Integrating Solar into Energy Efficiency Projects

1 Introduction

1.1 Solar and Energy Efficiency Need to Work Together

On occasion, solar and energy efficiency advocates have butted heads over which option should be implemented ‘first’ in industries, buildings, and homes and how much should be developed before the other is considered. Here, we will show that, like regulatory compliance vs. ESG programmes, this is a false choice. While energy efficiency is a bit cleaner than solar when it comes to emissions, energy conservation alone can’t produce power for customers looking for a clean option; and solar without energy efficiency cannot reach its full potential. Both are valuable and should work together as an integrated response to create a cleaner and cost-competitive energy [1].

However, some solar companies and prosumers have been using a solar-first strategy in the residential sector in recent years—commissioning solar systems without paying much attention to energy efficiency. This strategy has been spurred in part by net-metering rules in place in most states, substantial solar tax credits, and the availability of solar financing that cuts or even eliminates the initial purchase price, substituting the up-front cost with monthly payments that prolong over many years.

Despite these reasons, it still generally makes sense to implement as much efficiency as possible when installing generation capacity. Some specialists conducted two illustrative analyses to look more closely at this issue. The first compares the cost per kWh generated from solar or saved by energy management when done individually or together. The second compares solar technical prospects and residential electricity use with and without energy efficiency measures. They found that costs are lower when the two resources are implemented in tandem, and solar can meet a larger share of residential loads.

1.2 Valuing EE Projects

The recognition of EE’s importance as a driver of profits and risk within energy-intensive sectors—coupled with the growing concerns about climate change—has given rise to a large number of studies on how well industry and households perform in terms of energy efficiency. These studies showed that significant opportunities for EE were being ignored. The 2011 UNIDO paper [2] offers a taxonomy of barriers that could explain industry’s low rate of adopting profitable EE projects, and the main culprits are identified as the lack of appropriate management systems to identify, value, and implement EE projects as well as a wide range of behavioural biases.

We define sustainable operations management as “the set of skills and concepts that allow a company to structure and manage its business processes to obtain competitive returns on its capital assets without sacrificing the legitimate needs of internal and external stakeholders and with due regard for the impact of its operations on people and the environment.” As developed over the past decade, the literature on sustainable operations has focused on reducing the environmental impacts of industrial operations through “greener” product design and energy and carbon footprinting of supply chain operations. This research has led to significant advances in product design and reverse logistics.

The following three factors affect the profitability of a portfolio of EE initiatives in any given company.

1. The magnitude of the potential energy savings. This is the most critical driver of profitability, as it directly affects operational expenditures, process efficiency, and shareholder value.
2. The centrality of green concerns—sustainability and energy conservation—to the company’s brand image and strategy. This factor is associated with environmental compromises, local community ties, corporate ethics, and long-term company strategy. The green factor has become an essential driver of investment in EE projects. As more customers become willing to pay a premium for green products, companies like Philips see green innovation as a way to derive business opportunities from reputation management [3]. For example, the reduction of Philips’s operational footprint (due primarily to increased energy efficiency) is only part of the larger sustainability vision that seeks to make Philips “the leading company in health and well-being.”
3. The firm’s organizational complexity and underlying ability to implement solar and EE projects. These factors include not only project-specific competence but also project-related internal transaction costs. Such technical matters of implementation and portfolio management must be handled properly in order to reduce risk, maintain adequate cash flow, and ensure that the portfolio of projects is aligned with the company’s green strategy.

2 Industrial Facilities & Households

2.1 Finding and Implementing Energy Efficiency Projects

There are many profitable EE projects in almost every industrial enterprise that are not actually implemented [4]. A problem frequently cited as the culprit for this failure to enforce EE projects is the enterprise’s lack of a practical internal management approach to identifying and implementing them. There are ways to address the issue by building on a framework of sustainable operations.

