Chapter 11

Question 1

distributed generation

Answer 1

DER systems are
Distributed energy, also district or decentralized energy is generated or stored by a variety of small, grid-connected devices referred to as distributed energy resources

decentralized, modular and more flexible technologies, that are located close to the load they serve, albeit having capacities of only 10 megawatts (MW) or less.

Question 2

inverter

Answer 2

device that converts direct current into alternating current

there are some losses in the conversion process

Question 3

solar constant

Answer 3

amount of sun hitting any perpendicular surface over time

this is always the same

Question 4

insolation

Answer 4

how much sun is available for capture at any point on the surface of the planet.

depends on: where? (insolation higher/more consistent near the equator. how much dust/moisture in atmosphere?) when? how certain? (weather conditions, clouds, pollution)

Question 5

balance of system

Answer 5

encompasses all components of a PV system other than the PV panels. This includes: mounting, racking, wires, inverter and power management, and labor and inspection

Question 6

trackers

Answer 6

move the PV module so that the panels are more perpendicular to the incoming solar radiation. usually only used for ground-mount systems

(single-axis vs. two-axis tracking)

Question 7

soft costs

Answer 7

project developers will often charge a developer margin over and above the cost to components to compensate these costs and provide profit incentive for their efforts. soft costs:
customer acquisition costs
design and approvals
financing
monitoring and billing

Question 8

third party ownership

Answer 8

an alternative to install and sell systems to customers

allows for the PV customer to purchase the electricity that comes out of the system, and requires the system integrator to construct, monitor, and maintain, and finance assets on the customer’s behalf

minimizes risk and maximizes value created from system installation

Question 9

interconnection

Answer 9

to the gird. there are interconnection rules to make sure that DG systems are connected safely.

Question 10

net metering

Answer 10

once the DER system is connected, NET METERING counts the net kilowatt hours that flow into the house and charge the customer for JUST that amount. any surplus generation from the DG system can be used by the brid

Question 11

demand charge

Answer 11

the grid has to be prepared to provide adequate power at any given time to all customers — this creates capacity requirement for which the grid must contract (must accommodate for peak times)

customers are charged a fixed demand charged based on their highest historical power requirements = DEMAND CHARGE.

when DG can reduce peak power requirements, this = benefit

Question 12

investment tax credit

Answer 12

incentive mechanism for DG

similar to an issuance of monetizable tax credits, offered by US govt and some states

30 percent federal tax credit for solar systems on residential and commercial properties

Question 13

feed-in tariff

Answer 13

provides customers a preferential payment for the kwh they feed into the grid with their DG system.

customers then purchase their electricity consumption on a gross basis, as if they had no PV system

Question 14

renewable portfolio standard

Answer 14

require utilities within a jurisdiction to procure a certain % of their supply from renewable sources

usu. do this through a forward contract procurement process that allows generators to get paid a competitive rate based on their cost structure

Question 15

solar carve-out

Answer 15

For RPSs: portions of the RPS that have to be met with solar energy, also Solar RECs or SRECs

For RPSs – if utilities build renewable generators directly (or purchase from other generators in the market), utilities have to produce a Renewable Energy Certificate - to show how much energy they produced to meet the RPS. REC can be traded through formal exchanges

Question 16

experience curve

Answer 16

the more times an operation is performed, the more efficiently it is executed. can apply to individuals as well as whole industries.

aggregate learning/experience in industries benefits the whole industry as new methods are developed.

EC = analytic tool to understand the march of production and process innovation across many firms.

Y axis = observed market price or cost data for a product
X axis = cumulative volume that has been produced for that product by all manufactures

the slope of the EC tends t be relatively stable over long periods of time

Question 17

learning rate

Answer 17

the %age drop in the cost to produce the technology for each doubling of cumulative production.

dictated by the nature of the technology.

higher learning rate (and lower progress ratio) = steeper experience curve (or, a technology that is more susceptible to cost reductions from scale)

Question 18

progress ratio

Answer 18

Progress Ratio = 1 - learning rate.

higher learning rate (and lower progress ratio) = steeper experience curve (or, a technology that is more susceptible to cost reductions from scale)

Question 19

economies of scale

Answer 19

cost advantages that a firm can obtain by producing more or larger units of its output

a proportionate saving in costs gained by an increased level of production

Question 20

market shakeout

Answer 20

non-linear change in experience curve. happens when “price umbrella” closes — supply catches up to demand and a shakeout occurs until margins are normalized and the price returns to the normal experience curve trajectory

consolidation of an industry or sector, in which businesses are eliminated or acquired through competition

Question 21

price umbrella

Answer 21

for a short period of time, demand can outpace supply. this tends to bid up the market price of the device (even as the underlying cost to manufacture it falls through experience curve effects). — price umbrella happens this persists – when margins for producers expand (for a period of time until shakeout occurs)

Question 22

grid parity

Answer 22

parity = the point at which a technology becomes competitive with the current competitive solution for a particular customer need in a market

grid parity = the point at which distributed PV falls to the same level of cost as grid electricity

Question 23

early adopters

Answer 23

not every potential user has the same reserve price (or next best alternative). some adopters may find immediate economic benefit in smaller/more niche application. May find benefit like novelty or pollution reduction valuable. early adopters help to buy down the cost and scale of production until other customers find it economic to buy as well

Question 24

sustaining technology

Answer 24

in situation where the emerging technology is absorbed into the existing infrastructure and its deployment is limited by the existing deployment architecture, the new technology = sustaining technology

such innovations may help to improve or optimize the incumbent business model and its economics, but do NOT fundamentally change the system architecture

Question 25

disruptive technology

Answer 25

when emerging technologies can bypass the limiting features of the incumbent delivery architecture and offer WHOLLY NEW and cost-effective solutions to the incumbent’s customers.

cause substantial change to a system’s overall performance and character