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The ‘Lock-In’ Concept and Passivhaus Construction

It’s better to save up your money for a deep-energy retrofit in a few years than it is to implement less comprehensive measures now

Over the long haul, a deep energy retrofit saves much more energy than a moderate retrofit. To achieve the greatest level of long-term of energy savings, homeowners should save up enough money for a deep energy retrofit in a few years rather than implementing more affordable retrofit measures now.
Image Credit: Global Buildings Performance Network

Alan Gibson (my GO Logic colleague) and I just returned from the 18th annual International Passive House Conference in Aachen, Germany. This incredible three-day conference featured some of the superstars in the Passivhaus community as well as influential European policy makers, including Dr. Wolfgang Feist, founder of the Passivhaus Institut.

We witnessed a watershed moment in the adoption of the Passivhaus standard in European policy, and saw solid evidence of widescale, successful implementation of all types of Passivhaus projects across the globe. And I am happy to report that North America was well-represented. Our GO Logic presentation was one of several demonstrating Passivhaus market viability in North America.

Higher renovation standards yield increased energy savings

Of the many inspiring, interesting, and in some cases very geeky perspectives that we were exposed to, there is one that has really stuck in my mind that needs to be better understood in order for anyone — be they policy makers, lenders, or homeowners — to make sound decisions regarding investment in reduced building energy consumption. Dr. Diana Ãœrge-Vorsatz, director of the Center for Climate Change and Sustainable Energy Policies at Central European University, presented this new perspective using the catchphrase “lock in.”

When you look at the long-term impact of different levels of energy-efficiency in buildings across a 50-year span, taking an incremental approach to renovations — achieving, say, a 40% improvement in building performance — is actually a very poor strategy, Dr. Ãœrge-Vorsatz explained, as compared to waiting several years until a proper Passivhaus-level building shell can be implemented. How could that be?

Well, across a 50-year period, on a macro scale, a moderate, LEED-Gold-level energy retrofit will hold the greenhouse gas emissions from building energy use to only a 46% increase from today’s levels of CO2 in the atmosphere. This is not such a bad result. Consider what would happen if we do nothing to improve energy efficiency by the time the global population is 9 billion people. Building energy use will increase by 110%, with CO2 emissions increasing by 68%. Draw your own conclusions about what will happen next.

Meanwhile, a Passivhaus-level renovation approach will actually reduce energy use of buildings from today by 34%. That means the difference between doing a Passivhaus renovation over standard, incremental improvements is actually an 80% difference in CO2 levels over 50 years! The graph at the top of the page illustrates this concept.

Window replacement jobs are infrequent

In Dr. Ãœrge-Vorsatz’s words, the “lock in” effect is acknowledging that most buildings that undergo a moderately efficient renovation are not likely to be renovated again for another 50 years, given the financial strain on owners to recover the original renovation investment cost. In other words, you will not re-replace the windows in 10 years, even if you understand window specifications better then than you do now. Your replacement windows have “locked in” a moderate level of efficiency for the long term, and that decision will result in 80% more CO2 emissions than a Passivhaus renovation would have.

Conventional wisdom is that incrementally increasing the performance of buildings is the best approach. That concept needs to be revisited. “Locking in” with moderate improvements in energy performance has a massive negative outcome over the life of a building renovation — which is the margin we require at this stage to combat global warming. So if Passivhaus-level efficiency appears out of reach when building new or renovating — given that the policy, products, and financing required to make it happen are not yet in place — it is worth considering waiting a few years until they are available, for your own financial interest and for the health of the planet.

For more information on the “lock-in” concept, please visit the Global Buildings Performance Network.

Matthew O’Malia is an architect and principal at GO Logic in Belfast, Maine.


  1. dankolbert | | #1

    Good report
    Thanks, Matthew - lots to think about here.

  2. GBA Editor
    Martin Holladay | | #2

    Does it make sense to wait and save for a Passivhaus retrofit?
    Thanks for your excellent summary of the "lock-in" concept.

    The argument makes sense for some types of retrofit work, but not for all.

    Clearly, if homeowners spend $15,000 on a window replacement job, they are going to be reluctant to consider another window replacement job for at least 25 or 30 years. So it makes sense to choose your windows wisely, and to do a little math before proceeding. (Actually, it rarely makes economic sense to replace existing windows, but that's a topic for another blog.)

