Renewable Energy Research

The three largest deterrents to the application of most renewable energy technologies are the cost of the technology, inadequate functional efficiency and the indirect costs related to their usage. A prime example is the solar cell. The idea of solar power is appealing because we love the sun and its abundance of raw power. Making use of that energy is another story entirely. In the lab some solar or photovoltaic cells have achieved efficiencies as high as 30% but commercially available units struggle to achieve 15% and most are at 7%. The cost per kilowatt of these solar panels ranges from $4,000 - $6,000. Because these units only provide power during solid daylight hours there is a need for power storage or alternate supply to cover the continued 24 hour demand. The backup options simply add to the cost of using what seems like an abundant and cheap energy source., The reality is when all costs are considered, solar is not cheap energy. The end result is solar power plays a very insignificant role in the world energy scheme.

Another good example is wind power. Wind power is a technology using economy of scale. The bigger the blades, the more blades there are, the cheaper the kilowatt. However, where wind power is installed on a significant scale, its impact on the overall power grid is considerable. When wind is available a considerable dynamic adjustment to the power grid is necessary to facilitate the distribution of the wind power generated. The power output from a wind farm will fluctuate far more rapidly then the consumer load it is supplying. To stabilize the grid to accommodate the fluctuations requires fast responding generation capacity such as combined cycle gas turbines. Gas turbines are more expensive to operate and are normally used to handle peak loads on the grid. In addition, to maintain the integrity and stability of the grid, generation capacity equal to the wind farm has to be maintained as an overall system backup. This expense almost always resides with the Utility and will factor into the overall price charged for power supplied to the consumers. As can quickly be seen, the use of renewable technologies is often not as easy or economical as it first appears.

KVA has long recognized these hurdles and applied research to reduce the manufacturing costs of various technologies, increase their functional efficiencies and reduce the indirect costs of applying these technologies. This section describes some of these issues and how KVA is working to solve the problems.

A medium size company wants to install a wind farm, but by itself the wind farm is not economically feasible. However state and federal laws related to wind energy and related tax credits and other incentives can make the project economically feasible. So the decision is made to build a 50 MegaWatt wind farm. The utilities are required by law to buy and absorb this power. However, if there is no wind the utilities (not the owner of the wind farm) are still required to supply their customer's power and must maintain in backup 50 MegaWatts of capacity to offset the potential loss of wind power from the wind farm. In this case, the utilities end up bearing the indirect costs associated with the wind farm.
For homeowners currently using grid power, the cost per kilowatt-hour for utility power is usually lower than the cost of alternative power. This obstacle could be partially overcome for individuals able to sell power back to their utility, depending on the price the utility offers for renewable energy. However even if the local utility company is quite generous with their buy-back prices, the initial cost of a large residential alternative energy system can run in excess of $10,000.
The initial outlay is a primary reason more individuals don't feel able to invest in renewable energy. This obstacle can be mitigated due to the availability of government-subsidized loan programs for alternative energy development. A low interest loan, combined with the increase in property values created by the installation of such a system makes the cost of alternative energy much more reasonable.

Capital and Installation Costs

The following table is provided for reference and comparison purposes. The table displays the cost in dollars per kilowatt of capacity. These numbers include the initial capital and installation costs to purchase and install an energy technology at a specified location. Capital costs refer to the total equipment cost of a power generation system (i.e., fuel cell system, combustion turbine, etc.) to the end user. This table also gives some comparison of the indirect costs associated with the technology. The last column is used to relate the cost of money and the relative return on investment. The lower the percentage the better. For instance solar is 69%, which when translated means that if all operating conditions of solar usage are optimal (365 days of sunlight), the savings provided from the generated electricity would just cover the interest expense.

Capital and Indirect Costs of Energy Technologies
Capital Cost ($/kW) Indirect Costs Breakeven Usage*
Nuclear 2500-4000 1100-2500 (disposal) 21%
Micorturbine 700-1100 0 6%
Combustion Turbine 300-1000 0 5%
IC Engine 300-800 0 3%
Plasma Waste Conversion 3000-5000 0 27%
Waste Heat to Electricity 500-1800 0-1000 8%
Fuel Cell 3,500-10,000 0 34%
Photovoltaic 4,000-6,000 700-2100 69%
Wind Turbine 800-3,500 300-1100 14%
*This represents the percentage of utilization required to simply offset the cost of money to install the system at 6% interest with a return based on $0.10 per kilowatt hour avoided electrical cost.