POWER-GEN INTERNATIONAL

Optimizing PV Plant Design to Achieve a

Low Levelized Cost of Energy
by

Kevin Joyce
Black & Veatch

ABSTRACT
As the solar photovoltaic (PV) industry progresses and matures, the importance of achieving a lower
levelized cost of energy (LCOE) becomes increasingly important. Because many of the design
considerations that affect LCOE are interdependent, understanding the complex relationships between
cost, energy production and other parameters of a PV plant design is essential to achieving a minimized
LCOE. Black & Veatch has used its detailed design knowledge and experience with modeling energy
production and cost to create tools that optimize a plant design to achieve the lowest LCOE. By
performing iterative multifactor analysis of the relationships between the many design parameters that
ultimately determine both the performance and the cost of the plant (e.g., ground coverage ratio and
inverter loading ratio [ILR]), optimal designs can be found subject to project constraints (e.g., available
land area, interconnection and solar resource). This paper discusses the nature of the tools used and
provides examples of the relationships between important design factors and their effect on
performance and cost.

INTRODUCTION
The most economically attractive design for any generating facility is one that maximizes the revenue
associated with energy production at minimal corresponding cost. In the case of solar energy
generation, the problem of finding the most attractive design can be reduced to a primary analysis of
energy value and capital cost, with a secondary consideration of the long-term operations and
maintenance costs.

PV system designs must be evaluated based on their estimated cost, annual production (assuming site-
specific solar resource) and a definition of energy value such as time of day (TOD) energy price factors.
The metric of choice that combines all of these economic considerations in a pro forma model is the
LCOE. By definition, LCOE is the constant (i.e., levelized) cost per unit of delivered energy (dollars per
kilowatt-hour [$/kWh] or dollars per megawatt-hour [$/MWh]) that makes the net present value of the
project zero (NPV equals zero) by making the present value of the future net income (i.e., revenue
minus operating cost) stream equal to the cost of constructing and commissioning the plant.

To be able to realistically optimize PV plant design to achieve a minimized LCOE, the following three
principal components are required:

1. Modeling tools that are not only capable of accurately estimating performance (energy production)
as a wide range of design parameters are adjusted and explored but also capable of accurately
capturing the cost impact of varying those design parameters, both in terms of the amount of
equipment and materials and the associated labor and construction costs.

2. A problem definition that properly reflects the project site conditions, commercial drivers and
project goals.

3. Real-world experience with the design, cost and performance of actual PV power plants to ensure
that design variations are accurately modeled and that the results of the analysis are properly
interpreted.

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Black & Veatch has developed tools and procedures for performing these types of automated
parametric analyses on PV system design parameters to evaluate their effect on LCOE.

LCOE PARAMETRIC ANALYSIS TOOLS

Black & Veatch has developed a full suite of tools and procedures for the parametric analysis of PV
system design parameters to determine their effect on LCOE. Three primary components are a
production estimate batch tool, a capital cost tool and an LCOE calculator.

Production Estimate Batch Tool

PVsyst is a modeling application that is widely used and accepted throughout the PV industry; it is the
tool that Black & Veatch uses to generate bankable production estimates. PVsyst was evaluated and
determined to be the preferred application to model PV system performance and generate energy
production estimates. It was also selected because a sophisticated and trusted model is required to
accurately capture the subtle effects of small design changes. However, PVsyst is a difficult application
to automate because it does not have an application programming interface (API) or built-in batch
capability. Black & Veatch enabled the use of this tool for parametric analysis by writing scripts that are
capable of manipulating the program to enter design scenarios and export results in the form of 8,760-
hour generation years. These scripts allow for large numbers of scenarios to be run through PVsyst in a
short time.

Capital Cost Tool

Several levels of cost estimate are available for different purposes, ranging from the conceptual level to
the detailed. For a conceptual level analysis, Black & Veatch uses a basic cost estimate with scaling
factors structured to ensure that changes in design parameters have the appropriate effect on the
capital cost estimate. For a more detailed analysis, Black & Veatch builds a more precise capital cost
estimate from an extensive bill of materials cost database, a detailed set of labor and construction cost
models, and a detailed parametric scaling overlay that is matched with the project design model. Black
& Veatch has experience generating cost estimates for utility-scale PV projects at all levels of precision.

LCOE Calculator
Black & Veatch has developed an LCOE calculator that can be used across renewable technologies. It is
based on a project pro forma that assumes the project financing structure of an independent power
producer (IPP) with a power purchase agreement (PPA). Black & Veatch chose this LCOE model
because its financial mechanics are well-known and widely applicable. It is also a straightforward
model that effectively combines production estimates and cost inputs into a useful metric. The
intended purpose of the LCOE parametric analysis is to identify trends in LCOE rather than to calculate
it precisely. This aligns with the intent of LCOE minimization.

