We've started analyzing the installation of solar photovoltaics around the world and determined what factors play a big role in solar. Click "Read more" to learn more about what we found out.
The earth and the organisms living on this planet are blessed to receive a tremendous amount of energy from the sun. Nuclear fusion of hydrogen releases energy in the form of heat which is then radiated as a black body at a temperature of around 5,800 Kelvin. Only a relatively small portion of the power reaches earth, which is generally used by nature (photosynthesis, water cycle, winds) or it is reflected back into the atmosphere or absorbed along the way. It can be claimed that the sun is responsible for the almost all renewable energy sources, with the exception of tidal and geothermal energy sources.
So sunlight is the driving force of nature, but it is not always used by nature in an efficient way. Photosynthesis in plants creates glucose with an efficiency as low as 1 percent. Converting this glucose to fuel or electricity comes with another efficiency step, lowering the overall efficiency to maybe 0.1 percent. This means that only one-thousandth of the energy that reaches the earth’s surface is converted into useful energy for mankind.
The ancient Greeks found that they could make use of the sun to keep their houses warm in winter. They built their houses facing due south to maximize the amount of sun shining in to warm the room. In 1861, Auguste Mouchout showed that concentrated solar irradiation can be used to perform work in a steam cycle. The majority of solar power being installed now are photovoltaic solar panels. It was pioneered by Albert Einstein in his research on the photoelectric effect back in 1921, for which he received the Nobel Prize. The application of solar panels to generate electricity started at Bell Laboratories (1953). Fuller, Chapin and Pearson created a small size cell which was able to generate measurable electric currents from its electrodes. Suddenly, a whole new era started: people forecasted the depletion of fossil fuel resources and saw that solar power could provide the electricity needed in the future. However, it was not until the year 2000 that solar power was installed in big numbers. Even though the technology was promising from the beginning, implementation didn’t come through, with the exception of a few pilot projects and small applications like electricity generation in space. Lets take a closer look at the reasons why this idea was not adopted until the beginning of the millennium.
Cost
Solar panels showed to be reliable and sustainable, even under severe weather conditions. Current technologies have lifetime warrantees in the range of 20 – 30 years, in which they can provide vast amounts of electricity. One square meter of solar panels with an efficiency of 16%, provides as much as the annual electricity consumption of an average US household over its 30 year lifetime . The biggest threshold that keeps solar panels from being installed is their cost. The unit of comparison which is mostly applied is the dollars per Watt: [$/W]. One should not misinterpret that this is continuous power production; it is the cost of panels per peak power production rate, under AM1.5 Standard Conditions (SC). This is a 1,000 Watts per square meter, with a sunlight wavelength spectrum similar to that typically received on the surface of the earth. In 1955, solar power would cost up to $300/Watt. In 2008, First Solar announced the first production cost for their thin-film cells of under $1/Watt.
Years of R&D and commercialization of photovoltaics have brought the cost of the technology down. This process takes place on a global scale, where companies from all over the world compete to build panels the cheapest way possible, finding their target group in renewable energy investors who depend on government incentives. Besides companies pushing the boundaries of pv-technology, universities and other research groups (1972: Delaware University, NASA, NREL, etc.) have contributed in a significant way as well. For decades, researchers experimented with different materials to use for the semiconductors and in each category they have been racing for the highest conversion efficiency of cells.
Looking at the money spent on solar pv technology by the members of the International Energy Agency (IEA), one finds that R&D funding for solar has been constant at a value of around 0.3 billion dollars from 1985 to 2003. The members include the U.S., Japan, Germany, Canada, Spain, and 23 other nations.
Space Race
The costs of solar power dropped with the rise of new applications and the results of research. For example, the Space Race between Russia and the US in the 50’s and 60’s caused prices to drop, since solar power is the most cost-efficient way of providing power in space. You can imagine that if you realize that it costs about $10,000 to bring one kilogram in a low earth orbit . The panels are convenient there because they provide a lot of energy on a ‘per mass’ basis over time. Much better than bringing a heavy engine and generator up to space. After all, when you run out of fuel, you can’t really drop by a gas-station up there for a refill. NASA therefore stimulated research on solar electricity, resulting in higher efficiencies and lower material use per unit of power.
Oil shortage
Four years after the first man walked on the moon in 1969, the US suffered under the Arab Oil Embargo. The middle-eastern OPEC stopped exports of oil to the US and the other western nations. As oil was the main supply of energy in the United States, the government put a series of interventions in place to cope with the shortages. Besides laws like lowering the speed limit on highways to 55 mph, more funds were directed to researching alternative energy sources like hydro, nuclear and solar power. Again, like with the Space Race, an external force contributed to a rapid development of the technology. And as the external force disappeared (end of the embargo), so did the majority of funding for renewables . Even the Energy Tax Act of 1978 was discontinued, stopping critical tax credits for solar projects. Because of this, growth of solar power moderated to around 15% from 1984 to 1996.
