United States? Which are concerned primarily with the design of nuclear power plants and this type of thing. Hi, I'm Pamela Wildstein. I'm Wyatt Makaronski. I'm Ben Hilborn. I'm James Gordey. You're listening to Intermediate. Intermediate. Intermediate. To Intermediate. Intermediate. The place for people trying to get into or already working on distributed energy resources and clean energy. This is the podcast that makes it easy to learn how the grid actually works beyond the obvious. Hey everyone, this is James Gordey. This is episode three of the Intermediate Podcast. Today we're focused on solar. In addition to myself and Ben Hilborn, who's a regular on the show, we have two guests today. He's our first guest and we're really excited. I'll let them introduce themselves, maybe starting with Karl. Sure. Yeah. So I'm Karl Lennox, currently the VP of product at Sunrun, been in and around the solar industry for about 20 years, starting in a, you know, engineering product development role and then moving into product management and strategy. and I've seen a lot of stuff. So I'm hoping to chat about that today. I'm excited. Awesome. And I'm Spencer Fields. I'm the Director of Insights at EnergySage. I have not quite 20 years of experience in solar like Carl does, but I have 10 years in clean energy. I started out as a consultant at Synapse Energy Economics before moving to EnergySage five years ago. And even in the last five years alone or 10 years, uh, the pace of change for clean energy and solar in particular has been truly remarkable. So also very excited to be on the show and thanks for having us. Yeah, absolutely. Um, and so before we break into the core content here, I thought we could, um, get warmed up a bit. And so we have two kind of icebreaker questions here. Um, maybe we'll each let you answer, uh, kind of in the same order we did the intros. Um, the first is just, you know, for you, this show is all about learning about energy and DER is beyond the obvious. Um, what's your kind of go-to way about learning about this, this sort of information, Carl? Oh, wow. Interesting. So I think for me, it's like, it's like the sea I swim in. Like to be very honest, um, uh, I, I to kind of learn about what's new and what's coming. I actually, you know, spend a lot of reasonable amount of time connecting with startups and innovators in the space who were kind of thinking about problems in new ways. Sometimes they're thinking about problems the same way as somebody who's thought about that problem 10 years ago and maybe they've figured out a way to overcome a barrier that was insurmountable at that time. I also obviously keep up on the media sources that people tend to follow in this space. I think Canary Media is a great one, for example. But, yeah, just in general, you know, just keeping ears open, eyes open, talking to smart folks as much as I can, and always, you know, challenging myself to challenging my priors. That's one of the disadvantages of being in this space so long as you do come with a lot of priors, which is sometimes good and, you know, but it's always important to challenge those. So I do try to do that every day. So I don't know, that's my approach. You know, it's interesting, I'm absolutely with Carl in terms of paying attention to the main media sources, really Canary Media, obviously paid attention to GTM before Canary, but love what everybody's done when they built the new publication there. I think beyond that, there are a couple of newsletters I follow, obviously pay attention to what's happening in the DER task force and the Slack channel, I think that's a connected to get here. But my favorite newsletter in the space is the Climate Tech VC newsletter, which if you're not subscribed to is really, really wonderful. And they just raised some money to turn it into a sort of a bigger platform and begin to build their voice even more. So I'm excited to see what will happen with them. But that's the main way. And then I think beyond that, it's getting asked questions by friends, family members, coworkers, other folks in the space and thinking that I know a lot about solar clean energy. And then as soon as somebody asked me a question, realizing that in fact, there's still a whole heck of a lot more to learn. So like Carl said, keeping ears open and really trying to listen to what it is that people are asking. Yeah, and I'll add to that too, I think. So first of all, I should have also pitched in on the DR Task Force in general and the Slack community specifically. It's just a great way to connect and really ask all sorts of people who have tons and tons of experience on really any topic. I'd also say that to the point of talking to friends and family and things like that, neighbors, people in the street, you can tell you're interested in this stuff, is a really good way to learn about how people who are not in the space look at the space and the kind of questions they have, that continues to be eye-opening for me, frankly, because it shows you what people really care about, and that's ultimately what we need to care about, right? And so it's not exactly learning about solar, but it's learning about how other people think about solar and other DOs. Yeah, and I mean, I think all of us here, right, we're always learning. We think we know, and then people ask the question, like Spencer said. Carl, do you have a specific aspect of DER as an energy in general that you're still like exploring right now or curious about? Yeah, for sure. I think, you know, one area of keen interest, you know, to me is the vehicle to grid space. It's an emerging space. I think there's, it's one of those areas where actually there's probably more questions than answers for everybody, right? There's still a lot of things that need to be out. So it's one of those areas where, you know, there's just a lot of inquiry happening about how should it be, and what are the constraints that are real, what are the constraints that are regulatory or there for historical reasons, why are those constraints in place. So that would be like for me the top of mind, but you know there's many examples of that. I think like one of the interesting things about the DER space is that there is like layers upon layers of historical practice and rules and regulations that can sometimes actually be kind of hard to bottom out. If you really want to understand why do we have this rule in place, oftentimes you learn it's kind of a rule of thumb. And then it's like, well, why is this rule of thumb in place? Where did that come from? And actually, it can be, it can take like several levels of digging to kind of bottom that out. And then you sort of realize, like, maybe like, does that still make sense? And if not, like, what can we do about it, right? So I think I think that's another sort of class of open questions that's always intriguing to me. Yeah, super interesting. And, you know, you sort of pulled the words right out of my mouth, Carl, with vehicle to grid. And I think bidirectional charging in particular for electric vehicles certainly opens up a lot of opportunities. It also opens up a ton of questions. I think, you know, even today, a colleague of mine was asking, hey, why did you select the level two charger that you did? Why didn't you select a bidirectional EV charger? And I think there's this sort of already this misconception around what an EV can do. And obviously, Sunrun