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New Renewable Energy Technologies: Status and Prospects - Part 3 - Solar Power

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The current worldwide installed solar capacity is about 40,000 MW of photovoltaic power[4] and about 1,170 MW of concentrated solar power.[5]

Solar power in the form of photo voltaic cells has been around for many years. Over the last few years, the cost of the cells themselves has dropped rapidly until it is now around $1000/kW. At this price, many manufacturers of solar cells have gone bankrupt. Solyndra defaulted on $500 million loan from US taxpayers. The Chinese company Suntech, the largest manufacturer in the world, went bankrupt with debts of $1.6 billion.

One disincentive to solar power is the large land area required. A 1000 MW Concentrated Solar Power facility requires 6000 acres of land, enough for about ten coal-fired plants with the same rated output. Producing 1000 MW from photovoltaics requires over 12,000 acres of land.[6]

Since the costs are significantly higher than from conventional sources the development of solar power is driven entirely by subsidies. For residential installations the subsidies are often provided by "net metering" that offers the same price for imported and exported electricity. If the import and export are equal over a year, the consumer pays nothing. Yet the consumer exports electricity to the grid when it has little value - such as summer afternoons. In return, the consumer takes expensive electricity from the grid every night and, in particular on cold, cloudy winter days and nights. The consumer makes no contribution to the cost of the transmission and distribution system and the cost of the generation and fuel to provide his electricity when the sun is not shining.

Net metering finishes up being a subsidy from poor consumers who cannot afford solar panels to rich consumers who can. If everybody had solar panels and net metering the power industry would go broke, the power system would collapse and anarchy would prevail.

As a result of the subsidies, solar power is being developed in northern latitudes where there is less sunshine and where the skies are often cloudy. Typical capacity factors in desert areas are about 21% but in high latitudes they can be 10% or less. This leads to the absurd situation where Germany is the world's leading market for photovoltaic systems, with a total installed capacity of 17GW and a capacity factor of 10% in 2010. The German government is now reducing the very generous feed-in tariffs to slow the boom in the industry and reduce the €13bn paid out annually in incentives.[7]

A major disadvantage of solar power in high latitudes is that system peak demands nearly always occur in winter evenings. This is when solar power output is very low or, more often, zero. As a result, solar power generates most energy when it is not needed and virtually none when it is needed. The only way of mitigating this problem would be to come up with a technology that can provide low-cost, efficient long-term storage for electricity. No such technology exists and none is on the horizon.

In Germany during 2010 the total amount of power generated by photovoltaics was just 12TWh, or 2% of the total output of 603TWh.[8] If we assume an average PV system capacity of 13GW over the whole year, the theoretical output would have been 114TWh, giving a capacity factor of just 10.5%. A less efficient use of money would be hard to find.

In the UK, the government introduced the following feed-in tariffs in April 2010:[9]

  • - Less than 4kW - 43.3p/kWh in first year, declining to 18.8p over 10 years
    - 4-10kW - 37.8p/kWh, reducing to 16.4p
    - 10-50kW - 32.9p/kWh, reducing to 14.3p
    - 50-100kW - 32.9p/kWh, reducing to 8.5p
    - Greater than 100kW - 30.7p/kWh, reducing to 8.5p (but with different rates of decline depending on size and when installed)

Many householders are putting their money into such schemes, which offer payback periods of less than ten years and a considerably higher rate of return than offered by bank savings accounts.

In the UK, the capacity factor would not be above 9%,[10] and could be significantly less. A 1000 MW nuclear station with a capacity factor of 90% would generate the same amount of energy as 10,000 MW of solar power.[11] Based on these figures, the equivalent installation cost of a 1000 MW solar farm PV is about $20,000/kW. This is more than three times the cost of nuclear power-and even more when an allowance is made for backup generation! In reality the price is even higher then calculated above: home installers typically offer to install a 2.5 kW unit for £12,500.[12] This works out at $8000/kW of nominal capacity. The equivalent price to nuclear is then more than $50,000/kW.

Solar power suffers from all the problems of wind because it generates no power at all in the night-time and a cloud going over the sun can drop the output by 60% in a very short period. So it too needs backup, system support and even more transmission capacity per unit of energy generated than wind power.

