What’s the difference between the installed capacity and electricity generation of energy sources?

It’s a good question and one that’s commonly misunderstood.

In the energy world, these two terms are often used to describe the growth of energy resources in the United States.

Take wind or solar, for example.

According to the EIA, around 1% of U.S. electricity generation came from solar energy in 2016.

NREL

There might be an article about wind making up 8% of all energy generation capacity. Or, that solar will make up 1% of electricity generation in a specific year.

So what’s the difference? Let’s break it down for you.

What is Capacity?

The U.S. Energy Information Administration (EIA) refers to capacity as the maximum output of electricity that a generator can produce under ideal conditions. Capacity levels are normally determined as a result of performance tests and allow utilities to project the maximum electricity load that a generator can support. Capacity is generally measured in megawatts or kilowatts.

Let’s look at an example.

According to EIA, wind turbines accounted for 8% of U.S. installed electricity generation “capacity,” as of December 2016. This means under ideal conditions, utilities would be able to supply 8% of the country’s electricity needs with wind power, but this won’t necessarily be the actual amount of electricity produced.

According to EIA, wind turbines accounted for 8% of U.S. installed electricity generation capacity as of December 2016.

NREL

What is Generation?

Electricity generation, on the other hand, refers to the amount of electricity that IS produced over a specific period of time. This is usually measured in kilowatt-hours, megawatt-hours, or terawatt-hours (1 terawatt equals 1 million megawatts). To understand the unit of megawatt-hours (MWh), consider a wind turbine with a capacity of 1.5 megawatts that is running at its maximum capacity for 2 hours. In this scenario, at the end of the second hour, the turbine would have generated 3 megawatt-hours of energy (i.e. 1.5 megawatts X 2 hours).

If the wind was not blowing strongly enough for the turbine to operate at its maximum capacity, and the same turbine was only producing 1 megawatt of power for 2 hours, the total energy generation would be 2 megawatt-hours (i.e. 1 megawatt X 2 hours). This simple thought exercise demonstrates how calculations of generation take into account the fact that not all generation sources are operating at their maximum capacity at all times, such as when the sun isn't shining or when the wind isn't blowing.

Where Can I Learn More?

The EIA has a roster of Frequently Asked Questions on electricity usage and every other energy topic under the sun.

Learn more about recent advancements in wind energy and solar energy.

Not too long ago, electricity worked as a one-way street—utilities produced energy and people consumed it. Solar energy has changed that model, enabling people who install solar panels on their rooftops to consume the energy generated and sell the rest of it back to utilities. This turns consumers into prosumers—people who both produce and consume energy.

Here are four fast facts about what it means to be a solar prosumer.

1. Prosumers don’t need to produce 100% of the electricity they consume

The solar panels on a homeowner’s rooftop might not produce all of the energy a home needs to function each day. Energy generation also depends on the season. For example, homes consume more energy for cooling in the summer and heating in the winter than they do in the spring or fall. This means that the solar energy being produced doesn’t have to equal the demand at all times; the solar may cover a portion, all, or more than a consumer’s load. This is especially true for people who have smaller rooftops. That’s why solar prosumers still connect to the grid and rely on utilities to balance supply and load just like other electricity consumers.

2. Prosumers don’t sell solar energy to other consumers

When prosumers produce more energy than they can use, the excess is sent back to the grid to be managed by the utility.  However, not all the excess energy is captured back on the grid because the grid was initially built for power to go only one way.   The U.S. Department of Energy’s Grid Modernization Initiative is working to change this by enabling power to flow on a two-way superhighway rather than a one-way street. This includes funding the development of new transformer technology that will allow larger volumes of solar-generated energy from rooftop installations scattered across a utility’s territory to be utilized efficiently onto the grid.

Read More

Consumer vs Prosumer: What's the Difference?

3. Businesses can be considered prosumers, too​

Solar panels aren’t just made for homes. Businesses can use rooftop or on-site solar energy arrays to help offset a variety of expenses. Solar can also be used in conjunction with combined heat and power, which is useful for industrial and large commercial facilities. This technology allows businesses to use the heat that would normally be lost in the power generation process to be recovered for use in heating or cooling, taking business prosumer cred to the next level.