is working directly to try to change, take that misconception and turn it into a reality. But when Ford ran a Super Bowl commercial two years ago with the F-150 Lightning Electric and said, this will power your home in a blackout. At that time, that was not true, right? That didn't exist in the US. And so there's this sort of difference between the reality of the products and getting closer to what it is that consumers want. And that's always been the case in solar, right? At the beginning of solar, there was this notion that, oh, if you have solar panels on your roof, you'll still have power in the blackout. That is not how it works. Then it became solar plus storage. Oh, you'll be able to power your whole home in the event of a blackout. And for most folks, that's not the case, or it's not the case without a lot of batteries. That doesn't mean that you don't have resiliency in the event of an outage, but there's sort of this missing 10 to 15% of the consumer perception of how solar works. And now finally we're getting to the point where actually this technology is going to provide the benefits and the services that people want. And so I think that sort of gets to what I'm really interested in in this space, which is primarily virtual power plants. Because all of these distributed energy resources, when you start stacking them in an individual home or business, Now all of a sudden you have a fully operational power plant in your home and that can provide a ton of different value streams to a utility, to a grid operator, and understanding how to monetize that appropriately for the homeowner to make it worth their time to forgo comfort, to not forgo comfort, and to make it worth their while to actually participate in these programs, because I think there's a ton that they could do, but they haven't seen a ton of success yet, in part, in my mind, and Carl, you'll come from a different place than me on this, in part, in my mind, because the incentive structure just isn't there for a homeowner to say, okay, yeah, utility, you can come use my battery 20, 50 times a year in exchange for 150 bucks over the course of the year, when I'm getting battery to be as far removed from the utility as possible. So that's sort of the space that I'm interested in seeing how we move from taking what's a really cool idea and has potentially huge ramifications for the clean energy build out in this country in terms of deferred transmission and distribution costs, in terms of integrating more renewables, et cetera, et cetera, and turning that into something that consumers actually want and actually start to adopt. Yeah, Spencer, I 100% agree with you actually. And it is to our earlier discussion it actually is like one of my huge open questions about DER is like, why is it so difficult to make a scalable, viable, consumer-friendly virtual power plant offering? Now, of course, we're doing that in various places around the country. They're always a little bit bespoke. So why is that? Why is it that it's so difficult to work with utilities to create these programs in some cases? Why is there a set of misalignment here? What can we do about that? So these are sort of existential almost, or almost philosophical in some degree. But so it's not really about facts so much as it is about just political realities, economic realities, how to kind of cut through these, you know, what do you call them? I would say hairy problems. Anyway, you know, just cut through the Gordian knot of some of these like areas where I think, you know, the solar system has historically kind of been in opposition, you know, and utilities have found themselves in opposition. And I think, you know, how do you find yourself so that you're actually actually have that alignment to deliver like what's really the best experience for the customer? Because what you don't want And from a technology standpoint, I think over the next five years or so, we're going to see that it's going to be viable and economically feasible for some customers to leave the grid if they want to. Nobody wants that. That's not a good thing. The network effects that you get from interconnection with your neighbors and your community via the electrical grid is valuable. And so, like, but you need to be able to deliver that value to customers, and they need to be able to see the value, right? And you have to share that value appropriately among different parties. And so that is like, I think, a huge open question for our industry. And I really resonate with that as someone who's, you know, been in energy about maybe two or three years, spend so much time and energy and effort just trying to like learn things as they exist and how they are so I can orient myself that I don't have as much brain capacity to like synthesize and think about like what should it be how can I drive it in the right way because it's just such a steep learning curve right and like you're trying to figure all these things out much less drive them in the right place. So there's a lot of power in these detailed things that are they're pretty nuanced so like a number of years ago there was a or a kind of a received truth in the industry broadly speaking that you can only get distributed solar right like no more than 15% penetration like you're never gonna be able to get beyond 15% of your power on like a district on a distribution circuit from from solar and you know people are saying we're gonna reach that pretty soon you know so you know the next in the next few Here's like, where's this coming from? Is this really true, right? And so it started to dig into it and what you find out is this. So where does 15% come from? So 15% came from this idea that in a normal distribution circuit, typically right on average, your peak loads and your minimum loads. So your minimum loads are about one third of your peak loads, right? And so at the time in particular, they really only measured annual peak loads. So in every circuit they had a number and that number was the annual peak load. Say cool divide that by three all right and you're like an estimated minimum load and then to be safe we're going to cut that in half and then we're going to round down 15 percent. That's where this came from and moreover it actually wasn't a hard and fast rule it was actually intended originally to be a screen so if you were above that 50 percent threshold that kicked you into a situation where you needed to do studies and things like this But it was received as this sort of like, you know, wisdom from, you know, the gods, right? Well, it turns out that like that's, you know, it's a lot more nuance than that. And we worked through how to represent solar more appropriately. By the way, that made no sense for solar because your minimum load is usually in the middle of the night, right? So as you work through, you know, you kind of work through those things and you realize like, oh, actually, yeah, we can easily go to 100% of minimum load or we can go even higher than that. And that's actually been, you know, revised and interconnection codes all around the country to kind of take this new knowledge into account. But that all starts with like, just sort of questioning, like, where did this never come from? Yeah, and so to jump into it, what I thought we could do. Yeah, no, this is great. I'd say like, this is our first episode with guests and like, very clear to me, listening to you guys