Ethical Dimensions of Renewable Energy and Sustainability Systems

Case 3: Where Should I Buy My PV?


Case 3: Where Should I Buy My PV?

Video: (Stakeholders) Do I, the Homeowner / Private Citizen, Really Have a Choice? (2:34)

Do I, the Homeowner / Private Citizen, Really Have a Choice?
Click for a transcript of the Do I really have a choice video

You want to buy photovoltaics, you want to buy a certain type of photovoltaic panel, we have to think about who are the different stakeholders, who are the people who actually make those decisions, and who are the people that are potentially interested in where you're buying your photovoltaic modules from. So, along the line of getting a photovoltaic array installed on your rooftop, you yourself, the party interested in purchasing the panels are going to be the client. You're going to be the individual who's going to invest the money into having the array installed on your house. The next step out is going to be the installer, that's the individual, the company, who will site your home, your building, that commercial structure or the land surrounding that you might want to install photovoltaic panels on. And that installer, who does the siting, and will later do the installation is going to have a commerical license to buy certain types of panels. And they will have access to maybe a small suite of panels but they are not necessarily going to have all of the photovoltaic panels known to the world available to purchase, nor would they want to. They're going to have a select group that they prefer, that they know from proefessional skill, they know the reliability of certain type of modules, they know the cost of these modules, and they tend to go for them. So the installer, the person or company who is responsible for deploying your photovoltaic panels really makes that decision. Now you, as the client, might have the ability to go in and talk to your installer about the fact that maybe you'd like to buy an all-american type of panel, maybe you're looking for the highest efficiency panels that you can find, or maybe you're looking for the lowest cost but highly reputable photovoltaic panels, which is usually the likely path. And typically the installer will then tell you, here are the different types of modules that we've installed in the past. Here's your choices. So you have a certain ability to select from modules, but the key decision-maker, the key purchaser of the modules along the supply chain, is going to be your installer.

Credit: J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: Benchmarks and metrics, global market (peak watt, etc.) (4:14)

Benchmarks and metrics, global market (peak watt, etc.)
Click for a transcript of Benchmarks and metrics Video

So one of the things that people as consumers want to think about, are what are the key metrics? What are the key factors that I should be paying attention to? Or, what are the key factors that installers are paying attention to? The first thing is that every module, every photovoltaic panel, right, is ultimately going to be rated with a certain amount of input light. And it's a standardized input light. It's going to be 1000 watts per square meter. And that's going to be solar-spectrum light, so light that's very similar to light from the sun and the energy input is 1000 watts. So from that 1000 watts input, your photovoltaic panel is going to convert that energy into electricity. And we'd like to know how many watts of electricity are we getting out given the 1000 watts of input. And so each module will have a certain rating that will tell you the output electricity power per square area, potentially per square meter in this case. So we'll have a watts per square meter, given 1000 watts per square meter input. And it's pretty easy division to have your output of 250 or 200 watts per 1000 watts input, you'd have about a 20% efficiency. Obviously that's probably one of the highest performance cells, modules that we'd expect. We'd probably expect around a 17% to 15% efficient module for most silocn modules that we have. But that 1000 in and a certain number of watts out is classified as a peak watt. So we often see our modules framed in terms of how many peak watts are we getting out and you'll see a "w" with a little "p" behind it. And that's the metric for the power performance under standard testing conditions. When your modules actually out on the house, it's actually going to be exposed to dimmer light conditions, brighter light conditions, and temperature variations that will change the ultimate performance. But the peak watt is a very useful side-to-side comparison for different types of photovoltaic modules. Now in addition to that, there is the cost for the module. And so we can have a very high performance module with a certain peak wattage, and that module will cost so many dollars per peak watt, ultimately. And that's what we'd call a unit cost. So dollars per peak watt is rolling together the cost per square area of the module relative to the performance per 1000 watts of input solar energy. Tie them all together and we've got this really useful metric of a unit cost. And so the dollar per peak watt gets used very often because we can imagine that a high efficiency, high cost module, photovoltaic module, may have effectively the same dollars per watt as a lower efficiency, lower cost module, right. And so, the thing that's being kind of lost in here is going to be the area of the module. So if I had a lower efficiency, lower cost module, what I would be sacrificing, or what I would need to compensate for, is actually the area. So I'd have to install maybe one or two more modules or I'd have to have a larger on my rooftop in the case of a lower efficiency, lower cost module. But ultimately, when I'm an installer, I'm looking for that balance of high enough efficiency at a very low cost so that I can be very competitive in the market against other modules and other installers.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: A Tiered System (3:48)