    Other types of retrofit work make a lot of sense at any time, even if a homeowner can't afford Passivhouse (EnerPHit) level retrofit work. It always makes sense to seal air leaks at a basement rim joist, for example, or to seal air leaks in a utility chase that connects a basement with an attic. Many types of air sealing jobs fit the incremental model.

    Finally, if Passivhaus-level retrofit work doesn't make economic sense now -- and it often doesn't -- it is extremely unlikely that it will make economic sense in 10 years. (I know that many analysts believe that energy costs will rise on a steep curve, changing the math for retrofit work, but I'm a skeptic -- especially in light of the recent drop in the cost of electricity from renewable sources.)

    So, if a deep energy retrofit that includes the installation of 4 inches of exterior rigid foam on a building's walls, along with the installation of new triple-glazed windows, makes no economic sense now -- and it doesn't -- then I wouldn't advise anyone to put their nickels and dimes in the bank, saving for this type of work in the future.

  3. mdahlhausen | | #3

    Commercial buildings may be different
    My understanding is that "lock-in" graph shows energy use for all buildings - commercial and residential. Most commercial buildings are categorically different from residential buildings, with most loads coming from ventilation requirements, lighting, and plug loads, and their schedules. There are sometimes non-obvious trade-offs. For instance, infiltration and and lower thermal resistance may provide substantial cooling in commercial buildings in colder climates with high plug loads, and this cooling may be as important as the benefit of reducing heating demand in the colder months. Of course, as plug and lighting load goes down, wall and window thermal resistance becomes more important. Infiltration also matters for humidity contributions, and is significant for high-traffic buildings (retail), or tall buildings.
    I expect that reducing plug, lighting, and ventilation requirements will dictate the energy savings in commercial buildings over the coming years. It'll be the lower solar-heat gain windows and sensible window-to-wall ratios in new construction in South China and India that will dictate building energy demand globally, not so much the relative difference between triple-pane and double-pane in the heating climates of Europe or North America (though this is still important, and should be encouraged).

  4. Expert Member
    Dana Dorsett | | #4

    Show the CO2 math, the underlying assumptions...
    ... and the 1-sigma error bars.

    Dr. Ürge-Vorsatz may have some data to work with, but it's probably mostly conjecture with very large error bars. Predicting the carbon footprint of future energy sources is fraught with potentially large errors. The notion that reducing the energy use of a building by 40% would still result in an atmospheric carbon increase by 46% in 50 years is an assertion that requires more explanation. While the average energy use of the buildings may not change much over 50 years, the carbon footprint of the energy sources can (and probably will) by quite a lot, even over a sub-decade period of time.

  5. jinmtvt | | #5

    Martin and Dana ...
    IT seems if we look at the problem from an NA pov, that the economical limitations are always brought up first.
    I wonder why that is .
    How can a movement that is sooo largly adopted in Euro countries, be brought to its knees here using only the homeowner investment argument...
    It is only what there is to it ?

    There must be something that either we do not understand or is fundamentally different from EU countries to NA countries ...

    It seems impossible that soo many smart organization and people from EU , mainly germanic countries, are all on the wrong path and agree on it .

    I personally have hard time with the fixed energy requirement from PHI for all different situations,
    just not very logical if you consider the vast climatic difference between NA itself and vs EU climate.

    But, maybe it is the "standard" itself that is driving it forward.
    It sets hard "metrics" and values that are easy for anyone to follow, instead of
    going with a loose or table of set values for each different situations.

    Maybe the difference in price for labor and materials has to do with the ROI .
    We tend to be much more egocentralistics around here,
    they are much furter into the societal investments than we are least economically wise.

    I think it would be great that we try to find what exactly makes PH stardard work there
    and not quite that much here .

  6. GBA Editor
    Martin Holladay | | #6

    Response to Jin Kazana
    I'll speculate about some of the reasons why the Passivhaus standard has been more widely adopted in Germany and Austria than in North America:

    1. The standard makes more sense in the climate of Central Europe than in the colder regions of North America.

    2. Construction costs in Europe are higher than in the U.S., changing the cost-effectiveness calculations.

    3. Energy is significantly more expensive in Europe than in the U.S.

    4. The founder of the Passivhaus Institut is German, and the institute is located in Germany.

    5. Europeans tend to be more respectful of authority figures with academic degrees than Americans. Americans have a stubborn skeptical streak, and are more likely to examine basic principles rather than to swallow a theory without analysis. (This last idea will likely get me into trouble. I may be wrong on this point.)

