Photovoltaics is the official name for the production of electricity through sunlight; however, more often than not it is referred to as solar energy. And when you put a bunch of solar cells together, you get a solar system. Large arrays of solar systems are constructed creating solar farms.
Solar energy offers not only the ability to take advantage of a renewable source, but it also offers a myriad of associated manufacturing opportunities as well. This article dives into some of the considerations when modeling the construction and operation of solar farms.
The best way to model the construction of a solar farm requires the line item spending from the builder. To do this, the analyst would need the cost of each item that is purchased as well as the total payroll for the project. Then, using the Analysis-by-Parts method, each category of spending can be entered into IMPLAN.
Another method utilizes the Jobs and Economic Development Impact (JEDI) models put forth by the National Renewable Energy Laboratory (NREL). These downloadable spreadsheets allow the user to enter the state and project size (in megawatts) and see a list of the associated costs by category. These costs can then be translated to IMPLAN Industries and run through an analysis. As with the first option, Analysis-by-Parts would be used to analyze these estimates. Additionally, NREL published the U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018 which breaks out spending differences by the type of system: residential, commercial, and utility.
The last option, which is by far the least specific to solar farms, would be to run an Industry Output Event through IMPLAN Industry 52 - Construction of new power and communication structures. This is the least preferable option as it includes all types of power and communication structures. Per the Census structure types, this includes communication structures like telephone, television, and radio, distribution and maintenance buildings and structures; power plants (nuclear, oil, gas, coal, wood), nuclear reactors, hydroelectric plants, dry-waste generation, thermal, wind and solar energy facilities; electric distribution systems, electrical substations, switch houses, transformers, and transmission lines; and buildings and structures for the distribution, transmission, gathering, and storage of natural gas. Because there are so many structures in this category, it is the least definitive for solar farms.
To model the operations of solar farms, there are two good options. The first is to again visit the Jobs and Economic Development Impact (JEDI) models put forth by NREL. In addition to their construction estimates, they also offer estimates for the operations and maintenance of solar farms. These costs can then be translated to IMPLAN Industries and run through an Analysis-by-Parts.
The other, arguably simpler option, is to run the total operations and maintenance spending through IMPLAN Industry 42 - Electric power generation - Solar. IMPLAN has worked to disaggregate the single “Electric power generation, transmission, and distribution” Industry into nine more detailed ones, including solar. Details on the process IMPLAN used for this is in the article 2017 Detailed Production Functions for IMPLAN’s Nine Electrical Power Industries.
One important consideration for Input-Output and JEDI models is how much of the spending will be happening locally. For example, if the solar cells are being imported into your port city, there is no domestic impact on manufacturing; perhaps only a small impact in transportation. These purchases should be modeled carefully in IMPLAN so as to not overestimate the potential impact. However, perhaps the growth of this Industry offers an opportunity for local manufacturers to increase production or add a new product line.
It’s also important to consider the net effect to the Region. If a city is switching to solar energy due to this new solar farm, a near equal drop in their use of another form of energy is expected if demand is constant. Consider performing a Net Analysis to show the increase in solar energy coupled with a decrease in the energy production that is negatively impacted, like fossil fuels.
Written October 27, 2020