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The Solar Energy Industry is Red Hot - Will it Get Hotter?

The solar industry has been very hot. Record amounts of new solar capacity have been installed over the past two years. The accelerating pace of adoption of solar panels for distributed generation (installed at the point of use, rather than sold into the power grid) and the downward trend of module prices have created exuberance over the industry’s future.

Solar has reached and eclipsed price parity with traditional fuel sources in some markets, and ultimately the potential market for solar PV is huge. A solar module costs approximately 1% of what it did 35 years ago and prices for solar pv panels have plummeted since 2010, with an average price per watt for modules falling from $1.81 in 2010 to less than $0.70 and today.

It is clear that the future is very bright for the industry. What is less clear is when growth will accelerate and how near-term challenges for the industry could create some rough patches for the industry before widespread adoption drives truly explosive industry growth.

The rapidly decreasing costs of solar cells and corresponding growth of the global solar industry have lead people to invoke Moore’s law and predict that the installed capacity of solar PV on homes and businesses will double every two years. The total installed capacity worldwide and in the U.S. doubled over the last two and a half years. While the steep decline in the cost of manufacturing solar panels appears to be flattening out, the associated balance of system costs, along with customer acquisition, transaction and capital costs will continue to drop, though this will likely happen inconsistently in fits and starts over coming years. Meanwhile, the per-unit cost of retail electricity delivered by utilities will begin to rise as costly infrastructure demands combine with stagnating or falling demand caused by the penetration of distributed power systems. These two merging dynamics – dropping solar costs and rising utility rates for electricity have caught the eye of more than a few investors and analysts.

insert #1

The opportunity is immense

Solar is still a relatively immature industry. About 0.2% of electricity in the U.S. comes from solar generation and solar has been installed on less than 250,000 homes in the U.S. If a building or structure receives direct sunlight and uses electricity solar could be used to generate some of that electricity. The residential market potential is immense: there are more than 90 million single family homes in the U.S. and as many as 50 million more households in multi-family structures and several million more commercial and other non-residential structures. While solar may not work on every structure in the U.S. just a small wedge of this market is worth hundreds of billions of dollars.

insert #2

In some markets it is already cheaper for a household to invest in solar than to buy electricity, and the projection is that at a $3 per watt for the cost of installed solar, about 100 GW could be economically installed today without relying on any state or federal subsidy programs. As the market closes on that $3 per watt threshold, the rate of growth will almost certainly explode.  Manufacturing capacity, capital and a skilled labor force will be the only constraints on growth.

insert #3

Some possible bumps ahead?

The future isn’t all sunshine and excitement – subsidy erosion, attacks from utilities, a slowing of the price reductions of solar panels, an uncertain market for utility scale projects due to low wholesale power prices, and structural market challenges like a lack of adequate and low cost capital are all possible challenges to the near-term success of the solar industry.

Both federal incentives and local support like net metering are at risk of being scaled back. The federal Investment Tax Credit is set to decrease from 30% to 10% if not extended by December 31, 2016. State-level renewable portfolio standards, or regulations that incentivize or require utilities to purchase renewable power or solar specifically, also have an unpredictable future. These portfolio standards are threatened by policy instability, driven by some utilities, but more seriously by conservative political groups like the American Legislative Exchange Council and Heritage Foundation, which are actively campaigning (though unsuccessfully so far) to roll back these programs.

Net metering policies that allow households and businesses with solar to sell their surplus power back to the grid are another important economic program for solar growth, as solar output does not necessarily match energy demand (getting value for electricity generated but not used on site is typically vital for project economics to work). Utilities have made targeted efforts to limit or reverse net metering requirements, arguing that these programs increase their cost of managing the grid, and that the additional costs for solar connections are borne by consumers that have not installed solar. Several utility executives have also begun to acknowledge that distributed energy sources like solar pose a direct threat to the utility business model.

This growing conflict, across state and local policy supports will only add to uncertainty around the stability of the programs that solar depends upon for growth in the near-term. Additionally, as we have seen in markets like with New Jersey SRECs, market dynamics can also erode portfolio standard values and undermine a program’s stability. Uncertainty with respect to program value has two related effects: 1) direct reduction of program value is a drag on project economics, and 2) the inability to obtain loans or investments because investors and lenders will discount the revenue associated with an uncertain program.

This pool of incentives is vital for distributed solar’s immediate future in that they provide the bridge between the price per unit of electricity from on-site solar generation and the delivered cost of power from a utility.

As noted above, the downward trend in panel pricing appears to have slowed. Investment in solar PV production and manufacturing fell by 72% from 2011 to 2012, mostly because of market overcapacity. Despite some recovery (investment is expected to rise by 30% by the end of this year) there is simply less excess panel supply to force down prices in the near-term. While advances in the economic efficiency of other pieces of the full stack of solar system costs – transactional, installation, non-panel components, customer acquisition – will continue to decline, these have historically represented a much smaller portion of the overall drop in the price of solar, and the price declines will be less linear than the decline in panel prices have been.

The utility-scale market will drive a smaller portion of growth than it has for past few years. The third quarter of 2013 saw a decrease in utility-scale solar installations to the lowest level in the past six quarters. Wholesale electricity prices remain low in many markets (islands or any market using diesel fired electric generation are an obvious and important exception), and with fewer mandated pricing premiums from utilities there are fewer opportunities to build economically viable utility scale solar projects.

Additionally, the demand for capital against the rapid pace of growth is a constraint that may not resolve in the near term. The pool of investors and associated available capital that has experience with solar finance remains limited – critically so for tax equity investors – and new market entrants face at least a significant educational barrier to entry. The downstream market for installation and ownership is still very fragmented, and without more players that can draw investments in the hundreds of millions to multiple-billions of dollars range into the solar market, the appetite of large institutional investors, which drive most large-scale infrastructure investment in developed markets, will be limited.

The confluence of these three near-term challenges creates the potential for some mild disruption to the still nascent marketplace. So a market evolution that looks like this:

insert #4 

rather than this:

insert #5

Is a possibility that needs to be factored into planning for anyone participating in the solar industry.

An aggressive, dynamic, and visionary strategy put in place today will define who wins the solar race 

The longer-term future of the solar industry, and especially the future of distributed solar PV, is exciting and the economic potential is simply immense. The industry will certainly go through a period of exponential growth. The solar skepticism that grew out of anti-solar campaigning follow the failure of Solyndra is now a distant memory for most of the industry and increasingly more investors.

