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Solar photovoltaic electricity has historically suffered from a troika of complaints that limited its deployment to niche markets: "Solar is too expensive," "Solar is not reliable" and "Solar is not scalable enough to solve major energy needs." The newest wave of technologies, equipment makers, module manufacturers and installers are putting an end to those misperceptions once and for all.
At the same time, our country's reliance on imported oil, the environmental costs of fossil fuel energy generation and the predicted long-term increase in energy prices create an urgent need for solutions. The International Energy Agency estimates that global energy demand will increase by 45 percent between 2006 and 2030. As demand escalates with uncertain supply, prices will in turn increase, placing a huge strain on our economy. Clearly, the mandate to deliver new energy solutions has never been stronger, and solar PV is ready to deliver competitive prices with high-value job creation at the same time.
Cost is the key factor in energy generation. The photovoltaic-module manufacturing industry has an outstanding record of continuously driving down cost per watt as production levels increase. In fact, module prices have historically decreased by nearly 20 percent for every cumulative doubling of production. This means that when only 10 megawatts of modules were produced in 1982, modules cost $18.73 a watt. By the time 1.5 gigawatts of modules were being produced annually in 2003, the cost had fallen to $3.53 a watt. This highly predictable pattern, typical of virtually all manufactured goods, demonstrates that as the scale of module production ramps, rapid improvements in process, throughput, and uptime deliver continuous cost reduction. Thin-film photovoltaic technology has an even greater chance of driving solar costs down to that of energy produced by fossil fuels, a concept known as grid parity.
Thin-film technology dramatically reduces the amount of silicon needed to produce a module, thereby reducing costs. Applying our company's 40 years of experience in driving down the cost of integrated circuits, and more recently flat-panel displays, we're also bringing advances in deposition process, automation and factory efficiency to the thin-film production environment. All of these efforts further help to drive down the price of solar.
Importantly, solar has already achieved grid parity in several areas today. For example, California's peak summer electricity rates hover above 40 cents a kilowatt-hour, which is more expensive than unsubsidized solar power generated today at about 30 cents a kilowatt-hour. In addition, solar can be distributed across the grid to relieve pressure on critical substations or transmission lines without the time or expense of wiring new transmission or distribution facilities. A resource for energy generation, solar is incredibly abundant. Every day, the sun provides 10,000 times more energy than we need for the planet. What this means is that from a cost, availability and rapid-deployment perspective, solar makes sense right now.
Questions about long-term reliability have also hampered solar photovoltaic deployment, and in particular, thin-film modules. But thin-film modules are neither new nor unproven. In the United States, the Sacramento Municipal Utility District began deploying amorphous-silicon, thin-film modules since 1992 and now has more than 1.5 megawatts of the modules producing electricity in its portfolio. According to SMUD, these solar arrays are performing at or above projected power outputs. Europe has also embraced the low-cost advantages of deploying utility-scale thin-film solar arrays, with more than 10 megawatts of capacity deployed in the past five years. Almost every reputable module manufacturer seeks International Electromechanical Commission and Underwriters Laboratory certification for photovoltaic components, meaning the components must pass an arduous set of tests designed to accelerate the aging process to determine whether day-night temperature cycling, humidity or other stress conditions will cause them to fail.
Finally, solar has faced an obstacle of being too small a solution to truly make a difference in addressing the world's energy needs. Not anymore. As module factories increase in size, high-productivity tools and automation and factory process management continue to advance stride-for-stride to support growth. In addition to increasing the output of factories, scaling up the size of a manufacturing facility provides tremendous opportunities for materials cost reduction, utility cost savings, and improved efficiencies in logistics planning -- all of which further help to reduce the cost per watt.
Applied Materials is currently ramping 11 thin-film photovoltaic factories for customers in six countries on two continents. Increased production around the globe is helping to transform solar photovoltaics from a cottage industry to a key long-term solution for alleviating the world's energy crisis with an affordable, clean source of energy.
it looks like about 6.0 Gigawatts (6,000,000 kWp) of Solar PV was installed in 2008. How much is that? Apparently, that translates into 6Mx(800-2900) kW-hr or 4800 to 17,400 Million kW-hr. Throughout the course of a year, this is an average power rating of 500 to 2000 Megawatts, about the size of a small to large-sized nuclear power plant (which can operate at night).
Len Gould 5.21.09
Agreed Jim, nuclear will also be required to substitute for the petroleum energy soon to disappear by some accounts. An ideal mix would be 50% nuclear baseload, 50% solar peaking.
Edward Reid, Jr. 5.21.09
The comparison of the "all-in" annual average COST of solar electricity at the bussbar with the peak summer electricity RATES in CA is specious. We all realize the apples and opals are different.