Global warming
In the last decade, the issue of global warming has received an increased amount of attention from both public as well as government levels. ‘Sustainability’, ‘Eco-’ and ‘Green’ are the magic words that whirl around in articles, daily newspapers and advertisements. People realize that fossil fuels are not endless, the earth is warming up with devastating consequences and the ozone layer is depleting. Governments redistribute their R&D and financial incentive funds to renewable energy sources, including solar energy. For the first time, companies and individuals can install solar panels profitably with the incentives provided by federal and state governments. Growth of installed solar panels suddenly went through the roof and this is believed to be the true take-off of the technology since ‘grid-parity’ (cost competitiveness with conventional generating sources) is expected to be reached somewhere around 2016 (for Germany, at least). From that point on, solar electricity will be cheaper than the consumer price of electricity. With special funding structures the big capital investment can be spread out over the years so that it is not that big of a threshold for consumers.
So over the years, waves of funding have stimulated research and application of solar power. Costs have shown to be a big threshold for the implementation of the technology, but with the right financial incentives and cost-reducing R&D that has been done over the years, the technology took off and is now being widely implemented in the US.
The Curve
The Energy Curve of solar pv must be investigated on different levels. On a global level, conclusions can be made on the overall implementation of the technology by looking at module prices (without incentives), performance and reliability of the systems and the diffusion of knowledge about the technology in different society groups [find terms in DoI].
However, it is more appropriate to analyze the growth rate of installed solar capacity on a level where financial incentives apply. This is because the implementation in this stage of the S-curve is very much dependent on the expected Rate of Return of the investment. Without financial incentives, the RoR of solar PV projects is too low for investors to step into. This can be seen in the graph below:
Germany
Looking at Germany, solar installations bloomed with incentive programs.
The 100,000 Roofs Program that started January 1st, 1999 was intended to serve until the end of 2004. It provided the opportunity to get a zero-interest loan for the purchase and installation of a rooftop PV-system bigger than 1kW. It reached its goal of installing 100,000 systems already in 2003. The total installed capacity by this program was 350MW, making it the biggest industry in the world after Japan (4). The 100,000 Roofs Program cost the German government about 1.3 billion euro’s and was at that time the largest PV subsidy program in the world (Mints, 2007).
Then, in 2000, the first actual feed-in-tariff (FIT) started in Germany: the EEG. It cleverly financed a range of renewable electricity generation methods per kWh of electricity fed to the grid. The money needed to pay for all the green kWh supplied comes from the electricity consumers themselves: the price of ‘dirty’ electricity is raised marginally (around 2 cents, according to different sources). When the 100,000 roofs program was reaching its end, the German government decided to increase the EEG tariffs. Photovoltaic systems were agreed upon to get 57.4c/kWh, with lower rates for larger systems. The annual installed capacity in Germany in 2002 and 2003 was estimated at 83.4 and 153MW, respectively. A shift of the demand line in the market stimulated the photovoltaic sector and this led to a staggering 603MW of systems installed in 2004. In the years after, the number increased somewhat linearly to 1,505MW in 2008. Due to the announcement of lowered feed-in-tariffs in 2010, the last months of 2009 counted a massive amount of installations in Germany. The global stock market in solar energy sector dipped, as the biggest offset market lost momentum in 2010.
Spain
The solar-PV history of Spain is the most unstable of all. Total installed capacity was insignificant (~17 MW) until 2004, when the government passed the RD436/2004: a feed-in-tariff capped at 160MW. Installations surged: 11MW (2004) grew to 25 and 97MW in 2005 and 2006. In an attempt to greatly increase the installations of solar PV in Spain, the government introduced tariffs that were inappropriately high for a country with such high insolation. Lets compare to Germany: similar tariffs were given out, while insolation is 1.5 - 2 times higher! It would be stupid NOT to put solar panels on your roof in Spain during that year. Many Spanish investors grabbed the opportunity and as a result, 2.7 GW of PV was installed, making it the highest amount installed ever. Installations surged in December, as this was the last chance to get a share of the treasure chest. 2009 shows the sad outcome of the badly managed feed-in-tariff in Spain.
References:
Paula Mints, Germany - model success?: Germany has achieved much in terms of encouraging RE takeup, but what does the future hold?, Refocus, Volume 8, Issue 3, May-June 2007, Pages 48, 50, ISSN 1471-0846, DOI: 10.1016/S1471-0846(07)70067-7.
(http://www.sciencedirect.com/science/article/B73D8-4NVM06M-G/2/90a837097bdaa39dedb2aee372fc1bfa)
(1)Assuming a 2370 kWh/m2/year solar irradiation on latitude tilt (California) and a 0.8 conversion factor for inverter, cables etc.
(2)http://www.spacedaily.com/news/ssp-03b.html
(3)http://www.cuantumsolaramerica.com/history.php?lng=en
(4)http://www.senternovem.nl/mmfiles/The%20100.000%20Roofs%20Programme_tcm24-117023.pdf
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