The proposed approach is based on field studies of large manufacturing enterprises and companies that provide energy services to these firms. At its core, this framework is based on the Kaizen approach, which emphasizes measurement and continuous improvement along with a strong valuation component to assure profitability [5]. The Kaizen approach to finding and reducing energy waste follows the same lean manufacturing principles that have proven effective in identifying and eliminating the waste of time, inventory, and quality in manufacturing organizations. Previous research on quality and environmental management suggests that any workable approach to EE must provide convincing answers to the following questions.

1. Perceived importance: Why is EE a potential source of profit for this company?
2. Clarity and concreteness: What are the most important EE projects that could be undertaken in this company, and what results can be expected from these projects if they are properly implemented?
3. Feasibility: What means are there to finance and implement these projects without jeopardizing revenue generation and disrupting current operations? Does the firm have the skills (or can it access the skills) needed to implement specific EE projects at an acceptable cost?
4. Technological reliability: The distinct issue of technical reliability is closely linked to feasibility. In the operating context of most manufacturing companies, firms cannot afford to adopt technologies that are not already tested and reliable.
5. Customer perception: Do customers give the firm a “premium” or “discount” for having EE sustainability objectives and accomplishments? Such downstream pressure is becoming increasingly apparent for public projects (where the buyer is a public entity) and major international buyers, which face their own customer demands for supply chain energy footprinting.

2.2 Solar Process Heat

Vast amounts of energy are used for low-temperature process heat in industry, for such diverse applications as drying of lumber or food, cleaning in food processing, extraction operations in metallurgical or chemical processing, cooking, curing of masonry products, paint drying, and many others [6]. Temperatures for these applications can range from near ambient to those corresponding to low-pressure steam. Energy can be provided from flat-plate collectors or concentrating collectors of low concentration ratios.

Process simulations similar to those already outlined in another article on heating and cooling are valuable tools in the study of industrial applications. The principles of operation of components and systems outlined in previous articles [7] apply directly to industrial process heat applications. The unique features of these applications lie in the scale on which they are used, system configurations and controls needed to meet industrial requirements, and the integration of the solar energy supply system with the auxiliary energy source and the industrial process.

There are two different systems: with and without thermal energy storage. The solar system consists of arrays of either parabolic or linear concentrating (e.g., Fresnel) collectors with a variety of modelling options.

Other than traditional crop drying and solar evaporation, which have been practised over centuries, most solar applications for industrial process heat have been relatively small and experimental in nature. A few large systems are in use. In this section, we outline some general design considerations and then briefly describe several examples of industrial applications to illustrate the potential utility of solar energy to industry and the kinds of particular problems that industrial applications can present.

Two primary questions to be considered in a possible industrial process application concern the use to which the energy is to be put and the temperature at which it is to be delivered. If a process requires hot air for direct drying, an air heating system is probably the solar energy system best matched to the need. If steam is needed to operate an autoclave or indirect dryer, the solar energy system must be designed to produce steam and concentrating collectors will probably be required. If hot water is needed for cleaning in food processing, the solar energy system will be a liquid heater. An essential factor in determining the best method for a particular use is the fluid temperature in the collector. The generalizations of building heating applications (e.g., that return air to collectors in air systems is usually at or near room temperatures) do not necessarily carry over to industrial processes, as the system configurations and energy uses may be quite different.

2.3 Energy Savings and Project Complexity

Taking the two most important drivers of project profitability, energy savings and green concerns, we may categorize EE projects into four distinct types.

First, projects that are already saving considerable energy and are both sustainable and communicated as such in the company’s self-presentation. Second, those with substantial branding and image advantages but do not yet produce significant energy savings. An example was the installation of some solar panels on the rooftop of Pfizer’s Heidelberg facility. Such projects are principally motivated by the company’s long-term green strategy. The third group comprises EE projects that are currently capable of producing significant energy savings but are neither being visualized nor communicated as sustainable initiatives. The main drivers of value for this project type are cost-cutting and corporate profit. Examples in this category include improving proprietary industrial technology and innovations as well as optimizing internal processes. Finally, this classification includes (typically start-up) projects that cannot yield significant energy savings with current technology. These projects are usually intended to evolve toward cost savings or green R&D.