Despite this well-founded enthusiasm, there are real near-term concerns that could slow the pace of the industry’s expansion until deploying distributed solar costs less than the utilities’ per-unit cost of power delivery with a high enough level of certainty to attract many more investors than are already invested in solar projects. Actual policy instability and the associated perceived risks could create real limits in the pace of solar’s growth.

As the industry moves forward it will be vital to have vision and strategy – investors and businesses that entered the market early and have survived the challenges so far already understand this. As new market participants look to the huge potential of solar they too must make sure they have the vision, knowledge and flexibility to navigate some potential near-term bumps in order to win a commanding share of the industry’s tremendous future.

Special thanks to Claire Austin, a very smart young clean energy professional, and 2012 graduate of the School of Foreign Service at Georgetown University, who was instrumental in the research and writing of this piece.

This article first appeared in Banking Energy at Energy Trends Insider and subsequently in Breaking Energy. Follow me on twitter here.

Elias Hinckley's picture

Thank Elias for the Post!

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Schalk Cloete's picture
Schalk Cloete on December 11, 2013

I’m still trying to get my head around all the excitement about the impending exponential explosion of distributed PV. To me, the whole concept just appears highly unsustainable. 

Consider the entire power system. I cannot see how distributed generation can make any significant dent in the total amount of traditional generation, transmission and distribution capacity required. If the sun does not shine (peak load is often in the evenings), the entire capacity still needs to be there to ensure grid reliability. This implies that rooftop solar only displaces some fossil fuel burning by lowering capacity factors of some load following powerplants because it enjoys dispatch priority. 

If you then look at the costs, you can calculate that rooftop solar will provide electricity at about $300/MWh for current costs of $5/Wp and $180/Wp for the $3/Wp point at which you predict explosive exponential growth (25 year lifetime with no degradation, 16% CF, 7% CoC). This electricity displaces variable operating costs of baseload plants (including fuel) which are generally somewhere around $30/MWh.

Thus, a rapid expansion of rooftop solar will create minimal savings in traditional power grid infrastructure and displace some variable load with power that is about an order of magnitude more expensive. And then there are of course the additional costs in reduced efficiency and increased wear due to rapid ramping of load following plants and also the capital losses when highly efficient baseload plants have to be prematurely replaced with less efficient load-following plants. This just does not seem like a good deal to me. 

For homeowners who have lucrative net-metering or FIT deals, this is of course not a problem, but the simple calculations above should clearly indicate just how unsustainable such an expansion really is. Substantial (and totally justified) pushback from utilities and grid operators can therefore be expected as more and more homeowners install PV while still being totally reliant on the traditional grid. 

Does this look like a recipe for sustained exponential growth? Perhaps for a few years, but the unsustainable nature of this setup may very well cause a very large and painful correction if accommodative policies push this ideal too far. 

Keith Pickering's picture
Keith Pickering on December 11, 2013

You stated, “prices for solar pv panels have plummeted since 2010, with an average price per watt for panels falling from $1.81 in 2010 to less than $0.70 and today.”  This is not correct, as the prices cited by you (and by your linked source) are for solar modules, i.e., cells, and not panels. The difference is significant, since the price of modules is subject to Moore’s Law, while the price of panels includes a lot of things (physical structure, mountings, electrical connections) which are not, and therefore should not be expected to decline in price.

This leads to the observation that the price of modules today makes up about half of the total cost of the panel — which in turn implies that the cost of the panel will never drop below half of what it is today, even if the cost of the module is free. And since EROI for solar is currently about five times that for competetive technologies (http://en.openei.org/apps/TCDB/), solar will never be cheap without subsidy, in spite of analysts’ regular predictions that it will happen any time now.

Elias Hinckley's picture
Elias Hinckley on December 12, 2013

Thanks for catching the panels/modules typo! For what it’s worth I am seeing Q4 module prices down around $.50. 

 

With that said I simply don’t agree that the balance of PV project costs will be static – we’re seeing a few market participants drive significant cost reductions on full panels, balance of plant and financing.

 

Would be interested to see good EROI numbers across energy sources (your link is to LCOE) – Scientific American had numbers maybe a year or so ago that showed solar PV EROI at better than 6 (which takes it above many of the unconventional fossil plays).

 

Elias Hinckley's picture
Elias Hinckley on December 12, 2013

Seems like you are arguing that distributed solar is expensive when compared to built fossil generation and can’t ever compete without net metering or equivalent programs.  A lot of that built generation is going to be (and should be) retired, so I’d argue new generation is a better measure, and then you have to factor in delivery costs (against a backdrop that T&D infrastructure needs >$1 Trillion in the US alone over the coming years). And there are plenty of technological solutions coming along that will significantly decrease the net metering gap (storage, DR, etc.).

Whether this disruption to the tradition centralized generation model is a better or worse macro-economic answer is an interesting question, but without a cogent rebuild of energy policy (not holding breath) this won’t be adequately addressed so my view is that market dynamics look pretty good for solar.

Keith Pickering's picture
Keith Pickering on December 12, 2013

Thanks for catching my typo too, obviously I meant LCOE.

EROI is a hugely complicated business, because (a) there are at least three different ways to do it; and (b) even within a given method, there are different ideas of where system boundaries should be drawn. Thus you can get numbers all over the map for pretty much any source you want. And even beyond that, technology tends to be a moving target. For example, one of the biggest inputs to nuclear EROI is enrichment, which used to be via the gas diffusion process, very energy-intensive. Today enrichment is nearly all centrifuge, which is ten times more efficient than diffusion. And there are currently two laser enrichment facilities being built, which promises to be 10 times more energy efficient than centrifuge. EROI for solar can vary widely too, depending on the technology chosen. And to be thorough, it’s better to count electrical energy inputs differently than thermal energy inputs, because electric generation carries a cost too.

But if you’re looking for a study that’s recent, uses consistent methods and boundaries, and covers a wide variety of sources, try Weissbach et. al. 2013: http://www.sciencedirect.com/science/article/pii/S0360544213000492

 

Schalk Cloete's picture
Schalk Cloete on December 12, 2013

My point is just that distributed solar cannot displace significant amounts of traditional generation, transmission and distribution capacity (without lots of expensive energy storage). Thus, any traditional power-plant that is retired must be replaced by another traditional power-plant. Solar PV can only reduce the capacity factors of these plants, not the capacity itself. 

