Redesign the Paradigm

In order for widespread Photovoltaic (PV) use to become an economically viable alternative to fossil fuel electricity production three components are required by the world governments: Research and development funding increases and additional R&D subsidies provided to the private sector to increase PV conversion efficiencies (converting the sun’s diffused solar rays into electricity). Subsidization and private sector incentives for expensive infrastructure development and for establishing economies of scale in critical production areas. Continue support for programs such as feed in tariffs, rebates and refunds, power purchase agreements will also be necessary to reduce installation costs to end users. There are many reasons that the United States and other governments, businesses and citizens need to increase funding for R&D, PV based infrastructure, and end user subsidies.

PV installations once installed can operate for years with little in the way of maintenance and operation costs. There are no long term mining, drilling, refining, processing, and transporting costs such as those associated with petroleum, coal, and natural gas fossil fuels. Commodity traders cannot influence or run up regional pricing. PV solar energy reduces the reliance on obtaining fossil fuel commodities from geopolitically unstable countries and contributes towards energy independence. It represents a good long term investment considering electricity costs have continued to rise every year for the past 20 years.

PV systems are outstanding sources of power in very rural areas where grid access is limited. It is also an excellent source of supplemental electricity within the grid since it can offset peak demand periods and is readily available in many of the Earth’s climate zones. Finally, there has been relatively little research done in both the PV and Solar Thermal sectors meaning that there is still considerable room for R&D improvements.

When considering electricity generation in general, PV provided electricity is the fastest growing global power generation technology averaging growth rates over the past 5 years of 40 – 60% per year. This growth has resulted in providing 21GW of world wide power, which is still miniscule when compared to world wide generation capacity which is at 4800GW. Global PV installation jumped 110% in 2008 to 5.95GW. Germany, Spain, Japan, and the United States represent almost 90% of total worldwide PV installation capacity. Germany installed 3800 MW of PV in 2009 creating 10,000 jobs contrasted to the U.S. at 500 MW. The vast majority of these installations are tied to the grid and not off-grid stand alone installations.

The U.S., the largest consumer of electricity and one of the countries best suited to propel PV into the mainstream, is reluctant to seriously move beyond fossil fuels and is playing catch-up having only installed 500 MW last year. More importantly, it is far behind in terms of R&D funding, net metering guidelines, feed in tariffs, and subsidy programs for commercial and residential PV installations.

Research & Development

New technologies and advancements on existing systems are critical to reach grid parity with fossil fuel generated electricity and to meet installation cost expectations necessary to ensure PV are a viable economic substitute. Grid parity is where PV electricity becomes equal to or greater than grid electricity which is dominated by coal and natural gas.

Government funding for research and development needs to be ramped up to ensure higher efficiencies can be achieved without increasing production costs. Advances in efficiencies generally come at higher module costs due to the use of more expensive materials and manufacturing processes. R&D expenditures can be utilized to discover alternatives to solar cell like non-semiconductor polymer cells and biomimetics, utilizing tandem/multi-junction cells, quantum dot technology, or development of  intermediate band or hot-carrier solar cells. R&D should also focus on improving the existing semiconductor materials Crystalline Silicon, Amorphous Silicon, Gallium Arsenide and providing additional advancements in thin film and polymer paint cell efficiencies. 

Due to current efficiency levels of solar cells and PV modules in general, concentrating efforts into new technology advances and development represent the most beneficial lines of investment at this point. Solar panel efficiency, as measured by the energy conversion ratio, is currently peaking at approximately 24% for production; market average is hovering between 12 – 18%. Solar conversion efficiencies are critical to economically reaching grid parity and reducing infrastructure costs and is one of the arenas R&D dollars should be concentrated.

There are high efficiency technologies being tested by some manufactures that claim to reach as high as 42% which should easily equate to grid parity. However, most of these have yet to provide prototypes for grid testing and research allocations are nowhere near comparable to other existing energy sources. Even promising applications such as light concentration approaches onto multilayer PV modules that have been around a while have yet to be put into wide-scale production.

PV systems are also intermittent energy sources that are dependent on available sunlight. While this is beneficial to utility companies who prefer to operate with less excess capacity and who can thus offer net metering. Net metering allows excess electricity from residential and commercial PV systems to be sold back to the grid offsetting daytime peak loads requirements and reducing the end users electricity bill. However, for off grid applications or those who desire energy independence, expensive and even less efficient batteries are required. This is another area where R&D funding needs to be significantly increased and the development of more efficient battery technology, high capacitance systems, and other type of electricity storage mediums made a priority.

Infrastructure and installation costs

PV produced electricity is still considered expensive for both end use installation and utility companies.  There is no guarantee on investment return if the commercial business sells the facility or homeowner sells the house. State or local tax assessments that are passed onto the new buyer are being considered in some States to offset this potential loss. For utility or solar companies intending to provide electricity to utility companies there are large infrastructure outlays required for initial buildup. Currently these costs for PV and especially solar thermal can be more than traditional coal fired or natural gas plants.

