I've been getting a lot of questions about this: "Solar panels a 'loser,' professor says."
Severin Borenstein is an economics professor at UC Berkeley. He did an analysis of California's solar program and found that if you compare the current cost of distributed generation solar PV, which delivers retail power, with the wholesale power cost of a gas peaker running on pre-Katrina natural gas prices -- and leave global warming and environmental benefits out of the equation -- then solar "isn't cost effective."
Quick, someone call the Nobel Committee.
We can argue about faulty assumptions and apples-to-oranges comparisons, but that would continue to miss the forest for the trees. The point of the California Solar Initiative, and other solar programs, is not to deliver the cheapest kWh amongst all possible kWhs in year one. It's about market transformation. The entire premise of the program is to take an expensive but useful technology and make it cheap.
A great historical analogy is the commercial development of the integrated circuit, as described by Denis Hayes in this 2001 report (PDF) for the Energy Foundation:
Perhaps the best analogy to the role the government could play for solar cells is the role that it played in commercializing integrated circuits. In 1961, Texas Instruments began producing integrated circuits for small, specialized applications. The earliest versions were very expensive: They cost $100 but replaced just a couple dollars' worth of larger electronics, perhaps two transistors and three resistors. There was essentially no market for such devices in the private sector. Other electronics companies sneered at them. But the American military recognized the potential importance of small, lightweight, low-power integrated circuits. The Department of Defense began to purchase integrated circuits in large quantities. Following a predictable "learning curve" (see the accompanying article by Robert Williams), the price fell dramatically. As the price fell, numerous private market niches opened up.
Sales of Integrated Circuits Year Unit Price Military Percentage 1962 $50.00 100% 1963 $31.60 94% 1964 $18.50 85% 1965 $ 8.33 72% 1966 $ 5.05 53% 1967 $ 3.32 43% 1968 $ 2.33 37%
And in fact, that's the path we're on.
At last year's American Solar Energy Society conference, First Solar gave a presentation (PDF) that made a credible case that if things continue -- market growth and cost reductions -- it will be selling its product at $1.25/W by the 2010-2012 timeframe. That's grid parity in a lot of places. Sunpower makes a similar case (PDF).
Do yourself a favor and page through the slides. The cost reductions are not coming from places that can be invented and directly commercialized straight from a lab bench. It's process efficiency all through the value chain, combined with economies of scale in materials.
And let's not forget -- materials are only half of the cost equation. Workforce development is the other half, and Lord of the Rings notwithstanding, that doesn't come from a lab either. It is created through a market.
Borenstein thinks that if we sit on our hands long enough, a government lab somewhere will invent a magic solar bullet. Well, we could give that shot. But given the stakes, and the low level of funding our government directs at the problem, that's a rather risky proposition.
A better approach, I believe, is to recognize that NREL and friends have done a fantastic job -- the technology works. While government R&D efforts should be redoubled, creating markets:
- leverages orders of magnitude more private equity to the problem. In 2007, publicly-listed solar companies raised about $7 billion globally. Over $600 million in VC money went to California based solar start-ups alone.
- addresses issues -- process engineering, workforce development, material economies of scale -- that don't find their solutions in a lab.
In the late '80s and early '90s, a 354 MW solar thermal power plant was installed in 50 MW chunks in the Mojave Desert. The first 50 MW went in at 28 cents/kWh. The last 50 MW went in at 14 cents. Same technology, same material -- just learning by doing. Shortly thereafter, policy support was pulled, and Luz went bankrupt.
Imagine where we would be today if that generation's Borensteins hadn't gotten their way.
Update [2008-3-28 10:4:22 by Adam Browning]: My post was focussed on how, technical issues notwithstanding, Dr. Borenstein's paper misses the point. For those further interested, here's a paper (pdf) that discusses some of those technical issues in dispute.
Why buying cheap energy certificates worsens climate change
‘Heretic’ battles straw man
Comments
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amazingdrx Posted 2:55 am
25 Feb 2008
Mollecular level circuitry designed to be built with DNA, like coral organisms build a reef? It may be the next step?