4. Prosumers can save money

Switching to solar can help balance a budget, making the prosumer lifestyle a worthwhile choice. In fact, SunShot-funded research from the North Carolina Clean Energy Technology Center found that in 42 of America’s 50 largest cities, going solar is less expensive than only relying on a utility to generate your electricity. As more financing options become available, solar energy will become even more affordable in cities across the country.

Are you thinking about becoming an energy prosumer with solar? Check out our Homeowner’s Guide to Going Solar to learn more.

*Graphics by Sarah Harman | U.S. Department of Energy

If you own a solar energy system, it’s very likely that the SunShot Initiative has impacted at least one of the steps that helped you get there. Since SunShot launched in 2011, the program has funded hundreds of projects at national labs, universities, and private companies that have added clarity, speed, and cost savings to each step of the “going solar” process.

Powered by SunShot Homepage

The Big Decision

Simplifying the “Going-Solar” Process

Deciding to go solar is the first step in the process and often the most challenging one. A lot of variables come into play: Should I make the leap to solar energy? Is my home suitable for solar? Does it make financial sense to go solar? Who should I go with for installation? SunShot awardees are addressing all of these questions.

The National Renewable Energy Laboratory (NREL) uses SunShot funding to research market barriers that prevent solar adoption, fostering competition within the industry to develop a more streamlined process. Awardees such as Sun Number and EnergySage have developed tools that help consumers find personalized information needed to assess the suitability of their homes for solar and to find the best installers. These companies are also driving down solar costs by providing consumers with new tools to help them make informed decisions on how to get started.

Calculating Finances

Just how much can one save by switching to solar? It depends on a complex mix of your home, local laws, and daily energy usage. Algorithms and remote sensing, however, have made it easier to determine your cost savings.

SunShot-funded small businesses use the latest technologies to make this process easier and faster. Aurora Solar developed a remote design tool that creates custom 3D solar system designs, making it easier to determine accurate financing options and potential savings. Another awardee, Genability, created a third-party savings calculator known as Switch, which instantly generates savings estimates that have been found to be more than 99.5% accurate. And, when it comes to obtaining financing to pay for going solar, SunShot awardees are developing solutions to enable loans, master limited partnerships, and new streams of capital for solar finance.

Rooftop Reality

Once a solar installer is selected and financing is obtained, the installation process begins—much more efficient and affordable thanks to early-stage funding from SunShot. Zep Solar’s rooftop mounting equipment shaves $0.28 per watt off of the total installed price thanks to reduced hardware and labor costs. This savings led to their acquisition by SolarCity, one of the country’s largest solar companies. SolarBridge developed a microinverter that can be integrated into solar panels, eliminating the need to set up modules to a single string inverter. Finally, NREL research is used to establish evaluation systems for solar module durability, as well as inspection guidelines, so that industry can offer uniform quality to every customer.

Solar Financing Options

Talking to the Grid

After installation, solar arrays must be connected to the grid. This step is important because utilities need to plan for increases in solar energy on the grid. Since there are many different utility jurisdictions across the country, the process is rarely standardized, and red tape can create lengthy interconnection times.

Enter more SunShot awardees to help simplify the process.

GridUnity, formerly Qado Energy, developed a cloud-connected tool that uses algorithms to determine what impact a solar installation will have on the grid. It identifies which circuit a solar project will join, calculates its hosting capacity, and provides an instant response on whether the circuit can handle more solar. This can speed up the impact study process in some utility territories from 55 days to just 60 minutes. In addition, to minimize potential negative grid impacts of PV systems, several smart inverters are under development that will allow grid operators to better control solar energy’s local impacts on the electric grid.

