Guest essay by Chris Yakymyshyn
Vermonter Bill McKibben was recently quoted in Salon Magazine:
“The roof of my house is covered in solar panels. When I’m home, I’m a pretty green fellow. But I know that that’s not actually going to solve the problem.”
This is a very interesting comment. He had solar panels installed on his home, even though he knew it would not ‘solve’ the CO2 problem.
One goal of installing solar PV is to reduce CO2 emissions associated with generating electricity. Ideally, this would be achieved at a cost that is less than the social costs of CO2 emissions, estimated by the EPA to be somewhere between $12 and $117 per ton in 2015. To minimize the cost of avoided CO2 emissions, ideally a residential solar PV system replaces utility energy that is supplied by burning coal, since coal produces the highest CO2 emissions per kilowatt-hour. Likewise, adding solar panels in a location that already receives 100% carbon-free electricity will result in an infinite cost per ton of avoided CO2, since no CO2 emissions will be avoided. The reality at your wall outlet will lie somewhere between these two limits.
I decided to calculate how much it costs to reduce one ton of CO2 emissions by installing a residential solar PV system in Vermont. I then repeated the calculation in every other U.S. state and Canadian province or territory. This estimate assumes that electricity generated within a state, territory or province is consumed there, and that electricity imports constitute a small percentage of total electricity consumed within that state, province or territory.
The first step is to figure out roughly what percentage of today’s wall-plug power is provided by coal, natural gas, nuclear, wind, solar, hydro, geothermal, biomass, etc. The Energy Information Agency (EIA) tabulates, by year and by state, the total amount of electrical energy (in Megawatt Hours, or MWhr) delivered by each type of generating source. For the most recent year available (2011) in each state, the utility and IPP (Independent Power Producer) electrical energy generated by CO2 emitters (coal, natural gas, petroleum liquids) and non-CO2 emitters (nuclear, wind, solar, hydroelectric, geothermal and biomass) was extracted, with the assumption that biomass was carbon neutral. The ratio of fossil fuel to total electrical energy produced was then calculated for each state in 2011. The results ranged from 0.14% fossil electricity in Vermont, to 98.7% fossil electricity in Delaware.
The same tabulation was performed for Canadian provinces and territories using 2011 data from Statistics Canada. In Canada the results covered the entire range, from essentially 0% fossil electricity in Prince Edward Island up to 100% fossil electricity in Nunavut.
Next, the CO2 emissions per MWhr were calculated using the following emissions estimates: 1.4 tons/MWhr for coal, 1.0 tons/MWhr for fossil liquids, and 0.47 tons/MWhr for natural gas. The total CO2 emissions were estimated by multiplying the energy in MWhr produced from each source, by the CO2 emissions per MWhr for each source. The resulting CO2 emissions in 2011 ranged from <0.001 million tons CO2 in Prince Edward Island, 0.008 million tons in Vermont, up to 279 million tons in Texas.
The average CO2 emissions associated with electricity generation in each state, province or territory in 2011 was then calculated by dividing the total CO2 emissions by the total amount of energy generated. The resulting averages ranged from <0.001 tons CO2 per MWhr in Prince Edward Island, 0.001 tons CO2 per MWhr in Vermont, 0.567 tons CO2 per MWhr in Nevada, to 1.36 tons CO2 per MWhr (almost 100% coal) in West Virginia.
The amount of solar energy generated by a solar PV residential system was next estimated. The annual averaged hours per day of full sun for a South-facing fixed solar array tilted at latitude was extracted from the National Renewable Energy Labs (NREL) Renewable Resource Data Center. The values ranged from a low of 2.5 hrs/day in Yukon Territory up to 6.5 hrs/day in Nevada and Arizona. Assuming a 10 kW(AC) system with a 20 year service life and no aging, the total energy delivered by the rooftop solar PV system was estimated in Nevada to be (6.5 hrs/day)*(365 days/yr)*(20 yrs)*(10 kW(AC)*(0.001 MWhr/kWhr) = 475 MWhr of electricity. All of the generated electricity was assumed to be used somewhere in Nevada. This calculation was repeated for every state, province and territory.
The cost of the residential solar PV system was needed next. A recent article at Solar Panels Review gave 2013 price estimates for a contractor-installed system using several panel choices. The average unsubsidized cost was $5.57/Watt AC, or $55,700 for a 10 kWAC system. This unsubsidized cost is assumed to be the same everywhere.
The cost of CO2 emissions avoided using residential solar PV can now be estimated. The cost per ton CO2 avoided is given by the solar PV system cost divided by the total CO2 tonnage avoided over the 20-year life of the system. For example, using the previous estimates for Nevada, the avoided CO2 emissions cost is given by ($55,700)/(475 MWhr*0.567 tons CO2 per MWhr) = $207/ton CO2. This calculation was repeated for every state, province and territory and, as shown in Figure 1, plotted versus the fraction of generation that is free of CO2 emissions.
First, notice that the vertical axis is a logarithmic scale, ranging from $1/ton CO2 (well above the 5 cents/ton that traders at the now-defunct Chicago Climate Exchange determined was an appropriate price), up to $10,000,000 per ton CO2. Several horizontal lines indicate the California carbon exchange price of about $12/ton CO2 and one EPA estimate of around $60/ton CO2. A vertical line marks one widely discussed goal of 80% CO2-free electricity generation.
Note how the use of residential solar rapidly escalates the cost of avoiding CO2 emissions as the power grid moves towards a ‘low-carb’ diet. Also note that even in ‘high-carb’ states at the left side of the graph, residential solar PV is an expensive way to avoid CO2 emissions associated with electricity generation, never breaking below $100/ton CO2. Substituting DOE’s 2020 SunShot goal of $1.50/Watt installed cost for a residential system shifts the curve down, but retains the highly coveted hockey stick shape J.
So, Bill McKibben’s solar panels in Vermont are indeed avoiding CO2 emissions in Vermont (one of the data points at the far right side of Figure 1), at a cost of around $155,000 per ton CO2. This is equivalent to paying a carbon tax of $2.00 for one teaspoon of gasoline.
Figure 1- Semi-log graph showing the cost of avoiding one ton of CO2 emissions using residential solar PV, province or territory, as a function of the carbon content at the wall outlet. Several U.S. states and Canadian provinces are indicated. The two horizontal lines represent two official estimates of the social cost of carbon dioxide emissions.
Salon magazine article-
Solar insolation data from NREL-
Electricity production in the U.S.-
Electricity production in Canada-
Solar PV system costs-