I agree with you that correct pricing which accounts for the reliance of PV on the traditional grid will be quite complex and the simple systems currently in place makes the short-term outlook for solar quite rosy. However, your post suggested a long and sustained exponential expansion which I think will end very badly if simple accommodative policies allow this to go too far, simply because the cost of distributed PV is so much greater (an order of magnitude) that the fossil fuels it displaces. 

 

Gary Tulie's picture
Gary Tulie on December 13, 2013

The time of peak demand varies according to location, climate, and types of customer. In Northern climates, the highest demand comes during the winter heating season when sunshine levels are at their lowest, whilst in Southern climates, peak demand comes hot summer afternoons when demand is dominated by air conditioning. 

The distribution of customer types is also relevant as industrial, office, and domestic consumers all have very different usage patterns. 

A further important factor is the availability or otherwise of dispachable hydro-power

Considering all of the above, the amount of conventional capacity which can be displaced by solar varies dramatically according to local variations. 

In the best possible case, a utility is using a mix of fossil fuels and hydro such that as solar is introduced, it displaces the fossil fuel component, deferrs hydro-generation when the sun shines, and alows the remaining balance to be delivered by hydro when the sun does not shine. 

Worst case, the utility is in a dull Northern region with cold winters, little of no dispachable hydro and dominated by fossil fuels and nuclear. In this case, solar may not even displace a lot of fossil fuel use if nuclear covers the base load and fossil fuels are used to meet peak demand. 

As for cost, the US is something of an anomoly with very high soft costs compared to Europe giving opportunity for substantial savings if ever the federal government sorts out an efficient standard set of rules to be applied across the whole country.

True, panel costs cannot drop enough on their own to bring about a halving of solar electricity costs as they now make up less than half array costs in nearly every market. For that to happen will I think require technological developments achieving substantially more watts per area at today’s area costs (so redusing BOS expenses) combined with savings on other parts of the hardware, physical installation costs, and soft costs through learning effects and more efficient processes.

Nathan Wilson's picture
Nathan Wilson on December 13, 2013

The important cost metric to consider is not “solar vs. fossil” but rather “solar w/ fossil backup vs. fossil”.  The notion that Demand-Response will eliminate the need for fossil backup strikes me as highly optimistic. As Gary’s comment points out, adding storage to solar can eliminate the backup, but only at modest penetration (below around 5% of energy, otherwise the solar becomes an unacceptably high single-point failure risk), and only when the peak demand occurs in the summer (ie. only in the south and south-west).

So to calculate the cost of “solar w/ fossil backup”, using the EIA data, add the Levelized Cost (LCOE)  of solar to that of the backup fossil, then subtract the “variable cost” of the backup (this is the cost component that depends on how much electricity is actually produced: fuel, operations & maintenance etc).  The EIA gives these costs:

  • Solar LCOE = $0.144/kWh  (utility scale)
  • nat. gas combine cycle LCOE = $0.066/kWh
  • nat. gas combine cycle variable cost = $0.045/kWh

A few things to note: older natural gas plants tend to be less efficient (as are simple combustion turbines and oil-gas dual fuel boilers); hence the variable cost will be higher.  Distributed (residential) solar tends to cost double what utility scale costs. Developing nations like China use mostly coal, which has an even lower variable cost ($0.029/kWh in US per EIA).

Of course many areas have retail and even wholesale electricity rate structures that effectively ignore the cost of fossil backup (and the distribution network) or substitute a very small “capacity payment” (based on legacy fossil plants with sunken costs).  As Elias points out, these legacy fossil plants won’t last forever, and someone will have to pay for new ones to be built – our society simply can’t tolerate unreliable power.  The result is that regulatory reform is inevitable.  Under the new regulations, solar will compete with the variable cost of fossil fuel, and will most often lose.

Hence the solar industry is every bit as vulnerable to regulatory reform as the wind industry is to loss of its subsidy. The falling cost of utility scale solar will allow it to compete with wind in some location that have renewable portfolio standards (not in the central plains however, as the 40% wind capacity factors there make it half the cost of solar). 

Gary Tulie's picture
Gary Tulie on December 13, 2013

On the other side of the coin, consider the following

1. The USA currently does not apply the polluter pays principle to fossil fuel use. This means that fossil fuel users are “freeloading” on the environmental services of the planet and doing environmental damage that is not being paid for.

2. Low gas prices – in my view temporarily due to a fracking boom, and isolation from the global marketplace for gas. Were US produced natural gas bought and sold on global markets rather than US markets, gas costs would be a great deal higher.

3. Fossil fuel prices are highly volatile and on a generally rising trend not withstanding the current situation of fracked natural gas in the USA.

4. Once installed, solar power costs are highly predictable over a long period as the vast majority of costs are paid up front.

 

5. Installed solar power costs are still declining and almost certain to continue doing so disregarding short term influences such as excess or short solar panel inventory. 

6. In many markets electricity consumption is showing a marked downward trend as more and more energy efficient technologies are deployed. 

7 LCOE calculations are highly sensitive to factors such as discount rates, assumed product life, interest rates etc so that there is room for discussion as to how accurate and useful the comparison is.

Of course, outside the USA there are areas such as parts of Southern Europe and Australia with excellent solar resource, high electricity prices, and far lower solar installed cost than the USA (Except Hawaii and parts of Alaska). 

In Africa, there are constant rolling blackouts in many areas and a massive undercapacity – so that adding solar even without storage or backup generation will increase the availability of grid electricity. In practice, most of Sub Saharan Africa with the exception of South Africa uses a far larger proportion of hydro than is found elsewhere often involving dams with generators which are constrained by limited water supply – so that there is inherently a significant regulation capacity by running hydro when wind and sun fall short. 

This being the case, there are places where the lowest LCOE for new electricity capacity even taking into account backup may come from solar, and those areas will only become more extensive as the technology developes further. 

 

Keith Pickering's picture
Keith Pickering on December 13, 2013

No, the relevant comparison isn’t solar vs. fossil, or solar with fossil backup vs. fossil. The relavant comparison is solar with nuclear backup vs. nuclear. Since the idea is to get to a fossil-free energy system, and to do so as cheaply as possible, let’s just leave the fossil systems off the table and figure out the cheapest way to get to zero fossil carbon. And that’s hydro, where available, and nuclear, where not. Wind has a role to play as long as it doesn’t reach a market penetration high enough for curtailment (which drives wind costs way up). But solar is simply out of the market: it’s too expensive, and likely will remain so.