DEFINING THE PROBLEM FOR LCOE ANALYSIS

The goal of LCOE analysis is to find the most economically attractive set of design parameters given
project constraints. To define the problem for analysis, Black & Veatch establishes the optimization
criteria, selects design parameters that will be held fixed and which will be explored, and establishes
project constraints.

Optimization Criteria
Black & Veatch defines the most economically attractive design for a PV plant to be the combination of
design parameters that results in the lowest LCOE within project constraints.

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Design Parameters
The following table lists common variables used in the parametric analysis to determine the most
attractive design. Not all of the parameters will apply to all projects.
PARAMETER NOTES
Mounting System Fixed tilt or tracking systems can be compared.
Tilt Angle The angle away from horizontal toward the equator. This is applicable to
fixed and tracking systems.
Row Spacing This is often driven by construction or maintenance requirements, but can
be optimized if space is constrained.
Azimuth The angle deviation from due south orientation, favoring east or west.
Inverter Loading Ratio (ILR) The ratio of module rated capacity to inverter rated capacity. It is common
practice to have higher module capacity.
Module Technology Thin film or crystalline modules can be compared.

Project Constraints
The following table lists common constraints used to define the parametric analysis. Not all of the
constraints will apply to all projects.
CONSTRAINT NOTES
Site-Specific Solar Resource Site resource and ambient conditions will define the most attractive
design. Solar resource data will need to be for an entire operating year
and will need at least hourly resolution.
Energy Value Factors Commercial terms that value energy at certain times of the day and
year will change the most attractive design.
Land Availability The geometry and size of the collector array may be constrained by the
available land.
Interconnection A capacity constraint associated with the project interconnection will
affect the design.
Equipment Limitations A common equipment limitation is the maximum recommended ILR.

EXAMPLE ANALYSIS
Black & Veatch performed a parametric analysis on a basic design to demonstrate the process for
analyzing a conceptual design. The design parameters are shown in the following table.
ASSUMPTION VALUE
Mounting System Fixed tilt. Tables arranged 2 by 9 in portrait orientation
Tilt Angle Analyzed from 20 degrees to 30 degrees
Row Spacing 8.8 meters
Azimuth Analyzed from -5 degrees to +10 degrees
Inverter Loading Ratio (ILR) Analyzed from 1.1 to 1.5
Module Technology 280 watt polycrystalline modules

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The project constraints were as follows.

CONSTRAINT NOTES
Site-Specific Solar Analysis was performed for the Kansas City National Solar Radiation
Resource Database site and for the Las Vegas National Solar Radiation Database site.
Energy Value Factors Analysis was performed without TOD factors and with Southern California
Edison 2011 factors.
Land Availability The project was assumed to not be land constrained.
Interconnection The project was assumed to not be constrained by the interconnection.
Equipment Limitations The inverter manufacturer does not recommend an ILR greater than 1.4.

The goal of the analysis was to identify the most economically attractive combination of tilt, azimuth
and ILR for the example configuration for three scenarios: with the plant located in Las Vegas, Nevada;
with the plant located in Kansas City, Missouri; and with the plant located in Las Vegas but with
Southern California time of use value factors.

Las Vegas Site

The table and charts in Figure 1 show the results of a tilt angle and ILR analysis for a zero azimuth
orientation. The LCOE values have been normalized to the minimum value seen in the analysis. One
hundred (100) percent indicates the most attractive configuration. In this analysis, the most attractive
configuration has a tilt angle of 27 degrees (interpolated between 26 and 28) and an ILR between 1.4
and 1.45. The manufacturer of the inverter used for this conceptual design does not recommend ILRs
greater than 1.4; therefore, Black & Veatch was constrained to that value (pending an analysis including
the cost of additional hardware to accommodate higher direct current [dc] capacity).

Tilt angles
20 22 24 26 28 30
1.1 108.02% 107.49% 107.12% 106.88% 106.77% 106.81%
1.15 106.14% 105.62% 105.26% 105.03% 104.93% 104.97%
1.2 104.47% 103.98% 103.63% 103.41% 103.31% 103.36%
1.25 103.07% 102.59% 102.25% 102.03% 101.94% 102.00%
ILRs

1.3 101.99% 101.52% 101.20% 101.00% 100.92% 100.98%

1.35 101.23% 100.79% 100.50% 100.34% 100.29% 100.38%
1.4 100.83% 100.43% 100.17% 100.03% 100.00% 100.11%
1.45 100.70% 100.34% 100.12% 100.01% 100.00% 100.11%
1.5 100.80% 100.48% 100.30% 100.21% 100.23% 100.36%

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100.80%

100.60%

100.40%
LCOE

100.20%

100.00%

99.80%

99.60%
20 22 24 26 28 30
Tilt Angle

108.00%

106.00%

104.00%
LCOE

102.00%

100.00%

98.00%

96.00%
1.1 1.15 1.2 1.25 1.3 1.35 1.4 1.45 1.5
ILR

Figure 1
Las Vegas Site

Black & Veatch performed similar analyses for other azimuth orientations (-5, 5 and 10 degrees) and
noted that there was a region that the model said could improve on the LCOE noted in Figure 1. If ILRs
of 1.5 and higher were possible, then an azimuth orientation of 5 percent to the west offered benefit.

