Photovoltaics Comes of Age

Solar panels are cheap enough to become a major component of green energy.
Originally posted at: MIT Technology Review

Zweibel-KenThe United States has supported research into photovoltaics for almost 40 years, recently with a 30 percent investment tax credit. Japan instituted incentives in the 1990s, when photovoltaics cost at least five times as much as residential electricity. In the new millennium, Germany instituted incentives an order of magnitude larger.

Thanks to these efforts, the cost of photovoltaic modules has dropped 40 percent in the last 18 months. Photovoltaic electricity now costs about 15 cents per kilowatt-hour in the best sunlight. That’s only twice the cost of wholesale electricity and wind. Costs are expected to continue decreasing, and electricity is worth more during the daytime than at night. That means this technology is finally cheap enough to become a significant element in plans to combat climate change and oil dependence.

Solar for “Everyman”

ECONOMYSometimes I am asked the number of jobs solar will produce, and people are often disappointed when I point out that solar PV can operate without on-site labor. It’s as if they equate adding extra useless jobs with being green. Of course, we are trying to minimize the jobs so we have economical solar electricity…BECAUSE THAT IS WHAT WILL HELP OUR ECONOMY, not the jobs watching solar panels in the desert.

Have people forgotten how painful it is to have a terrible balance of payments, with our money going to oil dictators who hate us? Now that’s what I call a loss of jobs. Solar is about not sending our jobs abroad. (Of course, I am assuming we have the sense to deploy electric cars to use solar to avoid imports.)

The Arithmetic of Solar Royalty Trusts

Government bondsIn many ways, owning a PV system should be a dream investment. It promises dependable cash flow for an indefinitely long period of time, even a century, with little underlying market risk. It could be as good a definition of ‘risk free’ return as government bonds. Government bonds still face the challenges of national default; and PV, the challenge of a price drop in electricity. Maybe the PV is more dependable?

The basis for this is the two almost unique aspects of PV systems that are hardly ever fully exploited or even understood:

It uses no fuel, needs no on-site labor, and may have no moving parts (and thus has negligible operating costs)
The basic parts either last indefinitely (the PV module that converts sunlight to electricity) or can be replaced with nominal maintenance costs (the inverter that takes DC electricity and makes it ready for the AC grid).

The Future of Solar: It’s a Lead Pipe Cinch

coalWe are not competing with coal to make electricity from solar. We are replacing coal. This is not a competition with coal in the marketplace on a cents per kWh basis – this is a replacement of a harmful infrastructure. Coal, like lead pipes, is a harmful infrastructure.

We get very confused about competing in the marketplace for the electricity customer. But that is not happening. Instead, we are telling the electricity customer, “You are being poisoned by your lead pipes. What are you going to do about it?”

We are not waiting until coal power plants retire. We are turning them down and turning them off.

Why Utilities Don’t Buy Solar Energy (and why they do)

cost-effectiveUtilities don’t buy solar energy to provide energy to their customers. It’s too expensive and too unreliable. They don’t even buy wind for their customers, even though in most cases it is very close to being cost-effective. Neither of these intermittent sources suits their needs, either in price or dependability.

But they do buy solar and wind. They are trying to reduce their carbon dioxide emissions, and to a lesser degree, diversify their sources of electricity in case of fuel price shocks.

They are required by state and Federal regulations to buy wind and solar.

It’s really a simple equation. If –

Federal and state requirements – Added cost of electricity – Intermittency and transmission penalty > 0,
then they buy solar and wind.

How Much Could We Save If We Harness Solar and Wind with Electric Vehicles to End Oil Dependence and Eliminate Carbon Dioxide as a Problem?

electricity3We might save money if we harnessed solar and wind to displace all our coal and all the gasoline used for light duty vehicles (cars, SUVs, pick-ups). Let’s see how this works.

The US uses about 4000 TWh of electricity, and about half of that comes from coal (about 2000 TWh/yr from about 23 Quads of primary energy).