  7. jinmtvt | | #7

    Martin :
    i agree about the origins of the PH ,
    what i am shooting at is more of the "way" we handle discussion about PH here and other NA communities .
    There are alaways hard followers and their antiparts,
    but everytime we mention PH , we always go back to the ROI point
    which is usually pretty far up ahead in time when analyising NA projects.

    When i attended mr Lang conference, i was astonished when he mentionned about pretty short ROI on many of the projects he showed us,
    going as far as a 5 years packback time on some homes VS regular building system.
    And this is to PH standard, not the PGH standard.

    How is it possible ??

    This is where i would like to discuss about your point #2 ..

    From his slideshow, there was quite a few $$ example of construction costs which seemed very low compared to what i am used to read about around here, and experience locally in Quebec.
    Some as low as ~ 125$/SQ FT for a PH multiresidential buildings ,
    and i'd have to look for it but i recall 1 house project @ ~ 150$/sq ft ( without land ) up to PH certificate.

    I haven't seen too many professionally built PH project s@ ~150$/sq ft .

    My guess is that either we built very ineffeciently here and or some people are making more money than their EU counterparts for similar projects.

    onto 5 : as discussed a few week ago, Germans tend to be control freaks, PH provides the control required for building and thermal regulation ..maybe this is something they like.
    But we are talking about massive acceptance going up to complete cities that will be built using this standard... again you cannot f00l everybody .

    Again i am not a follower of the 20" subslab insulation to mett PH ,
    but i cannot understand why soo many people would invest on this
    standard if there is not something big about it.

  8. Expert Member
    Dana Dorsett | | #8

    ..and more...
    6: Europeans tend to build for centuries-long building lifecycles, whereas tract housing in the US often doesn't make it past 50 (which is a a resource & sustainability issue problem on it's own.)

    The carbon content of heating/cooling energy isn't constant over time OR location. Assigning hard CO2 emissions levels to a building's energy use simply has no single-number hard basis, and can vary by more than an order of magnitude. A code-min house on a hydro & wind & solar powered grid (like much of Quebec or Washington state) heating a building leveraged by heat pumps can be lower-carb over then next 50 years than a PassivHaus starting out with the present-day German grid.

    And without a crystal ball or a completely inflexible decades long power development plan, how do they average the carbon content of power used at the PassivHaus on the German grid (or any grid) over the next 50 years?

    The implied precision in the numbers presented are quite dubious when delivered without the underlying assumptions.

    I haven't been talking about the financial/economic aspects of it at all, only the carbon content of the energy use over 50 years, and how squishy those numbers really are.

    Case in point:

    There is archealogical evidence that years ago my house was being heated with #2 oil, at probably 70% net thermal efficiency, and probably using 1.5x-2x the annual electricity that it currently does, most of which was from 30% efficiency thermal coal and 25% efficiency #2 jet peakers. But 45 years ago the owners hooked up to the gas main and installed a 78% efficiency gas furnace, cutting the space heating carbon load by a third, and the total by more than 20%.

    About 30 years ago somebody put some storm windows up, taking a low double-digit bite out of the space heating carbon.

    About 20 years ago the replacement gas-fired appliances marginally improved upon that, and by then 1/3 of the electricity was coming from low-carb nukes, and at least half the rest was from a combination of 40%+ efficiency combined cycle gas and 30% efficiency gas peakers, all taking another double-digit chunk out of the carbon emissions rates without changing the energy intensity at the house. Shortly thereafter all low-efficiency incandescent lighting was purged, replaced by fluorescent lighting, cutting the electricity use by at least 1/3.

    In the past 15 years between air-sealing and retrofit insulating the wall cavities the space heating energy use was cut by about 1/3, without anything like a major re-build of the house.

    A couple of years ago we installed an ~80% efficiency wood stove, cutting the space heating net carbon of the remaining space heating carbon load in half, again without major changed to the house. By then about half of the grid electricity here was from low-carb nukes + hydro + other renewables, the rest mostly from ~50% efficiency combined cycle gas.

    As the grid grows greener, heat pump options start looking favorable, but biomass burners like pellet boilers can also be used sustainably here, with a lower carbon footprint than heat pumps (and without overstretching the grid.) And as the lifecycle of things like roofing & siding come full-term, and as the collection of spot-insulation improvements that can be had get done, there is at least another 25% of space heating energy reduction that can be had without a major re-build of the house.