Future Developments in Solar Power

It is difficult to see how there can be any major improvements in the overall economics of solar power. It costs more than 3 times the cost of alternative methods of generation and even if the solar cells cost nothing, the cost of mounting, installation, cabling, inverters, transformers, grid connection and system support would still make the power too expensive to contemplate. However, as with wind, there is a niche market in isolated areas where the only power comes from small diesel generators.

[4] http://en.wikipedia.org/wiki/Photovoltaics

[5] http://en.wikipedia.org/wiki/Concentrated_solar_power

[6] http://en.wikipedia.org/wiki/Solar_power#Concentrating_solar_power

[7] http://www.reuters.com/article/2011/02/24/germany-solar-idUSLDE71N2KG20110224

[8] New Record for German Renewable Energy in 2010

[9] http://www.ofgem.gov.uk/Sustainability/Environment/fits/Documents1/Feed-in%20Tariff%20Table%201%20August%202011.pdf

[10] According to http://re.jrc.ec.europa.eu/pvgis/download/download.htm the capacity factor of UK solar cells at an optimum angle is 9.5%. Cells in Cyprus would have a capacity factor of 16.3%

[11] But even then, it is not equivalent because the solar units generate no power at night and during winter evenings when the system load is highest. At the very least, 1000 MW of backup generation is needed. This will be inefficient open cycle gas turbines as they are the only ones that are able to react sufficiently rapidly.

[12] http://www.solarcentury.co.uk/homes/how-to-buy/buy-outright


Content Discussion

Ferdinand E. Banks's picture
Ferdinand E. Banks
Excellent, very informative.

By the way, if you knock on any door you might be told that solar and wind are working wonders in Germany - and presumably for the German economy. Take a Little advice from Professor Fred and, don't Believe it.

Ferdinand E. Banks's picture
Ferdinand E. Banks
Well, Bryan, it looks to me as if you have told folks something that they do no want to hear.

As for telling their political masters, if you take the case of Sweden, those ladies and gentlemen have been told that solar is a bummer by some of he best engineers and managers in this country, and the same is true in Germany. The problem is that this is something that you don't talk about until the cognac has gone around the table a couple of times.

As for the amount of solar in action in the US, the last numbers I saw were so small that I decided not to put them in my new book out of fear for being called an ignoramus.

Ben Montclair's picture
Ben Montclair
This article is riddled with bias and misinformation and is a disservice to those who don't know better.

The capital costs of solar are higher than for fossil fuel plants, but the fuel costs are significantly lower, as in zero. Such fuel costs are unpredictable, as demonstrated by the very industrious betting that is the stuff of commodities markets worldwide. Fuel cost volatility over the long term is exacerbated by the risk of carbon-restrictive laws impeding the fossil industries profits. To state that "development of solar is driven entirely by subsidies" suggests the author overlooked the reasons for those subsidies: the solar industry provides quality differentiated electrons, but, as an emerging industry, has neither the legacy advantage of scale nor the monopoly advantage of predictable revenues. Quality differentiation come in the form of solar producing no effluent, requiring the stripping of no land, requiring no workers to operate in conditions that cause illness and death (i.e. black lung); solar electrons come from equipment that is scalable, portable and democratizes the generation of electricity for both advanced and emerging markets; buying solar electrons supports a technology path that moves us towards a mode of energy that doesn't involve digging up rocks and burning them to boil water, itself a valuable resource. Some segment of the retail energy buying market recognizes these or other differentiators and is willing to pay a premium, but as long as the monopoly model exists, such premium cannot be discovered by the market-clearing mechanisms that underpin the global economy.

