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Distributed Generation Renewable Energy Estimate of Costs

(updated August 2013)

Overview

Estimates of total installed costs and operation and maintenance costs are for grid-tied distributed generation (DG) scale systems appropriate for residential, commercial, industrial, and Federal facilities. Technologies considered are technically proven and commercially available. Electric generating technologies included are solar photovoltaic (PV) systems, wind energy, and biomass combined heat and power (CHP). Thermal technologies included are biomass heat, solar water heating (SWH), solar ventilation preheat (SVP) using transpired solar collectors, and ground source heat pumps. Values provided are not to be interpreted as statistically significant. They are only meant to provide rule-of-thumb information, accurate enough for a first pass screen of economic viability.

Table 1 – Costs for Electric Generating Technologies

Technology Type Mean installed cost
($/kW)
Installed cost Std. Dev.
(+/- $/kW)
Fixed O&M
($/kW-yr)
Fixed O&M Std. Dev.
(+/- $/kW-yr)
Variable O&M
($/kWh)
Variable O&M
(+/- $/kWh)
Lifetime
(yr)
Lifetime Std. Dev.
(yr)
Fuel and/or water cost
($/kWh)
Fuel and/or water Std. Dev.
($/kWh)
PV <10 kW $3,910 $921 $21 $20 n/a n/a 33 11 n/a n/a
PV 10–100 kW $3,819 $888 $19 $18 n/a n/a 33 11 n/a n/a
PV 100–1,000 kW $3,344 $697 $19 $15 n/a n/a 33 11 n/a n/a
PV 1–10 MW $2,667 $763 $20 $10 n/a n/a 33 9 n/a n/a
Wind <10 kW $7,859 $2,649 $28 $18 n/a n/a 14 9 n/a n/a
Wind 10–100 kW $6,389 $2,336 $38 $12 n/a n/a 19 5 n/a n/a
Wind 100–1000 kW $4,019 $803 $33 $13 n/a n/a 16 0 n/a n/a
Wind 1–10 MW $2,644 $900 $36 $16 n/a n/a 20 7 n/a n/a
Biomass Combustion Combined Heat & Power* $6,067 $4,000 $91 $33 $0.06 $0.02 28 8 $0.04 $0.02
*Unit cost is per kilowatt of the electrical generator, not the boiler heat capacity

Table 2 – Costs for Solar Thermal Technologies

Technology Type Mean installed cost
($/ft2)
Installed cost range
(+/- $/ft2)
O&M Lifetime
(yr)
Lifetime Std. Dev.
(yr)
Fuel and/or water cost
($/ton)
Fuel and/or water Std. Dev.
($/ton)
SWH, flat plate & evacuated tube $141 $82 0.5 to 1.0 % initial installed cost 31 14 n/a n/a
SWH, plastic collector $59 $15 0.5 to 1.0 % 20 10 n/a n/a
SVP $31 $15 n/a 25 n/a 1 Watt/ft2 fan power
Ground Source Heat Pump $7,518 $4,164 $109 +/- $94 38 25 $397 $392

Table 3 – Costs for Wood-Fired Heat System

Technology Type Mean installed cost*
($/kW)
Installed cost range
(+/- $/kW)
Fixed O&M
($/kW)
Fixed O&M
(+/- $/kW)
Lifetime
(yr)
Lifetime Std. Dev.
(yr)
Fuel and/or water cost
($/kWh)
Fuel and/or water Std. Dev.
($/kWh)
Biomass wood heat* $600 $361 $91 $33 32 8 $0.03 $0.01
* Biomass wood heat converted from thermal energy capacity (Btu/hr)

Table 4 – Costs for Ground Source Heat Pump

Technology Type Mean installed cost
($/ton)
Installed cost range
(+/- $/ton)
O&M Lifetime
(yr)
"Lifetime Std. Dev.
(yr)
Fuel and/or water cost
($/ton)
Fuel and/or water Std. Dev.
($/ton)
Ground Source Heat Pump $7,518 $4,164 $109 +/- $94 38 25 $397 $392