go back and forth, like, definitely we should have our guests because just like the level of like, expertise really flows through beyond like us in our current level. So what I thought we could do, Spencer, I found an article from EnergySage where you give a brief overview of, and shout out to you all for your content. You do a great job. It's definitely helped me a lot. The history of solar, just so good people have some historical context. And then if we could, bonus points, overlay on at the different key milestones in history, talk about the cost so people can understand how we've gotten to where we are today of solar being just like a fantastic and economic solution. Yeah, totally. Thanks for the energy sage shout out and for coming and reading our content. Yeah, so the history of solar is pretty interesting. I mean, I think there's a little bit of debate around who the inventor of solar cells or solar panels truly is. There are some folks who credit a French scientist named Edmond Becquerel who in sort of the 1800s found the photovoltaic effect. There's some folks who in the 1870s discovered that selenium had this photoconductive potential which basically means that when sunlight photons hit this material the electrons start to basically bounce around 1883 Somebody by the name of Charles Fritz produced the first solar cells from selenium wafers And so some people credit that man with the invention of solar cells But the way that we think about solar cells today, they're made with silicon, not selenium. And so some folks point to Bell Labs in 1954 as the inventors of the, the true inventors of PV technology, because that was the first instance of solar technology that could actually power an electric device for several hours of a day. And so, I don't have the exact cost of what that particular panel was, but in 1954, that first ever silicon solar cell could convert sunlight at 4% efficiency, whereas today, solar panels on the market, like the best-in-class residential solar panels, are over 22%, 23%, maybe even approaching 24%. So pretty significant change in the quality of solar cells in the technology over time. I'm actually curious. I haven't looked recently, but what is that curve looking like? I assume that there was some sort of kind of accelerating exponential of, okay, we're getting rid of the early bugs and having some big leaps and bounds and I feel like the past few years, it's really been half a percent, 0.1% increases in efficiency every year. What is that looking like and what do you think is it is gonna take to change that? Yeah, I'll go first then. I'm very curious to get your take on this as well, Carl. We see sort of in the residential space in particular, we see very incremental gains in terms of efficiency. for solar panels. A lot of the announcements that you see around larger and higher watt class solar panels, so you know a solar panel is rated in terms of the number of watts that it can put out. And then also we talk about costs in the solar industry in terms of dollars per watt, the same way that you talk about dollars per square foot when you're looking at an apartment our house. So watt is sort of our standard metric here. You know, even five, ten years ago we were looking at solar panels that were under 200 watts. I was actually at a solar install today that was using 405 watt solar panels that are the same form factor effectively as those older solar panels that were 200 watts. When you see these higher watt class, power class solar panels that are coming out that are 500 watts, 600 watts, they're huge, they're gigantic, like they take up more space than a typical residential solar panel does, which is, you know, a typical residential solar panel is about four by six, so it's about the size of a hockey net, for comparison's sake. Whereas these larger ones are going to be, you know, maybe even eight feet tall. So, in terms of where the efficiency is coming from, certain folks in labs have modeled efficiencies over 30 or 35% with perovskite. I'm probably butchering how to actually pronounce that, cells and that technology. But in my mind, you know, most homes today, sorry, let me step back. Solar panels are powerful enough that by covering the side of your roof that faces the most southward, you can power more than your electricity needs for an entire year for an individual home, right? So most homes have 500 square feet or more of usable roof space, and you're going to be able to fit 8, 9, 10 kilowatts of solar in that space, and that's going to produce more than an individual home is going to use over the course of the year. Certainly with net metering, that changes the way that you calculate the benefits and the credits and the value of solar. But, from my perspective, I think that there isn't as much of a need for efficiency gains in residential panels in particular because they're already powerful enough to accomplish what they set out to do, which is power an entire home. Now maybe that equation changes as folks electrify more and more of their homes, right? So if you move from an internal combustion engine car to an electric vehicle, now you're charging at home you know once every two weeks once every week once every day that's that all of the sudden is the largest appliance in your home by a mile you know if you're trying to fill a 70 80 100 kilowatt-hour battery every day compared to the average residential usage of 30 kilowatt hours a day right so that's that could change the the calculus pretty significantly once you install heat pumps if you move to induction stoves as you electrify more things in your home, you're gonna use more electricity, maybe now you become space constrained again, and there is this need to really push for higher efficiency solar panels. But again, Carl, I'm really curious to get your take on that too. Yeah, Spencer, that's exactly right. I mean, I think efficiency is actually a really interesting topic to dig into because again, kind of coming back to how consumers think about solar, For many people, the first thing they think of is efficiency as a proxy for technological sophistication as a proxy for quality, when in fact, it's almost like when you think about when you use it by a computer and you care about how much ram it had or the clock speed of the chip. Nobody cares about that anymore, because it reached a point where it didn't have a practical difference. And efficiency is kind of like that. In a lot of cases, all efficiency is impacting is basically the physical space, the amount of kilowatts that you need takes up on your roof. So if you can get the amount of kilowatts on your roof, doesn't matter what the efficiency is. As Spencer points out, if you start to run into space constraints, that efficiency becomes valuable to you. And that's where it matters. And electrification is certainly gonna drive that. In terms of the evolution of efficiency, it's actually interesting because it's actually been, I think, fairly linear over time. The real innovation and exponential impact on solar has actually been in cost down, right? So that's where you see kind of your experience curves, your 15, 20 percent per doubling of cost reduction. Efficiency comes with trade-offs. So I spent most of my career SunPower. SunPower is very well known for its high efficiency modules for its special cell technology and they were for a very long time and still today they have the highest