I point this out because even though solar is still in many ways an infant industry, it has matured enough to compete head to head some dirty old stalwarts like coal. Yes, even coal with its 200 year head start. And as the technology matures, people are just beginning to understand the economic implications of a technology that you put out on the lawn or up on a roof and it provides useable energy. To say this is a game-changer is to court the outer limits of understatement.
The Falling Cost Of Solar Energy Is Surprising Everyone
Rob Wile | May 2, 2013
Everyone's talking about all the new oil and gas being produced thanks to new drilling methods.
But there's another narrative nipping at the shale boom's heels: solar energy. And it's expanding just as fast.
It's just that the scale is not quite the same. But that's changing.
Citi has just named solar photovoltaics, which convert solar radiation into electric currents via semiconductors, to its list of 10 world-disrupting technologies.
In a note this week in advance of the disruption report, Citi's Jason Channell said that in many cases, renewables are already at cost parity with established forms of electricity sources.
The biggest surprise in recent years has been the speed at which the price of solar panels has reduced, resulting in cost parity being achieved in certain areas much more quickly than was ever expected; the key point about the future is that these fast ‘learning rates’ are likely to continue, meaning that the technology just keeps getting cheaper.
Below is a chart showing where "socket" or grid parity has already been achieved. (Grid parity is when a source of power becomes cost competitive with other sources.) The lines represent the pattern of expanding solar power in a given year — so at peak solar exposure, parts of the southwest U.S. are now already capable of meeting their electricity needs via solar panels.
He also adds this cool chart showing that the Age of Renewables has only just begun.
Channell writes:
The rapidly expanding parity provides enormous scope for growth in the solar industry, driven by standalone economics as opposed to subsidies, which are becoming ever scarcer in an austerity-driven world.Gas isn't going away, but renewables are coming on strong. more
As a previous Saudi oil minister once noted, “The stone age didn’t end for a lack of stones...”, and this substitutional process can be well demonstrated looking at the US energy mix over the longer term.
Hmm... I may have some bad news on this:
ReplyDelete"The biggest surprise in recent years has been the speed at which the price of solar panels has reduced, resulting in cost parity being achieved in certain areas much more quickly than was ever expected; the key point about the future is that these fast ‘learning rates’ are likely to continue, meaning that the technology just keeps getting cheaper."
I'm actually publishing a paper that, among other things, looks at the learning rate of multicrystalline solar PV over time. The calculated learning rate was very high from late-90s to late-00s, but it's been plummeting since then. The most recent years (2010-11) had learning rates equivalent to those found back in 1994 and 1995. It might go back up, but I think the quote above is quite optimistic.
Additionally, my LCOE calculations have solar prices about 5 - 7 cents/kWh higher in 2012 than Bloomberg's. This is going off a complete historical cost/production dataset running back to 1976 and accounting for a rough estimate of minimum possible cost due to material and thermodynamic limits. Its likely that Bloomberg followed the common practice of economists and used $0.00 per Watt of capacity as their minimum cost level--mine is $0.30 per Watt, since you can't make a panel for free.
I hope I'm wrong though! (And this all reminds me, I really need to work on my next draft!)
You paper is probably right. The delay between a big burst in learning and a price drop in production should be about ten years if historical trends hold. Moreover, the cost of solar cells these days has a lot to do with Chinese "dumping" which is not sustainable.
DeleteI still think it is quite wonderful that we can even have a conversation about cost parity that isn't completely insane. And while Bloomberg may be jumping the gun here, my guess is that we will see most of these assumptions come true in the next decade.
Good luck with your paper!