Kansas City Site

The table and charts in Figure 2 show the results for the same plant configuration but with the plant
located near the Black & Veatch world headquarters. The LCOE values have been normalized to the
minimum value seen in the analysis. One hundred (100) percent indicates the most attractive
configuration.

At the Kansas City site, the most economically attractive design occurs at 26 degrees of tilt and at a high
ILR. As before, the inverter manufacturer did not recommend ILRs higher than 1.4, so Black & Veatch
would choose 1.4 pending an analysis including the cost of the additional hardware required to add
additional dc capacity. Black & Veatch notes that an ILR of 1.4 occurs at a point on the curve where the
LCOE marginal benefit of additional dc capacity is declining. Based on experience, these points of
declining returns are commonly selected as lower investment design points.

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The higher ILR for the Kansas City site results from the differences in the solar resource. The higher
frequency of low-resource cloudy days allows better utilization of the dc capacity beyond the inverter
clipping point.

Las Vegas Site with TOD Factors

The final scenario also used the Las Vegas solar resource dataset but applied Southern California
Edison’s 2011 TOD factors. These factors include a 3.13 multiplier for summer peak power and a 0.61
multiplier for winter off-peak power. The table and charts in Figure 3 show the results of the analysis.
In this case, the results shown are for an azimuth orientation of 5 degrees west, which proved to be
most attractive. The LCOE values have been normalized to the minimum value seen in the analysis.
One hundred (100) percent indicates the most attractive configuration.

The TOD factors reduce the most attractive tilt angle to 24 degrees. Higher ILRs are still the most
attractive, so a selection at Black & Veatch’s limit of 1.4 is still preferred. Black & Veatch notes that the
inclusion of TOD factors significantly affected the LCOE results, highlighting the importance of
considering commercial constraints as part of the design process.

CONCLUSION
Black & Veatch has developed a set of tools and procedures that allow parametric analysis of the
relationship between design choices and project economics to optimize PV plant design and achieve the
lowest LCOE. The use of this analysis can help ensure the economic performance of a utility-scale PV
project.

Tilt angles
20 22 24 26 28 30
1.1 109.47% 109.47% 109.18% 108.98% 108.92% 109.05%
1.15 108.00% 107.56% 107.27% 107.08% 107.03% 107.16%
1.2 106.27% 105.83% 105.55% 105.37% 105.33% 105.46%
1.25 104.70% 104.29% 104.02% 103.85% 103.82% 103.95%
ILRs

1.3 103.35% 102.96% 102.71% 102.56% 102.54% 102.69%

1.35 102.26% 101.88% 101.66% 101.53% 101.54% 101.71%
1.4 101.40% 101.06% 100.88% 100.78% 100.81% 101.01%
1.45 100.80% 100.50% 100.34% 100.27% 100.33% 100.54%
1.5 100.43% 100.16% 100.04% 100.00% 100.08% 100.30%

100.50%

100.40%

100.30%

100.20%
LCOE

100.10%

100.00%

99.90%

99.80%

99.70%
20 22 24 26 28 30
Tilt Angle

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110.00%
108.00%
106.00%
104.00%
LCOE

102.00%
100.00%
98.00%
96.00%
94.00%
1.1 1.15 1.2 1.25 1.3 1.35 1.4 1.45 1.5
ILR
Figure 2
Kansas City Site
Tilt angles
20 22 24 26 28 30
1.1 107.63% 107.30% 107.12% 107.05% 107.12% 107.35%
1.15 106.19% 105.87% 105.69% 105.63% 105.70% 105.94%
1.2 104.51% 104.20% 104.03% 103.97% 104.04% 104.27%
1.25 103.06% 102.75% 102.58% 102.52% 102.60% 102.83%
ILRs

1.3 101.92% 101.63% 101.47% 101.10% 101.18% 101.41%

1.35 100.87% 100.60% 100.47% 100.43% 100.52% 100.76%
1.4 100.55% 100.31% 100.19% 100.17% 100.26% 100.48%
1.45 100.51% 100.30% 100.20% 100.18% 100.29% 100.51%
1.5 100.24% 100.07% 100.00% 100.01% 100.13% 100.35%

100.40%

100.30%

100.20%
LCOE

100.10%

100.00%

99.90%

99.80%
20 22 24 26 28 30
Tilt Angle

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108.00%

106.00%

104.00%
LCOE

102.00%

100.00%

98.00%

96.00%
1.1 1.15 1.2 1.25 1.3 1.35 1.4 1.45 1.5
ILR

Figure 3
Las Vegas Site with TOD Factors

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Holding Company.

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