By Mark Cerasuolo
Grid-interactive PV systems give users more choices and greater flexibility, while increasing the level of reliability in deployments. While the development of interactive systems offers significant benefits, they are not so different from the grid-tied systems with which integrators are familiar. Those similarities, combined with comparable payback expectations and greatly increased utility, should speed grid-interactive adoption levels in the market.
Four Core Benefits Grid-Tied and Grid-Interactive Systems Share
In comparing how different grid-tied and grid-interactive systems are, it makes sense to first take a close look at what both have in common. Both types of systems deliver four core benefits:
1. Financial savings: Both grid-tied and grid-interactive systems save users money on utility bills and take advantage of net metering (running the meter backward), of which some version is offered in almost every state. During times of strong sunlight and relatively light load demand, net metering makes solar power systems especially attractive financially, as surplus power can be sold back to the utility.
In Washington, where there is limited sunlight and relatively cheap electricity, net metering might save a home or small business between US$1,500 and US$2,500 each year (according to solar installers), and the state has a US$5,000 annual cap. In states such as California that have higher electricity costs and more sunlight, the savings can be significantly greater.
2. Production credits: Both grid-interactive and grid-tied systems make their owners money by qualifying them for production credits. Washington, for example, pays .54 cents per kWh for producing electricity, even when the system owner consumes that electricity, as long as the main system components (panels, inverters, controllers, etc.) are made in that state. Production credits vary by state and also by local utility, but they are a large contributor to the eventual payback for a renewable energy system.
3. Greener lifestyle: Solar power is the most accessible path toward greener living beyond the low-hanging fruit of higher-efficiency lighting and improved weather sealing. Unlike wind turbines and micro-hydro installations, solar does not require prevailing breezes or a running stream on the owner’s property─sunlight is ubiquitous. And unlike those sources, solar power has zero impact on the environment as a solid-state, low-impact energy source with no moving parts. Solar is the most widely-deployable form of renewable energy.
4. Improved home resale value and marketability: According to a recent Forbes article, solar energy system owners can recoup up to 97% of their investment at resale, which is much higher than other home upgrades and amenities. Note that this is in addition to the money owners save by reducing their energy bills and net metering. Equally important, a U.S. Department of Energy study recently found that homes equipped with solar energy systems sell twice as fast, even in depressed housing markets. A study in Southern California by the National Renewable Energy Laboratory found that solar-equipped new homes increased in value at a faster rate than non-equipped comparable homes. For homeowners who want to remain mobile, grid-tied and grid-interactive systems are both attractive investments.
The Differences between Grid-Tied and Grid-Interactive Power
The main difference between the two system options is not what happens when the local power grid is operating normally, but what happens when the power is out or fluctuating. Blackouts and potentially damaging brownouts are becoming more frequent in many parts of the country, and so-called ‘storms of the century’ are now making seasonal headlines. Last year’s news cycle started with a tsunami in Japan and progressed to record storms on the Eastern Seaboard of the United States. This year is leading off with record tornado activity in some regions.
These conditions should be of great concern to those who operate grid-tied systems, which are incapable of delivering power during blackouts and emergencies. There are two reasons why grid-tied systems cannot help during these events. First, they must disconnect per national and international industry safety standards for both safety reasons (utility workers restoring power could be exposed to potentially lethal ‘backfeed’ AC if the system remained connected). Second, the power fluctuations in solar panel-generated energy caused by cloud shadows, wind, trees and natural light variation make it impossible to use this non-grid augmented raw power to power anything in the home or office directly from the panels.
In contrast, grid-interactive PV systems with their bi-directional energy transfer capability can tie into the local energy utility when it benefits users and opt out when it does not. When the user wants to lower his energy costs and consumption, he can rely primarily on renewable energy sources, turning to the grid only when needed to augment their clean self-produced power or charge an energy storage system. In this way, grid-interaction lets consumer and commercial users get highly reliable, cost-conscious energy while staying environmentally aware and responsible.
This is where the grid-interactive system takes a clear lead. For an incremental extra investment during installation, a home or business can get the best of both worlds: greener living plus real savings when the grid is up, and reliable back-up power when the grid is down or compromised.
The difference is not so much in the costliest part of the solar energy system the panels on the roof but in the balance-of-system components that convert solar-generated electricity into something a home or business can use to operate.