commercially available efficiency modules. The cause of that is in order to achieve that level of efficiency you have a much more complex manufacturing process and every step in the manufacturing process of solar cells you have an issue of yield. So every time you move a cell with a robot from one station to another station, a certain percentage, a tiny percentage of those cells break. And the further along you get in that process, the lower your yield is, right? And so, and by the way, in order to create that process, you have to invest a lot of money in specialized tools. And you have to have literally a bigger factory because your lines are longer, right? And so, it becomes like this question of, yeah, you can get higher efficiency, but at what cost? And what's that cost efficiency trade-off? Because yeah, I can get an extra couple of points of absolute efficiency, but it may not be worth it if I can just add another couple of modules of lower efficiency to create the same power in the same space or in a little bit more space, right? So that's how this kind of ends up playing out. And I think you touched on something that, Karl, that James asked us to cover that I missed, which is, how have the costs of solar changed over time? And I think that's sort of a natural transition. Yeah, and so, exactly. So the cost of solar has really come down over time, especially the installed cost for residential systems. Like Carl said, there's so much efficiency from learning within the industry, not only for the installers and the manufacturers and the sales teams, but also for the authorities having jurisdiction, the AHJs that have to come out and inspect these systems and provide the permits for them and the utilities that have to provide permission to operate and interconnect to the system. So for those that aren't intimately familiar, what is an AHJ? An AHJ is basically a local permitting office, so an authority having jurisdiction. So, they're the ones, you know, for instance, they're the local building code or electrical inspector or fire inspector, depending upon the municipality, that come out to your site and do either a spot check or a sort of a more in-depth check on the quality of install the system and make sure that everything is electrically set up and installed to code, whatever that code is at that individual municipality. And that's basically what an AHJ is and the role that they play in this space. What's really, I think, unique about solar is that each municipality is different and has their own processes. And so one of the largest sort of remaining sources of costs for, in particular, residential solar are these soft costs, which are permitting, inspections, interconnection, also sales and marketing. But I think permitting, interconnection, and inspection, PII, are things that are spoken about pretty regularly in an area that's really ripe for innovation and bringing down costs like what NREL is doing with the solar app. Yeah, I want to talk about cost and a little slightly different framework too. Like I 100% agree with what you're saying, but kind of going back a little bit of the history of solar and actually why is solar where we are today? So for the fundamental thing about solar technology, which it shares with some other technologies that I'll talk about in a second, is that it's extremely modular. So you think about it, at the beginning of the industry, first launched. Let me put space applications aside for a second, like terrestrial applications. Where was Bell Labs selling a PV module? Well, they were selling a $50 a watt PV module in a place where the only thing that could provide power to that thing was a PV module. It's like a buoy fully out in the ocean or whatever, or some remote tiny little light. And then you get into applications where like, oh, I need five modules to power my off-grid yurt or whatever in Humboldt where I don't want to connect to the utility because you know for reasons right well that's like actually like one of the places where the solar industry started was people who were like had a lot of cash we're not really cost-constrained needed power and you know we're kind of the middle of nowhere and didn't want to connect to the utility so that was like that was like the original original market and so but you could do that because you could buy five of these things and you could set up a one kilowatt system, that was possible. Like as opposed to any other kind of power generation where just the increment of it is larger, right? So the way that manufacturing learning curves work is the fundamental thing for solar is that just in general, when you manufacture a widget, that widget comes down in cost by some percentage for every doubling of manufacturing volume. In solar, we've had, I don't know how many doublings, right? But the basic principle is that PV module, whether it's 100 watts like it was forever ago or 500 watts now, you're still producing it in increments of a couple hundred watts. And so that mass production cost down is a huge lever, huge lever. That's why we've been able to create this kind of these curves. And the same thing exists for batteries, right? That's why lithium-ion batteries, it's this little thing that goes into your cell phone, go into your laptop, now all of a sudden it's in your car, now all of a sudden it's in your house, now there's containers, 40 foot containers full of them, 50 of those containers on a site. Well guess what's inside of those things? A pouch cell, or a cylindrical cell, just like it's in your laptop 10 years ago. It's scale. Also, going back to history, Albert Einstein got the Nobel Prize for the photoelectric effect. That was what he got his Nobel Prize in. So there you go. That's a good, that is a good DER trivia. No kidding. Nobel Prize for physics in 1921. It was, you know, obviously theoretical, theoretical physics. So I don't know if it was directly, who knows, that's an extra good question. Hard to believe we haven't covered this yet. but I think now it would be helpful to just kind of describe like the world of solar and the different types. You know, maybe people have heard, we've talked about rooftop or commercial, or maybe people have heard about community solar. Like, Karl, I know you had some thoughts on this. Like, how would you describe the categories or characteristics or categorizations of solar so people can kind of understand what like all the buckets or types are? Yeah, sure, I could take a crack at it. So, you know, I think really The one fundamental distinction is what we would refer to as behind the meter versus in front of the meter solar. So behind the meter solar is your residential, your commercial, maybe even industrial scale. The main point being that you have a photovoltaic system that's installed by a customer for their own use to offset their utility use. So, you're offsetting retail rate electricity. There are some exceptions. I won't go into that, but that's basically the rubric. Front of the meter is where you're installing basically as a wholesale power generator in some form or another. And again, it gets very complicated in terms of how off-take contracts are structured and whether you're actually getting wholesale value or some other value. But at the end of the day, you're delivering that energy directly to the utility grid. you're not offsetting retail electricity. You're operating like a power plant, like