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Solar Energy Faces an Economic Test at Moscone Center by Tom Standing San Francisco Chronicle - September 17, 2002

Responding to voters' overwhelming approval of solar energy propositions last year, San Francisco is developing a plan to generate electricity from sunlight. The city will construct a solar-electric system this fall at the Moscone Convention Center.

Other solar projects are planned for San Francisco reservoirs, the port and San Francisco International Airport. The strategy is to develop diverse, nonpolluting generating facilities so that old power plants at Hunters Point and in the Potrero can be decommissioned. Solar energy could provide 50 megawatts of peak-period generation, according San Francisco's Electricity Resource Plan, published in March.

Analysis shows, however, that energy from the sun is so dispersed that vast arrays of solar collectors will generate only negligible amounts of electricity. Furthermore, solar systems can generate only enough electricity to amortize half of the capital investment during their expected lifetime.

The solar system at Moscone will have about 80,000 square feet of collectors, 50 percent bigger than a football field, capable of generating a maximum of 740 kilowatts at noon on a cloudless midsummer day. Under the summer sun at 10 a.m. and 2 p.m., generation is about 75 percent of maximum, but 50 percent at 8 a.m. or 4 p.m. But peak solar generation at noon does not match peak electricity demand, which occurs about 4 p.m. in the summer. (At midday in winter with cloudy skies, the system would generate only 20 percent to 30 percent of capacity.)

With peak power output at Moscone about 740 kilowatts, it would take 68 Moscone-sized systems to reach the 50-megawatt goal. That much solar collection would cover 100 football fields. Combined power output from all such solar systems, however, would generate 50 megawatts only during the noon hour on sunny summer days. Thus on warm summer days, when electricity reserves are thinnest, San Francisco's 50 megawatts of solar systems would generate only 25 megawatts at the time of peak power consumption. That is less than 3 percent of San Francisco's peak power consumption of 900 megawatts.

Is constructing 100 football fields full of solar collectors to produce 3 percent of the city's peak power demand a wise strategy? Check the costs: Based on unit costs of a system that was built in Palo Alto in 2001, the Moscone solar system will cost roughly $4 million. Can that be paid back through the electricity generated during the 20-year life of the system? Let us assign a value for electricity at 14 cents per kilowatt-hour, then calculate how much energy the system will generate, then compare the value of the electricity generated annually with the annual costs for retiring the $4 million debt.

Ignoring maintenance, the only costs would be payments on the $4 million plus interest (say 5 percent). Over 20 years, annual payments work out to be $321,000.

On the revenue side, we use San Francisco's average solar radiation given in kilowatt-hours per square foot per day for each month. Figuring the monthly solar radiation by 80,000 square feet of collectors, the number of days each month, 10 percent conversion of radiant energy to electricity (the most cost- effective conversion factor for solar panels), and 14 cents/kilowatt-hour, gives monthly revenue ranging from $6,600 in December to $24,000 in July. Annual revenue adds up to $184,000, or 57 percent of the annual payments. The calculation does not include degradation of the solar collectors, inevitable during 20 years of operation.

Unless the Moscone solar system costs less than 57 percent of $4 million, solar power will not be cost-effective. Even if exceptionally favorable financing keeps capital investment down, one must ask: How many decades will it take to build enough solar systems to cover 100 football fields, only to generate 3 percent of San Francisco's peak power demand?

(bluefish notes: assuming 28 cents per kilowatt hour doubles the payback)