California Solar’s Revolutionary Energy Business Model for Desalination Pumps

As I have mentioned before, water desalination costs consist roughly of 1/3 each of capital, maintenance and energy. The most promising technology so far — carbon nanotube membranes show promise of collapsing capital maintenance and energy costs by replacing a 30 million dollar desalination plant with a <2 million dollar membrane tipped pipe you stick in the ocean. (More on that later.)

However, there will still be energy costs involved with pumping water. Those costs increase as you contemplate pumping water hundreds —even thousands of miles inland.

So what about electricity costs?

There is a serious power generation paradigm shift afoot which will result in lower electricity prices.

Current solar generation efforts underway might well provide a way to offload all the construction and maintenance costs of the electrical infrastructure onto private contractors — Leaving water utilities just the consumer’s cost of metered electricity–all along the inland pipeline.

Here’s How.

Low cost high volume electricity will be generated from next generation solar plants going up in the deserts of Southern California. In fact, it looks like they will be able to bring in electricity at the current cost of coal fired electricity.

None of the companies would give a price for building the solar sites or disclose the rates the utilities will pay for power, but both said the cost would be similar to traditional coal or gas.

It looks like the solar power operators in Southern California have come up with a seriously innovative way to mainstream solar power using net metering.

January 20, 2007

Is the Sun finally rising on Solar Power?

An Interview with Rob Styler of Citizenre

Press Release from Affordable Photovoltaics LLC

 

In the past, solar power has been too expensive and too complicated. To switch to solar, people had to invest their children’s college fund or sell their second car. The average consumer pays $40,000 to convert their home to solar-plus you are responsible for the installation, maintaining the equipment, getting permits-who has the time (or the money)?

A company called Citizenre has a bold plan to remove all of the traditional barriers to solar power. They offer: No system purchase. No installation cost. No maintenance. No permit hassles. No performance worries. No rate increases. No way!?

(My comment:So what if this were a water utility–)

When we first heard about this, we were so intrigued that we contacted the company. It seemed almost too good to be true. Like most innovations, their model is so simple it makes you wonder why no one thought of it before.

You simply pay Citizenre the same rate per kilowatt for power that you used to pay your utility company-but it gets even better. Citizenre will guarantee that your rate per kilowatt will not go up for 25 years. With ever increasing electricity rates, this gives consumers peace of mind and can add up to significant savings. They even have a solar calculator on their website that shows exactly how much you will save over 1, 5, and 25 years. I saved over $13,000 and by using clean energy, it was the equivalent of taking 24 cars off the road or planting 400 trees. Nice.

In the past, “going green” usually implied sacrifice. You get to feel good about saving the planet but most “green” products are more expensive than their “dirty” counterparts. With Citizenre, going green can actually save you money.

This is all made possible by net metering laws that require the utility companies to allow renewable energy to flow into the grid and then allow the consumer to pull that same amount of energy off of the grid at no cost to the consumer. Basically the grid becomes a huge battery. The meter spins backwards during the day when the sun is shining and forwards at night when the consumer pulls that power back off the grid.

(My comment: Ok. So what happens if all along the canal/pipeline into the desert you installed solar electricity generating systems– installed for free by franchisees of Citizenre-that generated twice as much energy as the canal pumps need–so that at night when the solar cells weren’t working–the pumps could still draw power from the network–for free–because they had produced twice as much as they needed during the day. The answer is that there is still a rental fee whose total is still calculated by the amount of energy produced by the solar cells. However, it won’t be anything like the retail rates of .10-.20 a kilowatt retail rates)

These laws were passed because residential energy production was the number one cause of pollution in the US last year, but there are still 9 states that have not joined the party. If you live in Alaska, Tennessee, South Carolina, Mississippi, Alabama, Missouri, Kansas, Nebraska, or South Dakota, the Citizenre Solution is not an option for you yet.

We were still a little skeptical, so we asked Rob Styler, the president of their marketing division, some hard questions.