A Tiered System
Click for a transcript of A Tiered System Video

So the nature of having a global market for photovoltaic panels and the fact that alot of this panel manufacturing is coming from Asia, largely China, is that we have a tiering system emerging that's actually been developed from the installers perspectivem where we have basically a first tier and a second tier classification of photovoltaic modules that conveys to the installer the kind of the reliability of the modules, the comfort in buying those modules and knowing that they can return the modules should they for some unforseen reason fail, as well as just kind of having a kind of track history of using them. So this tiering system is different than just alone thinking of the unit cost of the dollar per peak watt. A first tier photovoltaic module will tend to be, for example, a module through an American company, potentially a European company, that will be well known for having very high performance, photovoltaic technologies, they will have very long established track records, the modules themselves will be tested for their lifetime performance or for the degradation over the period of intensified testing, and the company name will be well-known. So that first tier is gonna be often times a first choice for installers because they will be installing a module that they know very well, that they can vouch for the value of, for having say a higher unit cost, a higher dollar per watt, and ultimately they ca speak to the return on the investment for that. A second tier photovoltaic module is largely grouped around modules that are less well known, that are coming out of newer companies, and tend to come from companies in Asia, tend to come from potentially Chinese companies. They are going to be modules that have a very competitive, lower dollar per watt, so a very competitive unit cost, but their reputation won't be as well known, so there's a slightly higher risk if those modules fail. There's a certain amount of risk in terms of will the company be there when we want to return those modules ten years from now should they fail. So the first tier versus second tier are associated with a higher unit cost and a lower unit cost but there are ultimately two different framings of this from the perspective of the installer and that is an assurance, a quality assurance, quality control, that tends to be associated with the gained knowledge from a first-tier system versus a less amount of information about a second tier photovoltaic module, but the incentive is that they are at a lower unit cost. And so if a client is looking for a lowest cost solution they could create a pressure for the installer to tend to go for second tier photovoltaic system versus a first tier system.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: QA/QC and Transparency (2:19)

QA/QC and Transparency
Click for a transcript of QA/QC and Transparency Video

One of the things that can add to both the cost and the performance of a photovoltaic module is going to be the degree to which the institution, the firm, that makes the module is looking into quality assurance and quality control. So these types of companies that invest a larger franction of their income into research dollars that are tied to knowing the rate of degradation of a photovolatic module, the liklihood of a failure in their photovoltaic moudles and that actually convey this information in a transparent way to their buying community, that's going to tend to be a first tier photovoltaic module corporation. They're very transparet with their information in terms of how their systems perform because they also will tend to have very high performing modules. So they know that their modules have a very low risk of failure or very slow rate of technological decay. But they convey that openly to the community and they continue to test their modules as they continue to make improvements iin their modules or as they see thier older lines of modules aging. So they'll keep track of all of these in a database, they'll keep testing these, usually in different climate regimes. And much like the window and glass industry they'll try to keep this line of iformation open to the community, to the buying community in particular, such as the installers, so that they convey that they are a trusted industry a trusted firm within the industry, and they ultimately have an added value for their commodity. So they are adding value to their modules by actually being open with their information and by showing that they are continually looking at quality assurance and quality control.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: Clients and Value Sets (2:15)