    At any one point in the 91 year history of this place predictions at any point about the next 50 years (or lifecycle) carbon emissions based would have overshot reality by multiples of what has actually come to pass. Yes, PassivHaus is predictably low-carbon right now, but it's very easy to overestimate, and very difficult (impossible?) to accurately estimate even the next decade's carbon output of a new house built to code minimums, even when the energy intensity can be known fairly well. In less than 15 years credible analysts are predicting that cheap PV solar will be significantly undercutting all other energy sources on raw cost, which will drive a massive and rapid shift toward distributed PV as a primary energy source. But those analysts could be wrong. But there could be nearly an order of magnitude difference in the 50 year carbon output of a house based on whether the optimist's views are exceeded (as has historically happened with both PV and wind power), or if they turn out to be dead wrong, and the carbon content of the grid is static for 50 years, an eventuality I don't consider very likely, but my crystal ball has lied to me before.

    What I want to know is, what scenarios were played out in Dr. Ürge-Vorsatz's crystal ball that led to such seemingly fixed CO2 numbers for total? What is the basis for assertions such as

    "Well, across a 50-year period, on a macro scale, a moderate, LEED-Gold-level energy retrofit will hold the greenhouse gas emissions from building energy use to only a 46% increase from today’s levels of CO2 in the atmosphere. " ???

    That 46% number seems like a real number- not a rounding off to 45% or 50%, but there is no hint of just how big the estimated error bars on that are. Could it really be a 60% increase, or possibly a 10% DECREASE? Show me the base assumptions, and the math!

    It's simply not a number that stands credibly on it's own- it needs clarification, beginning with the underlying assumptions about the carbon content of the energy used, and how carbon emissions from non-building sources tracking, etc. Whatever the assumptions are, at least some of them are guaranteed to be wrong, and wrong in ways that effect the outcome. As a number seemingly pulled out of the ether, without context it's a useless & not particularly credible number to work from. None of this operates in a vacuum.

  9. Expert Member

    A couple of comments
    I don't know enough or maybe we haven't been told enough to evaluate this latest plug for Passive House standards.
    Reading the report a couple of things do come to mind. In addition to Dana's comments on the assumptions behind it, I see in this month's Economist magazine that if the present fertility rates continue many countries may well face a crisis of under-population. Japan for example will go from it's current 127 million to 43 million by 2110. So the Malthusian scenario envisaged in her research may or may not come true.
    I also wonder whether the embodied energy of the components (Yes I'm thinking about all that foam again) necessary to retrofit a building to Passive House standards have been accounted for in the analysis.

  10. jinmtvt | | #10

    EPS has approx 2.5KG of Co2
    EPS has approx 2.5KG of Co2 per KG of product .

    I don't know shiznit about Co2 maths ..

    40 years ROI could be ok .. but the next 6 " ??? ouch
    on the energy basis its not that bad though

    at the current rate Asian countries are rising up,
    they will probably be the trouble maker more than NA and EU pretty soon !

    As Dana pointed out, regions where energy has less Co2 impact, all this means not much.
    And with the PV rage, it will be again even less dramatic.

  11. DEnd2000 | | #11

    PH costs response to Jin
    Jin, you have to remember that most of the PH costs in Germany relate to multifamily buildings, where as in the US the main projects we see are single family homes. The reason this is important is that multifamily buildings can obtain a very efficient floor to enclosure ratio (F/E) a lot easier than a single family home can. Building Science Corporation has a very nice insight piece on this topic:

  12. jinmtvt | | #12

    thanks for the info .
    I know that most of our projects are single family detached houses.
    They have also many similar projects .

    I've invest a hour or two yesterday trying to find more info about project costs in DE and AT ,

    and most of what i've seen listed overs around 140$USD/sq ft TO 220$USD/sq ft
    in the detached single family projects .
    ( i did not count the extravagant architectural pieces which brings the prices up to 3-400$/sq ft )

    Although most of what i found ( not many mention the costs , and i have not found info on if it was for both land and building or just building cost on any of those ... it did seem like it as either PHPP planned building only cost of end of project building only costs )

    are in the high 175-200$ /sq ft domain.

    i'll read the BSC report...this is one of the few it seems i missed on their website :)

    I've just worked ( 1-2 weeks ) ago on a quick excel sheet with calculations to determine best ratio of floor to envelope for common sizes of houses in my region, so good timing!!

