Solar energy and electric utilities: should they be interfaced?

Abstract

Analyses of the economics of solar collection in the firm- and shifting-peak cases (that is, with off-peak electricity indefinitely available or with a flat load curve) indicate that, for many important applications, solar energy systems that interface with electric utilities can be justified only in terms of the value of the off-peak utility fuels that they displace. In regions where off-peak electricity costs are low, the most economically efficient solar energy systems will be those that use electricity as the auxiliary energy source. This implies extremely low break-even costs for a number of important solar energy applications. In regions where the cost of off-peak electricity is higher than that of competing energy forms, the most economical solar energy systems will utilize auxiliary fuels other than electricity. The general conclusion is that conventional electric utility systems and most solar energy systems represent a poor technological match. The basic problem is that both technologies are very capital intensive. The electric utility, because of the high fixed costs of generation, transmission, and distribution capacity, represents a poor backup for solar energy systems. On the other hand, the solar collection system, because it represents pure, high-cost capital and because of its outage problems, cannot be considered as a part-load source of auxiliary energy for the electric utility system.