El Paso Behind in Solar PV, but Picking Up the Pace

Research Suggests 'Sun City' has Untapped Potential

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Posted: Wednesday, September 28, 2016 4:48 pm

If there’s one thing El Paso, Texas has plenty of, it’s sunshine. So, it would stand to reason that this west Texas border town known as the “Sun City” would possess a booming solar energy market. But, as research at the University of Texas has discovered, that has not been the case in El Paso.

This article examines the evolution of solar photovoltaics (SPV) in the El Paso area. It highlights the milestone events associated with national and state policy decisions that affected the region’s adoption of solar power, and the role the El Paso Electric Company has played in the development of this technology.

According to the Solar Energy Industries Association, the U.S. installed 7,260MW-dc of SPV in 2015, the largest annual total ever and 16 percent above 2014. In Texas, 207MW of solar electric capacity was installed in 2015, ranking the state 9th nationally. In the first two quarters of 2016, the state ranks 15th. For a “Sun Belt” state that ranks second in both population and total area, that ranking is not so great.

A Slow Start

Solar photovoltaics in the El Paso area have seen a slow, discontinuous and disquieting start. Even though alternate energy presented itself in this area early in its development as compared to its national presence, solar energy development in El Paso has not kept up. Due to the low cost of traditional supply of electricity, regulatory policy in Texas, and its geographical location, solar photovoltaic systems in El Paso have trailed far behind other areas even in Texas.

Silicon photovoltaic appeared in the United States in 1954 when engineers at Bell Telephone Laboratories developed the first solar cell with an initial efficiency of 11 percent.

Coincidentally, the concentration of strong interest in formulating public guidance began in the early years of the 21st century for both Texas and the nation, in the form of white papers, policy and regulations for renewable energy generating systems. Although nationally the electric industry restructuring had been under way since 1997 and had allowed interconnection of small renewable energy systems onto the electric grid, this was not the case for Texas. The functional implementation of consistent, statewide net metering was not a reality in Texas. The state experienced, in part due to the lack of regulatory structure, dissimilar offerings to consumers of electricity by the electric service providers involving interconnections. The Texas RE-Connect Project, a voluntary collaborative initiative, sought to remedy this situation. It started work in October, 2003 and culminated with its Final Report and white paper in April 2005.

Texas Re-Connect consisted of utilities in Texas, renewable energy companies and other related stakeholders. It worked to gather, document and share information on how consumer requests for interconnects with net metering on small (less than 10kW) renewable energy projects could be handled in a state-wide consistent manner.

On a national level, in 2005 the Federal Energy Regulatory Commission amended regulations with its final rule under the Federal Power Act concerning interconnection procedures affecting generators with less than 20MW. This action applied to public utilities that owned, controlled, or operated facilities in interstate commerce transmitting electricity, and reduced interconnection time and costs to interconnection customers of all sizes, including residential solar. These regulations defined the development of technological advancements that provided alternate energy opportunities to the electric industry. The industry in turn could supplement the traditional vertically integrated power generators with renewable sources.

Despite having the regulatory latitude to implement solar power, the high demand for renewable energy, and the fact that El Paso’s solar irradiance is rated in the top 10-15 percent in the nation, this resource in Texas has largely gone unattended. Perhaps understandably, due to the abundance of oil in Texas, developers of Texan energy policy have placed more emphasis on the use of fossil fuels rather than solar energy. Also relevant is the fact that historically, most of Texas has typically not required supplemental heating and cooling for eight or nine months out of the year, which has resulted in a lower demand for all sources of energy compared to other regions of the U.S.

In mid-October, 2011, El Paso’s current U.S. representative, the city’s mayor and sustainability manager ascended to the roof of the city’s public library to inspect the new, federally funded solar panel system. At a cost of $92,000, the new system was estimated to generate approximately three percent of the power used by the library. The system was financed as part of the Energy Efficiency and Conservation Block Grant program made possible by the American Recovery and Reinvestment Act of 2009. This installation was part of a $5.8 million grant for city projects that would reduce electrical consumption in city buildings.

This project was one of a scant few SPV systems introduced to the El Paso area since the 1980’s but, as will be discussed later, powerful negative disincentives have been at play.

How Residential Solar Photovoltaic Systems Work

In simple terms, SPV systems capture the irradiance, or insolation, of the sun to produce electricity in the form of direct current (DC). DC is then converted to alternating current (AC) through the use of an inverter, as most electrical appliances require AC. The electricity generated by the SPV is metered and made available for use in the home. Should additional current be needed over the amount generated by the SPV, connection to the grid makes that possible. Excess electricity produced by the solar system may be directed to the power grid, essentially causing the meter to run backwards, crediting the home owner.

To achieve an optimum capture of solar irradiation, the location and placement of the panels on the roof is of prime importance. The direction and angle of the panels, the exposure to solar rays are all important considerations with respect to the efficiency of the system. Furthermore, the connection to the grid requires that the electricity generated by the SPV system be a quality comparable to that of the grid. Normally, approved solar installers are required to ensure the quality of the installation.

Selecting the correct overall size needed for the home is an important factor when choosing to utilize an alternate energy system. The financial analysis involved in the projected use of the system is just as important in the decision making process. Depending on the geographical location, the local market and the respective state regulatory requirements for SPV systems, there are several options that could be available for financing with possible tax credits. The selection of the financing alternatives employed for acquisition of the system could include any number of alternatives such as direct outright purchase, leasing arrangements where either the home owner or the installer owns the system, or other alternatives with variations regarding the receipt of tax credits. In many areas, tax credits and other incentives can lower the cost of the investment, and as the technology steadily improves and becomes less expensive, these systems become even more cost effective.