Figure 1. Installed Costs for Electric Generating Technologies


Figure 2. Installed Costs for Solar Thermal Technologies


Figure 3. Installed Costs for Biomass Wood Heat


Figure 4. Installed Costs for Ground Source Heat Pump

General Discussion

Many often-cited cost studies and reports for renewable energy focus on systems deployed at utility scale. Both initial capital costs and operations and maintenance (O&M) costs can vary significantly with project size and geographic location. In states and regions with high retail electricity rates and/or strong financial incentives (e.g. PV in California, New Jersey, and Colorado) or particularly suited for a given technology (e.g. SWH in Florida), there are cost differences that result from local market maturity and competition. This study reports cost information at a national level; most regional differences are captured in the ranges provided, especially as system sizes increase. Distributed electrical generation was set at 0 to 10 MW, a fairly large upper limit that may be appropriate for large, multi-building sites such as a military base or Federal laboratory.

In general O&M costs are not as available as total installed costs. The O&M cost information is mostly from interviews with industry experts and contractors. Cost, useful life, and size information was gathered from the following reference types:

  1. Published document
  2. Actual project information – publically available in on-line case studies, public presentations, database, or articles
  3. Actual project information – internal, not publically available
  4. Discussion with or quote from vendors
  5. Informed opinion or experience of NREL experts, or screening or assessment report by NREL experts that relies on some or all of the above reference types

Methodology

Most capital cost data used in the calculations are from the 2013 updated sources. 2012 data was used to supplement the update or when new data was unavailable. The data behind the DG cost estimates were given as an average or as a high/low range. When the data was given as a high/low range it was entered as a high value and a low value for that particular category. The mean installed cost presented in the Installed Costs charts was calculated from the average and the high/low data, as was the +/- 1 standard deviation range.

Data for O&M were similarly given as an average or as a high/low range. These data were combined with the O&M data from the previous update because of the lower number of sources for O&M data, as well as the general assumption that O&M has not significantly changed over the last few years. The given range is also +/- 1 standard deviation.

Photovoltaics (PV)

PV cost data is more numerous because it is a widely deployed technology. The data, however, are often out of date as a result of significant decreases in the price of modules and moderate decreases in the price of inverters and balance of system components over the last few years. Installation costs have also decreased due to scale, learning curves, and increased competition. The most recent report documenting current U.S. market prices is Green Tech Media's quarterly Market Insight report. Other references include consulting firm reports, prices from recent government projects, and numerous interviews with NREL experts and solar project developers/installers. PV is broken down into four size categories to reflect the effect of project scale on price. Since the 2012 update, the cost of PV has fallen by an average of 15 percent.

References: 2Arcaro, D., Chea, H., et al., 2013; 3Bazilion, M., Onyeji, I., et al., 2013; 5Entergy, 2013; 6Exelon Generation, 2010; 7Barbose, G., et al., 2013; 10Greentech Media, 2013; 11GTM Research and Solar Energy Industries Association, 2013; 14Lantz, E., 2013; 19NREL's Renewable Energy Optimization (REopt) Tool, 2013; 20Kiatreungwattana, K., et. al., 2013; 21Ong, S., Campbell, C., et al., 2013.

Wind

There is a steep declining unit cost curve ($/kW) as the size of a wind turbine and wind project increases. References show a wide range of O&M costs for wind systems, and O&M costs do not necessarily decrease with increased installed project size at the DG scale. Older installations tend to have higher yearly O&M costs. Newer wind turbines are better designed and have lower installed and lifetime O&M costs than machines deployed in the last decade. Total installed costs for utility scale wind projects are readily available but more challenging to find for smaller systems. References include the American Wind Energy Association report as well as interviews with NREL experts and wind project developers/installers.

References: 1Denholm, P., et al., 2009; 5Entergy, 2013; 14Lantz, E., 2013; 19NREL's Renewable Energy Optimization (REopt) Tool, 2013; 22U.S. Department of Energy, 2013; 23Wiser, R., Bolinger, M., et al., 2012; 24Wiser, R., Bolinger, M., et al., 2013.