Nathan Wilson's picture
Nathan Wilson on December 13, 2013

My comment was really directed at the short term, wherein nuclear competes with baseload coal, and solar competes with natural gas peaking, and wherein the EIA has put some thought into cost predictions.

Of course you are correct about the long term, Earth’s large sustainable energy sources are solar, wind, and nuclear (hydro and biomass are much smaller than these, but have been historically important).

I think it is important for us to develop all three of these larger sources, in order to replace fossil fuels as quickly as possible.  

Elias Hinckley's picture
Elias Hinckley on December 14, 2013

Not knocking nuclear as part of a low carbon future at all – but the practical examples of recent nuclear make the argument that it is a) in fact so much cheaper than solar and b) that solar can’t be a price competative energy source seem misplaced.

Elias Hinckley's picture
Elias Hinckley on December 14, 2013

Thanks Jim – great link. Outstanding review of EROI.

Donald Osborn's picture
Donald Osborn on December 14, 2013

No, the relevant comparison isn’t solar with fossil backup vs. fossil nor solar with nuclear backup vs. nuclear. In the real world of utility operations and consumer energy use, we need as clean of a MIX as possible. Not ZERO carbon, but greatly reduced carbon. Solar, wind, and othe renewables are all part of an overall mix that can deliver much lower carbon at a reasonable cost. That MIX, along with energy efficiency, demand management, and smart grid operations, will get us MUCH further along to a sustainable future and more responsible climate response. Setting up solar, or any other resource, as a 100% solution and then  dismissing it as uneconomic is just setting up false strawmen. 

Once energy storage becomes more economic, then we can talk 100% non-fossil. Meanwhile, the real challange is a MUCH greatly reduced fossil enegy MIX as soon as possible. Solar, and other renewables are already proving themselves and the market results, quarter after quarter, is showing that.

Nathan Wilson's picture
Nathan Wilson on December 15, 2013

As comments from Keith and myself suggest, the cost analysis comes out very different depending on the amount of “flexible generation” (i.e. fossil fuel and hydro) in the portfolio.  Consider two extreme cases:

When >80% of the total produced electrical energy comes from flex-gen, then solar, wind, and nuclear all compete on equal footing, and levelized cost is the primary consideration (plant lifetime is also important in the long run).

When <20% of the electrical energy comes from flex-gen, the situation changes dramatically.  Nuclear is by far the cheapest way to make baseload, desert solar (with a few hours of storage) is probably the cheapest way to do peaking.  Any attempts to use wind power result in either a lot of storage being required, or lots of curtailment (energy being discarded); either way it will be expensive.

As to the question of solar with nuclear backup:  it is a lot like solar with geothermal backup.  Anytime ths sun shines, the other will be curtailed.  The backup generator looses revenue, but doesn’t get to stop making payroll, and sees very little fuel savings (EIA says nuclear’s variable cost is $0.012/kWh, there’s no way solar can be cheaper than that).  So society as a whole will pay more for electricity, even if the regulatory policy allows solar owners to profit.

When large scale hydrogen (or other electricity-derived syn-fuel) production is used as a dispatchable load, this provides the system with similar flexibility to fossil fuel, so wind can earn its way back into the portfolio.  However, syn-fuel production is more economical when operated at constant power level, which again favors nuclear.

Gary Tulie's picture
Gary Tulie on December 15, 2013

What you say about the variable cost of nuclear is true however the full cost of nuclear is probably rather high – including initial capital cost with all the necessary enquiries and safety systems, FULL insurance cost (presently every nuclear plant’s worst case incident is covered by government), nuclear waste storage / reprocessing, and plant decommissioning.

Estimates vary widely regarding the true cost of nuclear, but in the UK, the government has just agreed a PPA for a yet to be bult nuclear power station at around twice the current wholesale electricity price. This suggests that costs are higher than for fossil fuels, and my guess is that comercial insurance cover for a worst case incident will be capped and the government will remain the insurer of last resort should there ever be a serious incident such as a meltdown or loss of containment. 

It could be argued that the variable cost of solar is virtually zero as once installed, very little has to be done to a solar array to keep it working, however this would be to ignore the balancing cost of having large scale penetration of solar. Nuclear has the opposite problem as you can’t sensibly use nuclear for anything other than base load as down regulation is not cost effective, and a regularly down regulated plant would have an excessively high capital cost per kWh.

One factor that could begin to favour higher penetration of solar is a large scale shift to electric cars which may now be starting – with widely distributed smart chargers, and electric cars programmed to charge at the convenience of the grid between certain hours i.e. when the owner is at work or overnight, a great deal of balancing can be achieved using the energy storage capacity of a large fleet of electric cars. True, in countries like the UK, solar will never generate a large proportion of winter power and of course does not operate at night, but that is where wind comes in, (being more available in winter, and with lower demand being able to meet a larger proportion of night time load) A large fleet of flexibly charged electric vehicles would allow for quite a bit of variation in generation so supporting a larger penetration of solar and wind power, and such energy storage could even back up the grid occasionally acting as emergency spinning reserve delivering power to the grid such as when a power station unexpectedly goes off line.

Whilst it is true that the ability to generate using fossil fuels may remain necessary for many years, this could I think in the above scenario be reserved for a relatively small part of the total energy mix with plant operating efficiently at design capacity when running and a combination of hydro and electric vehicle storage taking care of shorter term variations.  

Paul O's picture
Paul O on December 15, 2013

1) Aren’t you saying that a proper comparison would be the costs of SOLAR + Wind vs Nuclear power, if Solar has to be backed by wind power before it may be compared with Nuclear Power?

2) Are you factoring into your costs for Solar power, the fact that the Lifetime of solar panels would be merely 20-25 yrs somewhere between 2/5 and 1/3 of the life of a modern Nuclear Plant, after which they have to be replaced? Whereas, a modern nuclear plant is rated for 60 yrs, and more if the plant is designed to allow the core to be replaced while the infrastructure remains viable?

By the way, the same 20-25 year replacement cycle would apply for windmills too.

Keith Pickering's picture
Keith Pickering on December 15, 2013

“Recent examples” of nuclear are the four NPPs currently under construction in the US: 2 at Vogtle, coming in at $15 billion for the pair, and 2 at Summer, coming in at $9 billion for the pair. That averages to $6 per Watt for construction of units that will have a lifetime of 50 years or more (and the APS recently recommended licensing of up to 80 years for NPPs). Considering the vastly higher capacity factors for nuclear, lower systems costs, and longer lifetime, nuclear is the second cheapest non-fossil source available (after hydro, which isn’t always available).