As already mentioned, complexity is one of the main factors affecting the implementation of EE projects. Such complexity is a function of the firm’s capabilities and the project’s organizational complexity. In general, the larger the number of external parties (both financial and technical) involved in a project, the greater the complexity of ensuring that the parties’ participation constraints are satisfied and the higher the transaction costs of contracting. Figure 3 shows four different environments for projects along the dimensions of C (the horizontal axis) and E (the vertical axis). The attention of management will naturally be most focused on projects with high energy intensity and large potential payoffs.

The Low Savings–Low Complexity (E–C–) quadrant features transparent and straightforward applications, such as lighting, with proven technologies and relatively low cost. This quadrant also includes the no-cost and low-cost maintenance and savings measures that companies can implement internally in the course of normal operations improvement initiatives. The main impediment to establishing these projects, and thus to a rapid realization of their associated EE improvements, is that their energy savings are not (given their E– nature) significant enough to receive management attention.

The Low–High (E–C+) quadrant of Figure 3 is usually unoccupied. The reason is that high transaction costs tend to discourage the firm from investing in projects that require high initial investments (to establish the competence needed to assure project success) but cannot assure appreciable future savings. An ESCO could reduce the fixed cost of such projects by bundling together many small projects using similar technology; this has already occurred with regard to solar power installations, which have induced such energy companies as ENEL and Veolia to work with commercial and manufacturing facilities that have large rooftop surfaces. The interest in this quadrant is mainly political, as it allows companies to initiate some small-scale green R&D projects as a means to assess the reliability and technical capabilities of vendors or competitors.

The High–Low (E+C–) quadrant includes projects using proven technologies that could generate considerable savings in the future. For example, municipal waste or used cooking oils was innovative 20 years ago, but these are now proven technologies with relatively low risk. Other examples of projects in this quadrant are one-on-one deals with major suppliers that provide solutions with a track record and with built-in warranties.

Finally, the High–High (E+C+) quadrant of Figure 3 encompasses projects that could yield extensive future savings but are complex to implement; for instance, they may involve multiple organizational providers, and their financing may require sophisticated contracting and guarantees. Examples of such projects include investments in new kiln technologies (in cement or pulp and paper manufacturing) and updating the grid operations of an electric utility company to facilitate reliable integration of wind and other renewable energy sources.

2.4 Houses & Buildings

Solar panel costs have dropped dramatically in recent years, ushering in a solar boom that hasn’t been distributed evenly across the income range in affluent countries such as the United States. Despite being more vulnerable to energy bills, lower-income Americans have lagged behind more affluent households in embracing solar and reaping its myriad benefits [8].

High electricity consumption and cost in public buildings/institutions is a major challenge to many nations over the world, particularly in developing countries. Low-efficient electrical appliances, poor building envelopes and poor energy conservation practices are major contributing factors to the high electricity consumption.

Therefore, energy efficiency retrofit interventions and policies to reduce electricity consumption and cost have been explored in many countries, including energy efficiency for building envelopes and windows. For example, energy efficiency retrofits in Ghana in 2007 for lighting systems by changing incandescent lamps to compact fluorescent lamps (CFL) resulted in peak electricity savings of 124 MW [9]. Studies have also shown that energy efficiency standards and benchmarks for buildings and electrical appliances are crucial in reducing building energy consumption and carbon footprint. Appropriate energy management technologies and devices can also significantly reduce building energy consumption, thereby contributing to climate change mitigation strategies.

With increasing pollution from fossil-fuel-based electricity generation systems contributing to climate change and its negative impacts on the environment, many countries worldwide are developing programmes and initiatives to reduce their energy consumption and carbon footprint and increase their sustainable energy portfolio. For instance, in Europe, Green Building Programmes (GBP) have been developed to promote energy efficiency and renewables in buildings [10].