Viruses building mollecular "coral reef" chips? (Right onto your gray matter for a telepathic internet connection, yikes). Holograpic 3-D images guiding the viral "construction workers".
How much simpler would it be to build out rooftop concentrating solar PV that is 39% efficient (NREL verified at only 10 suns concentration) that uses 10% of the silicon.
We are at the begining of the efficiency curve for solar, relatively low tech improvements yield large gains.
Eventually mollecular engineering might make ambient temperature superconduction possible, that in turn might make near 100% efficient, total spectrum (heat as well as light converted to electricity) solar pV possible.
The whole human world powered by PV cells. Cheap, mass produced almost no cost energy for everything. Organic superconducting solar PV grown in a culture.
Subsidizing solar PV with a 10 cent per kwh payment to homeowners would pay off right now. And get the whole renewable energy revolution going.
http://amazngdrx.blogharbor.com/blog
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Alex 77 Posted 3:15 am
25 Feb 2008
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sunflower Posted 4:00 am
25 Feb 2008
There is silicon in solar cells and silicon in computer chips. There is concrete in solar homes and concrete in nuclear reactors.
While the most expensive solar technology is subsidized, and promoted in the press, the most cost effective solar technologies are not, and R&D at the labs is being zeroed-out, out of sight.
Be open to the possibility that solar competition with carbon is being sabotaged by the same industries that deny global warming, that lie when they say they want a cap on carbon. Lies, damn lies.
Oh never mind. All solar is good, political, tribal, and green.
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JohnMashey Posted 7:39 am
25 Feb 2008
1) For real-world discussion by the world's leading chip-manufacturing machinery, Applied Materials (AMAT), see:
http://www.appliedmaterials.com/news/solar_strategy.html
I've heard their (ex-NREL) VP&GM Solar Charlie Gay speak: very sharp.
AMAT is a solid, conservative company. When they talk about cost curves, they are not a startup hoping for funding.
See the PPT presentation, including:
Solar Learning Curve Dynamics
World Electricity Production Forecast
PV Solar Supply Growth
Scale to Enable Learning Curve
Experience in Reducing Unit Production Costs
cool machines! awesome mech eng
Multiple Technologies Driving Industry Growth
Warning: not everyone is used to log-scale charts.
The videos are also useful.
2) BUT, this stuff is not Moore's law lithography reductions, and one must be very careful not to get them confused. Denis hayes' document got pretty close to the edge.
a) There are normal learning-curve & volume effects. These apply to VLSI chips, LCD flat-panels, and solar cells.
b) For VLSI chips, we've had decades of Moore's Law improvements driven especially by optical lithography improvements, which by the-way, are getting much harder. We used to get both density and speed improvements just from simple optical shrinks of existing designs. That hasn't worked for a long time, and the industry has been having to go more and more 3D, which means more mask layers and more cost. In the "good old days", one could optically shrink a design from (say) 2 micron to 1.5 micron, get 2X more chips on the same wafer, and the smaller transistors switched faster.
c) Solar panel improvements are mostly in a), because they don't get the benefit of b); they're much more like flat-panel LCD display manufacturing. I saw a later version of Charlie Gay's talk, and it had a chart that plotted the various different curves together, which made this clear.
In the VLSI chip business, where if at process-node N, a chip we designed was a barely manufacturable monster, where we might get 1-2/wafer, at process node N, it would be quote reasonable, and at N+1 it would be really cheap. I.e., the process-technology folks (like AMAT) would bail us out, regularly, with better lithography.
That just isn't true for the solar module business, but that actually reinforces Adam's point: we need volume and learning curve in design & manufacturing and of course, we have to figure out cheaper installation, i.e., we have to work on the whole value chain. We do not get lithography's boost every few years, although of course, there are plenty of control&efficiency applications that will do so.
3) Economists.
