Integrating Solar Electric Systems into Roofing Design

Using Building Integrated Photovoltaic (BIPV) Electrical Systems to reduce energy costs and contribute to a carbon neutral building design
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Sponsored by Johns Manville Corporation
Peter J. Arsenault, AIA, NCARB, LEED-AP with Brad Burdic, AIA

Economic and Cost Considerations of BIPV

Every BIPV system will involve a discussion of the cost or initial investment as well as the economic returns on that investment from the system. The initial cost of the system will depend directly on the design choices and decisions discussed above such as the size of the system and the amount of kW you expect to generate in a year, measured in kilowatt hours (kWh). The overall economic outcome will be based on other factors like local electricity rates and available rebates or tax credits. Clearly, the discussion will look at not only the first costs, but also the long term or "life cycle" costs of the entire installation. Outlined below is a typical process to help work through such a cost and benefit analysis with a description of each step.

1.) Initial BIPV Investment: Like all good building projects, the basic costs of BIPV installation need to be identified. Reviewing the different material and installation options and different manufacturing systems will help inform the choice of which system is best suited for a particular project and identify the related cost impacts. These are then offset by other opportunities to make the total investment more appealing.

  • Material costs: (add) The choice of crystalline or thin film materials, the size of the overall array, and the design of the balance of system will all have the biggest impacts here.
  • Labor costs: (add) BIPV systems and components may be installed by a variety of trades depending on their design and how they are integrated into the building. Certainly there will be electricians needed, but some components may be installed by roofers, glazers, or others with coordination of other trades.
  • General Conditions: (add) In certain instances there may be additional permits or fees applicable to BIPV systems or some lift equipment which needs to be accounted for.
  • Offset costs: (deduct) There may be tangible material and labor offsets to take into account when estimating the impact on a total building cost. For example there may well be materials that are no longer needed such as roofing ballast or certain exterior finish materials that should be factored out of other building cost estimate line items.
  • Federal, State, or Local Tax Credits: (deducts) There are a variety of tax credits available to building owners that install solar electric systems. These may apply to personal income tax, corporate income tax, sales tax, or property tax. Some are able to be taken up front against the cost of the system and some may be taken over the life of the system. The Database of State Incentives for Renewable Energy (www.dsireusa.org) operated by North Carolina State University tracks the tax credits available in all 50 states.
  • Utility Company Rebates or other incentives: (deducts) Some utilities and some state programs encourage the use of PV systems through special rebate or other incentive programs that are usually paid out over some number of years. The value of these can be significant and can reduce the system cost notably. DSIRE also tracks this information on their website.
  • System leasing: (win - win) An emerging trend is appearing that allows a building owner to take advantage of the benefits of a PV system without incurring any of the first costs. Rather, a third party company will purchase and install the system in exchange for a long term lease arrangement. That lease could provide electrical power to the building owner for a pre-established rate or it could simply provide lease payments back to the owner allowing the third party to sell all of the electricity to the utility grid. This approach may or may not be appropriate to a given project, but if available it is worth analyzing.

1.) Initial BIPV Investment

+

Material Costs

+

Labor Costs

+

General Condition costs (equipment, permits, insurance, etc.)

-

Material and labor offset costs (materials replaced by PV)

-

Federal Tax Credits

-

State or Local Tax Credits (over time in some cases)

-

Utility Rebate or Other Incentives (usually over time)

-

Leasing Alternative

=

Net Investment

2.) BIPV Electricity Savings and Sale: Let's begin by looking at the first year savings before we consider the return on investment and long term savings. Once the PV system is installed and running, the electricity that it produces is free of any fuel or significant operating costs. That means the building owner or tenant will immediately start to reap a return on the initial investment through lower utility bills. If the owner chooses to take advantage of "net metering" then the utility company may actually pay the PV owner for any excess electricity that is supplied to the power grid. This excess is tracked through the electric meter and the owner pays only for the "net" difference between electricity purchased from the grid and electricity sold back to the grid.

  • Average daily energy used: The PV system will be capable of producing a definable amount of electricity. The relevant information here is the amount of energy that will actually be used from the system based on anticipated load profiles and demands throughout the normal operation of the building. While that amount may vary during the year, an average daily figure can be determined. Defining the energy in units of hours at1000 watts or Kilowatt hours (kWh) is most typical.
  • Purchased electricity rate: This is simply the full cost of purchasing electricity from the local utility. To be fair, the rate should include the cost of supply and delivery as well as all surcharges and taxes for a full expression of total cost per kWh. ($/kWh).
  • Energy Cost Savings: Multiplying the average daily PV energy used times the purchased electricity rate (kWh X $/kWh) determines the average daily energy cost savings. Multiplying that amount times 365 days/year will show the anticipated first year annual energy cost savings.
  • Excess energy: Anticipating that there will be times of the day when the PV system is producing more energy than the building needs to use, a certain amount of excess electrical energy can be calculated to be available either in watts or kWh units.
  • Sale or credit rate: The utility company will offer a standard rate to apply to the purchase of the excess electricity available. This rate is likely different (i.e. lower) than the full purchased rate since the utility company is only paying for the energy supply, not the delivery. Often the transaction is accounted for in the owner's monthly utility bill as a credit against purchased energy rather than a cash transaction.
  • Net metering value: Multiplying the anticipated excess kilowatt hours (kWh) times the sale or credit rate yields the value of the net metering electricity in the first year.
  • Total Return: The total annual value of the electricity from the BIPV can be determined by adding the energy cost savings value and the net metering value together.

2.) BIPV Electricity Savings and Credits

Daily average energy (kWh) used from the PV system

x

Current purchased Electricity Rate ($/kWh)

=

A) Daily Energy Cost Savings

x

365 days per year

=

B) Annual Energy Cost Savings

+

Yearly Excess PV Energy Produced (kWh) and returned to the utility grid

x

credit applied from utility ($/kWh)

=

C) First year Annual Value from Net Metering

Total First Year Annual Return B) + C)

 

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Originally published in November 2009

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