Solar power nears the tipping point

Is photovoltaic (PV) solar power about to reach a tipping point and come of age?   A couple of announcements yesterday imply that it might be – and not just for niche markets and remote locations but for grid power – although sadly only in rather sunnier climes than Britain!

Arizona based First Solar has announced that it has concluded a memorandum of agreement with the Chinese Government to build a massive 2 gigawatt solar plant near Ordos City on the dry steppe of Inner Mongolia about 300 miles west of Beijing.   Construction will start next year with a 30 megawatt demonstration project and then proceed by stages until completed by 2019.  To put this in context that means that, when completed, this single plant will have a capacity equal to the entire UK fleet of wind farms as of January 2007.

Also yesterday, California based Nanosolar announced the opening of a new factory near Berlin to assemble finished panels from their PV cells.  When production is fully ramped up the highly automated factory will produce a panel every 10 seconds for an annual production of 640 MW.  All are destined for utilities and customer committments totalling $4.1 billion to date are claimed.   Nanosolar modules have been designed from the outset to lower the ‘balance-of-system’ costs – i.e. the costs of mounting, connecting etc. so that the overall installation cost is minimised.  They also revealed that their cells achieve up to verified efficiency off up to 16.4% although the median is a litttle better than 11%.  

Now PV has been around for a long time but its high cost has always ruled its use out except for niche applications.   To be a serious player it has long considered that vendors would have to get the capital cost down to around US$1 per watt and produce electricity at a cost of around 10 cents per KWh and yesterday’s announcements imply that both companies believe these goals to be within sight.

First Solar is relatively happy to discuss costs and claims that by the second quarter of this year its module cost had fallen to just $0.87/watt and it projects further declines to $0.52 – $0.63 by 2014.   At the same time it is working to reduce balance-of-system costs and is targeting a cost of $0.91 – $0.98 /watt, again by 2014.

These projected costs possibly explain the phasing of the Chinese project; half the contemplated capacity will be added in the final phase to start construction only in 2014 – i.e. only when costs are rather lower than currently.   In the meantime the Chinese have guaranteed the project’s revenues by means of a feed-in tariff which First Solar considers vital as they drive their costs towards ‘grid parity’ – where they become fully competitive with conventional sources.

Nanosolar uses a different technology and has developed a method of printing a thin film of semiconductor onto a flexible metal foil which it claims is 100 times faster than conventional high-vacuum deposition and which certainly ought to be highly cost-effective.   The company is coy about costs but claims that its utility panels are ‘profitable in a wide range of geographies and power markets’.   According to Wikipedia cell costs have been reported as only 36 cents /peak watt (which Nanosolar declines to comment on);  if even approximately correct this represents an amazing breakthrough and implies that they are already at the tipping point – or as near as makes no difference.

So what does all this mean for us in the UK? 

Firstly, I don’t believe we are going to get a significant development of solar energy in Britain.   We are simply too far north and too cloudy.   However, on a global scale it does begin to provide alternatives that will very quickly become important once grid parity (or even a reasonable approximation) is achieved. 

Secondly, it highlights that an immense immense amount of R&D is going on into alternative energy sources and that some of that is getting very close to commerciality.   While both these companies happen to work in the field of PV, others are making equally impressive progress in solar-concentrating systems (that use sunlight to create steam to drive a conventional turbine) and in nuclear.  I think it likely that 20 years from now electricity will cost less in real terms than currently. 

Thirdly,  the UK needs to do far more to create a favourable environment for R&D led companies.  Even now, while the Chinese are getting in at the ground floor, DECC is still consulting on a feed-in tariff system with a view to it being introduced only in April 2010.  (To be fair to Ed Balls, the announcement of his support in principle for feed-in tariffs was one of his first acts on becoming Minister – but that does not excuse the government’s prior tardiness).

Fourthly,  maybe we don’t need to worry quite so much about carbon dioxide levels in the atmosphere for the future.   We’re not there quite yet but we appear to be getting close to having technical alternatives to carbon-based technolocgies for generating electricity.  Although the total amount of PV out there is miniscule in comparison with conventional capacity, it will ramp up very fast once the economics favour it.

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2 responses to this post.

  1. Posted by Hywel on 10 September 2009 at 6:39 pm

    “I don’t believe we are going to get a significant development of solar energy in Britain. We are simply too far north and too cloudy.”

    Solar can still produce a good return on cloudy days.

    However it is worth bearing in mind that many office blocks have higher energy costs from keeping cool than keeping warm and lit. That is a situation in which Solar would be a useful option as the energy needs are more on sunnier days.

    Reply

  2. I think that we’re very close to the solar tipping point. It’s already starting to become more and more economically feasible, with all of the government incentives included. Of course, it can’t yet stand on its own, but the cost is going down every day, and we’re almost there. Ted Page of Captains of Industry said in a recent post that we’re getting to the point where there’s no reason at all NOT to get solar: http://www.captainsofindustry.com/blog/the-invisible-solar-tipping-point/. We’re definitely closing in on the tipping point now, and what’s really left to do now is educate people about solar.

    Reply

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