Dick Maclay 5.26.09
There is a disconnect between Mr. Gay's numbers and industry pricing. Installed solar had been $7000 to $9000 per kW up until the impacts of the financial crisis dropped it to about $6000. If Mr. Gay's numbers are correct, then the high level of subsidies must have created demand that outran supply, giving solar companies market power to collect economic rents. Alternately, the panels are about half of the installed cost and panels generally still cost about $3.50 per watt.
Information we can gather suggests that only a few companies are well below $3.50 per watt in their production costs today, 6 years after the 2003 data sited. So the bulk of the solar industry appears to be well behind Mr. Gay's curve on declining costs. Solar will begin to make economic sense when installed costs fall below $4.00 per watt. Therefore, the article would be more accurately titled, "Solar Will Make Sense Real Soon Now." And if the industry as a whole becomes quickly capable of being profitable, including R&D and all other overheads, at $2.00 per kW for panels, and there is rapid progress in lowering the costs of the rest of plant and installation, then real soon will become just that, rather than the usual meaning of the phrase.
People in the utility industry should recognize that when the cost per installed watt falls to $4.00 in California, and around $3.00 in lower cost areas, utilities will begin to see real competition. PV costs and utility rates will be compared by utility customers. And they will act on the comparison. Trucks made self-transportation economic, which depressed railroads for decades until they reduced their capital stock to serve the smaller market share left to them. Low cost solar will enable self-generation that will have a similar effect on electric utilities. So a more complete title might be "Solar Will Make Sense and Obsolete the Utility Mind Set Real Soon Now".
Herschel Specter 5.26.09
I think that the renewable energy community is mature enough now to move beyond its argument about the many thousands of times greater sunshine or wind power is compared to energy demand. While interesting, that argument is not compelling. For example, consider a person that is washed ashore on a desert island. He is surrounded by an infinite and cost free amount of water. There is a very good chance that, in spite of all this abundance, he will die of thirst unless he can harness this infinite supply of water and meet his needs 24/7 all year long. The challege for renewables is converting this vast energy supply to match demand at a cost and reliability that is acceptable.
Also beware of your cost extrapolations. At a cost of $18.73 per watt in 1982 to a cost of $3.53/watt in 2003 one could extrapolate to year 2009 and get a cost of $0.00 ! Thin film PVs have very low conversion efficiencies and therefore need very large areas to collect fair amounts of solar energy, making their installation in high population density urban areas very problematic.
The rating of PVs in terms of peak watts is also troublesome. Not only does this condition only occur briefly per day, there are large seasonal variations. A solar electric plant in the southwest deserts rated for 1000 megawatts in the summer months would, at best, only produce about 500 megawatts in the winter and only when the sun shines.
I'll believe these projections of PV growth when these sources of electricity can stand on their own without subsidies or mandates and can provide afforable elctricity all day and all year long.
Herschel Specter
Don Hirschberg 5.26.09
Off topic: I have been incommunicado for months because someone, or some program, at my server keeps blocking EnergyPulse. I wish they could be as successful at blocking Viagra ads.
The article cites a rate of 40 cents per KWH under peak conditions in California. Is this true or a typo?
Len Gould 5.27.09
Herschel: "Thin film PVs have very low conversion efficiencies " -- Seems you've missed the NanoSolar etc. CIGS technology. Print-to-metal-roll, 16.5% efficiency. Obviously they'll keep the prices up as long as they can, but it's no longer a technology thing. If utilities don't immediately jump on large central solar-thermal (4 to 6 cents/kwh) they'll loose the market to PV. Of course we all know they wont see that headlight approaching....
Stephen Bagstad 5.28.09
Charles, your article is interesting but my experience suggests that others' comments on the order of "some day" rather than "now" generally remain a better fit to the facts. I happen to live in Ohio, and have relatively high home power rates a bit over 10c/kWh although we have quite large rate disparities in the region. My analysis of putting in a small home system that would put all its input to reducing my bills (using PV Watts calculator, http://www.pvwatts.org) works out to a hugely long payback - haven't yet done the direct comparison, but I suspect that I could better use my funds to buy a new high efficiency refrigerator to reduce my power bill than buy a solar system. Some detail: PV Watts projects a 1kW system for me would output a bit over 1,000 kWh/year saving about $100/year - and even the panel price alone at say $3.50/watt would cost $3,500 (35 year payback?!?) plus of course installation and other components. What would you say?
Thomas Stacy 5.28.09
As thankful as I am for the critical analysis that many of you bring here, it would be nice to coalesce into a group that sponsored a web site to compare various gen technologies fairly - and on more than just technical and economic grounds - the industrial impact or "sprawl" created by solar and wind (despite some compatible overlapping uses for wind) are an important consideration as well as scale, reliability (capacity credit) and all-in cost.