Clients and Value Sets
Click for a transcript of Clients and Value Sets Video

So ultimately clients, people who are interested in buying photovoltaics or having photovoltaics installed on their home, or if they were an institution, on their buildings, or nearby their buildings in a field, they all collectively as a question of where do I buy my photovoltaics from and do I have a choice of where I buy my photovoltaics from? So, part of the answer is in kind of the value set that you as a client have established. So, are you looking to invest in a technology that is sourced or is manufactured in some way tied to your local country? If so, then you are already putting constraints on the number of modules you can select from. Now what this might mean is that that will increase the cost of your choices because if we are in the United States say, we have several first tier photovolatic manufacturing companies that will have a higher unit cost for their technologies. They'll still be competitive but they will be higher and that means that we won't have as many selections in lower cost for performance modules. Now if in your decision-making criteria you really are looking at the lowest cost for a high performing module, or for a moderately high performing module, but let's preface that by saying you don't have a country of origin requirement, you've really opened up to the entire global market and you are likely going to be accessing both first tier and second tier photovoltaic manufacturing companies and you have a much wider selection. Now in that case, you're probably going to have a faster financial return on investment by selecting a lower dollar per watt module.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: So, Where Should I Buy My PV? (2:14)

So, Where Should I Buy My PV?
Click for a transcript of So, Where Should I Buy My PV Video

So in a broader context, some of us are thinking, where are we buying our modules from? Why would we care where our modules are coming from one place versus another place? We have definite interests when we're talking about technology, when we're talking about energy to associate those things with jobs, to associate those things with the kind of quality of the economy around us. And so oftentimes we have collective interests in going out and looking to purchase technologies that are going to positively influence the community around us, or maybe even the country around us, and so you would have a strategy to potentially want to buy american-made solar panels. Or you'd definitely have the interest in having your panels istalled by, say, a local installer, somebody who's, you know your purchasing power will go to your surrounding economy. The majority of solar panels made today though are manufactured and are assembled, are manufactured in areas outside the United States, and there's a large percentage of them that come from China. And so there's a definite debate within the solar community about where we should buy our panels and what is our obligation as, say an American culture, to look into investing in american-made panels or panels that are coming from American companies. So there's this discussion that's emerged and we have to think about the stakeholders, the different people responsible for the chain of development of manufacturing, to sales, to installers, to ultimately installations in different clients' residences and commerical buildings. The people who have the most ability to make those decisions are going to be the installers, but they will be strongly influenced by the demands or the requests of the clients.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: Solar Clip 3 (00:45)

Solar Clip 3
Click for a transcript of Solar Clip 3 Video

You have a cultural obligation to want to support the economy of your country. I think that we all ask that question whether or not we, when we have the decision, should we buy technologies that are closely tied to our country? Or when do we take an alternative and buy technolgoies from outside of our country, but that ultimately would say be financially a lower cost solution to buy outside the country versus a higher cost potentially solution buying inside the country? That's a decision that we need to weigh out in the buying process.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: Solar Clip 4 (00:36)

Solar Clip 4
Click for a transcript of Solar Clip 4 Video

So at this point we don't have a lot of choices of where solar panels are manufactured. They tend to be, there's a large percentage of solar panels that are assembled and then ultimately manufactured and sold through Asia. And there are markets for manufacturing in Europe, and there are markets in the United States. These markets have, in recent years, seen downturns because of the success of large inexpensive markets in Asia.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0

Video: Installation is a Local, that is not an Outsourceable Service (00:46)

Installation is a Local, that is not an Outsourceable Service.
Click for a transcript of Installation is a Local, that is not an Outsourceable Service

One of the things that is really interesting about solar energy as a system, as a supply chain, is that the installation of your solar panels are done locally. And you can't outsource the installation of solar panels. So you really have an active energy system that has to be done locally and it's local in everyone's backyard. So there's this really exciting development happening for the world of photovoltaic installers, solar hot water installers, that they have great opportunities, stable jobs, that can't be outsourced. And so it's a really interesting new development in the field of energy because of that.

Credit:  J. Brownson © Penn State University is licensed under CC BY-NC-SA 4.0