  13. mikekeesee | | #13

    Lock-In Passivhaus Concept
    Mr. Omalia has it almost right, or should I say the Passivhaus folks have it almostright. There's no doubt that doing a "deep retrofit" provides greater long (and short) term benefits both to the individual owner (greater comfort, lower utility bills, etc.) and society (lower greenhouse gases, etc.). The issue as alluded to is when is the best time or opportunity to undertake such an effort. Let's be frank, a deep retrofit, passivhaus or not, is a serious and expensive undertaking. So when's the best time to do it? Omalia's article implies that we should wait for the passivhaus opportunity without really describing what that effort is. I'll assume it means reducing heating and cooling loads by adding lots of (exterior) insulation, air sealing, and changing windows. Unfortunately, you may have to wait a long time for this to get done in the vast majority of homes, and we don't have that kind of time if we want to make big impacts in a short period of time. For example, the California Public Utilities Commission (CPUC) has as one of its big, bold goals to reduce existing residential energy use by 50% by 2020. sSo we don't have a lot of time.
    So what can we do? As a researcher w/ the Sacramento Municipal Utility District (SMUD) I sponsored several deep energy retrofit projects (projects were estimated to save between 50 and 70% of estimated annual energy use). The projects rehabilitated abandoned, foreclosed homes, including installation of lots of insulation. One project saw 4" of exterior insulation installed using the Quadlock product. None of the projects made economic sense as stand alone efforts, meaning if you were to make the improvements as true retrofits. However, if the costs of the improvement were financed using an energy efficient mortgage (or standard mortgage) the energy bill savings were easily recouped over the life of a 30 year mortgage. As a result, my research indicated that we should focus deep retrofit efforts at the time of sale, when a new homeowner could amortize the cost of the improvement using low cost mortgage financing. Additionally, there were several other benefits for doing a deep retrofit at time of sale, such as minimizing the disruption of the occupants such retrofits entail. Furthermore, the market is huge with 4 to 5 million homes sold each year and would enable whole house contractors a viable business model.
    But still, this isn't enough if we're really serious about saving energy and reducing GHGs. Think about the CPUC's big, bold goal. Other deep retrofit opportunities occur when homeowners have to replace mechanical systems or roofs. Work done by Rick Chitwood in Redding, California showed that a simple package of measures - air sealing the attic, increasing attic insulation to R-38, along w/ a high efficiency mechanical system (he used heat pumps) with tight ducts - produced big savings for both the home owner and the utility (big, permanent reductions in peak demand). A similar approach could be done w/ re-roofing - air seal the attic, add attic insulation, and tighten the mechanical system for those homes that have mechanical systems in the attic (most in California).
    So the point I'm trying to make is that we don't need to wait, in fact we can't wait, for Passivhaus type retrofits to get really big energy savings in the short term. In fact, we need to concentrate our efforts on promoting deep retrofit packages at time of sale and replacement of mechanical systems and roofs to take advantage of this "natural opportunity." Additionally we need to work to change utility energy savings incentives and programs (the strongest drivers of efficiency in the country) to focus on such programs rather than their current widget/appliance approach (think CFLs or rebates on high efficiency air conditioners), including a full scale, national effort to make the energy efficient mortgage work.

  14. Expert Member
    Dana Dorsett | | #14

    When your favorite tool is a hammer... (thanks, michael!)
    ... the whole problem seems to look like a nail.

    Deep energy retrofits & PassivHaus buildings only reduce carbon footprint when the energy sources have a carbon footprint.

    The carbon content of the energy used is variable in both over time & by location.

    The lifecycle financial cost of lo-carb distributed electricity is falling precipitously, and can be leveraged by high efficiency heat pumps for the heating & cooling fraction of the home's energy use.

    The all-in current up-front cost of grid tied PV is $2/watt in Germany, $2.50/watt in Australia, but in the $4+ range in the US. The world price of grid-tied PV will be under a buck a watt in less than five years, under $2 in the US. Small scale high-reliability grid storage using lithium ion technology is currently ~$400/kwh, and is anticipated to be under $200/kwh in less than five years. And lithium ion isn't the cheapest technology going- just the current darling, driven in part by it's high energy density (not needed for grid applications) making it a game-changer in the personal transportation sector when the price gets low enough.