Q. How can Citizenre afford to install this complete solar system with no upfront cost to the consumer?

A. Because we handle everything ourselves from the solar grade silicon to the final installation, we create savings at each stage of the production. Plus we are building the largest plant for solar power in the world. When you combine our vertical integration with our economies of scale, we are able to produce the final product at half the cost of our competitors.

Q. This sounds like Citizenre required a large amount of money to make all this happen?

A. $650 million.

Q. Now I know why no one did this before you guys. So the customer does not have to give any money to have this complete solar system installed on their house?

A. We require a security deposit, typically only $500, at the time of installation. They get this deposit back, with interest, at the end of the contract. If they don’t pay their bill and walk away from the contract, they lose their deposit and we come take the system off their roof. They are also required to pay a monthly rental for the solar energy system.

Q. And how is that rent calculated?

A. By the amount of energy that the system produces.

Q. But they are paying the same rate they were paying before, right?

A. Often it is actually less. We base our rates on the yearly average for their utility. So we have to base our rates on the prior year. Since rates tend to go up each year, many customers will save money on their first bill, and this will only increase as the years pass. We provide a calculator on our website that will tell specifically what they will save with their particular utility and their monthly usage. Many customers save over $10,000 just by switching to the sun. Our whole mission is to help people join the solution and stop being part of the problem.

(My comment: So a California water utilitiy could go to their web site and calculate on the spot how much they would save by having a solar system installed.Ok here is the web page you go to. Click on the lower left hand corner.)

Q. I like that. How long of a contract do they have to sign?

A. One year, five years, or 25 years. Over 70% of our customers sign the 25-year contract because that locks in their rate for the entire term of the contract. If they sign a shorter contract, their rate is recalculated according to current energy rates at the end of their term.

Q. What happens if I sign a 25-year contract and I want to sell my house in 10 years?

A. You have three options. First, you can ask us to move the system to your new house. We do that one time for free. Second, you can transfer the contract to the new owner. This can potentially add value to your house because if energy rates keep going up like they are and they are 60% higher in 10 years, then your buyer would get a 60% decrease on their energy bill because of your foresight. The final option is that you can contact us, tell us that you just want to end the contract and we will remove the unit. With this third option you do lose your security deposit.

Q. So is my security deposit the most I can lose?

A. Obviously if you don’t pay your bill there will be late fees or if one of our franchisees comes out to your house to remove the unit and you greet him with a shot gun and pit bull, we will have to take legal steps to recover our property. But if the customer is cooperative they should have no worries.

Q. Say I want a system on my house. How does it work? What is the process?

A. One of our Independent Ecopreneurs will help you each step of the way. There are some simple questions to answer about your amount of shade, the direction of your roofline, etc. After you sign the contract, a solar engineer will come to the house to design your system.

Q. What if I don’t like the design? Am I still obligated to the contract?

A. No. You can back out of the contract with no penalty. You don’t even pay the deposit until after you approve the design.

Q. Okay. I like the design. I want the system. What’s next?

A. The installation usually takes about half a day. The permit process can take as much as 90 days depending on how cooperative the local utility is, but we handle everything. All you do is sit back and feel good knowing you are using clean energy to power your home.

Q. What happens if something breaks or goes wrong?

A. We have a complete worry free performance guarantee. If the unit ever stops working, one of our franchisees will rush out to fix it for free. The customer has no rental charges until the system is working again so we are motivated to get it fixed fast.

Q. What if my kid hits a baseball through one of the panels?

A. It is just like renting a car or a TV. You are responsible for returning it in good condition. We recommend that customers contact their homeowners insurance to double check that the unit will be covered under their policy. Usually there is not a problem.

Q. Wouldn’t I save money in the long run if I just bought the system?

A. Actually, no. Renting can save you a significant amount of money, and it protects you from a large investment risk. We can help the consumer evaluate their options so they can make a solid decision. Our goal is to have solar power producing 25% of our residential energy supply in the year 2025. To make that happen, we removed every barrier we could find to solar entry. We make solar simple.