any other power plants connected to the grid. So that's sort of one distinction. The other distinction I think people tend to think of is the turf in terms of scale, right? So residential, typically, you're gonna be similar between, I don't know, four and 10 kilowatts. Commercial can be kind of in the low end, like a small SMB, small medium business, could be 10 kilowatts up to, but it could be all the way up to a megawatt, right? You see, in fact, going back to history, when I first joined the industry, we were very excited when I was at PowerLite, which is a pioneer in the CNI solar space, because we sold the first one megawatt rooftop system that had ever been seen in the world. It was like an amazing moment. Now that's like bread and butter for hundreds of companies, right? Anyway, I think at one point we did some massive roof somewhere. It was like a 10 megawatt rooftop system or something. That sort of thing exists, but it's unusual. And then you could have also ground mount, in some cases. You can have carports in commercial. It makes more sense to put it in a car. So you actually have a pretty broad range of scale behind the meter. Front of the meter, you have everything from what we call kind of like a wholesale distribution interconnected. So you're interacting at what we call medium voltage, you know, directly to the distribution system at say like 20 kV, and that could be anywhere from like a 1 megawatt to have a 10 megawatt up to like maybe 20 megawatt. But still wholesale system connected to the distribution side, all the way up to, you know, a truly, you know, multi 100 megawatt utility scale system that's going to interconnect directly into the transmission system. that's going to look a lot like, you know, a large-scale conventional power plant. So, again, that modularity, right? You can literally go down to, like, you know, something that's sitting on your RV to, you know, hundreds of megawatts, and the basic unit of it is the same. I think that's helpful. Yeah, one open question I had, I guess, is community solar. Spencer, I know you guys are pretty knowledgeable about that. Like, where does that fall in here? I, you know, it's kind of like a funky, it's maybe in front of the meter, but the compensation method, you know, is on your bill. So it's behind the meter. So just like curious how that fits in here as well. Yeah, totally. You know, community solar is designed for folks who either can't or don't want to put solar on their property is basically the idea. That's a big piece of it. And then the second piece of it is to try to aggregate buying power of people who live in various communities or in certain utility territories in order to drive better pricing and to support the investment in solar. Those are sort of the, in my mind, the two main reasons behind community solar sort of existing. And so community solar is very much one of those generating assets that's front of meter. The on-bill credits that you receive for that are due to an agreement that the sort of your utility has come to with that developer or with that sort of owner of the facility or subscription aggregator. And so it's not that you've signed necessarily a power purchase agreement to get a certain amount of kilowatt hours per month or per year from that solar per se, it's saying, I wanna support solar and I'll get a, call it a 10% discount on a certain amount of electricity on my bill by supporting clean energy and participating in this community solar program. So it's a little bit more complex and there are some sort of accounting cartwheels that you kind of go through to explain how it works. But that's basically where it sits. Anything to add to that, Carl? No, I mean, yeah, I agree. It's a sort of a type of an offtake agreement in a way. I think the other kind of similar concept is what we have very commonly here in California around community choice irrigation where you have an electricity provider that's effectively like a retailer, right, except they're nonprofit and community owned or community managed, I should say, that is basically procuring in many cases actually building and installing solar, for example, that then is basically offsetting their purchases from the wholesale market. It's almost like net metering for a for a quasi utility, interestingly. But, but that's another sort of similar kind of structure where you can go and subscribe, I can get like, you know, the the green plus, you know, plan from marine clean energy, which is what I happen to be. And they're they're saying great, like, we've allocated, you know, that's gonna that's, that's gonna create additionality, because by subscribing to that plan, that's going to require us to build more solar to make sure that we can deliver against a plan that your your electricity is 100% green, right? Yeah, very cool. And for people not as familiar with the hardware side, I think everyone is pretty familiar with the concept of like a solar panel. We've talked about that a lot. But like, what is like a solar system? You know, what are the aspects of it just so people can actually understand it without having to install one themselves? And is there a better word than solar system? So you don't get people thinking you're talking about planets? I usually say PV system, but not many people actually, a lot of people get confused by the term PV, which stands for photovoltaic, by the way. First of all, we talk about panels, we talk about modules, we talk about PV. It's all kind of the same thing. It's that, you know, that flat-looking box that goes on your roof that does the magic. It collects photons, it turns them into electrons. That's a photoelectric effect, wave-particle duality. It's frickin' amazing. We'll talk about that another day. All right, that's the panel so that so first of all like what is for what actually let's talk about Like can we talk about that? Like what it what the hell is that? So a PV module is made up of a bunch of cells. All right, each cell is a diode It's a photoelectric diode It's kind of like a light emitting diode, but like in but backwards in fact Actually, if you forward bias interesting little known fact if you forward bias a PV cell Where you apply voltage across it and it's dark It actually is a light-emitting diode. It actually emits infrared light, and that's used to do quality control checks on solar modules. You can do a non-destructive inspection of cell cracking by looking at the patterns, by looking at that image. It's pretty cool. That's incredible. I knew the theory that, yeah, okay, it's a diode. I had no idea that there was a utility to just driving it essentially in reverse. That is fantastic. Yeah, it's an end-of-the-line test in every modco. If you go visit a modco, you'll see it. Anyway, but the bottom line is like, where I was going with that, is that the module creates DC electricity, right? Because you pump in photons, outcomes, essentially a voltage, you connect a circuit, they flow through the circuit, Okay, it's direct current. So fortunately or unfortunately, depending how you want to look at it, like we don't use direct current for the most part. We use alternating current. Why do we use alternating current? Well, because like our whole system was built up around like driving motors and driving generators and generators span at 3600 RPM, which creates 60 hertz or 10, conveniently drives a motor 3600 RPM, which is or 1800 RPM, which