Rootop solar power is a booming business in the United States. It's getting easier and easier to do financially and technologically. But the least technological aspect of the process, physically putting panels on a roof, may need to be rethought according to Opower (NYSE:OPWR), a utility data specialist. Its findings not only show that rooftop solar might benefit from a truly minor "tweak," but also proves just how important properly vetted utility data can be to the utility industry.
Most rooftop solar systems are pointed south. This is to ensure that they get as much sunlight as possible -- at some points more than needed. Opower, which collects customer usage data from 28 of the 50 largest U.S. utilities, found that 93% of 25,000 rooftop solar systems it tracks in the western United States send power back to the grid.
According to Opower, "Between 11am and 1pm on a typical day, a solar home produces enough electricity to fuel both itself and an entire non-solar home during those hours." That's largely because the middle of the day isn't a peak usage time since most people are away from home.
Peak usage occurs later in the day, after people start getting home at around 4 p.m. Peak use starts to ebb at around 7 p.m. or 8 p.m. Opower's conclusion: "...the typical solar home is severely misaligned with the needs of the electric grid." Essentially, solar systems are producing power when it isn't really needed, and also when it's cheapest. What Opower's data shows is that, "By the 4pm hour, most solar homes generate enough power to reduce their own grid electric usage, but not enough to export power back to a grid that desperately needs it."
In fact, the stats are pretty interesting. At noon, 93% of the rooftop solar systems Opower looked at sent power back to the grid. By 4 p.m. that number had dropped to 27%. By 5 p.m., when power use really starts to pick up because people are getting back home and businesses are usually still open, that number drops to just 6%.
The solution ...
One of the big problems here, of course, is that the sun only shines during the day and most brightly in the middle of the day. However, that isn't the only issue. A big part of the problem, according to Opower, is the direction of your solar panels. Most likely they point south so that they'll get as much sun as possible. What if that wasn't the case?
About 9% of the systems Opower examined face west. This pushes peak power production to around 2 p.m., with power produced until, well, sunset. According to a University of Texas study, west-facing panels generate nearly 25% more power between 2 p.m. and 8 p.m. in the summer -- exactly when utilities need the most help. However, facing west can mean producing roughly 10%-20% less power overall.
If the homeowner's goal is to maximize solar power production, then facing west is a non-starter. However, if the goal is to maximize the benefit to the grid, then facing west makes much more sense. Why help the grid? Because power costs more during peak periods. If solar homeowners were paid more for power produced later in the day, they could actually wind up making more money, and/or offsetting more of their own costs, by producing power when it's most needed.
According to Opower, "...some utilities already offer such time-varying rate plans, in which customers exporting electricity in the late summer afternoon receive significant compensation (e.g. $0.35 per kilowatt-hour) relative to electricity exported around noon (e.g $0.12 per kWh)." So if you are thinking about installing solar, you should make sure to ask some questions about the orientation of your panels. It might make sense to head in a different direction from the pack.
And, if you are thinking about the changing utility landscape, take a look at Opower. It may look like a company that just takes data from customers and produces utility statements, but its quickly expanding database can do so much more when used properly. Where your solar panels are pointed is just the tip of the iceberg.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.