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Wyandot Solar Power Array

March 30, 2013

In July 2010 the Wyandot solar power array in Wyandot County, Salem Township, OH, was opened by Public Services Enterprise Group (PSEG) of Newark, NJ. It sells power to AEP in Ohio, as part of a power purchase agreement that helps AEP meet the mandates for “renewable” energy generation required by Ohio SB 221 enacted in 2008.

The Toledo Blade presented an article regarding the Wyandot array on July 31, 2012 entitled “Power farm welcomes hot sun”. In addition some other information can be found directly from AEP in a presentation regarding their plans to respond to Ohio SB 221. An excerpt from this presentation is attached here:

AEP Wyandot.

QUESTIONS AND COMMENTS:

From the Toledo Blade article:

“The $44 million farm can produce power for about 9,000 homes on a sunny day and consists mainly of solar panels that were produced at First Solar Inc.’s Perrysburg facility. PSEG does not release specific output figures and would not give a detailed account of how much energy has been produced this year.”

How much electricity can the solar array produce at night or throughout cloudy cold days?

The tax payers and electricity using residents of Ohio are paying for this array and the electricity it produces. Why can we not find out how much electricity this solar array actually provides?

“American Electric Power Co. Inc. has a contract with PSEG to purchase power produced at the solar farm. The extra energy produced this summer has been pumped into the power grid, Mr. Rosengren said.”

What are the terms of this Power Purchase Agreement (PPA) and what are we really paying for this electricity?

“Mr. Rosengren refused to comment on whether any of First Solar’s panels at the Wyandot Solar Farm were affected by the high temperatures this summer or last summer. First Solar noted in a Securities and Exchange Commission filing in March that some of its solar cells produced in 2008 and 2009 deteriorated more rapidly than their projected 25-year lifespan and had trouble performing at peak efficiency in warm climates.”

The solar panels were never going to be able to produce enough electricity in their 25 year lives to pay off the $44 million investment (see below). How much less than expected is their life going to be?

ANALYSIS OF PERFORMANCE:

Per AEP the array is expected to provide 15,800 MWh per year. This apparently assumes a 15% capacity factor, which is possibly a somewhat optimistic assumption.

12 MW x 8760 hours/year x 15% = 15,800 MWh / year

The cost of electricity in Ohio is generally about $50 per MWh wholesale (as sold to the grid) and $100 per MWh commercially (as sold to a commercial end user). This represents the rough actual annual average market value, and indicates that an optimistic value for the 15,800 MWh returned each year by the solar array is $1.58 million.

Simple division indicates that it will take 28 years to pay back the $44 million “investment” at the rate of $1.58 million per year; and since the life of the PV panels is expected to be 25 years, there will be no payback of the $44 million.

This analysis is admittedly simplistic in that it does not account for things like inflation in the cost of electricity (something that would benefit the case for the solar panels); however, it also does not account for annual Operation & Maintenance costs, which will also inflate, and the fact that the solar panel energy output will degrade by about 1% per year (both of which detract from the case for the solar panels).

The implication of the business case analysis is that PSEG and AEP are reclaiming the $44 million in ways other than selling electricity at market value. It seems clear that the following governmental involvement must be contributing to offset the loss of the $44 million:

  • Taxpayer funded grants and Renewable Energy Credits (RECs).
  • PPAs which allow sale of the electricity to Ohio consumers at higher than market value.

COMPARISON TO ALTERNATIVE CLOSED CYCLE GAS TURBINE (CCGT) GENERATION:

Investing $44 million in CCGT generation could have bought roughly 40 MW of CCGT capacity, capable of generating about 298,000 MWh per year, assuming:

  • CCGT costs roughly $1.1 million per MW
  • The Capacity Factor (CF) for CCGT generation is 85%

This means we could have gotten about 19 times the electricity, and about 10 times the reduction in CO2 emissions, had we invested in CCGT rather than solar panels to directly replace coal generation.

FINAL CONCLUSIONS & QUESTION:

We will never get the $44 million back in electricity from the solar panels, and we could have gotten far more concentrated and dependable electricity, while at the same time eliminating more CO2 and other pollutant emissions, by investing the money in other ways. Why did we buy the solar panels?

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3 Comments
  1. Great article jerry but I am skeptical, because I find that solar photovoltaics is advancing with more efficient technology every year and is more accessible, given the decreasing costs. Also isn’t concentrated solar less consumer friendly given the high costs of infrastructure?

    • I don’t profess to know everything that is developing with regard to PV technology. I am also not against support for R&D. What I find, however, is that every govervnment subsidized project I review makes no sense, and is a waste of money and resources. This is not R&D, this is lining the pockets of solar panel snake-oil salesmen with taxpayer money.

      I am not sure what you are referencing as “concentrated solar”? When I refer to concentrated energy I am referring to energy that can be supplied from a source that is dense, localized, continuous, and reliable; like natural gas as opposed to diffuse unreliable non-continuous sources.

      Thanks again for reading and commenting.

      • My mistake, I was under the impression that you were referring to concentrated solar. I also agree with you that subsidized government programs should have stricter regulations and mapping before being approved.

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