is very convenient if you're, you know, running a factory, right? So, plus for other reasons. So, anyway, so we got, we have to match that 60 Hertz, we have to match that 60 Hertz waveform the utility provides us. So that's what an inverter does. An inverter is a very cool piece of power electronics that takes DC and synthesizes an AC waveform. People don't talk enough about inverters and it's a key, key, key piece of technology. Actually, think about like PV systems in general and the evolution of technology and where is this all going? Two key pieces of technology were invented in the early 1990s that have enabled us to be where we are today. One is the inverter. One specifically, the insulated gate bipolar transistor, IGBT, which is the heart of an inverter, is the piece of power electronics that you actually is able to switch on and off. It's a transistor, right? So you switch it on and off very quickly. Solid state. And you put these things in a certain arrangement and by switching them on and off in the right sequence, you get a waveform, right? It's, by the way, also in every virial speed drive, in every EV, like it's a fundamental piece of technology for solar and really across electrification in general. So that's what an inverter is and how an inverter works. Also invented at the same time frame was a lithium-ion battery, by the way. So there you go. What a fantastic time in history. So very important that all these things happened to get us where we are today. So, those are like, I'd say those are kind of the two sort of major, you know, components. You think about what makes a PV system. You can make a PV system in your backyard a day. You buy a cheapo PV module. You buy, you know, an inverter from the hardware store and you plug those two things together. You probably want a battery too, but, you know, you can make that work. Modern grid-tied inverters are very, very sophisticated though, like because they have to synchronize with the utility grid and perform all sorts of grid protection functions. So we'll get into all that. I do have a question. Some terminology that I struggle with, the difference, and others might as well. What's the major difference between and benefits between a string or microinverter and an array single inverter? So as I've been talking a lot, I'm going to let Spencer take that one. Thanks, so micro inverters and string inverters perform the same function of producing that waveform that AC, you know, taking that DC electricity and turning it into alternating current, but they do it in different places, I think is the main way to think about it. So, a string inverter, you could also call a central inverter, and for a typical residential solar install, you only need one of them. And it's going to go on the side of your house, in your garage, next to...
to your utility meter, and it's going to aggregate all of the DC direct current output from the solar panels on your roof and convert that to that alternating current in a single location. And so that's why you could call it a central inverter because it's all happening centrally. It's typically referred to as a string inverter because the panels are all on input, individual strings and like literally like a string of Christmas lights yeah it's exactly that's the that is the most common analogy is a string of Christmas lights so if you it is it isn't a perfect analogy but and so the idea is that you're connecting all of these solar panels and the output from all these solar panels or call it up to ten solar panels onto an individual string and then bringing that string of electricity back down to the inverter where it's it's converted to alternating current. And most, you know, most typical string inverters today have can accept four different strings so you can have multiple different roof planes and not have to worry about the output from one of those impacting the output from the other. Can you go into that very for the audience why the output of, you know, one like a west-facing array would impact the output from a south-facing array if they were connected together? Totally. I'm gonna get into it and then have Carl correct me where I go wrong. So the reason that Christmas lights or a string of Christmas lights are used as an analogy, an imperfect analogy for a string inverter or solar panels that are connected to a string inverter is that, you know, historically if you had Christmas lights and one of them went out, all the rest of the lights beyond it on that string of Christmas lights would go out. And when string inverters first came on the market, something similar would happen with the production from the panels behind a malfunctioning or even a shaded solar panel on that string. It's not necessarily that their production would be reduced, but I believe it's their voltage would be reduced, I think. Is that right? To get the whole string to be the same level of... So yeah, so the current through a string, you can only have a certain current, right? And so, yeah. It's a little nuanced though, because I think the reason why this analogy imperfect is that unlike a Christmas light, if you have a module and a string that is under-producing, whether it be that shade or any other reason, there's actually a protection in the module called a bypass diode that knocks that module out, which will actually recover the string's current. Interestingly, these module-level power electronics, be they micro-inverters, which is just a PV module, an individual inverter for every PV module or something called an optimizer, which basically conditions the voltage coming out, it adjusts the voltage coming out of every module, so it balances the voltages basically. Ostensibly solves that problem because it's like, okay, you can actually produce some energy out of this module that was shaded and would have otherwise knocked itself out of the string. In reality, it actually doesn't create a huge benefit. It's been over-marketed, I would say. There's other reasons to have this architecture, unrelated to shading and all that, but as an analogy, you have rabbit shutdown, different roof planes, short strings. And so that's where the roof planes come into play, is that one reason that a solar panel could be underperforming compared to the other panels in a string is if you have panels all in a string on different roof planes. And so maybe in the morning, the sun is hitting some of those solar panels. But then as it progresses to the afternoon, the other solar panels are now being hit by the sun and are beginning to produce. And so because of that mismatch in production, that can change the output of the entire string of modules. So allowing for multiple strings on multiple different roof planes You can get around that like Carl was talking about the sort of the most popular Central inverter string inverter that's installed in the residential setting in the US is a solar edge inverter and they're almost always Installed with optimizers, which are these right they condition as Carl said condition voltage at the individual panel They're module level power electronics MLPE is an acronym that you'll hear thrown around. On the other hand, microinverters, instead of converting DC to AC electricity in one central location, do it at each individual panel. So they sit in the same spot that a power optimizer would, right underneath the solar panel. But instead of conditioning the voltage, they