Adjusting EIA’s version of LCOE for plant lifetime (a fairly pessimistic 50 years for nuclear, standard 30 for solar) and OECD systems costs puts the cost of new build nuclear at $76/MWh, compared to $169 for solar PV, and $284 for solar thermal — and those are for utility scale installation  (residential/commercial scale would be higher). Solar is diffuse: it takes a huge amount of physical structure to capture that energy, that that physical structure is the ultimate floor to solar cost — a floor that simply can’t go lower for reasons of basic physics.

For a wider range of estimates of LCOE for various sources, check out the Open Energy Information Transparent Cost Database (openei.org/TCDB) and you will see that the nuclear vs. solar comparison looks even worse for solar. 

 

Keith Pickering's picture
Keith Pickering on December 15, 2013

Regarding insurance costs for NPPs, currently this alleged “subsidy” has so far cost the taxpayer $0, including the cost of cleanup for Three Mile Island. Meanwhile the insurance pool just keeps getting bigger, making it less and less likely that taxpayers will ever see a dime of expense. Similarly, both storage and decomissioning are already internalized into the cost of nuclear power. So one has to wonder where you’re getting your information.

UK strike prices are <i>prices,</i> not costs, and as such they are based on politics as much as economics. Having said that, the UK strike price for nuclear is £92.50/MWh, compared to £100 for onshore wind, £125 for PV, and £155 for offshore wind. So if that’s your basis for comparison, nuclear still beats solar.

Running any power plant off-peak is inefficient, but nuclear (unlike gas) doesn’t waste fuel by doing so; the only inefficiency is in the thermodynamics of the generator. If you have actual numbers that a down-regulated NPP “would have an excessively high capital cost per kWh,” please present them. Otherwise, I will assume this is baseless specualtion, considering that France has run that way for decades and has the lowest electricity prices in western Europe.

Solar is quite unlikely to benefit from a larger base of electric vehicles, considering that most EVs would recharge overnight when solar output is zero. In fact, a large penetraion of EVs would most benefit nuclear, because overnight charging lowers the nighttime demand trough, thus increasing the utility of (and demand for) baseload plants.

 

Gary Tulie's picture
Gary Tulie on December 16, 2013

“Monocultures” are almost always a bad thing in power generation irrespective of the nature of the generator..

If hydro- then a dry year leaves you short of power, if fossil fuel, then you are exposed to price shocks, if nuclear, then you need constant vigalence of safety, and you have to build expensive capacity that will only be used for a few hours a year. Solar P.V and wind cannot provide constant power without storage. This being the case, a broad low carbon mix – with attention to energy saving is the ideal as each system helps hedge against the risks of all the others.

Wind turbines have a 25 year replacement cycle, whilst solar panels vary – I understand that projections show 99% of Sunpower panels continuing to be able to produce >70% of rated power after 40 years whilst other panels are often designed for a 25 year life.

Also to be considered is that there is a very long lead time for nuclear – a number of years of enquiries and planning before construction even starts, then around 4 years of construction if all goes to plan – overrun, and the costs rocket whilst first revenue is deferred possibly leading to large financial losses.

Small scale rooftop solar has a very short lead time – in the UK it is possible to have domestic rooftop solar arrays installed within 2 weeks of placing an order, with larger rooftop arrays on commrcial buildings taking only a few months at most to get full connection.

 

Schalk Cloete's picture
Schalk Cloete on December 16, 2013

You make a good point about the easy modular deployment of solar PV. This together with the great ideological appeal of this technology is the primary reason why I caution against premature technology-forcing of solar PV. Rooftop solar is very easy to maket to the average layperson and easy to deploy, but it is still about one order of magnitude more expensive than the fossil fuel burning it displaces (PV cannot displace any powerplants or grid infrastructure) and also brings a wide range of intermittency problems even at relatively low penetrations. 

One day when solar panels are simple plug-and-play fully recyclable pieces of plastic that you can buy at your local hardware store, I’ll happily support rapid distributed deployment, but at the moment it is only good for island communities, some industrial plants in very sunny areas up to modest penetrations or for environmentally conscious individuals who want to go solar without subsidies.  

Wind is almost in the same boat. Wind farms in the central US achieving 40% capacity factors can be very useful at low penetrations, but ideologically driven technology-forcing policies driving deployment in much less suitable locations are only hurting the fight against climate change. The total German wind capacity factor dipped below 15% for 2013, greatly increasing the effective LCOE and exacerbating the intermittency issue. In my opinion, this is simply wasting the amazing German willingness to pay for environmental protection on technology that effectively only increases CO2 emissions (displacing gas with coal and forcing the construction of new long-lived coal plants) and threatens energy security (high prices and increasing intermittency issues). 

Gary Tulie's picture
Gary Tulie on December 16, 2013

I disagree with your assertion that solar generated power is an order of magnitude more expensive than fossil fuels, at least outside the USA. 

By my estimate using global fuel prices, 40% efficiency for coal and oil, and 50% for gas, the price of fuel for fossil fuel generation is around 

Natural Gas $0.07 per kWh

Oil              $0.16 per kWh

Coal            $0.025 per kWh 

All of the above ignore handling costs, emission scrubbing costs and CO2 trading costs. 

In the UK, utility scale solar is currently being paid around $0.22 per kWh including the value of Renewable Obligation Certificate support – this is I admit around 9 times the price of buying coal – but that only takes care of the global market price not getting coal to site, handling it on site, or running the scrubbing equipment to remove dust, sulphur, NOx and dioxins. $0.22  is only around 3 times the cost of natural gas. 

In India, solar is now being installed based on PPAs of $0.12 per kWh and declining so not very far from grid parity – especially as in India unlike the UK, solar will help with shaving peak demand so can displace some conventional plant. 

Donald Osborn's picture
Donald Osborn on December 16, 2013

I am sorry, but your comment seems divorced from the reality of today’s marketplace for PV world wide. PV is clearly ready for “prime time” and is showing so every day. At current and projected levels it is a clear plus to our energy mix and consumers (homeowners, commercial facilities, and even utilities) are showing it is ready by voting for it with their purchases.

 

Schalk Cloete's picture
Schalk Cloete on December 16, 2013

My comment was directed at rooftop solar. True, utility scale is often less than half the cost of rooftop. 