The benefits of a SPV system include the presence of an alternate source of energy that can be dedicated to a single electrical application or made available for general use in electrical consumption of the home. With careful planning, an SPV system could serve as a safety measure in the event of a blackout to run critical electrical appliances or electrical draws needed for health reasons. It is an investment whose payback might be lengthy but ultimately could also be a hedge against rising electrical costs. This investment qualifies as an improvement on the house, which can increase its value.

El Paso Electric Company’s Role in Solar

The El Paso Electric Company (EPE) has played a major role in the growth rate of SPV in the El Paso area. Founded in 1901, EPE provides services on all three sectors of the electric power grid: generation, transmission and distribution. The generation of electricity by EPE, however, did not begin until mid-1920. The area served by EPE has steadily grown, and now covers west Texas and parts of southern New Mexico. In recent years, EPE has utilized energy sources derived from solar, wind, natural gas, coal and nuclear power. EPE’s customer base includes residential, commercial, industrial and public institutions.

November of 2003 saw the first residential interconnected photovoltaics noted to occur in the service area of EPE. Following that small 2.5kW system, nearly four years would pass before the second residential system was installed. And up until May 2010, when EPE and the city of El Paso had jointly begun to incentivize residential solar with rebates, only 10 residential systems totaling 30kW had been installed in the Texas service area of the utility. Following this initial financial boost by EPE under agreement with the city of El Paso to create new job markets, photovoltaics became more economically feasible for some early adopters in El Paso, adding another 51 SPV systems and 225kW by May of 2011.

Still, El Paso had to wait until April 10, 2013 before the 203rd residential SPV system, a small 2.45kW, pushed the distributed residential solar total over the 1MW milestone. Since that time non-governmental residential solar has grown to a total of 795 systems comprising 3.6MW as of September 2015 in the El Paso region of west Texas.

In their largest project involving solar, EPE joined with Newman Solar LLC, owned by juni solar Inc., for the construction of a 10MW solar photovoltaic plant in 2014 . The solar facility was located near EPE’s Newman Plant in northeast El Paso, and came online in February 2015. The 100-acre plant serves approximately 3,800 homes with energy secured by a 30-year Power Purchased Agreement (PPA). EPE stated in 2014 that solar energy would comprise 5 percent of its generating capacity at the time.

EPE’s Chief Executive Officer Tom Shockley has stated the utility’s position on solar energy: “Our commitment to building a portfolio that includes renewable energy technologies in order to complement our local, clean burning natural gas units help make overall power in our region dependable, safe and cleaner. We continue to look for opportunities to add cost effective solar energy such as the Newman Solar project, which in the long run helps reduce emissions and provide cleaner air. EPE is at the forefront in the solar energy industry, which is fitting given our location and abundance of the solar resources. We continue to look for the most cost-effective and reliable resources for our customers, which today is led by natural gas resources that support and enable us to expand our solar portfolio,” Shockley said.

Another solar venture included the El Paso Solar Photovoltaic Pilot Program offered by EPE. It began offering residential and commercial solar incentives in late April 2010. EPE, through the use of approved independent contractors, implemented the program and facilitated the installation of solar PV systems. Customers were required to use only those entities that were registered providers and considered to be in good standing with the Texas program. Once a system configuration had been developed and an agreement arrived at by the customer and the service provider, a prescribed list of steps had to be followed for construction of the system. The customer, the solar provider and the EPE program manager followed the protocol, which contained permitting, construction, and final inspection, leading to final approval.

Between 2010 and 2015, the program averaged more than 60 projects (480kW-dc) per year at a cost of approximately $548,000 per year. The average incentive was $1.31 per watt. Exclusive of customer sited solar photovoltaics, as of late 2015, a total of 107.8MW of solar generated power (peak capacity) was located at eight different sites near El Paso and available on the grid with connectivity to EPE. Of that total, only 10.79MW are in Texas and in or near El Paso city limits, with the remainder being located in New Mexico.

One of the El Paso sites is the Wrangler Solar Facility (48kW), which utilizes mirrors in the Concentrated Photovoltaic (CPV) in its configuration with small, multi-junction cells that are more efficient than conventional crystalline solar panels. The solar rays are said to be concentrated at 650 times the existing concentration while the dual-axis tracking mechanism follows the sun. The solar farm is comprised of 168 panels arranged in 6 arrays with 3,360 multi-junction cells.

Future Outlook on Solar in the El Paso Area

Even with the slow start that SPV installations have had in the El Paso area, indications are that they will improve, even if slowly. Figure 1 shows that solar installations over the recent years in Texas are increasing at an exponential rate. The climb in the number of installations is a reflection of how improvements in technology and decreased cost of solar systems can influence markets. In fact, the Solar Energy Industries Association in its recent quarterly report stated, “we expect emerging state markets such as Utah and Texas – both of which will be 50+ MW residential markets in 2016 – to begin to compensate for slowing growth” in other states.

Even though this trend depicts a boom in solar installations, Figure 2 shows that the greater majority of activity is located in east Texas around Austin, San Antonio, Houston and Dallas. West Texas (El Paso) does not share the same intensity of installations as the rest of the state.

More recent SPV installation activities in El Paso show a more aggressive pattern of growth. Residential solar installations are being offered by home builders and EPE has filed a petition to the Public Utility Commission of Texas (PUCT) for a special class in which to bill residential customers with solar installations. EPE claims the cost of service for those customers is higher than a regular residential customer. While this development might not be good for solar customers, it is an indication that EPE is positioning itself to assure revenues in a future with greater numbers of SPV customers. It would appear that it is only a matter of time before SPV takes a stronger presence in the Sun City.

Lead author Luis G. Perez is sustainability coordinator at the Center for Environmental Resource Management at the University of Texas at El Paso.

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