Presentation for the Berkeley Rural Energy Group.

1. Cost and Finance in Off-Grid Energy Services
Berkeley Rural Energy Group
Daniel Soto
Sonoma State University
21 March 2014

2. Introduction
How do we accelerate the pace of energy access, particularly
the adoption of watt-scale devices
How do we ensure that these devices are accessible to all
income levels?
Product cost and financing both important

3. Parallels between US and off-grid

4. Manhattan blackout
People exhibit identical behavior in disaster blackouts and
off-grid environments

5. US Third party financing
Growth in financing options led to an increase rooftop solar
Financing is key to off-grid energy access
Top investors target the residential solar leasing model
To address the growing residential opportunity, many of the world’s leading PV
manufacturers have opened new business units and launched financing and hardware
product solutions for the market. More importantly, the channel used to serve the
residential market has shifted quickly in the past three years. In H1 2009, third party
ownership with leases represented less than 20% of the California residential PV
installation market, while in H1 2012 solar leasing claimed >70% market share1.
2
0%
20%
40%
60%
80%
100%
H1-2007
H2-2007
H1-2008
H2-2008
H1-2009
H2-2009
H1-2010
H2-2010
H1-2011
H2-2011
H1-2012
Third Party Other
Calfornia Solar Initiative Residential Installations
http://www.pwc.com/cleantech

6. Outline
Millennium Villages microgrids
Pilot project
Data gathered
Lessons learned
Future Work
Affordability
Negative recurring costs for consumers

7. Millennium Villages pay-as-you-go
The primary objectives were to
Demonstrate system for micropayments for electricity
Remove upfront consumer investment
Demonstrate technical feasibility
Demonstrate customer acceptance

8. Typical sites

9. Millennium Villages Microgrid

10. Millennium Villages Microgrid

11. Millennium Villages Microgrid

12. Millennium Villages Microgrid

13. Customer education

14. Data Collected
Per customer power and energy consumption on 3 second
intervals stored locally
Hourly data sent via cellphone to a server
Customer transactions and credit balances recorded
Allows for observation of account balance and payment
regularity

15. Customer payment behavior
Accurate reporting on the financial behavior of customers
allows for an accurate calculation of risk and return.

16. Time with positive balance
70% of consumers maintained a positive balance over 90% of
the time

17. Time with positive balance
0.0 0.2 0.4 0.6 0.8 1.0
Percentage of Time With Credit Available
0.0
0.2
0.4
0.6
0.8
1.0FractionofCustomers 2012-02-01 00:00:00 - 2012-03-01 00:00:00

18. Positive balance and average expenditure
Many customers with modest expenditures displayed consistent
payment behavior.
Soto et.al. ICTD 2012

19. Technical outcomes
What technical improvements are suggested by these
observations?
Low cost metering solutions
Battery, inverter, generator efficiency
Reliability

20. Low-cost metering system
UCB developed a low-cost metering system for microgrids
Rosa, Madduri, IEEE GHTC 2012
System commercialized by a microgrid startup company

21. Inverter and generator efficiency
Inverters and generators must be large enough to safely meet
the highest demand
Operating below the rated load results in lower efficiency
What is the financial penalty for lower efficiency?

22. Load duration curves
0.0 0.2 0.4 0.6 0.8 1.0
Fraction of Availability
0
50
100
150
200
250
300
350
400
AverageHourlyPower
Lighting
Lighting and Freezer

23. Modeling of improvements
Clear sky insolation model
Semi-ideal inverter model
Choose smallest battery and panel to meet demand
https://github.com/dsoto/pv energy balance

24. Cost penalty for inverter performance
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Day
Night
Constant
Ligh:ng
Freezer
Cost
(USD/kWh)
Typical
Flat
Soto, Modi, IEEE GHTC 2012

25. Battery comparisons
Using same model, what is the dependence of system cost on
the battery technology
Lead acid batteries
Inexpensive
1000 cycles of life
80% round trip energy efficiency
Lithium iron phosphate
Expensive
10000 cycles of life
92% round trip energy efficiency

26. System cost by battery technology

27. Trade off between cost and reliability
Demanding high reliability as a design point can increase cost
Goal is to enable microgrid designers consider reliability in the
design process

28. Cost and energy shortfall probability (ESP)
Lee, Soto, Modi, In Press, Renewable Energy

29. Future Work
Affordability of energy access
Financing of energy access

30. Negative recurring cost
Payback is less important than a reduction in expenditures for
many consumers
If saving is difficult, little ability to pay above existing
expenditures
Pico-power product is an investment that generates returns in
the form of avoided costs

31. Payback periods
Device Initial Cost Monthly Revenue Months Payback
Solar Lantern $20 $2.00 10
Battery for
phone charging
$150 $15.00 10
Battery selling
electricity
$150 $3.00 50

32. Returns and available financing
0 10 20 30 40 50
Life of term (months)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Equivalentrateofreturn
small lantern
battery in a box
retail electricity
Microfinance usually shorter than 12 months and above 35%

33. What are the drivers of finance rate and payback period?
Perceived risk
Investor demand
Alternative investments
Transaction costs
Are there conflicting requirements for donors and recipients
for initial cost and sustainability?

34. Impact on practitioners
How do academics communicate with practitioners?

35. Thank you
Daniel Soto
sotod@sonoma.edu
http://danielrsoto.com