    Wind power is cost-competitive with thermal coal and combined cycle gas at $ $4.50/MMBTU gas and $2.50/MMBTU coal. And PV+ storage at $4/watt + $400/kwh is cost-competitive fast-ramping gas oir oil fired peakers, and below the fixed rate retail residential rates in high cost electricity states. At $2/watt + $200/kwh it becomes cost competitive with grid-retail almost everywhere in the US. The carbon content of grid power can (and will) be reduced quite rapidly compared to the lifecycle of a building.

    From a carbon-reduction point of view PassivHaus and Deep Energy Retrofits may still make lifecycle sense in some particular locations in 2014. But the point where the carbon-footprint value of higher-performance building envelopes vs. site generation of local lo-carb power cross over is rapidly overtaking building performance at the high performance end. It takes both a sharp accounting pencil and a crystal ball to estimate where the crossover point is on any individual house/location/grid, but it's clearly not the same every place and for all time.

    Does a $10,000 cost-adder for the windows in 2020 save more atmospheric carbon over it's lifecycle than the 5000-10,000 watts of on-site PV that the money would buy? It depends a lot on what is (or will be) heating / cooling / powering the house for the next 25-50 years. But it would be silly to assume that the house is going to be heated with a #2 oil-burner, and all grid power will be from 30% thermal efficiency coal plants for the next 50 years, when low-carb renewables are already cost-competitive with incumbent energy sources.

    Capital is not infinite- getting carbon reduction on a least-cost basis is important for getting there fast. The case for PassivHaus as the least-cost or most complete carbon reduction is already well beyond credibility in some locations (and losing ground every year.) It's not a bad standard as standards go, but it's something like a hammer, and not all the problems being addressed are nails.

  15. jinmtvt | | #15

    Sifu Dana,
    as always your technical/statistical knowledge is enlighting.

    It is very intersting to discuss about carbon problems for me,
    as it has never been a priority in Quebec because of our hydro electricity,
    and with the advent of the new mini splits it will have even a lesser impact.

    Your view on the carbon investment vs buildings efficiency is very logical.

    What do you think of flywheels as mean of district based energy storage ??

    IF as the say, the goal of the PH movement is to improve our Co2 levels, and most point to that,
    then the very different situation in and within NA should have an impact on the metrics of this standard, and a deep one.

    Some breahthroughs in thin-film solar in the near future could enable complete exterior walls of housings to be covered and used as energy generators.

    I was trying to find low cost per surface solar products to see how down it is at now compared to commercial exterior finishes, and it is slowly getting there.
    If the PV panels fall down 20% or more in price, they will be competitive with some commercial finishes in terms of sqft prices.

  16. Expert Member
    Dana Dorsett | | #16

    Grid storage is a booming business
    Flywheel technology works, but can be high-maintenance compared to some other technologies. Different storage approaches have different power-ramping rates and capacities, none need to be as fast acting or high-density as lithium ion batteries, but lithium ion works. Flow batteries are slower but higher capacity and have their own reliabilty & efficiency issues.

    The grid-storage technology that looks like it could really take off due to it's low cost, low maintenance, high current, fast ramping and wide scalability is the liquid-metal battery technology being developed by Ambri. (See: ) It's not the most efficient, but they are using that slight efficiency hit as a virtue- the current is what keeps the metals hot enough to remain liquid. Low efficiency at high current in other technologies is a heat problem than needs pumps & coolants to keep from damaging it. Their first field beta tests are happening this summer, to manage the excess power of a wind farm in Hawaii. Even the low-volume initial production would likely have an INSTALLED cost of under $500/kwh (about the cost for just the batteries for lithium ion at 2014 pricing), and since there is nothing precision or high-tech in their manufacture, and designed to use ubiquitous & cheap metals, getting it to under $100/kwh in high volumes seems almost assured. They have been getting a lot of inside press:

    The paint-on CIGS technology solar that people thought was going to dominate with lots of building-integrated has mostly flopped, in the face of wildly crashing silicon PV pricing, but that's not to say it will eventually get there. In the mean time wholesale panel costs (even with the tariff on some Chinese goods) is well under a buck a watt in the US, and there seems to be a clear path to 35 cent silicon PV within three years. A big chunk of that $4 /watt for small scale grid-tied in the US is due to advertising & marketing, as outlined by RMI's analysis: As PV becomes more mainstream and the permitting more streamlined the US should be able to hit Germany's $2/watt price point fairly easily (already have in parts of Texas). The higher efficiencies of some third generation silicon PV are sometimes worth paying a premium for, to get 2x more power out of your roof than with thin-film, or 30% more than with commodity silicon.