A second point: net metering is not a subsidy. It is a substitute for a market-based transaction. Because a solar rooftop owner generally cannot sell energy into a marketplace of buyers and sellers to get a market-determined price, the only buyer is the regulated monopoly or, now, monopsony: when there's only one buyer in the market, they have as much unfair pricing power as the only seller. In the absence of a market into which a rooftop solar owner may sell his or her electricity, a mandated price is set by way of, for example, net metering. In the presence of a competitive market, the price of power fed into the grid from a solar rooftop owner would be determined by buyers of such value-differentiated power and sellers. While direct tax incentives, for example, are clearly a subsidy, net metering most certainly is not. It could be argued the state-sponsored monopoly power is a subsidy, as might the free dumping of effluent into what would otherwise be healthy, breathable air. Of course, calling it a subsidy really helps if you're towing a pro-fossil party line.

Donald Osborn's picture
Donald Osborn
If this is the "quality" of articles that EnergyCentral provides, too bad. This article is filled with misconceptions, dated information and misleading statements. Note also the author states,"he has become sceptical on global warming". And THIS is what you want to represent your web magazine with???
Michael Keller's picture
Michael Keller
The article is accurate. The solar advocates are, as usual, unfamiliar with basic economics, basic science, basic finances and basic engineering.

The market does have a value for erratic (renewable) power; it just isn't very much. Further, green energy has essentially no impact global CO2 emissions. Also, the amount of land required to meet the planets needs using renewable energy is staggering and not remotely possible to achieve.

The actual market value of "net-metering" power is generally nearly zero (and sometime negative). Take a look at wholesale power prices for real-time non-firm power for an idea of the value of the "net-metering" power. Being forced to pay someone well above the market value of their product is a subsidy.

Ferdinand E. Banks's picture
Ferdinand E. Banks
Well Ben, Osborn, nice to have you join the party. Of course, if I may put on my 'Leading Academic Energy Economist in the World' hat for a moment or two, I Think I have the right to say that there is not an institution of higher or lower education in the World where you ccould stand in front of an intelligent audience and prove that wind and solar will provide what the Green Machine says that it can and will provide.

The problem here is the same as with shale gas and oil: they have something to offer, but not as much as certain people claim. My German is not as good as it once was, but it sufficed for me to find out that turning off the nuclear and trying to replace it with wind and solar is "crazy", as a German environmentalist pointed out. On the other hand, I am ready to insist that by mid-Century, Germany and Japan will probably be the most nuclear intensive countries in the World, while at the same time hoping - and to a certain extent believing - that renewables and alternatives have a Place in the energy Picture of most countries - and hopefully an important Place.

By the way, have you Heard of the remarkable progress being made by wind and solar in Germany. If you have dont Believe it, and more important dont repeat it. I mean, everybody has the right to be a Little...mistaken. but not completely off the wall.

Christopher Minott's picture
Christopher Minott
As most of this article is inaccurate and misleading I will start with just 2 of the most silly and most easily proven as most far from the truth.

First concerning the amount of land for a solar farm vs say a fossil fuel plant? The author is only including the amount of land required to site the project itself. When one takes into condsideration the amount of land required to supply say a coal plant with it's fuel its loses over time. Once solar is sited - that's it. Fossil fuels however will continue to gobble up land and contaminate more from it's need for fuel. The few employees of the solar farm? Not much of a chance of them getting killed is there? But of course the author ignores the fact that solar's best hope is not just taking up brown fields deserts but reclaiming the millions of rooftops across the world.

Lastly the statement "Yet the consumer exports electricity to the grid when it has little value - such as summer afternoons."?? What this website is doing printing such a boldface lie is beyond me. Power is at a premium at exactly the same time the sun is shining. The ability for the sun to generate energy to offset power (read AC) demand in the afternoon allows utilities to not have to buy expensive capacity beyond baseload. This is a well known fact. Why the author is not knowledgeable of this puts the legitimacy of the entire piece into question.

Michael Keller's picture
Michael Keller
Renewable energy is diffuse, coal is concentrated. That is why renewable energy requires significantly more vast amounts of land to supply large amounts of power.

Solar energy covering peaking loads would be fine, except that it's not particularly reliable in most places or particularly concentrated in most places. That means something else also has to be available to cover the load. Roll-up the numbers and solar is just plain expensive in most places. Easier and more cost effective to simply concentrate on more efficient use of energy (e.g. more insulation in the attic, more efficient HVAC equipment, etc) and conventional power sources.