Biomass Combined Heat and Power (CHP)

A review of the literature reveals that the most common biomass generators at the DG scale make use of the power plant's waste heat to provide needed thermal energy, which allows projects to be economically viable. CHP is described in some of the references as a technically sound and economically competitive technology that has not yet experienced wide-scale deployment. In the US, most CHP systems are installed in large industrial facilities with both significant electrical and thermal loads. CHP is also often installed at facilities that have a significant waste stream (such as a lumber or paper mill) that serves as a free fuel that would otherwise incur a disposal cost. Cost information for renewable wood-fired steam systems is reported here for system sizes between 100 kW and 10 MW.

Biomass Heat

Wood fired heat systems are technically mature and their costs have not changed significantly over the last few years.

Solar Water Heat (SWH)

Installed cost data on SWH systems were found from installers and NREL engineers who have access to a significant number of system costs. However, O&M costs are difficult to find. Two references (Bircher, Perlman) provided O&M estimates for residential sized systems only in cost per system. O&M as a percent of initial cost was estimated from these reports as well as interviews with subject matter experts. For commercial systems, economy of scale is assumed to achieve a minimum annual O&M of 0.5% of capital cost. O&M for systems with plastic collectors is assumed to be the same.

Solar Ventilation Preheat (SVP)

SVP, also known as transpired solar collectors, is the least deployed, and has the fewest publications, of those technologies included in this study. Cost information is difficult to acquire. The values reported in the table are from actual installed projects and the ranges are supported by discussions with a major vendor. In general, systems installed in new construction would be at the lower end of the cost range, while retrofit systems that may have significant integration costs (e.g. additional ductwork and fans) would price at the higher end of the range. It is assumed there is no maintenance cost for the transpired collectors; however, there is an operating cost for the fan power required to draw intake air through the collector. This is estimated to be 1 Watt per square foot of collector when the system is operational (collector is operated only when useful energy is available; collector is bypassed at all other times).

References: 4Energyguide.com, 2013; 18North American Clean Energy, 2013.

Ground Source Heat Pump (GSHP)

cite

GSHP information came from listed sources as well as interviews with subject matter experts at NREL and installation companies. Capital costs vary significantly depending on geographical location, which dictates land prep prices and horizontal versus vertical drilling for ground loops. Useful life varies significantly between interior components with standard 20 year warranties and ground loop components with 100 year expected lifetimes.

References: 8Geothermal Genius, 2009; 9Goetzler, W., Zogg, R., et al., 2009; 15LtGovernors.com, 2012; 16Meyer, J., Pride, D., et al., 2011.

Useful life

Useful life of the technology was estimated by interviewing NREL experts who have been working with the technologies and also by performing a literature search. Limited information on actual lifetime studies was found. The bulk of the literature referenced included an assumed useful life for a given technology. These numbers are useful since they provide conventional thinking of experts in each field; it is important to understand that they do not include lifetime statistical data of actual projects. The bibliography table shows the reports and papers that were reviewed to establish the conventionally accepted lifetimes.

Table 5 - Useful Life

System Useful Life Years
PV 25 to 40 yr
Wind 20 yr
Biomass Combined Heat and Power 20 to 30 yr
Biomass Heat 20 to 30 yr
SWH 10 to 25 yr
SVP 30 to 40 yr
GSHP 20 yr for interior components 100 yr for ground loop

Size

System size for each technology is intended to be used for a high level estimation of initial system capacity. Actual size may vary. The information was compiled by performing a literature search, using an NREL database with data from actual systems in the field, and interviewing NREL experts. Default system size values from NREL tools such as Renewable Energy Optimization (REopt)1 and In My Back Yard (IMBY)2 were also used. The mean system size was calculated from the average and the high/low data, as was the +/- 1 standard deviation range.

1 REopt is a screening tool that identifies and prioritizes renewable energy projects at a single site, or across a portfolio of geographically dispersed sites.

2 The In My Backyard (IMBY) tool estimates how much electricity can be produced through solar at your facility. It will be replaced with the PVWatts tool after 2013.

