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Has Solar's Day in the Sun Arrived?


Solar energy has been one of those technologies that is perpetually “30 years away” from commercial viability, but a recent article in the Financial Times argues that the green energy source’s day has finally arrived. More efficient panels, along with a crash in panel prices, the FT argues, has made solar price-competitive with fossil fuels in Europe:

When the solar panels that convert sunlight into electricity first came on to the market in the 1970s they sold for more than $70 a watt in 2012 prices. Today they cost less than 80c a watt, with prices plummeting by 80 per cent in the past five years alone, according to Bloomberg New Energy Finance. “I’ve never seen a crash in prices like this,” says Eddie O’Connor, industry veteran and founder of Ireland’s Mainstream Renewable Power.

Part of the price fall has been driven by a glut in supply that grew as solar power manufacturers around the world ramped up production to meet the demand created by the EU subsidies. More recently, a flood of low-cost Chinese solar panels, fuelled by government support, has driven prices down further.

The market’s growth has also accelerated an industry learning curve driving overall solar plant costs down and efficiency up that some compare with Moore’s law, the 1965 prediction by Intel co-founder Gordon Moore that the electronics industry could double the number of transistors on a chip roughly every two years.

The piece skips lightly over the fact that everyone in Germany is up in arms over skyrocketing consumer energy costs in large part caused by subsidies to green energy and other restrictions. The people quoted in the story all have vested interests in solar power or else in making the case that utilities need subsidies because of the effects of solar party; there are no real skeptics or questioners interviewed. The price-drop in Europe’s solar industry may not mean that solar is about to sweep the Earth. It may just mean that a rare combination of subsidies in Germany that create an artificial market and subsidies for solar panel plants in China have created both a supply glut and unusually high demand.

Nobody has ever thought that you couldn’t get people to install solar panels right left and center if you threw enough money at the problem for long enough. The questions here are things like what happens to the price of solar panels when the supply glut disappears? How long will German voters put up with prices that drive their electricity bills to artificially high levels? How much will the coming bailout and subsidies to electricity utilities (which can’t be allowed to fail as the country has to have enough energy to run on cloudy winter days) cost and how willing will German and other European governments be to pay it?

Remember, this isn’t making “green jobs” in Europe. It’s making more factory jobs in China, and the price crash that makes this important would not be happening unless China had moved aggressively to shift all the panel manufacturing jobs away from Europe. Via Meadia would be happy to see solar panels work without being propped up by government subsidies (either in feed-in tariffs, as Europe has employed, or loans to panel manufacturers, as in China), but that day still looks to be a good thirty years away.

[Solar array image courtesy of Wikimedia]

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  • Corlyss

    “Financial Times argues that the green energy source’s day has finally arrived.”
    Pink paper’s delusions.

  • Andrew Allison

    There’s another reason that the demand for solar panels has not kept up with supply — they can only be used as an adjunct to conventional power generation; when the Sun doesn’t shine, the grid must be able to deliver. Increased solar (or wind) capacity causes conventional power generation costs to rise due to under-utilization.
    Solar water-heating as an adjunct to gas-fired heating makes much more sense (because gas is readily stored). Too bad that the effort put into solar panels wasn’t put into making solar water-heating cost-effective instead.

  • Fat_Man

    Solar cells are a bright shiny object used by greens to distract the rubes from the misery green plans will inflict on the average person.

    Solar electricity will never be economical, even if the cells are free and operate at maximum quantum efficiency.

    First free cells wouldn’t be free. It would still cost thousands of dollars to put them up on a roof. We put a new asphalt shingle roof on our house (a nice suburban house not Algore mansion sized) a few years ago. It cost about $15,000. I can’t conceive of a generating material that would be as cheap as asphalt roofing ($200/100 sq ft.), which is about as generic and low tech as it gets. Furthermore the roofing business labor pool is also generic and low tech. Getting licensed electricians involved will only drive up labor costs. I have not even noodled the price of wiring and the electronics needed to make the low voltage DC output of the cells usable. Frames and land would be large costs for non-roof systems. Paving material? Around here roads are repaved every few years — more cost.

    Second, solar systems do not operate at night and their output can drop between 50 and 75% on a cloudy day. Every day has a night, and a majority of days around my location are cloudy. There are no economically viable systems for storing large quantities of electricity, therefor every watt of solar you are relying on must be backed up by a watt of something else. These days that is usually natural gas generation. This doubles the capital cost of solar systems.

    Third, north of the tropics there is an annual variation in the amount of available solar energy. In my location at 40 north, the ratio between available solar energy in June and the amount in December is about 2.67 to 1. The amount of electricity used does not vary nearly that much. Electricity used for air conditioning in the summer is used for lighting, heating, and cooking in December. We often hear brownout alerts on the coldest days of the winter.

    The implication of this is that two thirds of a solar electricity system big enough to supply us in December would sit idle in June, producing no revenue but still carrying a capital cost.

    The punch line is that solar electricity is and will remain unaffordable no matter what the solar cell technology is.

  • Wayne Lusvardi

    I suggest Googling “California Solar Initiative: Overhyped and Underperforming” for an empirical analysis of how home solar rooftop installations have performed. Here is a synopsis:

    Now that the $2.167 billion California Solar Initiative is winding down, electricity ratepayers might ask: What was it and what did it accomplish? Was it:

    1.) A cutting edge solar energy project to bring about a “self-sustaining” solar power industry, as touted by the California Public Utilities Commission (CPUC) and state legislators?

    The answer is mostly no based on post-project evaluations done by academic experts.

    2.) A program to replace very expensive conventional peak time power plants with equally expensive but clean rooftop solar electricity that is generated at the time of day when it is hottest?

    The answer is no. Contending that rooftop solar power replaces conventional peak time power is bogus. This is because electricity rates
    are tiered depending on usage and climate zone and the fact that ultra peak power rates during heat waves and cold snaps only last maybe as much as four weeks out of 52 weeks in a year.

    3.) An expensive, artificial green energy and jobs program that is now being wound down, as there is a recovery in the jobs market?

    The answer is yes. Since California’s Solar Initiative did not produce a self-sustaining rooftop solar power market (Question No. 1)
    and cannot be justified as a replacement for expensive peak time electricity, this leaves us with one conclusion: It was mainly a jobs
    stimulus program that ended up adding about a $200 tax to 10.8 million utility customers’ electric bills.

  • dankingbooks

    Even if solar panels are free, the energy storage problem remains intractable. Absent a cheap way to store electrical energy, conventional power plants have to take up the slack for when the sun don’t shine. There’s no way this is cheap outside of niche applications.

  • Jim__L

    “The questions here are things like what happens to the price of solar panels when the supply glut disappears?”

    Greens are making hay while the sun shines, so to speak.

    Maybe sometime in the future, space solar power stations will beam power down to Earth, available day and night, using wavelengths of light capable of passing through clouds unattenuated. The possibility of using orbital dynamics to send the power to each market experiencing peak energy demand in turn is also an intriguing way to maximize profits.

    Technological change can come quickly these days. Some of us might live to see that kind of situation happen.

    Until then, a bit of skepticism is warranted.

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