It is also true that solar economics look better when comparing to natural gas outside of the US. However, as Germany is currently demonstrating, the price signals sent by technology-forcing of intermittent renewables creates a situation where coal is rapidly displacing gas for load-following. According to Fraunhofer data, coal electricity has increased by 12.2% (28 TWh/yr) while gas has decreased by 39.3% (23.4 TWh/yr) over the past two years. It will take a CO2 price of around €40/ton to reverse this trend – something which is not likely in the foreseeable future.

This gas-to-coal shift implies that an increase in intermittent renewables will gradually reduce the variable operating costs of load-following capacity. Unfortunately, it will also increase the capital costs (and therefore the effective LCOE), putting even more pressure on poorer consumers, all while German CO2 emissions continue to increase. 

Donald Osborn's picture
Donald Osborn on December 16, 2013

Yes, but your rooftop comment is clearly refuted by bthe facts on the ground. Distributed PV (“roof top”) has many more benefits than utility solar and higher value. Most studies show the net benefits of distributed solar are greater than the retail price of the electricity being displaced. The distributed nature also reduces intermittancy effects and rduces load on dristrbution and transmission facilities. Distributed solar is proving itself in the marketplace every day.

Schalk Cloete's picture
Schalk Cloete on December 16, 2013

True, but solar PV is only expanding due to technology-forcing policies. It is rather obvious that, if you heavily subsidize something, you will get more of it, especially if it enjoys the ideological attractiveness and easy modular deployment of solar PV. 

I also agree with you that, at current levels (0.4% of global electricity), intermittency issues are not yet much of a concern. It is a continued policy-driven exponential expansion I am worried about. The last thing we need right now is a bubble in the least cost-effective CO2 abatement strategy out there.  

Schalk Cloete's picture
Schalk Cloete on December 16, 2013

Donald, could you please give a more complete breakdown of all the benefits of rooftop solar as a reply to this comment? The thread below is getting a bit thin. It will be easier to continue the discussion here. Thanks. 

Donald Osborn's picture
Donald Osborn on December 16, 2013

Yes, but energy is a subsidy and policy driven arena for ALL energy sources. The vast bulk of subsidies go to mature (and polluting) technologies. Yes, on a kWh basis the subsidies seem tilted to renewables, that is because the are in the early stages of commercialization and deployment so the basis is still small. And that is just what you want a subsidy to do, be used in the early stages to help accelerate the commercialization process. Pre-subsidy prices of PV have fallen drastically and are continuing to fall. On any rational basis, solar subsidies and right in line with good policy. It is the outlandish continuing subsidies to mature technologies that are out of line. 

The US alone will have installed in just 2013 about 4.3 GW of PV, that is over a GW equavalent of nuclear. As part of the energy mix, it is mainly displacing expensive peak load generation, does NOT need storage to integrate in to the mix, and is saving consumers substaintially. Compare that to 0 GW of new nuclear, closing of several major nuclear plants, and a decade to design and build a new nuclear plant. Nuclear needs to clean it’s own house before complaining about solar.

Schalk Cloete's picture
Schalk Cloete on December 16, 2013

Donald, about the subsidization, I understand that new energy technologies need some subsidization to establish the value chain and establish economies of scale. However, subsidies for solar PV have just been incredibly high. For example, over the past 5 years, solar PV has recieved about the same amount of subsidization as wind (IEA WEO 2013). However, wind has delivered close to one order of magnitude more energy than solar PV over this period (BP Statistical Review). 

I have written a much more detailed article about energy subsidization some months ago should you be interested. 

In terms of prices, solar PV needs to come down to about $1/Wp installed in order to arrive at the level where wind is now. If this ever happens, solar PV will still be completely dependent on subsidization (as wind is currently). The IEA projects that solar capacity will increase roughly by a factor of 5 up to 2035 to about 700 GW installed capacity (enough to supply about 1% of global primary energy) and that this will come at a subsidy price of about $1.3 trillion. If you crunch the numbers, this works out to an average subsidy of $0.14/kWh or, if we assume that solar displaces gas at 0.4 kg CO2/kWh (and ignore the fact that solar increases the attractiveness of coal relative the gas), an average CO2 abatement cost of $350/ton can be calculated.

I just feel there are so many better ways in which to combat climate change while simultaneously allowing for the necessary economic development (especially in the developing world). 

Paul O's picture
Paul O on December 16, 2013

Gary, We have built an entire civilization on Coal “Monoculture”  without  incident (Energy Wise). I am not persuaded that  this is a viable argument against Nuclear Power, which to my view is a complete package.

Moreover, I consider the cost overuns and time of construction questions to be basically red herrings. We can build Nuclear plants fast and cheaply, if we settled on a design, and use factory built components, instead of the one of a kind parradigms we have today.

As I see it, a well chosen Nuclear power design is a good fit for current infrastructire, it is reliable, provides baseload power, and it can be employed/deployed as a direct replacement for coal and oil plants.

Frankly, I am not so much opposed to solar power as I am opposed to the Shove-down-our -throat religious fervor of promoters who ignore its downsides and risk stranding society with inadequate patchwork power supply, which cannot sustain growth for the peoples of our planet.

Nathan Wilson's picture
Nathan Wilson on December 16, 2013

It is certainly true that it is easier to integrate a diverified mix of energy sources compared to 100% solar.

However, that does not change the fact that economics of each energy source source must be considered in the context of the grid’s dispatch strategy.  It is tempting to dismiss grid dispatch as too complex to bother with, but it is actually quite straight forward:

  • there must be enough generation capacity on the grid to always supplied demand with reasonable “contingencies” (i.e. a major generator off line, a transmission line failure, bad weather, etc). 
  • when excess capacity is available, the generators with the lowest “variable cost” are dispatched first.

From these simple rules, it is easy to see that trying to calculate the cost of solar or wind power without also considering the dispatchable generation it will displace will give the wrong answer.  The fixed cost on those dispatchable generators must be paid (by the electricity users, not big evil investors), even if they only run a small percentage of the time.

Like it or not, cost parity for variable renewables means the levelized cost of the renewable must equal the variable cost of the dispatchable source it will displace.  For most of the world’s grids, that means the low cost of coal ($0.029/kWh in the US, and even lower in developing countries).