Q. I understand that your manufacturing plant is not completed yet, is that right?

A. Correct. The first systems will be ready to install in September of 2007.

Q. So why would someone sign up now?

A. First because they lock in their rate as soon as they sign up. Second, they get in line so they can get their system sooner once the plant is producing. Third, it also helps us show the market how many people will go green if we provide an offer that makes sense on every level, including economically. To quote Ghandi, “Be the change that you want to see in the world.”

Q. So how does someone sign up?

A. They just go to http://www.affordablephotovoltaics.com and they can sign up for free right now

………………………….

Nice interview.

So for the purposes of a pipeline — local solar franchises could install and maintain the photovoltaic equipment along the pipeline that fed electricity at low fixed predictable costs to the generators that ran the pumps that pumped the water inland.

Kind of nice — don’t you think — that they lock in prices for twenty five years so that the consumer is protected from rising electricity prices….But what if future photovoltaic electricity prices fell rapidly and dramatically. That’s what Nano Solar has in mind. “Tomorrow’s solar panels may not need to be produced in high-vacuum conditions in billion-dollar fabrication facilities. If California-based Nanosolar has its way, plants will use a nanostructured “ink” to form semiconductors, which would be printed on flexible sheets. Nanosolar is currently building a plant that will print 430 megawatts’ worth of solar cells annually—more than triple the current solar output of the entire country.” And prices will fall substantially. According to Wikipedia.

Estimates by Nanosolar of the cost of these cells, fall roughly between 1/10th and 1/5th [3] the industry standard per kilowatt. A significant cost reduction which, if true, is expected to drastically affect, if not revolutionize the modern energy market.

Current costs for photovoltaics are +-.18@kilowatt hr vs +-.03@kilowat hr for coal generated electricity. So 1/10 of .18 would be .018 cents@kilowatt hour. Operating & maintenance costs add another .01 cent@kilowatt hour

That 1/10th number is not a fluke either. Another company called Innovalight with similiar technology — claims it will be able to do the same thing.

Innovalight has developed a silicon nanocrystalline ink that holds the promise to bring flexible solar panels to cost that could be as much as ten times cheaper than current solar cell solutions.

In fact according The Energy Blog:

Their [Inovalight]technology is similar in some respects to others that are developing thin-film silicon photovoltaics. Kyocera, Unaxis , Ovonics, Sanyo, Energy Photovoltaics , Konarka, Nanosys and Nanosolar are companies in this field that I have written posts about. It seems with all these companies and all the companies developing non-silicon thin-film products, a few should emerge as leaders with low cost solar products.

I think that its safe to say the costs of producing photovoltaics are going to come down substantially in the near future. Basically, we’re talking about electrical generation going through a paradigm shift.

Now remember we are talking about two kinds of solar power generation here. The first is the large scale thermal solar plants located in remote desert locations and the second is photovoltaic systems which are usually small scale affairs located on roof tops. (However, with photovoltaic costs falling so dramatically–next generation solar farms may use phtovoltaics rather than thermal solar power generation.)

A company like Citizenre is using both the large scale thermal solar plants and the small photovoltaic systems by way of net metering to gain enormous economies of scale.

One hidden cost of building the large power generation plants in remote sites is the costs of building electrical lines back to the main grid. To offset these costs

California ISO asks feds to back plan for greening the grid

Folsom, CA, Jan. 26, 2007 — The California Independent System Operator Corp. (California ISO) filed with its regulator, the Federal Energy Regulatory Commission (FERC), to approve in concept a financing plan for transmission trunklines to remote locations in order to get green power from multiple users on to the grid.

If the new payment mechanism is approved and implemented, it would be a means of removing financial barriers that can hinder development of wind, solar, geothermal and other renewable energy resources, said the California ISO.

This is a good idea and should be implimented in other states beside California.

Finally, from Moss Landing in Monterey California, an interesting method for drawing water from the ocean is being considered. Rather than stick a pipe out in the ocean planners are contemplating digging a diagonal well from the shore at a cost of 2 million dollars.