actually convert it at that individual site to AC electricity. So that's the main difference between micro inverters and string inverters or optimize string inverters And just before we leave like we're a little in the in the technical weeds and just before we leave this I think it'd be really good to have a brief primer on maximum PowerPoint tracking since that's Since that's pretty important You want to take that one Carl? Yes, that's a PowerPoint tracking I waiting for that? No, I mean, do I? Yeah. So, um, so we talked about how a solar cell is a diode, right? So all diodes, if you have any, if you're familiar with electronics, there's probably not that many people do, but hey, what the heck. Um, the, uh, a diode has a, every diode has what's called a current voltage characteristic, and so solar cells, when you, when you hit them with photons, they have a response characteristic of voltage and current, and voltage times current is power in watts, right? Amps times volts equals watts. And so what you see is that as your voltage goes up, all right, your current goes up kind of linearly, and then you sort of hit a point where you hit kind of like a knee of the curve, as you go over the knee of that curve, what happens is basically your voltage will drop, as your current increases, your voltage drops very precipitously. So your power drops precipitously. And so if you were to plot that as a voltage versus power curve, there's a maximum point where for any actually given any cell in a PV module, each individual cell has its own individual maximum power point. And when you string them together, the module has a maximum power point. And when you string modules together, the string has a maximum power point, which depends on irradiance, its temperature, and a bunch of other stuff. So in order to extract the most power out of a photovoltaic module or a string of modules, you have to keep the voltage and the current at exactly the right spot, which is matching kind of the the impedance of the system. So if you think about what that means, it means now remember this is shifting around and changing all the time, right, as irradiance changes, temperature changes, the wind blows over the thing, cools it off, right? A shadow transits across the module. So one of the things that an inverter does is it has very sophisticated control algorithms that dynamically adjust where the voltage and current are on that string to extract the maximum possible power. And that's called maximum power point tracking. It's actually really cool. And that's what I get excited about. Okay, we should get out of the weeds now. We've had our brief foray into electrical engineering for the day. One thing I did want to talk through here is what like a typical project looks like kind of end-to-end. Kind of starting with the you know sales marketing and then like going into install and then how customers actually like get compensated or the system is compensated. Happy for either of you to take that and I can appreciate that there's differences either behind the meter or in front of the meter? Totally, I'll take the first stab at it, just given that sort of where energy stage sits in the market. So most, right, so people generally learn about solar, they're researching solar, they're researching their clean energy options. A lot of people will have somebody in their neighborhood come to their door probably and ask if they're interested in going solar. A number of people come to EnergySage to request quotes from our installer network and receive quotes. The process of actually gathering a solar quote is pretty straightforward, and you want to make sure that you go out and get three to five to compare. But the solar installer will come out to your site, or they can do a lot of this remotely these days. they'll take a look at the roof planes, the orientation of your house, the angle of your roof, and they'll ask you potentially to send a couple of pictures of your main electrical panel, things like that. They'll get a sense of how much electricity you're using. That's a really big aspect of this, is understanding how much electricity you need to be able to offset or avoid pulling from the electric utility with solar. You'll get a proposal that has a layout of the solar panels on your roof that has an estimate of how much those solar panels are going to produce in the first year. It'll have obviously the name of the installer and any sort of reviews, recommendations, things like that, as well as usually also the equipment that's included, so the brands of equipment that are included, whether or not you're getting what wattage solar panels you're getting, whether or you're getting micro inverters or string inverters, things like that. And you can compare and contrast across a number of different metrics, whether it's the installer reputation, the brand of the equipment that you're receiving, the cost of the equipment, and that's, you know, the installed cost of solar in the U.S. right now has gone up over the last couple of years just with supply chain shortages, labor shortages, cost of capital getting more expensive. But I think is, you know, around $3 per watt, maybe $3.50 per watt, maybe $4 per watt, depending upon where you live in the country. The portion of that, I know you had a question earlier about sort of what the portion of that cost that comes from the equipment. Solar panels themselves are probably around 60 to 70 cents a watt, maybe at this point for top-tier solar panels. Inverters might be 20 to 25 cents per watt, so that gives you a sense of sort of the percentage of the overall cost that comes from that sort of hardware. Once you get the quotes and you sort of are working with an installer to move further along in the process, you'll want to have a site visit so that they can come out, take a look at your roof, make sure it's in appropriate condition to actually install solar, they'll get into any crawl space or your attic, take a look at the rafters, rafter spacing, things like that, finalize the proposal, see if there are any other upgrades that you need, whether to a main electrical panel, or if you want an EV charger, a battery, things like that, and then once you sign a contract, the, and we haven't talked about financing yet, but there are a couple of different ways that you can finance a system, cash purchase, a solar loan, or a lease or power purchase agreement, sort of where you aren't the owner of the system, there are a lot of benefits to that as well, as Carl can speak to much better than I can. But once you sign the system agreement, the installer will begin the process of pulling permits, the actual and making sure that they have all the equipment, scheduling an install day. Most solar installs can happen in a single day at this point. They run typically one crew of four people, two people who get started up on top of the roof, putting all the flashing, mounting, and racking in place to hold the solar panels in place on your roof. Those things are super strong. You can stand on them and they won't budge. And then the two other folks who are electricians who are getting started with main electrical panel and the inverter and making sure that everything's wired all together at the side of the house or next year electrical meter or main electrical panel. And then once everything's sort of laid out and set up it's just the process of getting solar