The Grid-Interactive Inverter
Regardless of the design, all renewable and solar energy systems are built around an inverter, which is a device that converts the DC power generated by solar panels (or by a wind or hydro turbine) into the AC power that appliances, electronics and other everyday items need to operate. In a grid-interactive system, that inverter is a much smarter, more agile device, capable of doing three things as opposed to the one-trick grid-tied inverter:
1. Like a grid-tied inverter, a grid-interactive type can convert solar-generated DC power to AC power.
2. It can also function as a battery charger and store energy in a battery system designed for residential and commercial applications.
3. It can convert battery-produced DC during an outage into useable AC power and charge those batteries during the day from the panels or a generator. It can even turn a generator on as needed. Having battery-back up taking care of power needs in the evening means the generator’s run time and fuel consumption can be greatly reduced during an outage.
The benefit is obvious─an investment in a grid-interactive system built around a smarter inverter and back-up batteries for energy storage results in a second system for clean, reliable back-up power during outages. Grid-interactive inverters accomplish this through advanced circuitry such as transfer switching for true bi-directional operation, and communications networking capability.
Grid-Interactive Component Design and Cost
The better grid-interactive components are based on their off-grid design counterparts, which are used in applications where solar, wind and hydro may be the only source of power other than a generator. Because these include everything from field hospitals to Arctic research stations and military outposts, the reliability and quality of grid-interactive inverters and components based on off-grid technology is usually superior and ideal for premium commercial and residential use.
While grid-interactive design effectively delivers twice the system, it doesn’t cost twice as much. In fact, the cost differential between grid-tied and grid-interactive inverters starts at 15% with essential back-up capability (usually furnace, some lighting, refrigerator, TV and Internet/PC). Larger homes and businesses may want to invest in greater back-up capacity, and that’s another advantage of grid-interactive design topology; it’s much more amenable to a building-block approach and adding additional inverter and storage capability.
Here’s an example using a typical residential system specified and designed for Washington use and consisting of 18 solar panels. A completely installed system using grid-tied technology would run just under US$27,000 before any tax and purchasing incentives (which are considerable). That same installation using smarter grid-interactive technology and a higher-capacity 48 V energy storage system could be achieved for just under US$31,000─less than 15% higher. Assuming an eight-year payback period factoring in all federal, state and utility incentives, that difference comes out to just US$500 per year. For context, that is exactly the average benefit limit of an average homeowners’ insurance policy for a freezer full of food lost during a power outage, not to mention the cost of disruption to a home or small office environment, which can be eliminated with grid-interactive technology. As solar energy production goes mainstream, the availability of pre-assembled systems, such as grid-interactive inverters, will become more prevalent and make it even more attractive.
Making the Right Renewable Energy Decision
Whether they were tied to the grid or completely free of it, most energy consumers have suffered the effects of power outages. To lose a refrigerator full of groceries or lose a day of productivity when the business goes dark is a frustrating experience that sparks conversation about better options.
Adding further to grid-tied power frustrations, developing countries often only have access to the traditional power grid for part of the day. A grid-interactive option delivers continuous access to electricity with additional compatible and connectable sources, often for a minimal price increase. Users don’t want to increase coal, nuclear or other controversial forms of power generation to meet their needs. The demand focuses on reliability and renewability. By creating ongoing cost savings while reducing the carbon footprint, grid-interactive systems meet those needs.
The difference between grid-interactive and grid-tied inverters boils down to a decision everyone considering an investment in a renewable energy system faces. Either system will get it half right and save money when things are normal. Investing an extra 10 to 20% up-front in grid-interactive technology gets owners twice the system and reliability. That cost difference is negligible over the system’s payback period, especially in commercial applications that take full advantage of solar power’s accelerated depreciation benefit.
Today, users in grid-accessible areas can commit themselves to a renewable energy future without taking the extreme step of moving to off-grid power consumption or making the concessions that come with grid-tied systems. The option of grid interactivity lets businesses and consumers reap the financial and environmental benefits of the cleaner, solar, wind or hydro power when conditions are favorable, while keeping the option open of going to the grid when necessary and most important, having a Plan B option when the grid is down. The outcome: greater energy reliability, lower bills, smaller carbon footprints and happier end users.
Mark Cerasuolo manages marketing at OutBack Power (www.outbackpower.com), a designer and manufacturer of balance-of-system components for renewable and other energy applications. Previously, he held senior marketing roles at Leviton Manufacturing, Harman International and Bose Corporation, and was active in the Consumer Electronics Association (CEA).
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