You keep saying that the track record of solar PV proves that it works.  That is not how I see it.  What I see is that using today’s nuclear technology, nuclear could provide 60-70% of our electricity for no increase in cost over what we pay today (phasing in over 40 years).  Using solar and wind, we pay more from day 1, and the price rises quickly as the penetration passes 20-30%.  So renewables provide an alternative that will never be the primary energy source in the developing countries that will use the most fossil fuels in coming years.  And even in rich nations, there is no convincing justification for choosing the higher cost of the renewable path relative to nuclear (i.e. the arguments are all false: the renewable cost savings, the presumed improved environmental impact, the claimed faster elimination of fossil fuels, the presumed reduction in nuclear weapons proliferation – all fantasies that don’t match reality). 

Paul O's picture
Paul O on December 16, 2013

Donald, If the intent is fighting AGW, then Distributed Solar Generation is of insignificant value. It is suitable for a small minority of OFF-Grid afficionados, and for stroking the ego’s of people who want to “disrupt” the grid power distribution scheme, for no other reason but that they hate the grid.

Most people who resort to distributed solar will very quickly discover that they do indeed need the grid. How else will they get all that green wind energy at nightfall or in winter, if not through the grid, and if so why bother with distributed solar in the first place?

Keith Pickering's picture
Keith Pickering on December 16, 2013

Just to be clear, subsidized renewables increase the attractiveness of whatever existing plants have the lowest O&M cost (which generally means lowest cost fuel). SInce hydro and nuclear are already running flat-out where available, that lowest-cost plant in Europe is coal. In the US, it’s gas.

Elias Hinckley's picture
Elias Hinckley on December 17, 2013

I don’t agree with your take on insurance – relevant measure is not historical claims – it’s the cost to insure against possible claims, so at a minimum the right measure is something closer to Fukushima (and anticipating the “that could never happen here claim” I’ll just point out that it did in fact happen, so suggestions of something of similar magnitude can’t happen misses the point of insurance).

There is a similar dynamic at work in offshore oil risk (though there it is an actual liability cap) the government is subsidizing the risk management cost by backstopping catastrophe. I think this is less a question of whether this is or isn’t a good idea but what the actual cost of this backstop really is to taxpayers and how to transfer this cost away from the taxpayer and back to the generation cost.

Elias Hinckley's picture
Elias Hinckley on December 17, 2013

Is there a link you can share to the IEA $1.3 trillion in solar subsidies by 2035 number?

Schalk Cloete's picture
Schalk Cloete on December 17, 2013

A graph showing subsidy projections for various renewable energy technologies can be found on page 227 of the IEA’s World Energy Outlook 2013. If your organization has access, you can download the entire report here.

The $1.3 trillion figure was only a quick estimate made for that particular comment. I just did a more precise piecewise linear integration below the curve to find the more exact number as $1.578 trillion (datapoints: 2012 – 35.3 G$/yr, 2015 – 53.8 G$/yr, 2020 – 68.4 G$/yr, 2025 – 79.8 G$/yr, 2030 – 82.0 G$/yr, and 2035 – 63.7 G$/yr). This brings the estimate of the projected CO2 mitigation costs up to $425/ton. If one also accounts for the 50 g/kWh CO2 emissions associated with solar PV, the mitigation costs go up to $486/ton CO2. 

Paul O's picture
Paul O on December 18, 2013

If I ever purchased Solar Panels, the only use that I can think of that would work for my Family, is to help reduce the cost of heating in the winter.

I wouldn’t buy batteries instead I’d heat some Heavy Synthetic Oil in an unused Freezer, and the try to convey the heat stored to parts of my hose at night. Actually, this could work for small scale wind power also.

I would try to keep things as simple and as cheap as possible. I certainly would not want to run my TV or Pc’s on some expensive and low Wattt-hour batteries that would die in  5 yrs or so.

Gary Tulie's picture
Gary Tulie on December 18, 2013

The point I made about the cost of nuclear rising if extra capacity were required to be built which would not run as baseload is that current prices are based on nuclear base load generation. If a nuclear plant were to be built which only operated at a capacity factor of 50% rather than 90% (Example rather than actual figures), cost per kWh delivered would rise by 80%. 

That said, I do acknowledge that if lots of nuclear plants were constructed in the UK rather than only a few then learning curve and economies of scale would begin to offset some of this increased cost. 

Regarding electric cars and solar, home owners with solar arrays could achieve very high levels of self consumption by using smart chargers to divert spare solar generated power to their electric vehicle rather than to the grid whils at the same time minimising stress on the power grid. This would be very attractive in the UK as the present feed in tariff regime uses a 50% figure for deemed export of domestic solar arrays (generation is metered, export is unmetered with 50% paid for by the electricity companies). This being the case, a housholder with a solar array can use all the power it generates without making any difference to their electricity bill / revenue as electricity generated and used on site is effectively free. 

Elias Hinckley's picture
Elias Hinckley on December 18, 2013

$76 seems pretty optimistic – is that just capex (and at what discount rate?). History would suggest $9 and $15 are not final numbers.

 

Elias Hinckley's picture
Elias Hinckley on December 18, 2013

$76 seems pretty optimistic – is that just capex (and at what discount rate?). History would suggest $9 and $15 are not final numbers.

 

Elias Hinckley's picture
Elias Hinckley on December 18, 2013

Maybe you can break out the calculation in a little more detail – still not sure I am following this.

Keith Pickering's picture
Keith Pickering on December 19, 2013

Actually, a nuclear plant operating at CP of 50% would have costs rise about 70%, not 80%, because about 10% of LCOE for nuclear is variable O&M. Beyond that, nuclear plants would never operate that way, even in an essentially all-nuclear grid. The nuclear capacity factor in France, for example, is 77%, which is low by US standards but is reflective of load-following. But that’s all the load following you need, because generally the daytime peak is not more than twice (in rare cases, three times) the nighttime trough.  If you had one massive powerplant load following the entire grid, under those conditions it would have a capacity factor of 75%. A nuclear plant operating at 75% CP would have increased costs of only 18%.

The real issue is that renewables increase the need for load following because they drop in and out of the grid intermittantly. Thus renewables incur a systems cost that is often not reflected in LCOE computations (and the US EIA is a good example of that.)

I find it hard — almost impossible — to believe that electric cars will be ever be substantially charged by solar power. Cars are charged at night, when the Sun doesn’t shine. The (hopefully fast) transition to EVs will put greater loads on at night, reducing the daily peak-to-trough ratio, which means EVs will require more baseload power, not more renewables or peaking plants. And since building a baseload plant to charge EVs defeats the purpose if it’s fossil, that means EVs will increase the demand for nuclear power.