    SolarCity ( a large US based solar company) is in the process of acquiring Silevo, a small high-performance silicon cell manufacturer, and has been making noises about building a gigawatt per year panel assembly plant using that technology in NY state. Since they have also recently acquired an innovative PV rack company, the speculation is that they will be modularizing and integrating the high-performance panels with the racking & wiring in the factory to reduce the installed cost to the customer to the buck-a-watt level before 2020, trading $50/hour rooftop labor for $15/hour factory labor, with state of the art quality control to boot. We'll see how that pans out. The chairman of the board of SolarCity, founder of the Tesla electric cars, and Space-X satellite launch companies, among other things), who is a risk taker, but one with a very winning track record. He's not big on tinkering around the edges- he strives to transform industries, and betting against him has proven to be bad bets, no matter how outlandish the project. (Space-X? REALLY !?)

    Whether SolarCity gets there first or someone else, there is no question but that buck-a-watt solar is coming, and soon enough to matter n building lifecycle terms. It would not surprise me to see some local building codes start to REQUIRE some amount of PV for new construction within a decade, adding site energy production minimums to augment mandated building efficiency levels.

    The age of cheap PV is in it's infancy, but it will be well past the toddler stage by 2030, which is why Barclays (and other financial institutions) are now treating the utility sector as a risky bet.

  17. jinmtvt | | #17

    Solar ,
    Some good quality panels have been available in small pallet qty for 0.8$~1$ for at least a year.
    I seen some recent SHARP USA made panels on that site for 0.83$/W on a 20 panel purchase
    ( not soo large quantity ) So someone can purchase required goods for almost 1$/w including grid tie
    and some rackings .. if going on a DIY install, it makes it pretty cheap option already if your energy costs are high and there are not much subsidies in your region.

    I think i read about AMBRI solution some time ago ..not too sure.

    100-200$/Kwh would be superb !

    How do you tell which products are 3rd gen PV ?

    As i said, the current PV panels are already near 10$/SQ FT
    ( they are there if you purchase qty in the hundred panels + )
    And only require basic aluminum tracks to install as wall finish ,
    and simple hardware.

    I've seen some projects in ACP ( alum composite panels aka alubond etc.. ) quoted in the 20-25$/sq ft without installation labor.

    Imagine if we could get some kind of laminated solar finish, that would cost in the 4~7$/sq ft
    even if much lower efficiency, until is has a good low power start rate.

    So basically, renewable energy, PV prices and recent MINI splits efficiency are going to greatly help reduce Co2 but it will ultimately push building efficiency ROI further out ??

  18. Expert Member
    Dana Dorsett | | #18

    3rd generationg silicon PV...
    .. are pretty much any panel with a 20%+ efficiency rating in a standard product panel (as opposed to a best-case laboratory prototype.) Silevo's production-grade panels are coming in at ~20-22%, and they believe they can hit 24% in a standard product.

    Cheap energy and high building efficiency has always been competing with building-efficiency ROI. Prescriptive U & R in US codes has always been predicated on a (fairly short) lifecycle energy cost savings financial rationale, not comfort, not carbon. When US crude oil was locked in at $8 / bbl and heating oil cost less than 25 cents / gallon and electricity was 2 cents/kwh, even R11 2x4 construction was considered not cost effective in more temperate parts of the US, and a lot of homes were built with R8 batts half-filling 2x4 walls, since that was the code min. (Many states had no code for R values before the oil price shocks of the 1970s.) Now that heating oil is running $4/gallon and electricity is north of 20 cents in some locations, the building performance matters a bit more, more states have set minimums for insulation & window performance, and those minimums are quite a bit higher.