Table 6 – System Size

Techology Type Size
(acres/MW)
Size Std. Dev.
(acres/MW)
PV <10 kW 3.2 2.2
PV 10 – 100 kW 5.5 0.7
PV 100 – 1,000 kW 5.5 0.7
PV 1 – 10 MW 6.1 1.7
Wind <10 kW 30 n/a
Wind 10 – 100 kW 30 n/a
Wind 100- 1000 kW 30 n/a
Wind 1 – 10 MW 44.7 25.0
Biomass Combustion Combined Heat & Power 3.5 1.9
Technology Type Size
(Btu/ft2/day)
Size Std. Dev.
(Btu/ft2/day)
SWH, flat plate & evacuated tube 774 320
SWH, plastic collector n/a n/a
SVP n/a n/a
Technology Type Size
(acres/MW)
Size Std. Dev.
(acres/MW)
Biomass wood heat 0.3 0.3
Technology Type Size
(Btu/ft2/day)
Size Std. Dev.
(Btu/ft2/day)
Ground Source Heat Pump n/a n/a

Bibliography of publically accessible references – 2013 update

  1. Denholm, P., Hand, M., et al. (2009). Land-Use Requirements of Modern Wind Power Plants in the United States. NREL.
  2. Arcaro, D., Chea, H., et al. (2013). Solar Annual 2013. Photon Consulting.
  3. Bazilion, M., Onyeji, I., et al. (2013). "Re-considering the Economics of Photovoltaic Power." Renewable Energy. Vol. 53, ppg.329–338. May. http://dx.doi.org/10.1016/j.renene.2012.11.029
  4. Energyguide.com. (2013). Heating for your Business.
  5. Entergy. (2013). A Comparison: Land Use by Energy Source - Nuclear, Wind and Solar
  6. Exelon Generation. (2010). Exelon City Solar. Factsheet.
  7. Barbose, G., Darghouth, N., Weaver, S., Wiser, R. (2013) Tracking the Sun VI - An Historical Summary of the Installed Price of Photovoltaics in the United States from 1998 to 2012. LBNL.
  8. Geothermal Genius. (2009). Pennsylvania Case Study.
  9. Goetzler, W., Zogg, R., et al. (2009). Ground Source Heat Pumps: Overview of Market Status, Barriers to Adoption, and Options for Overcoming Barriers. Navigant, EERE
  10. Greentech Media. (2013). PV News. Volume 32(7). July.
  11. GTM Research and Solar Energy Industries Association. (2013). U.S. Solar Market Insight Q1 2013.
  12. Holladay, Martin. (2013). Are Affordable Ground-Source Heat Pumps On the Horizon?. GreenBuildingAdvisor.com (Musings of an Energy Nerd)
  13. Kavanaugh, S., Green, M., Mescher, K. (2012). Long Term Commercial GSHP Performance Part 4. ASHRAE Journal. Volume 54(10). October.
  14. Lantz, E. (2013). Operations Expenditures: Historical Trends And Continuing Challenges. AWEA Presentation.
  15. LtGovernors.com. (2012). Benefits of a Geothermal Heat Pump System.
  16. Meyer, J., Pride, D., et al. (2011). Ground-Source Heat Pumps in Cold Climates. Alaska Center for Energy and Power & Cold Climate Housing Research Center
  17. North American Clean Energy. (2013). Going Green: Corps Builds Largest Induction Solar Wall in the Country
  18. North American Clean Energy. (2013). Hannah Solar Government Services LLC Awarded U.S. Army Solar Contract
  19. NREL's Renewable Energy Optimization (REopt) Tool: Models & Tools (Fact Sheet)
  20. Kiatreungwattana, K.; Mosey, G.; Jones-Johnson, S.; Dufficy, C.; Bourg, J.; Conroy, A.; Keenan, M.; Michaud, W.; Brown, K. (2013). Best Practices for Siting Solar Photovoltaics on Municipal Solid Waste Landfills. A Study Prepared in Partnership with the Environmental Protection Agency for the RE-Powering America's Land Initiative: Siting Renewable Energy on Potentially Contaminated Land and Mine Sites. 82 pp.; NREL Report No. TP-7A30-52615.
  21. Ong, S., Campbell, C., et. al. (2013). Land-Use Requirements for Solar Power Plants in the United States. NREL
  22. U.S. Department of Energy. (2013). Factsheet: 2012 Distributed Wind Market Report
  23. Wiser, R., Bolinger, M., et al. (2012). 2011 Wind Technologies Market Report. LBNL/NREL
  24. Wiser, R., Bolinger, M., et al. (2013). 2012 Wind Technologies Market Report Summary. LBNL/NREL