In many developing countries, electricity consumption and cost in public buildings, including the ministries, departments and agencies (MDAs) as well as public tertiary institutions, is a major challenge to the Governments. High power demand during peak hours (11 am–2 pm) of the day, which exceeds their contracted demand, usually results in many power fluctuations, distracting academic work. Solar energy could be used to supplement and provide a stable electricity supply during daytime hours.

Appliance energy auditing is the first step in assessing the energy efficiency situation and implementing a successful energy efficiency project in a facility. Energy auditing involves the process of inspection, data collection and analysis of energy flows for the identification of energy savings opportunities in a building or a facility to reduce the amount of energy input into it, without negatively affecting the output(s) and with the least environmental effect.

Solar energy has been determined as one of the most cost-competitive and sustainable energy options for many public buildings. From previous studies, we can determine how much solar PV rooftop areas can accommodate—in the order of thousands of kWp. Using the solar resource available in situ, the potential solar PV electricity generation of an installed capacity can therefore be assessed using the RETScreen simulation package. For the purpose of comparison, the monthly mean electricity consumption at any facility, as well as the total electricity consumption of all buildings, can be shown. Comparing the PV electricity generation to the total electricity demand of the site, one can demonstrate that solar generation can meet between 30% and 85% of the total demand depending on the month of the year.

With respect to bridging the solar income gap, policymakers could consider the following findings is:

• Proven policies that make solar more accessible and affordable, such as net energy metering (NEM) and the federal Investment Tax Credit (ITC) of 30%, as well as community development programs like the New Markets Tax Credit, should be maintained (NMTC).
• Emerging community/shared solar policies are an essential tool for increasing the solar sector, and they should be implemented in more states.
• Green banks, commercial property assessed clean energy (PACE), and on-bill financing programs are among the tools that need to be created and supported in order to improve credit, reduce lender risk, and leverage private capital.
• Solar power investments should be better incorporated into existing energy efficiency and assistance programs, such as the Weatherization Assistance Program (WAP) and the Low-Income Home Energy Assistance Program (LIHEAP).
• Extensive outreach and education will be required to attain lower-income populations who are typically difficult to reach and unaware of their electrical options. A nationally mandated, industry-funded education and awareness program could assist these efforts to achieve the requisite scale.
• Solar deployments in low-income areas will require utility partners, which will most likely be prompted by state legislation, utility commissions, or other creative value propositions.
• Suppose the market is not broadened to accommodate lower-income households, who are more likely to be renters, live in multifamily apartments, and have limited access to financing. In that case, the solar industry’s future growth potential will be constrained.

3 Frontiers in Technology and Applications

3.1 PV & CSP

With the rapid reduction in PV price and increases in system efficiency, recent research has investigated the potential for CSP-PV hybridization (integrating PV into CSP systems).

Deployment of variable renewables will raise important dysfunctionalities in the electrical systems, for example, curtailments with control ancillary services. Also, the market price will be very much affected by the introduction of variable renewable technologies, namely the hourly fee in the markets. That is why flexibility will be a must. Today, flexibility is not being appreciated because in many countries, like Spain, they have still a lot of backup from conventional sources. But when these conventional installations are decommissioned, flexibility is going to be required, and CSP plants with thermal storage are the key.

Another fact is that PV will be deployed very quickly in the coming years, for sure much quicker than a CSP. Hence, the primary role of CSP is going to provide a renewable backup from dusk to dawn to reduce GHG emissions and the key to avoiding using a lot of backup from fossil fuels. In this context, public-private agreements have grown, and customers prefer to have a specific dispatch profile, including 24/7 or night-only dispatch. Such profiles can be supplied with an intelligent combination of PV and CSP.

In the context of Concentrating Solar Power (CSP) plants, PV augmentation is the practice whereby the online parasitic loads (also known as auxiliary loads) of a CSP plant are supplemented by a PV facility located on-site. Typically, the cost of energy generated by a PV plant is lower than that generated by a CSP plant; thus, PV augmentation can improve the financial return of CSP projects. While previous work has explored the topic primarily from the point of view of using CSP-PV hybridization on new build CSP or to provide baseload power, the trend today focuses specifically on retrofitting existing CSP plants with a PV facility to service only the auxiliary loads.

