German Solar Rides Power Surge to a Win

Starting in 2010, there will be a gradual reduction in the FIT rate for new solar installations every year (with uncertainty about exact impacts of the new government).
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With the last moments of competition, with the last event, the German team of Decathletes surged forward to seize the lead, seize the victory of the fourth Solar Decathlon, topping second-place Illinois (The Gable House) by fewer than 11 points out of 1000 possible (908.27 to 897.3).

The margin of victory came from just one event, an event that Germany was almost certainly slated to win from the first word go: "net metering" or the house's ability to generate electrical power, support the house's requirements, and send the power back to the grid. Germany earned 150 points out a possible 150 while the UIUC team earned an incredibly impressive 137.236 (the second place in the event) with far less solar PV on the structure than Germany. The first 100 points came from producing enough power for the house, which was done by both Illinois and Germany (and which, if I understand correctly, 14 of the 20 homes did). The next 50 points was based on the amount of surplus energy the houses sent back to the grid, where the German house seems to have surged ahead significantly.

This PV-based victory reflects the realities of the different nations' foci on renewable energy. Germany has a very strong Feed-In Tariff (FIT) program to encourage solar installations. In short, a FIT provides a guaranteed price for a power source for a defined period of time. A FIT enables certainty for financing capital intensive efforts, like solar power, where there can be quite high confidence about future production. The German FIT, quite sensibly, is based on the concept of providing strong financial incentives for early adopters, to foster faster adoption and penetration into the market place to build up capacity and lower costs. Thus, starting in 2010, there will be a gradual reduction in the FIT rate for new solar installations every year (with uncertainty about exact impacts of the new government). Within the current structure, solar put on a home can earn up to 45 Euro Cents (about 70 cents US) for the next 20 years for every kilowatt hour produced, with the possibility for another 20% or so for solar on larger buildings. Even with Germany's relatively poor solar conditions (think northern United States, with clouds), the actual cost of production (amortized over years) is less than half that 45 Euro Cents in most circumstances, so the average homeowner can make be earning money via solar production off their home. (Surprised that the German solar market is so strong?) And, in an interesting twist, that profit can be even higher as the homeowner can send 100% of the solar electricity to the grid for those 45 Euro cents while paying the far lower general power rates that their utility charges. (In other words, this payment is not for electricity above home needs, but for every kilowatt hour generated by solar power systems.) (Note that California is moving toward establishing a FIT.)

How does this relate to The Solar Decathlon? Well, one of the competitions is market viability. Within that is this line: "whether the house offers potential homebuyers within the target market a good value". For the US market, the Illinois team should likely have been penalized for its 9.2 kilowatts of solar electricity capacity, about double what was calculated as required for supporting the house's requirements. If they're lucky, Americans live in an area where "net metering" enables turning back the electricity meter to zero out the billing costs but there are basically none who, currently, have the ability to earn a direct profit. Thus, having a home that sends power excess to the requirements to the grid at the high cost of US solar electricity would clearly not provide "a good value" in financial terms. In Germany, where a homeowner has the potential to be paid 45 Euro cents (US 70 or so), the market situation justifies stuffing every square inch (oops, centimeter) with solar cells, even on walls with mediocre solar conditions (here is a pdf map comparing US and German solar conditions) since there is such a high payback rate. Thus, plastering every surface possible with solar cells clearly enabled Germany to surge ahead in the net metering category while also almost certainly helping it to its 91 point, tied for fifth place position in the market viability portion of the competition.

Some points to draw from this.
  • How much solar PV is appropriate? Among Decathletes, the disparities in solar pv investment is a serious item of discussion. Rice University, for example, explicitly chose to plan their solar to meet their evaluated household requirements and not target excess electricity -- knowing that that would hurt them in the competition. (Congrats, by the way to Rice, with a score of 100.251 they seem to have well calculated this.) Illinois decided to maximize solar on their rooftop, which they estimate is about twice what they would put on a home for actual sale. Thus, they hurt themselves in market viability (an extra $25-40k in market costs, or so) while providing them a major leg over Rice for that extra 50 points for sending power back to the grid, but not enough to keep up with Germany. Team Germany, as per above, maximized their solar earning points both in marketability and net metering via plastering their home with solar pv systems.There is discussion as to potentially limiting the homes for the 2011 competition, perhaps to no more than 7 kilowatts of pv. This, however, would be a mistake for a variety of reasons which include:
  1. This could drive teams to other sub-optimal solutions. The UIUC team chose to not have solar thermal systems, calculating that using electricity to operate a highly efficient water heating system was a more effective solution than money into a solar hot water system. Under this limit, the UIUC team almost certainly would have chosen solar thermal to enable the maximum amount of electricity production to send to the grid while meeting contest requirements for hot water production. Or, for another example, Illinois chose to have much of the house's 'systems' manually controlled while other teams had automated controlling of things like shades to reduce solar thermal gain on hot days. The second, clearly, uses electricity that the first does not (the first, of course, uses human power rather than IT and electricity). Both are viable approaches and placing a strict limit on pv might lead teams to make design choices that could be 'sub-optimal' in terms of what they actually think makes the most sense moving forward. This could restrict innovative approaches coming to the fore on The Mall.
  2. There are real world market conditions, such as discussed for Germany's FIT, that foster much greater PV use. The artificial limit would go against those.
  3. Technology and costs are rapidly shifting when it comes to solar PV. If it becomes as cheap as paint to plaster a building with solar PV, why artificially limit the number. Or, if far more effective PV panels come on the market. Or ...
The current rules create a skewed situation where Team Germany won out two ways: in market viability and power production. To "level the playing field" might make sense, but an artificial limit on total power production does not make sense for reasons including those above. Perhaps there can be a hybrid solution. For example, the requirement remains that a house must be able to support itself with solar power and that it can gain points with sending power back to the grid. However, for every the 'excess' power is divided by the number of kilowatts on the house for judging purposes. Thus, a house with just 5 kilowatts of pv on the roof would have every kilowatt sent to the grid have double the competition value of another house's 10 kilowatt system. This isn't, necessarily, "the" solution but the idea suggests that there are paths forward other than an arbitrary limit to pv panels.
  • The United States used to have the world lead in energy technology, in energy expertise, in renewable energy technology. This is two Decathlons in a row where a foreign team, just one of a few foreign teams out of the 20 on The Mall (four of 20 this year: two Canadian (4th and 6th places) and Spain (a very surprising to me 14th)). Clean energy (including quite significantly clean energy & energy efficiency related to the built structure) is a key arena for 21st century prosperity. Is the two-time German victory a symbol of America following, rather than leading, in this arena and will we fight (manage) to turn this around?
Two final notes here:
  1. Every single team, from first place Germany to the 'last place' University of Wisconsin, Milwaukee, merits real praise. Every team had innovative design elements, had items which had visitors giving praise, and had some form of advantage over other teams. Milwaukee, for example, had the highest content of 'local' material in its construction, with something like 95% of the home coming from within 250 miles. Their distinctive roofing design sent rainfall into a catchment system that would lead to beautiful ice sculpture like displays for those short Wisconsin winters. Etc ... While there is a "winner", not a single one of the entrants merits the term "loser" -- they all merit respect and admiration, and there are things to learn from every team's efforts, problem solving, and designs.
  2. Finally, congratulations are in order to the German team for a repeat victory (which follows on the University of Colorado, Boulder, victory in the first two Solar Decathlons).

Additional posts on the 2009 Solar Decathlon:

Discussions of houses
Overview of Decathlon / policy / framing / discussion
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