The first thing that comes to mind when considering a PV installation is the amount of renewable electrical energy PV will produce to serve building loads. The energy produced by the PV system can be used to offset the amount of electrical energy that the utility needs to generate, transmit and distribute to serve the building. Utilities charge building owners for the amount of electrical energy or kilowatt-hours (kWh) delivered to the building.
The building-owner's electric bill will be reduced by the amount of electrical energy produced by the PV system. In the case of grid-connected PV, there may be an opportunity for the building owner to supply energy to the utility that will offset the energy used by the building when the PV system is not producing a surplus due to weather or night. A net-metering provision in the utility rate schedule can be advantageous to the building owner if there is sufficient PV capacity to produce an energy surplus during the day.
In addition to supplying energy to the building, PVs can also reduce building demand. Demand is how much power or kilowatts (kW) a building requires from the utility at any point of time to meet its energy needs.
Power is the rate of energy use or energy per unit of time. A building that needs 10 kWh of energy in an hour will have a demand of 10 kW. On the other hand, if the building requires 10 kWh of electrical energy in 10 hours, it will have an average demand of 1 kW.
The larger the building's demand, the more generation, transmission and distribution capacity the utility must provide to serve the building. The utility's cost of providing this needed system capacity is usually recovered from commercial, industrial and institutional customers through a demand charge.
The utility-rate schedule many commercial buildings operate under includes an -energy and a demand charge. Building owners are charged so many cents per kWh for their energy use as well as so many dollars per kW for demand during a billing period.
Billing demand is usually the maximum average demand measured over a 15- or 30-minute interval during the month. Some utilities have a ratchet clause in their rate schedule that uses the greatest billing demand in any one month as the basis for calculating the building owner's demand charge for a number of future months.
Assume that a building owner had a billing demand of 10 kW in July and then had subsequent billing demands of 8 kW in August, 7 kW in September and 6 kW in October. If the rate schedule had a three-month ratchet clause, the building owner would be required to pay for 10 kW of demand through October.
In many parts of the country, building loads peak at about the same time of day the building's PV system output will peak. As a result, the overall building demand seen and metered by the utility will be reduced due to the PV installation.
This will reduce the utility's demand charge for the building, which could have a significant impact on the building-owner's electric bill. If a ratchet clause is in place, this reduction in building demand would be magnified because the PV system would also reduce the demand charge paid in following months as well as the month in which the peak billing demand occurred.
The building's heat load can also be reduced using PV. Advances in thin-film technology are allowing PV to be integrated into building roof and façade materials including spandrel and vision glass. This means the entire building skin could potentially produce electric power from incident solar radiation.
Incident solar radiation converted to electric energy through PV reduces the amount of energy converted to heat in the building. This reduces the amount of energy needed to cool the building in the summer.
Before installing a PV system, consider all the possible ways it will have an impact on building operation and not just the amount of energy the PV system will produce. Demand reduction and building heat-load reduction are two other effects that should be considered when planning and analyzing a potential PV installation.
This article is the result of a research project investigating the investigating the potential of the emerging PV market for the electrical contracting firm being sponsored by The Electrical Contracting Foundation Inc. The author would like to thank the foundation for its support. EC
GLAVINICH is an associate professor in the Department of Civil, Environmental and Architectural Engineering at The University of Kansas and is a frequent instructor for NECA’s Management Education Institute. He can be reached at 785.864.3435 or firstname.lastname@example.org.