Blue Sky Power

Solar Energy (continued)

What are solar cells and solar arrays?

Solar cells are rectangular or circular wafers made from silicon. Modules (usually 20 or more solar cells mounted in a frame under a transparent covering) can be free-standing units, and multiple modules can be connected together to form solar module arrays. More power can be generated by using larger surface area modules and multiple arrays that capture more sunlight.

Presently, most solar cells in use in the United States turn between 12 percent and 20 percent of the sunlight that hits them into electricity. However, new multi-junction solar cells have been tested at higher efficiencies of around 35 percent, and the technology is constantly being improved.

The two types of systems

Stand-alone, or independent, PV systems are ideal for locations that are far from existing electric power lines. They also work well for portable road signs or other devices in places where it would be too expensive to run power lines.

PV systems that are connected to the grid allow users to still draw electricity from the local utility during times when it’s not sunny and the PV modules are producing little energy. But when the sun is shining brightly, these cells can produce all of the power needed for a building or campus, and sometimes even more power than is needed. When the cells are producing enough electricity to meet a building’s needs, the electric meter doesn’t spin. When the cells produce excess electricity, the meter spins backwards because electricity is being sent into the grid. When this happens, the owners of PV systems can actually get credits from the utility.

Costs and future prospects

In the 1970s, solar cell panels cost $100 per watt. Today, the price is down to about $2 per watt due to advances in technology and competition among a number of solar panel manufacturers. Thus, the market for solar PV has expanded rapidly. Production of PV panels stood at about 58 megawatts per year in 1992. By 2010, production had exploded to 27,200 megawatts per year. As the efficiency of the panels increases, analysts believe the PV industry will continue to see impressive gains and cost reductions for solar cells as economies of scale come into play with larger production facilities.


New Jersey, Delaware, Massachusetts, California, Maryland, Pennsylvania and Ohio are among the states that extend renewable energy credits for the production of solar power (“SRECs). The market for selling SRECs can be lucrative. In Massachusetts, where a single credit is awarded for every 1,000 kilowatt hours of electricity produced, SRECs are currently trading at more than $500 per credit. In New Jersey, where SRECs are also earned for every 1,000 kilowatt hours of electricity produced by a PV system, the credits are currently trading at about $100 apiece.

PV systems that are put in place before Dec. 31, 2016, are eligible for a renewable electricity production tax credit of 30 percent of the cost of the system. Further, for projects placed in service between January 1, 2012 and December 31, 2012, 50% first-year bonus depreciation is available.

Multiple states offer tax incentives for installing PV systems. Many states exempt all solar generating equipment from sales taxes, and system owners are also sometimes exempt from any increases in property taxes from the increase in property values attributable to the solar asset.

More information

Blue Sky Power has developed numerous solar PV projects and has assisted public entities, such as municipalities and school districts, as well as non-profits, to achieve the benefits of solar energy without losing the value of the available tax incentives. Blue Sky has also developed, owned and constructed systems at numerous facilities under third-party financing structures. Contact us to find out if Blue Sky can help your organization take advantage of solar PV technology.

The U.S. Department of Energy conducts extensive research on solar cells and administers programs to advance their implementation nationwide. For more scientific and technical information about PV, visit the U.S. Department of Energy website.

The National Renewable Energy Lab (NREL) conducts research on renewable energy and energy efficiency. To learn more about PV research from NREL, visit the NREL website.


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