There would be other means, for instance, hydrogen production, which could be green if it was obtained from renewable generation. Solar PV generation is very cheap, but the most important investment in a hydrogen factory green hydrogen factory will be the electrolyzer. No electrolysis can really provide a reasonable cost operating only two thousand hours per year. Hence, the prices need to run more an extended time, preferably eight thousand hours per year, which is why the combination of PV and CSP will be fascinating.

There are no significant constraints for retrofitting PV into a CSP plant from a technical perspective. Physical interconnection of the PV facility will typically occur on the Medium Voltage (MV) auxiliary load’s busbar of the CSP plant in the main electrical building. Current ratings, cable entries, and switchgear protection will need to be reviewed on a plant by plant basis. Still, generally, depending on the size of the PV facility, only minor upgrades will be required. Concerning the overall plant control, two criteria would typically be required based on the regulatory constraints discussed above; a) the CSP plant’s power export may not exceed the contracted capacity as per the PPA, and b) no energy from the PV facility may be injected into the grid. Therefore, the PV facility’s power generation will need to be limited to the online auxiliary consumption required by the CSP plant at any given time.

These criteria result in a dependency of the PV facility on the CSP plant, which means that it can’t be controlled or operated in isolation; this can be achieved with upgrades to the Distributed Control System (DCS). The PV inverters can be operated by readily available load following devices such as a Power Plant Controller (PPC), which can curtail the PV generation in order to match the online auxiliary loads of the CSP plant. The main set point of the PPC will be provided on a continuous basis by the existing DCS of the CSP plant resulting in a dynamic curtailment control of the PV facility. The existing DCS will also ensure that the exported power from the CSP project does not exceed the PPA limitations (or any other setpoint defined).

3.2 Mechanical Design Considerations

Many industrial processes use large amounts of energy in small spaces. If solar is to be considered for these applications, the location of collectors can be a problem. It may be necessary to locate collector arrays on adjacent buildings or grounds, resulting in long runs of pipe or duct. Collector area may be limited by building roof area and orientation.

Existing buildings are generally not designed or oriented to accommodate arrays of collectors, and in many cases, structures to support collector arrays must be added to the existing structures. New buildings can be readily designed, often at little or no incremental cost, to allow for collector mounting and access. Interfacing with conventional energy supplies must be done in a way that is compatible with the process. If air to dryers is to be preheated, it must be possible to get the solar-preheated air into the dryer air supply. In food processing, sanitation requirements of the plant must be met.

Heated outside air is used in many industrial applications where air recirculation is not practical because of contaminants. Examples are drying, paint spraying, and supplying fresh air to hospitals. Ambient air heating is an ideal operation for a collector, as it operates very close to ambient temperature. Systems of this type, which are designed for small contributions by solar in relation to the total loads, can be performed without energy storage. No energy will be dumped as long as the maximum output of the collector is less than the energy needs of the application at the time the collector maximum occurs. It may be that the time of collector operation would be determined by the process itself (e.g., times when paint spraying is going on or when materials are in the dryer ready to be dried), and under these circumstances, storage may be needed.

Indirect drying, with solar-heated air supplied to a drying chamber, has been applied to a variety of materials, including foods, crops, and lumber. In most such operations, adequate control of temperature and humidity can lead to improved product quality by controlling the drying rate; this is usually accomplished by recycling to the collectors part of the air that has passed through the dryer. Solar drying of lumber to reduce its moisture content from that of the green wood from the trees to levels acceptable for use in building and manufacturing has been the subject of several experiments.

It is not possible to generalize on these matters; the engineering of the solar energy process and the industrial process must be mutually compatible. In most of the examples in real-world applications, solar heating was retrofitted, it supplied a relatively small part of the plant loads, and in varying degrees, the range of problems noted here have been encountered.