Reaping the Benefits

Going solar can help save homeowners money on monthly utility bills, but only if the system is operating correctly. Some awardees have tools that allow you to monitor your energy usage to ensure things are running smoothly. Should the time come to sell your home, a study at Lawrence Berkeley National Laboratory determined buyers are willing to pay a premium of $15,000 for a home with an average-sized, resident-owned solar array. The team is also making home sales easier for real estate agents. They created five standard data fields for solar properties that can be used by the more than 700 multiple listing services around the country to ensure real estate transactions remain secure and efficient.

A Full Solar Circle

Research from Yale University has shown that, if your neighbor notices your new solar panels and you tell them about the cost savings you’re experiencing, the cycle often starts anew as someone else considers going solar. Once a costly process, making the switch to solar is now easier and more affordable thanks to the research and development funded by the SunShot Initiative.

From start to finish, the “going solar” process is powered by SunShot.

It’s been nearly a century since anyone in the U.S. has experienced anything like it: On August 21, the moon will pass between the earth and the sun, effectively blocking some or most of the sunlight that reaches the earth across a large swath of the United States. Starting above Salem, Oregon and ending above Charleston, South Carolina, this is the first eclipse in 99 years that spans the entire continent. While only lasting about two minutes in each location, the output of photovoltaic (PV) power plants across the U.S. will dramatically decrease.

Studying the Impact

The National Renewable Energy Laboratory (NREL) conducted a study of the Western Electricity Coordinating Council (WECC) territory, which covers the vast majority of the Mountain and Pacific Time zones including 14 Western states. In these areas, the eclipse will occur between 8:00 a.m. and noon. Researchers have already examined potential impacts of the eclipse on generation from power plants and rooftops. It is estimated that both sources provide the WECC with PV capacity of approximately 25 gigawatts (GW), utility scale accounting for two thirds of that. Total PV power installed across the U.S. is estimated to be over 44 GW today.

Examining the WECC as a whole, and assuming the worst case scenario—a bright and sunny day—the rolling effects of the eclipse are expected to have the biggest impact at approximately 10:30 a.m., when PV output is projected to drop 5 GW below typical generation levels. This represents the amount of energy needed to power approximately 1 million homes and, if not already anticipated, could create difficulties for portions of the grid network that use solar to meet a significant fraction of electricity demand during the day. The burden of compensating for the lost energy from solar generators will fall mostly on natural gas powered turbines, which are able to ramp up ahead of the eclipse. Hydro generation—power created from flowing water—will also help to fill the void of solar output, though conservation constraints in the West will prevent it from compensating for all of the lost generation. NREL’s modeling is expected to enable utilities to pass through this eclipse without completely disconnecting any PV, to maximize the production of solar electricity.

Preventing Future Issues

Research funded by the SunShot Initiative’s systems integration subprogram is helping to mitigate impacts of the August 21 eclipse and will continue to help utilities plan for weather events that are harder to predict. Solar forecasting technologies allow grid and solar power plant operators to predict when, where, and how much electricity will be produced—thus developing the best strategy for balancing supply and demand. SunShot funding allows NREL to conduct forecasting simulations on two large PV arrays located at a field test site near Denver. As the eclipse happens, those arrays will be monitored to verify the simulations. Denver will experience a 92% eclipse, so the impact is significant and will benefit solar producers during future eclipses.

Systems Integration

The systems integration subprogram enables the widespread deployment of secure, reliable, and cost effective solar energy on the nation’s electricity grid. Learn more

SunShot is working to develop certain energy storage solutions that are scalable, secure, reliable, and cost-effective. As more solar energy continues to be added to the grid, storage would play an important role in mitigating the intermittency of solar, which is currently not capable of meeting energy demand around the clock. These projects would enable solar generated electricity to be dispatched when and where it’s needed. Austin Energy is already beginning to integrate energy storage technology into its management tools and will soon have the capability to divert grid-connected solar to storage facilities. This work will serve as a benchmark reference for any utility to optimize its solar resources at all times.

As parts of the country prepare to experience darkness in the middle of the day, the SunShot Initiative is doing its part to help develop a more reliable and resilient electric grid, regardless of the time of day.

Learn more about SunShot’s resources on the eclipse and visit NASA’s eclipse website.

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