Our light duty vehicles require 17 Quads of oil, but only 3.4 Quads of it actually gets to the vehicles and moves them (20% efficiency from oil to movement). At ~300 TWh per Quad, this is about 1000 TWh of energy. If we did it with electricity and assumed 25% losses (electricity to batteries to motors to movement), we would need about 1333 TWh to move our light duty vehicles without oil. The total to displace both oil for cars and coal would be 3333 TWh. Let say this takes 25 years, so let’s assume 33% more demand by then (perhaps not warranted, since we may be saving energy, but just to be conservative) – that would be 4444 TWh in 2035. (This should be rounded, but it’s such a charming number, we’ll use it as is.)

So how much would this cost? Let’s do half with solar, half with wind.

First Solar, Ordos, China, US

China, USHow can we be so profoundly behind in our awareness of solar PV? China signs an agreement with the world’s largest PV company (which just happens to be an American company) for the world’s largest PV system (equivalent to Hoover Dam in output) using the most advanced, lowest-cost technology, and we haven’t even heard about it? The company, the technology, the concept of big PV. All that is new. Our press and our government are in the dark. Why?

We hear about self-promoting Silicon Valley PV start-ups manipulating the press for coverage while they raise money (First Solar is from the Rustbelt). We hear about Chinese silicon PV companies using low-cost labor to take the market away from everyone, because that is a cliché of our psyche – the foreign threat.

EPA’s New Mandatory GHG Reporting Rule and Solar Energy

Smoke StacksIndividuals interested in solar energy and climate policy are likely aware that the U.S. Environmental Protection Agency (EPA) published its final Mandatory Greenhouse Gas Reporting Rule in the Federal Register on October 30, 2009. (74 Fed. Reg. 56260) This regulation represents the first U.S. effort to require public reporting of certain greenhouse gas (GHG). However, few of these observers may be aware that the final rule will not require the tracking of progress by electricity consumers in reducing greenhouse gas (GHG) emissions by substituting on-site solar energy for purchased fossil fuel-fired electricity.

Nonetheless, a close reading of the final EPA rule indicates that solar energy supporters should not pack their bags and go home. Although the final rule is focused on direct emissions from electric generation sources, the Agency signaled its interest in conducting a future rulemaking to address the treatment of electricity purchases. According to the preamble to the final rule, EPA stated as follows:

Buying PV Without Getting Ripped Off

PV pricesThe second, and much improved, version of California’s experience with PV prices, Tracking the Sun II, has been released.

It is a huge step forward from the previous report, which seemed to treat CA as an island and ignored the much greater experience of the non-CA-dreaming world outside. This year there are special sections comparing CA with Europe. We are blessed!

However, the report is still out of date, since it ends in 2008 (with an unrevealing peek at 2009). As we know, prices for silicon modules have dropped like a stone, and very large quantities can be bought under $1.5/W.

Now what we can do from the CA report is actually estimate what we should be paying going forward without getting ripped off. The reason this is important is that most people will read the CA report without the knowledge of the staggering plunge in module prices and think we are still stuck at $8/W for residential systems (and similarly high prices for the commercial and big ground-mounted systems).

PV Fast Facts

It’s relatively easy to estimate the amount of annual output from a solar photovoltaic (PV) system, its comparative price with other solar systems, and its economics in terms of cents per kilowatt-hour (c/kWh).

Local Sunlight

Local sunlight is an important factor in the output and economics of a solar PV system. Electric output is essentially proportional to the amount of local sunlight, and cost is inversely proportional to output.

US Sunlight on a module at latitude tilt

US Sunlight on a module at latitude tilt (kWh/m2-day)

Solar maps are a good source of local sunlight. Here is one from NREL for the US, showing sunlight available for a fixed array pointing south at a tilt equal to its latitude, about optimal for such designs. You need a different map for one- and two-axis trackers for flat plates; and another one for concentrating trackers, which use only a portion of the light. But most installations are simply fixed tilt; or, in a few cases, large systems use single-axis trackers.