Cal Am estimates well drilling to cost $2M

PUC asked water company to research method seen as less invasive way to cool desalination plant

By KEVIN HOWE
Herald Staff Writer

If California American Water is required to draw seawater from wells rather than Moss Landing’s once-through water cooling system for a pilot desalination plant, the cost will be about $2 million, the company has told the state Public Utilities Commission.

The purpose of the diagonally drilled test wells, Bowie said, would be to see if they could draw enough water to support a full-scale desalination plant, a process that would involve water quality testing and may include experimental desalination.

The company’s estimate for all of that work, including some pilot water treatment, is $2 million, she said, “and they may not ask us to do all of that.”

Subsurface intakes are diagonally-drilled wells that extend below sea level toward the ocean floor. They are the favored desalination technology of many environmental groups that object to the open ocean-water intakes employed at Moss Landing and other coastal power plants, because they can trap plankton, larvae and other small organisms.

Subsurface intakes collect water after it has passed through layers of sand, soil and gravel, thereby avoiding impacts to marine life and reducing the need for pre-treatment before the water goes through the desalination process.

In Marina, a subsurface test well would draw water from the seawater-intruded, 180-foot aquifer. Engineers have posed the theory that drawing water at this location could actually help prevent the advancement of seawater intrusion.

Mark Lucca, general manager of the Marina Coast Water District, said district officials and Cal Am representatives have been talking in general terms about possible test wells and sites, “but I’ve not heard about an ‘X’ on the map.”

No decision has been made to drill test wells, Bowie said.

If the PUC requests additional subsurface research, Bowie said, installation of the test well could begin as early as July. The company would need appropriate permits from the Coastal Commission and other agencies for the well.
As currently proposed, the Cal Am pilot plant would divert seawater from the Moss Landing plant’s once-through cooling system. It would then discharge the remaining brine from the desalination process into the power plant’s system to be returned to the bay.

The state Lands Commission early last year adopted a resolution to phase out once-through cooling systems for coastal power plants.

Using the diagonal wells would eliminate the environmental objections of once-through cooling systems and avoid making desalination plants dependent on them.

Desalination, combined with aquifer storage and recovery, Bowie said, has been identified by the Public Utilities Commission as the most viable and environmentally sensitive supply project for the area.

For the full article click here.

2 Million Dollars to drill a diagonal well out into the ocean. That looks like the future cost of a desalination plant– –someday — when all that’s needed is a pipe stuck out in the ocean — with a semipermiable membrane attached to the cnd. Except that they won’t need to drill diagonal well. They’ll just need to lay pipe out into the water. Which should be cheaper than 2 million.

Update:

In December I blogged about peak oil predictions of the collapse of production of Saudi oil production.

A couple of things happened in the last month that I think will result in the collapse of demand for oil in the next 10 years. First GM introduced the hybrid Volt at their auto show in January. The car goes 40 miles on a charge and then switches over to gas. It costs an extra $5000 to make. It can be recharged in 6 hours overnight. (Since standard commutes are <=33 miles daily most cars can be charged overnight without using gas.) The DOE released a study saying that 85% of the US could run off hybrids without need of upgrading the current US electrical system because cars would be charged at night–during a period of low demand. Finally, Bush signed an executive order mandating that federal vehicles use uses plug-in hybrid (PIH) vehicles. So GM will have enough demand to justify investments to ramp up production that will leverage economies of scale to bring down prices that will make the car attractive the public.

 

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5 Comments on “California Solar’s Revolutionary Energy Business Model for Desalination Pumps”


  1. […] MSSC Salinity Summit 2008 Last February I wrote a piece called California Solar’s Revolutionary Energy Business Model for Desalination Pumps […]


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  4. […] biodiesal significantly. (Same goes for thermal depolymerization.) Further, solar panels mentioned here will come onstream next fall at 1/10 current costs to convert sunlight to electricity for […]


  5. […] operation” Too bad they won’t have those cheap photovoltaic cells that I mentioned in last week’s post. Those won’t come out until this fall. However, a couple  ideas mentioned in this blog […]


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