When you ask the average American to think of prime locations for solar energy production, places that enjoy seemingly unlimited amounts of bright sunlight year-round, such as states in the South and West, surely come to mind — and for good reason. Home to around 80% of overall grid-connected installations in the country, California is the clear leader in U.S. solar production. It continues to drive the U.S. solar market, leading the nation not only in the number of photovoltaic (PV) systems installed, but also in the adoption of incentive and rebate programs available to attract new residential and commercial customers.
California's success with photovoltaic installations mirror those of Germany where the local solar economy has been driven by the government's commitment to reducing and ultimately eliminating its dependency on fossil fuels by instituting mandates for certain percentages of solar installations and implementing incentives for customers.
A good portion of the design, supply, and installation of these systems is handled by the many specialized dealers who focus solely on solar and offer full-service sales, design, installation, and maintenance of PV systems. But this hasn't deterred some electrical contractors from venturing into this niche market. Electrical contractors like Chico Electric are getting in on the action now, hoping the market will continue to grow.
A fine example. Founded in 1960, Chico Electric, located about 100 miles north of Sacramento in Chico, Calif., is an electrical contracting firm with 60 employees. The company specializes in commercial and industrial design/build projects. But even though the company's main focus is on traditional electrical work, it's keeping a close eye on the PV market and tackling a few projects when and where it makes good business sense.
Norm Nielsen grew up in the electrical business and became president of Chico in 1985. He first became interested in photovoltaics when he was in college about 25 years ago. At that time, he remembers the price per watt for solar was about $32 without installation. Today that rate has dropped to around $8 per watt installed. “I'm proud of the fact that our company is market driven,” Nielsen says. “We're in solar now because our customers have asked us to install these systems on their facilities. We've just taken growth opportunities in that direction by listening to what they want.”
Has adding this new niche, which mostly consists of installing grid-tied PV systems in commercial and agricultural settings like walnut and almond processing plants, changed Chico's overall strategic plan? Not yet because solar currently only makes up 10% of its business. “I think it can grow from here, but that's only if our customers request it,” says Nielsen, who admits he hasn't really marketed this capability yet but will in the future if the need presents itself.
For now, Nielsen prefers to bid on those projects that support his company's growth and keep current on the technology. That way, when the incentives make it financially advantageous for his customers to install a system, his company will be ready to take on the project.
Cost considerations. Paula Mints, a market research analyst for Strategies LTD, agrees that costs are coming down in some areas, but warns that PV module prices are still high and going up because of the combination of the silicon shortage and high demand. Silicon now accounts for 50% (Sidebar below). “Silicon prices are high, thus wafer prices are high, and again, due to the shortage of the raw material and extraordinarily strong demand, module prices are high,” she says. “So it's really not as simple as needing the costs to come down. For example, in many areas utility grid electricity is subsidized, which means people pay below the market price, so you have to factor in all of those externalities.”
That's why Fred Cherrick, president of Independence Power, a solar firm that provides design, material supply, and installation services for commercial and residential projects in the Los Angeles area, speaks to his customers in terms of return on investment (ROI) rather than cost per system. According to sources interviewed for this article, payback on these systems typically runs from seven to 14 years. However, most manufacturers warranty their products for 20 to 25 years with the potential to perform even longer (some claim up to 40 years). From a sales pitch perspective, the math really speaks for itself.
Cherrick maintains that the key to optimal ROI for PV systems lies in the quality of the design, materials, installation, and labor. He says customers in California pay an average of 18 cents/kWhr during peak periods. The utility's cost to bring on additional generating resources during such periods is often more like 30 cents/kWhr, which he says will eventually be rationalized with even higher rates to the consumer. Organizations providing incentives, such as the California Energy Commission and California Utility Public Commission, have established certain “target levels” based on system size. For example, they advise that a 6kW system should produce 6,000 kWhrs to 7,000 kWhrs per year. However, Cherrick claims you can easily exceed expectations by 30% in some cases if you do quality work.
Electrical opportunities. Although solar seems destined to be a niche market for quite some time, Todd Stafford, a director at the National Joint Apprenticeship and Training Committee (NJATC), who provides PV certification training for the North American Board of Certified Energy Practitioners, predicts the industry will see more and more contractors entering the market. “The small stuff — 4, 5, 6kW or less — is probably going to be for the niche market guys, but there's going to be quite a bit of commercial work springing up eventually, such as community centers and government offices, incorporating photovoltaics into their building designs,” he says. “That's going to be the key. When solar gets incorporated into the design of the building, it goes up for a bid process, which gives electrical contractors an opportunity to get the work.”
Stafford, who has seen an increase in solar students in the last few years, says medium to large contractors who typically do public design/build work better be able to provide solar services in the future if they want to stay competitive. “Any commercial contractor that does any government work is going to have to have solar in his arsenal in the very near future or he's not going to be able to bid,” he says.
Lloyd Gomm, director of marketing for renewable products at Xantrex, a Burnaby, British Columbia-based manufacturer of inverters (one of the key components in the PV system) says the quality and quantity of dealers and installers moving forward will be important for market growth. “In order to grow the industry we're going to need more feet on the street promoting the systems to customers,” he says. “Especially on new construction, solar is a fantastic way to help differentiate contractors from their competitors just by presenting the option.”