Ferdinand E. Banks's picture
Ferdinand E. Banks
Hmm, sounds like some of the criticism of the articles I have written on nuclear, Bryan. Or maybe even talks or lectures that I gave. The problem is that when I give a talk or a lecture, and ignorance Surfaces, I usually have a difficulty responding because I cant stop laughing.

For the people who want solar and wind, send them to school to learn German, and then send them to Germany. Everything that could go wrong has gone wrong in that country, except of course for the upper levels of the Middle Class (and of course the wealthy). Yes, we want wind and solar when they make sense - and I for one agree to subsidies - but not when the cost is as great as is is or will be in Germany.

Robert Graber's picture
Robert Graber
Here in the US we are in the position of replacing highly reliable nuclear plants with highly unreliable renewable resources. This results because generous solar and wind subsidies allow renewable generators to bid into power markets at negative prices. Merchant nuclear plants without PPAs are challenged, and at least one nuclear plant has closed already, with probably more to follow. The more renewables there are, the more backup power in the form of gas is required - up to 75% of the time. So, not only have we reduced reliability of the grid, we've actually added to carbon emissions by installing renewables. And I see that Germany is now paying three times the price for electricity now that they've embarked on a renewables strategy. There's very little doubt in my mind that this situation cannot be sustained over the longer term, either here in the US or in Europe. And when I look at the response of the renewables zealots in the responses above I see the same old hysterical responses and attacks that we're so familiar with; some of them even attacking Energy Central for having the audacity to print such trash (1st Amendment be damned). But the response that rings true with me is Michael Keller's observation that renewable supporters lack basic knowledge of economics, finance and engineering principles. That's my observation and I could not agree more.
Ferdinand E. Banks's picture
Ferdinand E. Banks
No Mr Graber and Michael. Many of those people know economics, finance, engineering and a lot of other things - but not where solar and wind are concerned. Hypocrites is what they are, but the bottom line in Germany is the price of electricity, which is ruinous for many families. As for the future, I would like to offer the following: Germany and Japan will be the most nuclear intensive countries in the World by mid-century.
Carlos Araquistain's picture
Carlos Araquistain
Regarding the sentence that states that sometimes customers with PV solar export power at time when it is not needed, is not inaccurate. it is simply being taken out of context. There are parts of the world-like the author mentioned, high-latitues-where demand peaks during the Winter and at night, think about areas with cold weather and electric heating. Secondly, the capacity factors for PV solar are extremely low. The best locations in the Arizona or California dessert get at maximum of 25-30%, the author again is providing accurate and factual information. Thirdly, feed-in tariffs do not account for losses in the Distribution grid. The customer with PV solar is getting a credit for exporting power that sometimes does not have any load to feed, this translates into losses that are paid by the Utility and eventually are passed down to the customers without solar. In a world with a voracious appetite for energy, there are tough choices to be made when it comes to building new generation plants, and in the short to medium term, the only economically viable sources (depending on what part of the world you live in) for generation are nuclear, natural gas, coal and hydro. For those who absolutely hate the "evil electric utilities' monopolies", there are renewable resources that will allow you to live completely off the grid, they are just very expensive and your lifestyle will suffer from a lot of inconveniences, but you do have a choice.
Michael Keller's picture
Michael Keller
No Fred, they really do have a self-imposed fundamental lack of understanding of basic science, finance and engineering. I believe they suffer from the common malady of true believers. Namely, the inability to see the obvious because of being blinded by a religious belief. Unfortunately, many of these same folks also follow the same path as religious fanatics - completely intolerance of anyone who dares challenge their beliefs.
Ferdinand E. Banks's picture
Ferdinand E. Banks
Michael, I gave a friendly lecture about nuclear in Singapore once - filled with humor and without a trace of arrogance - but a few seconds after thanking the audience and asking for questions, I had a gent in my face telling me what a dumb and horrible person I was. I answered in the same spirit, but could not understand what was going down.

What was going down was MONEY. He not only was an environmentalist but had a business interest in solar. At least he said that he was a Green Person, but if he had put serious Money in solar he had a right to blow his top, because 'solar aint going nowhere in the Place that he calls home!