3.3 Solar Cells Own Efficiency

Since the early 1990s, Progress in Photovoltaics has published six monthly listings of the highest confirmed efficiencies for a range of photovoltaic cell and module technologies. By providing guidelines for the inclusion of results into these tables, this provides an authoritative summary of the current state of the art and encourages researchers to seek independent confirmation of results and report results on a standardized basis.

Results are reported for cells and modules made from different semiconductors and subcategories within each semiconductor grouping (e.g., crystalline, polycrystalline or directionally solidified and thin film). Moreover, spectral response information is included (when possible) in the form of a plot of the external quantum efficiency (EQE) versus wavelength, either as absolute values or normalized to the peak measured value. Current-voltage (IV) curves have also been included where possible.

Eight new results are reported in the 2020 version of these tables [11]. The first new result is 24.4% efficiency for a large-area (268 cm2 ) cell fabricated upon an n-type directionally solidified (DS) wafer (sometimes called a ‘cast mono’ wafer), with the cell fabricated by Jinko Solar, and the result confirmed by the Institute für Solarenergieforschung (ISFH). The broader ‘DS wafer’ category displaces the earlier ‘multicrystalline’ category.

The second new result is a new efficiency record for a perovskite minimodule. An efficiency of 18.6% is reported for a 30-cm2 minimodule fabricated by the University of North Carolina and measured at the U.S. National Renewable Energy Laboratory (NREL). The tables now accept results based on ‘quasi-steady-state’ measurements (sometimes called ‘stabilized’ in the perovskite field) for perovskite cells.

The third new result is 15.2% efficiency for a 1-cm2 solution-processed, single-junction organic solar cell based on a photoactive donor polymer (D18) and non-fullerene acceptor material (Y6), as has earlier given good results. The cell was fabricated and measured at the Fraunhofer Institute for Solar Energy Systems (FhGISE).

Along with other emerging technologies, perovskite and organic cells may not demonstrate the same level of stability as more conventional cell technologies. Recent progress with organic, perovskite and CdTe cells has been most notable, with good progress also with CIGS and directionally solidified silicon (ds-Si). Impressive progress has been made with monolithic III–V MJ cells, improving efficiency from 31.8% to 47.1% over 28 years.

4 References

[1] Solar and energy efficiency need to work together like peanut butter and jelly.

[2] Sorrell, S., A. Mallett, S. Nye. 2011. Barriers to industrial energy efficiency: A literature review. Working Paper 10/2011, Development Policy, Statistics and Research Branch of The United Nations Industrial Development Organization.

[3] Philips Annual Report 2020. Innovating to address global health challenges

[4] Aflaki, S., Kleindorfer, P. R., & de Miera Polvorinos, V. S. (2012). Finding and Implementing Energy Efficiency Projects in Industrial Facilities. Production and Operations Management, 22(3), 503–517. doi:10.1111/j.1937-5956.2012.01377.x

[5] Quality Assurance in Electromechanical Systems – EPCM Holdings

[6] Duffie, J. A., Beckman, W. A., & Blair, N. (2020). Solar engineering of thermal processes, photovoltaics and wind. John Wiley & Sons.

[7] Thermal Energy Storage – EPCM Holdings

[8] Study Examines Energy Efficiency Actions of Solar Homeowners

[9] Opoku, R., Adjei, E. A., Ahadzie, D. K., & Agyarko, K. A. (2020). Energy efficiency, solar energy and cost saving opportunities in public tertiary institutions in developing countries: the case of KNUST, Ghana. Alexandria Engineering Journal, 59(1), 417-428.

[10] Ascione, F. (2017). Energy conservation and renewable technologies for buildings to face the impact of the climate change and minimize the use of cooling. Solar Energy, 154, 34-100.

[11] Green, M., Dunlop, E., Hohl‐Ebinger, J., Yoshita, M., Kopidakis, N., & Hao, X. (2021). Solar cell efficiency tables (version 57). Progress in photovoltaics: research and applications, 29(1), 3-15.