Maybe some of you would be interested in helping flesh out the web site wiseenergy.info?
Don Hirschberg 5.28.09
Stephen Bagstad
I had to smile when I read your estimate of a 35 year payback for a PV system. It put me in mind of eons ago when I was process and project engineering new oil refinery units. The engineering guide lines at the time said go for 2 year payback on heat exchanger surface. (I actually cheated and always made them bigger. I was green before there was green. All those “oversized” heat exchangers have saved many a BTU over the decades.)
Edward Reid, Jr. 5.29.09
I'm going to guess that a 35 year payback is going to exceed both the equipment warranty and its expected useful life.
Ed
Larry Kelley 5.29.09
Well, everyone here actually seems able to actually think! How refreshing! Steve, a 35 year payback is about right with the figures you input.
Len, NanoSolar has raised LOTS of money, but ALL their are behind 'locked and gated' enclosures and not visible to the public. Their 1MW plant is still not built according to NanSolar's website. Are they actually REAL?
I am applying for grants to ARPA-E as i write this. My new design for a crystalline Silicon PV cell is about 0.002" thick and about 17% + efficient, with the possibility of a nano carbon coating to raise the efficiency to 30%. At that point, the cell becomes a 'radiation' cell, not just a 'solar' cell! You guy can take a look at one of my earliest cells (actually made over 25 years ago) at this location: www.siliconsolarenergy.com
We project a finished panel cost of 65¢/watt (calculated at 15% efficiency).
Lkelley@goruby.com
Len Gould 6.1.09
Sooner or later (i'll bet sooner) Larry or someone else WILL do it.
James Carson 6.1.09
The compelling advantage of solar versus other green generating technologies is the 'temporal factor'. Solar generation maxes during both the season and time of day when demand is highest: summer afternoons. Yes, the cost of capacity remains astronomical, but at least we don't have to worry about storage until it dominates.
Kenneth Kok 6.2.09
James, that is true in the Southern US but even in eastern Tennessee where I am the winter and summer peaks are about the same. Further north the peak is in the winter.
Len Gould 6.2.09
Kenneth: If high efficiency solar cells were freely available to you at zero cost, what proportion of your load would they supply? Optical Rectenna will eventually do that. (Is that what Larry has a start at?)
Ferdinand E. Banks 6.3.09
What's the problem, colleagues. The TV audiences are being repeatedly told that solar and wind can provide the low cost, reliable energy they need, and so they are ripe to be fixed up now. In this country, Sweden, if you knock on any door, a crazy might come out and assure you that nuclear is passé, and inexpensive wind installations can keep the discos and wine bars humming.
And Hershel, speaking of the maturity of the renewable energy community, you should take some evening courses in Swedish so that you can read the newspapers in this very literate country. After you've caught up on your reading, spend a few hours thinking of something that Tina Turner might have said: What's maturity got to do with it?
Len Gould 6.4.09
Fred: Presuming our societies don't drop into a rapid freefall a la LimitsToGrowth/ClubofRome/theOilDrum, then technical advances should continue to make what we now know ever more rapidly obsolete.
I noticed an article yesterday announcing the "Atom Pinhole Camera" developed at the Institute of Spectroscopy, Russian Academy of Sciences. It provides for cheap and precise placement of individual atoms onto a substrate simply by placing much larger pattern holes in a mask in front of the substrate and accelerating atomic ions toward it. "atoms pass through pinholes in a mask and generate a scaled-down nanostructure of the mask’s pattern onto a substrate." .."As the scientists noted, a camera with up to 10 million pinholes could open up opportunities for simultaneous generation of large numbers of identical (or diverse) nanostructures." .. "The technique could produce individual nanostructures down to 30 nm, a size reduction of 10,000 times compared with the original object." Physorg - Atom Pinhole Camera Acts as a Shrinking Copy Machine
Assuming this works as described, it should revolutionize miniature electronic circuit fabrication, which is just what Optical Rectenna needs.
James Carson 6.6.09
Kenneth, winter peaking is much further north than you think. NYC is strong summer peaking. You have to go north of Detroit, Chicago and Minneapolis to get to winter peaking in the midwest. Even Toronto is summer peaking. The only large (over 2mm population) winter peaking city I can think of in the eastern interconnect is Boston.
James Carson 6.6.09
I happen to have the load records for Connecticut handy and just checked them for the period April 2008-09. The Jan winter peak was 170mw while the July peak was 305mw and the overall peak was June 9th at 372mw.
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