I recommend Charles A. S. Hall.
http://www.esf.edu/EFB/hall/
This paper is good:
http://www.ker.co.nz/pdf/Need_to_reintegrate.pdf
But for this discussion, see especially:
http://scitizen.com/screens/blogPage/viewBlog/sw_viewBlog ...
That can be compared to slide 36 in the AMAT presentation, which shows expected growth in PV manufacturing capacity.
IF PV capacity were growing like Moore's Law rates for transistors/chip, we'd be in OK shape, but it isn't.
Missing from all this is CSP, of course, which will likely need to be an important part of the solution and I think will show up on Charlie Hall's charts after some of his students look at it. There is at least some hope of scaling that faster.
-John Mashey
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Colburn Posted 7:54 am
25 Feb 2008
Given the limitations of TV news, viewers were left with essentially no information on which to base a judgment about the merits of the issue, but I was pleased to see that at least energy issues were being taken seriously on a local TV newscast. The report was on KTVU, but I can't find anything about it on their website.
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GreyFlcn Posted 7:56 am
25 Feb 2008
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Pangolin Posted 9:12 am
25 Feb 2008
It would also be nice if we knew where to find EROI tables for solar, coal, oil, nuclear and natural gas electricity.
If this guy follows the normal pattern of economists commenting on energy issues he's made piles of unfounded assumptions and totally ignored the massive energy subsidies provided to the fossil fuel industry by the federal government.
In short, he's likely an idiot or paid shill.
Put the Carbon Back
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sunflower Posted 9:33 am
25 Feb 2008
Organic clothesline one day.
Passive solar one month.
Solar thermal six months.
Roof pv a few years.
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disdaniel Posted 6:37 am
26 Feb 2008
I have a patent pending panel design that pairs mirrors with cells. The following link shows photos of how one could build a panel that uses 30% less silicon, by adding flat mirrors.
http://time-is-energy.blogspot.com/2007/10/some-photos-of ...
If you assume that silicon makes up 1/2 the cost of a solar panel this simple design would reduce the price of solar panels by ~15%.
I've got another design that can bring the cost down 25%...the economics of both are described in more detail on posts at
http://time-is-energy.blogspot.com/
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davea0511 Posted 11:04 am
28 Feb 2008
The me give you some examples and then tell you why it's happened this way, and then tell you how to fix it:
Example 1: Geothermal furnaces provide the biggest bang / buck for saving energy. Their payback is around 6-10 years- AND THAT'S WITHOUT SUBSIDIES OF ANY KIND. Also, unlike solar, most single homes could experience this kind of payback anywhere in the world. 40% of our energy costs are in heating/cooling and geothermal units could cut that consumption by 80%. Nobody implements it though because the government has offered NO financial incentives for it. Sure in some states you can get Uncle Same to pay half ($20K) for an inefficient solar roof, but NOTHING for geothermal.
Example 2: For 15-20 years we've had massive proof that CSP is a magnitude cheaper than PV, so why does everyone think of PV when you talk about solar? Why did we do relatively nothing in CSP when inefficient CSP farms were producing at $0.15/kWh for 15 years straight and can produce as cheap as $0.07/kWh if done right?!
Giving money to less efficient technologies in hopes that they'll catch up to the more efficient ones have been depriving the truly promising technologies for decades - AND IT'S TIME FOR THE INSANITY TO STOP.
This is what I propose: Renewable incentives should be awarded on a bang / buck basis. It should be distributed on an award basis to those companies who can show that within a 10 year period their technology will average the cheapest $/kWh (installation cost included). Companies who's average more than $0.10/kWh will get nothing, and the rest of the players will be prorated based on their $/kWh over than 10 yr period.
Here's the kicker: the companies don't get the money though ... the consumers do. You get awarded big time if you bought a geothermal furnace - resulting in a much faster payoff and a profit until you hit $10k profit.
Then the most effective and promising technologies will rise to the top and we'll see unheard of progress as companies focus on what will make the biggest difference in the shortest amount of time.
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