 

Keith Pickering's picture
Keith Pickering on December 19, 2013

EIA’s LCOE figures for new build advanced nuclear at 83.4 for capex, 11.6 for fixed O&M, 12.3 for variable O&M, and 1.1 for transmission upgrade for a total of 108.4 (all figures $/MWh). That assumes 30 year lifetime. Assuming 50 year lifetime reduces nuclear capex to 50, and rtherefore reduces the total for nuclear to $75; and then add in a buck when you switch to the (much superior) OECD numbers for systems costs.

 

Schalk Cloete's picture
Schalk Cloete on December 20, 2013

Well, it is best if you see the graph in the IEA report, but to make it simple, let’s just say that the IEA predicts average solar subsidies of $68.6 billion per year for the next 23 years. This works out to 68.6×23 = $1578 billion ($1.578 trillion) on a cumulative basis. 

In reality, the subsidies increase from $35.3 billion in 2012 to $82 billion in 2030 and back to $63.7 billion in 2035, but 68.6 billion per year is a good average.  

Clayton Handleman's picture
Clayton Handleman on December 20, 2013

You continue to compare renewables with fossil fuels at their existing cost without offering any way to account for the cost of carbon.  Politically a carbon tax or cap and trade are untenable.  So the other option is to subsidize renewables or create markets through portfolio standards with REC markets. 

If we are talking about the hypothetical case that vast carbon emissions and other externalities are OK then I fully agree with your reasoning.   

But if looking at solutions to carbon then comparing unsubsidized renewables to coal and nat gas at today’s price is really not a meaningful contribution to the discussion.  In any good faith discussion in which carbon reduction is of concern, the market inefficiency regarding carbon must be addressed.  And really there are many other exteralities that are undercounted as well. 

 

Clayton Handleman's picture
Clayton Handleman on December 20, 2013

Modules have 20 – 25 year power warranties so I think that puts a lower limit on their lifetimes.  Their useful service life is in the 30 – 40 year range probably higher. 

Beverly high school in the Boston area had a solar array that was in operation for about 30 years.  Module quality has improved since those early generation modules.  From encapsulents to better manufacturing methodologies, it is hard to imagine that tier 1 modules won’t last considerably longer than those early modules.

This is backed up by conversations I have had with engineers at module manufacturers.  In one conversation they indicated that based upon their tests they expected 30 – 50 year life expectancy from their modules.

 

Gary Tulie's picture
Gary Tulie on December 20, 2013

I have read on the website of a Sunpower installer that Sunpower anticipate 99 out of 100 panels retaining >70% of their initial output after 40 years which indicates a useful life almost certainly longer than 40 years, and possibly quite a lot longer

Clayton Handleman's picture
Clayton Handleman on December 20, 2013

While storage is expensive now, I don’t rule it out in the timeframe over which PV will be reaching penetrations high enough to lead to stability or dispatchability problems on the grid.  DemandLogic(TM) is already offering a product that load shifts to reduce demand charges.  It is provided on a service contract and the company claims it is revenue positive for the commercial site.  Presumably, much of the cost is in the battery pack and Tesla is looking at ways to reduce the cost of batteries by ramping down the learning curve – “This will be a giant facility. We are talking about something that is comparable to all of the lithium-ion battery production in the world — in one factory,”

Learning curve theory is well established and offers a surprisingly effective way to project costs as can be seen in these plots (the last of which shows the learning curve for Li-ion batteries).  these were made before the Tesla announcement which seems certain to keep downward pressure on batteries.  Note that the cost projections are based on a line parallel to the consumer Li-ion batteries but that the EV battery data seems to be on a much steeper path.  A factory of the size that Elon Musk is talking about will surely keep the cost dropping rapidly.

The point is that for peak shaving in the Southwest, storage solutions exist to support higher penetration of solar with no down-sides.  The writing is on the wall that storage is going to drop rapidly.  And all this without monetizing the carbon.  Finally, it would not be hard to design one of these units to work in conjunction with the PV array to moderate intermittency from clouds on-site.  If smartgrid is done right, it will also be able to provide demand response via signals from the grid. 

Storage to facilitate high penetration of solar appears to be well enough along that it should not be discounted.

Schalk Cloete's picture
Schalk Cloete on December 21, 2013

The issue is not that solar is more expensive, the issue is that it is massively more expensive. As an example, I estimated somewhere else in this comment section that, according to IEA projections, subsidized solar electricity generated between now and 2035 would come at an enormous cost of roughly $350/ton CO2 (by which time it would contribute only 1% of global energy). 

If we were serious about CO2, we would shift almost all renewable energy subsidies to efficiency which can abate CO2 for as little as $10/ton during this decade, followed by a natural shift to CCS, nuclear and low penetration wind/solar from 2020 onwards when more serious carbon pricing schemes are projected to come online. 

Gary Tulie's picture
Gary Tulie on December 21, 2013

Schalk, I think you are half right. I would not put the solar subsidy anywhere near your figures however I agree with your point on energy efficiency!

To get to your subsidy numbers for solar, given the way solar costs are dropping you would have to ignore most of the costs of conventional generation – capital, fuel, and O & M. Then you could possibly argue a carbon saving cost for solar of $350/ton to 2035. Please note that Indian developers are already installing solar based on PPA prices of $0.12 per kWh which is not a great deal higher than the costs of installing and running other forms of generation! 

In regards to energy efficiency, in most cases, costs are negative rather than $10/ton as many forms of energy saving already substantially improve the bottom line without any need for subsidy – it’s just a case of adopting best practice. 

As regards CCS, the cost of any fossil fueled generation with CCS is probably higher than the current costs of solar and wind power, let alone lower future costs.

Nuclear? Depends where you place the cost boundries as well as assumptions made in estimating levelised cost of electricity, however I do not know of any fully commercial nuclear power station without direct or indirect subsidy – no-one is offering commercial insurance to fully cover a Fukushima / Chernoble scale accident so governments absorb the extra risk!

Regards the solar contribution to global energy requirements in 2035 

In 2010, around 18% of energy consumed was in the form of electricity – a proportion which is now much higher than in the 1970s. If this 18% solar currently produces around 0.5% rising by around 30% annually. Following this trend for 10 years (22 years of this trend seems unlikely) would result in around 7% of global electricity consumption by solar power or around 1.4% of total primary energy consumption – this is ignoring the solar heat contribution which already provides many millions of people with a proportion of their hot water. Given this, I think 1% of solar primary energy by 2035 is a very conservative figure.

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