The cost of developing PV modules currently varies for a single PV device at $4.00 to $4.50 watts peak (Wp) and can be doubled initially with installation, wiring, and system costs until the system pays for initial infrastructure costs. Current capital costs for a commercial PV system range from $5.50 per watt to $6.60 per watt dependant on size and scaling of installations. The WP prices have dropped over 22% in the past 9 years but are no where near 2015 expectation levels of $1.25 WP. The reasons for such high prices are associated with the production costs of crystalline silicon panels which are increasing due to limited amounts of silicon and expensive clean-room manufacturing. These costs can be brought down some by government subsidization of large silicon production and increases in scaling and deployment.

However, additional economies of scale in silicon production and increased deployment may not be enough to drop costs to $1.25 Wp by 2015 and $1.15 by 2030 to meet the Solar American Initiative and industry and government targets. This is where the aforementioned research and development advances in new technology will be necessary to achieve these cost goals.  Economies of scale are a crucial element to drive and production costs down but even when combined with government infrastructure subsidies more actions will be required to meet grid parity, at least until new technology advances in efficiencies are ready for mass production. This brings us to the third component individual incentives and subsidies.

Financing, Subsidies & Incentives

Government and regional subsidies and incentives for the end users are a vital part of solar electricity equation. The following processes have proven beneficial in a number of countries:  Direct subsidization of PV systems by Federal, State, regional, and local governments to utility companies or to companies that build arrays for utility companies can be provided for infrastructure development. For end users, refunds, rebates, and tax incentive programs can offset PV system purchases and installation costs.

Another powerful program is the Power Purchase Agreements (PPA) which grants free PV installations in return for 25 year contracts. These programs require the customer to purchase the electricity generated from independently owned PV system at a determined price usually at or just below current electricity rates for that region. Currently the majority of tied-to-grid installed PV systems are being done through PPA’s. There are a number of new PPA agreements under consideration to reduce or remove the significant upfront costs which can be in the tens of thousands of dollars to the consumers in exchange for a 20 – 25 year contract.

Two beneficial programs that encourage the adoption of solar electricity are Feed in Tariffs (FIT) and Solar Renewable Energy Credits (SREC). FIT’s are where electricity providers agree to purchase electricity generated from PV systems instead of traditional fossil fuel plants. The producers provide PV electricity at a guaranteed rate, usually for a set number of years.  Pricing can be subsidized initially to keep prices comparable to traditional grid pricing. SREC’s can require or  provide individuals and companies an incentive to invest in PV electricity that will guarantee PV electricity purchases and are designed to improve the distribution of electricity sources in the grid.

The purpose of R&D investment, scaling, and subsidies are not to only provide costs savings to utility companies and end users to encourage the adoption of solar electricity but to also reduce reliance on fossil fuels securing greater energy independence, create home grown high tech jobs, and reduce CO2 emissions.

Solar PV systems are beneficial in all regions with adequate sunlight but are most beneficial when concentrated in regions with the highest sources of available daylight which means a massive scale up in the southwestern United States and similar such geographic zones.

The real value of PV use over the next 25 years will be to supplement existing utility power generation during peak daytime use. This will offset the need to construct additional power plants to meet increasing demand from growing population centers. PV are also modular by design which allows for easy installation of additional units very suitable for commercial building and residential home expansion.

New applications building integrated PV should be more widespread in new and retrofit construction; other innovative technologies will be feasible as R&D increases yield new products. One such application might be solar roadways, thin film PV on skyscraper windows / grid panels, and paint on applications for irregular surfaces.

Greenhouse gas (GHG) reduction is another critical component to support PV build up. Lifecycle GHG emissions for PV systems will approach 15g/KWh (grams emitted per kilo watt hour of use) by 2015. Only wind generation produces less GHG at 11g/KWh. The remaining sources are as follows

• Nuclear – 40g/KWh, this figure is debated to be considerably more
• Combined gas fired facility – Traditional natural gas – 400 to 599 g/KWh
• Oil fired plant – 893g/KWh
• Coal fired power plant – 915-945 g/KWh, drops to 200g/KWh if carbon capture and storage is utilized.

Solar power integration will increase as solar efficiencies increase and costs come down. This effort must be driven at the government level with proper subsidies and funding allocated intelligently and barriers to entry removed through proper legislation. Initial profitability for companies will be gained through continuous improvements in efficiencies and from government/private funding and subsidization. PV combined with solar thermal facilities can supplement fossil fuel electricity production significantly within the next 15 years for a third of the world population and potentially replace it after that.

http://www.energyefficiencynews.com/i/1787/

http://www.history.rochester.edu/class/PV/future.html

http://articles.sfgate.com/2005-07-11/business/17380048_1_nanosys-fossil-fuels-energy-foundation/2

http://berkeley.edu/news/media/releases/2008/02/20_solarpanels.shtml

http://www.renewablepowernews.com/archives/1501

http://www.consumerenergyreport.com/2010/03/03/will-solar-prices-fall-into-grid-parity/

http://en.wikipedia.org/wiki/Solar_power

http://en.wikipedia.org/wiki/Solar_cell