    Until very recently solar has been one of the most expensive sources of energy, but we are in a rapid transition phase where soon it is expected to be one of the cheapest sources, which takes a big mental shift. Long term seasonal storage of electricity is still pretty expensive, but the short-term storage able to manage a few days of weak sun is looking more hopeful. The way the electricity grid has historically been managed was do have a significant amount of faster-ramping power generators capable of handing minute-to-minute or hourly changes in the average load, but with disributed storage and a smarter grid those generators begin make no economic sense- there's no point to building and maintaining a power generator that''s only need to run10 hours per year, but those generators currently exist. With load-sited (or variable output renewables sited) storage and some intellegence the average load on the grid can be made pretty flat, with no big peaks or dips. It's cheap enough RIGHT NOW for this approach to be cost effective in high-cost areas such as diesel-powered island grids, and micro-gridding at the large office building level is too. It won't be decades before that makes financial sense ieven at the single home level, even in low-electricity cost areas. The result is that electricity prices should become cheaper over time, and the grid more reliable. But it will take changes in the regulatory environment to get there in most of the developed world.

    Case in point, Feldheim Germany, where power purchased from the larger grid costs 26 cents, but power from the town's renewables-fueled heat & power cogenerator is 16 cents. The regulations did not allow the town to hook up their cogenerator to the grid and still charge the lower price. At that price difference it was cost effective for the town to build their own parallel grid not connected to the larger grid, so that the people who paid for and manage the fuels processing & cogenerator can reap the financial benefit: It's not a rational expenditure of capital to have parallel systems, but the regulations made it impossible to do it any other way. This sort of thing can happen with solar + storage now in high priced markets elsewhere- it's happening in Hawaii and parts of Australia in a limited fashion now, but if the regulators don't fix the rules there is potential for it to become rampant, where people with the financial resources can get cheap power and abandon the grid, pushing the costs of maintaining the grid onto those who can't afford to do the same. New York state is currently overhauling their utility regulations in an attempt to avoid this, now that the average residential retail rate in the state is 22 cents /kwh. There has to be a cheaper-better way than business-as-usual under rules drafted a century ago for a very different set of circumstances & technologies.

    PV & storage don't have to get any cheaper to compete financially with the last R10 (and the last U0.05) of most PassiveHouse buildings right now, but PV + storage cost half what it does in 2014, it can compete at an even deeper level. Net Zero Energy Houses cost about the same to build as PassiveHouses right now, with substantially lower raw building performance, but become cheaper every year as PV costs fall. Right now in MA a typical Net Zero house has 5-6kw of grid tied PV that costs $20-25,000 USD. In five years the cost of that PV will be less than $10,000, and in fifteen years it will probably be less than $5000. Adding 10kwh of local storage will likely cost only ~$1500-2000 by then too, which is enough storage that they can pick & choose the price at which they draw power from the grid. When the wind is blowing and there is surplus power available it can be pretty cheap! The building performance of Net Zero Energy houses only has to be enough that the PV supplying that energy still fits on the house. When 4 generation PV is hitting 25% from sun-to-AC (possible) it will take about half the space that a typical commodity silicon PV panels do right now, which means Net-Zero houses in 2030 won't need to have quite the performance of those built in 2014. It will have to be higher performance than 2014 code minimums, but nowhere near that of a PassiveHouse.

    Of course there are big error bars on the price point of any of it at any given date, but the trend lines are clear, and the technical hurdles do not appear insurmountable. It's a competitive market- it's only a matter of when, not if this stuff crosses through the necessary price thresholds.

  19. jinmtvt | | #19

    What is your prediction for the next 5 years on PV ?? price and efficiency ?

    thanks again for sharing your insight on all this sifu :)

  20. Expert Member
    Dana Dorsett | | #20

    Crystal ball, cloudy as it might be...
    I'm guessing the installed price per watt of grid-tied PV in 2020 will be about $1/watt at the world price for commodity panels, $1.20/watt for higher efficiency panels. That will be in all countries with streamlined (or no) permitting & inspection, including most of Europe & Australia, probably India & China too.

    Currently it costs literally twice as much to install grid tied PV in the US installations compared to Germany or Australia. There are no fundamental reasons for that difference to persist. In the US it may be somewhat more expensive in 2020- it may be $1.25-$1.50/watt, but it won't be anywhere near $2 (which was the average cost in Germany last year.)

    Efficiency-wise standard production run high-efficiency panels will likely be slightly better than 25% efficiency (currently they run about 20% efficiency), and run-of-the-mill commodity panels will be closing in on 20% (currently 14-15%). Theoretical maximum efficiency for simple cell silicon PV is about 35%- there is room to get better. But the absolute efficiency isn't nearly as important as price per watt or energy-return-on-energy-invested in terms of developing the market and changing the world. We are already in pretty good shape with 15% efficiency cells and a panel cost less than $1/watt. It only gets cheaper and better from here.

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