Installation issues. What's stopping some electrical contractors from jumping into the PV system installation market? Solar installations can be somewhat confusing for residential electricians, say some solar veterans. Nielsen sees how some residential electrical contractors might not be in step with the equipment in the beginning (see Table here). “You're working with a complex set of equipment,” he says. “If you're working with stand-alone systems, things also get a lot more complicated because there's generally battery storage involved, which calls for a hybrid system arrangement.”
However, for those who have done their homework and are committed to the proper education and training, most say the electrical skill set is virtually the same (Sidebar below).
Nielsen says the biggest challenge for his firm has been mounting the PV panels, a task electricians are typically not accustomed to handling. “It takes a lot of time to get the layout done on the computer, but once it's done right the installation falls in line in the field,” he says.
Then there's the difference between working with AC and DC. Gomm gives a wiring example with his firm's inverter. From the PV array you'll get between 195VDC to 550VDC. Typically one of two strings of series-connected panels comes off of the roof in conduit down the side of the house or through the attic and feeds into a DC terminal block. Then you ground the inverter and make the AC side interconnections, which run into a typical load center or standard circuit breaker. The output of that inverter is 240VAC.
Changing mindsets from AC to DC doesn't really present a problem for most of his students, says Stafford. “Quite a few of our members already understand DC wiring methods far more than the solar industry because that's what they do in the chemical facilities,” he says.
Another installation concern relates to safety. When the sun hits a solar panel, it immediately begins producing electricity, which ultimately means installers are working “hot,” introducing potentially lethal safety issues. “A few years ago it was quite dangerous to do this type of work in the daytime, but the industry's responded,” says Tom McCalmont, president of REgrid Power in Campbell, Calif. “Now almost everyone supplies their solar panels with shielded or polarized connectors with female and male ends called MC connectors. You can't physically insert your finger into the connector because it's got an insulated hood on it. The only way to make contact is to push the two together. Now that everybody has MC connectors, it's really pretty safe. You just have to be mindful as you're plugging them together that this is potentially 300 or 400VDC.”
McCalmont says the PV market has been riding a huge growth curve over the last six or seven years (somewhere between 30% to 50% worldwide). In fact, he isn't looking for new business; it's mainly finding him through referrals. McCalmont believes this industry also holds promise for competent electrical contractors who show the initiative to learn PV system installation. “It's not that complex of a process. You're just hanging equipment on the wall, wiring it in, and pressing start. Any electrical contractor would be very comfortable doing this type of work with a minimal training class.”
Sidebar: Inside the Cells
There are three key elements in a solar cell that form the basis of their manufacturing technology. The semiconductor absorbs light and converts it into electron-hole pairs. The semiconductor junction separates the photo-generated carriers (electrons and holes). The contacts on the front and back of the cell allow the current to flow to the external circuit.
According to Solarbuzz, an international solar energy research and consulting company based in San Francisco, the two main categories of technology in this market are defined by the choice of the semiconductor — either crystalline silicon in a wafer form or thin films of other materials.
Crystalline silicon solar cells. With about 93% of market share, crystalline silicon (c-Si) has been used as the light-absorbing semiconductor in most solar cells. Cells made with this material are efficient (11% to 16%, half to two-thirds of the theoretical maximum), and each one generates about 0.5V. Because of their small size, 36 cells are usually soldered together in series to produce a module with an output to charge a 12V battery.
Thin film solar cells. The high cost of c-Si wafers, which make up 40% to 50% of the cost of a finished module, has led the industry to look at cheaper materials to make solar cells. Researchers found that amorphous silicon and polycrystalline materials can absorb a lot of light with a thickness of only about 1 micron (as compared to several hundred microns for c-Si). This led to a significant reduction in cell materials costs.
However, thin film technologies are complex, and most have taken at least 20 years to get from the stage of promising research (about 8% efficiency at 1cm2 scale) to the first manufacturing plants producing early product at that same efficiency level on large-area PV panels. The emerging thin film technologies have yet to make significant in-roads into the dominant position held by the relatively mature c-Si technology.
Source: Solarbuzz USA
Sidebar: Education and Training Resources
Although certification isn't legally required for individuals installing photovoltaic systems, most solar industry experts highly recommend it. The North American Board of Certified Energy Practitioners (NABCEP), which is a volunteer board of renewable energy stakeholder representatives, offers a voluntary Solar PV Installer Certification program for contractors, foremen, supervisors, and journeymen. The organization maintains that this certification, which includes hands-on experience and a written exam, isn't intended to prevent qualified individuals from installing PV systems nor does it replace state licensure requirements if applicable. Rather, its goal is to provide a set of national standards by which PV installers with skills and experience can distinguish themselves, and to increase the safety and reliability of PV installations throughout the United States.
The NJATC's solar certificate training, administered by the NABCEP (www.nabcep.org), covers safety and installation considerations for grid-tied and stand-alone PV systems in both residential and commercial applications. Todd Stafford, an NJATC director, says they approach training from the journey wireman's point of view. “What we do is take someone who has completed the five-year apprenticeship program, which includes 900 classroom hours and 8,000 hours of on-the-job training, then we show them the solar side of it, which amounts to an additional 32 hours of training,” he says.
Contractors can also take advantage of individual education and training programs offered through many solar panel and inverter manufacturers. This type of training focuses on a company's specific line of products.
Other organizations offer educational resources through workshops and training sessions on renewable energy system design, equipment, and installation techniques, including the Solar Living Institute (www.solarliving.org) and Solar Energy International (www.solarenergy.org).