panels, carrying solar panels up onto the roof on a ladder, putting them in the right place, connecting them to either the optimizers or the micro inverters, and then screwing them into place and making sure that everything is sort of laid out the way that you want it to be. And, you know, each individual solar panel, once everything is laid out, might take, depending upon how steep the roof is, connecting a single solar panel probably takes less than five minutes from ground to actually screwed into the racking. So that's sort of, you know, once that's all done, then you have final inspections from your local utility and your municipality, once you get the go-ahead to actually interconnect in the permission to operate your system, you either go out and flip the switch on the side of your house, or your installer can do it remotely, depending upon the inverter that you're using. What I missed there, Carl? No, you got it. I think there's a couple of things I would just add onto that. One, I would say like, you know, in most places the- it is fair to say that the timeline to get residential solar from like the time you sign to the time it's up and operating can be rather extended, a matter of, you know, many months. In most places that is because- not because of the time it takes to actually install this or actually do anything, but because we're waiting for somebody to do something. So you're waiting to get permits or you're waiting for the utility to take an action or you're waiting for permission to interconnect, permission to operate. And so that's actually, I would say, one of the lesser understood soft costs that we talk about. One of the things that happens is like when people have to wait, they get frustrated. When they get frustrated, they cancel. When they get canceled, companies like ours have to spend a bunch of money on a customer that we didn't actually acquire in the end. And that's actually turns into a soft cost. So we like to avoid those things. We like to try to pull in upcycle times And, but some of that is inevitable. The other thing I think I would just touch on briefly is on the financing side of it. You know, there is basically three major options. There's cash, so you basically take, you know, $15,000, $20,000, whatever it is, you put it on your roof instead of in the bank, and you make money off that. The other option is to take out a loan. You still own it. you pay that loan off after a certain period of time. It's just like a home improvement loan. And the third is kind of unique actually to solar, which is a lease model where basically it's owned by a third party if you don't own it. So a third party entity owns it and you're paying for the service. So the service you're paying for, you're paying for electricity that this other entity from this asset is generating that happens to be on your roof. And the interesting thing about that is that you don't have to, there's no money down. So you literally start saving money on your bills the moment it turns up. which is pretty attractive for some people. Now you're not saving as much as if you had, you know, made the investment yourself. But, you know, for a lot of people it's like, hey, you know, I saved a little bit compared to the utility and I'm using green energy and I feel good about that. I have more independence from the grid goes down, for example, if you have a battery with it, et cetera. And I think one thing that you just touched on there, Carl, that's really important that we haven't talked about yet is how you actually save with solar, Which is sort of a crucial piece of the whole puzzle here. And you save with solar because when your solar panels produce electricity, they offset consumption from your utility. And so you're really just avoiding electric bills. And each of the ways that Carl just laid out to finance your system allows you to avoid paying electric bills or to reduce the amount that you spend on your electric bill any given month. And so with a, you know, so for instance, if you're paying $100 in electricity costs per month today, if you put enough solar on your roof, you should be able to avoid all of that or all of that outside of non-bipassable charges or customer interconnection charges, which might be only $10 or $15 a month. So you're saving money straight away. Now the question is how did you actually pay for, and sorry, the reason that happens is because when you are producing more electricity than you are using on site, you send that electricity to the grid, run your meter in reverse. When you are using more electricity than you're producing on your roof, you pull from the grid and run your meter forward, you're billed on net. That's how net metering works. And so, and then also if you're using exactly the amount of electricity that your solar panels are producing, you're just, you're not pulling from the grid. So it's just avoided cost offset, right? And so, if you have, if you pay for your system in cash, that's a sunk cost, it's all upfront. and then month one, now whatever your savings are on your utility bill are your savings, but you've put a lot of money down in order to achieve those savings. Over 20, 25 years, you're going to see, like Carl mentioned, higher net savings over the cost of the system, but you have to have access to that capital and be willing to invest it in a solar panel system to actually get those highest level of savings over 20, 25 years. With a solar loan, Until very, very recently, it was very easy to design a solar loan where your solar loan payments were less than what you would have otherwise paid your utility and electric bills. So in other words, if you had $100 a month electricity bill and you're offsetting 90, 95% of that, so you still have a $10 a month bill, you should be able to get a monthly loan payment at $75 or $70 or $80. So you're saving, again, more or less from day one without having to put down any money to install the system. And then at the end of the loan term, you own the system. Because you own the system, you can take advantage of the tax credit, the federal investment tax credit, which is a 30% tax credit for solar, and you get the benefit of owning the system at the end of its life. lease PPA is the same thing but you don't own the system and you're not taking out a loan and like Carl said you're reducing your electricity spending from day one which is is pretty enticing yeah no doubt like what I've learned talking to people is like there's a lot of details here and it depends like market by market and the like compensation models no doubt are changing and then to your point and I would guess this is probably Related like in the loan model the like interest rates have had like a pretty decently sized impact on like the economics for customers, too So it starts to get pretty Pretty difficult to figure out or at least much more complicated than just a simple. Yeah, you're definitely gonna save and you know, here it is Yeah, well in the interest of time. I think we're gonna wrap it up here This has been really really great Carl Spencer. Thank you so much for joining I think as a follow-up to the guests, we're going to try and collect a few more resources to kind of go deeper if people are interested, teach the audience how to fish of it for themselves. In general, though, thank you so much for joining and really, really appreciate the time. Thanks for having us.
Share this post