Friday, January 25, 2013

Solar: It's about to be a whole new world.


Many conservatives appear to have an unshakable, bedrock belief that solar power will never be cost-effective. Talk about solar, and conservatives often won't even look at the numbers - they'll just laugh at you. Mention that solar power recently provided almost half of Germany's electricity at peak hours, and they'll say things like "Oh, Germany's economy must be tanking, then." It seems like almost a fundamental axiom of their worldview that solar will always be too expensive to exist without government subsidies, and that research into solar is therefore money flushed down the toilet.

I suspect that many of these conservatives came of age in the 1970s, when solar was first being mooted as the "green" alternative to fossil fuels. They probably saw solar as a crypto-socialist plot; by scaring everyone about global warming and forcing businesses to convert to expensive solar power, "greens" would impose huge a implicit tax on business, causing the capitalist system to grind to a halt.

Maybe some people did support solar for just such a (silly) reason. But far-sighted people knew that technologies often require lots of government support to develop (basic research being, after all, a public good), and they saw that fossil fuels would have to start getting more expensive someday.

And now, after decades of research and subsidies, we may be on the verge of waking up into a whole new world. The cost of solar power has been falling exponentially for the past 35 years. What's more, there is no sign at all that this cost drop is slowing. New technologies are in the pipeline right now that have the potential to make solar competitive with coal and natural gas, even with zero government subsidy. Here are a few examples:
1. Nano-templated molecules that store energy
MIT associate professor Jeffrey Grossman and others successfully created a new molecule [to] "lock in" stored solar thermal energy indefinitely. These molecules have the remarkable ability to convert solar energy and store it at an energy density comparable to lithium ion batteries...

2. Print solar cells on anything
An MIT team led by professor Karen Gleason has discovered a way to print a solar cell on just about anything...The resulting printed paper cell is also extremely durable and can be folded and unfolded more than 1,000 times with no loss in performance.

3. Solar thermal power in a flat panel
Professor Gang Chen has been working on a revolutionary new way to make solar power — micro solar thermal — which could theoretically produce electricity at 8 times the efficiency of the word's best solar panel...Because it is a thermal process, the panels can heat up from ambient light even on an overcast day, and these panels can be made from very inexpensive materials.

4. A virus to improve nano-solar cell efficiency
MIT graduate students recently engineered a virus called M13 (which normally attacks bacteria) that works to precisely space apart carbon nanotubes so they can be used to effectively convert solar energy...

5. Transparent solar cell could turn windows into power plants
...Electrical engineering professor Vladimir Bulovic has made a breakthrough that could eliminate two-thirds of the costs of installing thin-film technology [on windows] by incorporating a layer of new transparent organic PV cells into the window glazing. The MIT team believes it can reach a whopping 12 percent efficiency at hugely reduced costs[.]
And then there are the technologies that are out of the laboratory and being sold to customers. For example, here's this article from the website Grist:
The company is called V3Solar (formerly Solarphasec) and its product, the Spin Cell, ingeniously solves two big problems facing solar PV. 
First, most solar panels are flat, which means they miss most of the sunlight most of the time...The Spin Cell is a cone...The conical shape catches the sun over the course of its entire arc through the sky, along every axis. It’s built-in tracking. 
The second problem: Solar panels produce much more energy if sunlight is concentrated by a lens before it hits the solar cell; however, concentrating the light also creates immense amounts of heat, which means that concentrating solar panels (CPV) require expensive, specialized, heat-resistant solar cell materials. 
The Spin Cell concentrates sunlight on plain old (cheap) silicon PV, but keeps it cool by spinning it... 
[T]he company tells CleanTechnica that it already has over 4 GW of requests for orders. There is 7 GW of installed solar in the U.S., total... 
Maybe this tech or this company will peter out before reaching mass-market scale. But advances in solar technology are coming faster and faster. (Small, distributed energy technologies are inherently more prone to innovation than large, capital-intensive energy technologies.)
As the article says, this could easily be just an illusion. Don't believe the hype. But the point is that there are now lots of companies and academic labs making claims like this, and the rate appears only to be increasing. Sooner or later - and recent trends suggest "sooner" rather than "later" - one of these claims is going to be right.

And on that day, we will wake up into a whole new world.

Cheap solar energy will change pretty much everything. First of all, it will cause a huge boom among essentially all industries in every country (except for competing energy technologies, of course). Energy powers everything. So far, with nuclear technology stalled, we don't have anything cheaper than coal and gas for producing electricity. Our only hope for cheaper energy has been to find better ways to mine coal and gas. With cheap solar, that is no longer true. The Great Stagnation - which many suspect is really just an energy technology stagnation - would suddenly be a lot less scary. 

Mention this possibility to conservatives, and they will of course be skeptical. These days, you are less likely to hear outright denials of solar's cheapness; instead, the knee-jerk conservative response is "Well what about the intermittency? Solar power only works during the day!"

Two things to note about this. First, it's very telling that solar detractors didn't talk much about intermittency a decade ago. They didn't have to; solar was too expensive even at high noon. The fact that detractors are falling back on the intermittency argument shows how much the game has changed.

Second, the problem of intermittency isn't really a big one. Most electricity is used during "peak" hours, which incidentally is when the sun is shining. It's easy to imagine a future in which solar electricity powers the world during the day, and then gas takes over at night. But that will mean solar is the main source, and gas only a sideshow. (And that's even without any breakthroughs in energy storage technology.)

Anyway, it's looking more and more likely that conservatives are going to wake up one day soon, and look around and blink and find that one of their bedrock beliefs has suddenly been invalidated on a grand scale. If they're smart, conservatives will take this opportunity to discard the old belief that solar is the thin wedge of crypto-socialism, and recognize it for what it truly is - a breakthrough technology, being developed by entrepreneurs for profit on the free market.

In other words, exactly the kind of thing they should applaud.


Update: A commenter writes:
Great discussion. I am a conservative and I own a solar energy company. I do not understand your premise on conservatives aversion to solar power. By nature most conservatives I know desire to break free from the control of the energy,environmental, foreign wars and government lobby, and solar allows us to get there.
Good point. Some other good reasons why conservatives should be more pro-solar.

Update 2: I guess I should give a concrete prediction about when solar will actually start being cost-competitive with fossil fuels, without subsidies, in some locations for some customers. My prediction is: around 2020, or 7 years from now. 95% credible interval would be...um, let's see...2014 to 2040. So that's a fairly wide interval.

Update 3: Commenter Kevin Dick provides some numbers regarding current costs:

[T]he US DOE actually tries to calculate the cost of various energy sources using a complicated levelized cost model. See http://www.eia.gov/forecasts/aeo/electricity_generation.cfm. For power plants coming on line in 2017, their nationwide average estimates in $/MWH are: 
Conventional Coal: 98
Convenional CC Gas: 66
Solar PV: 153  
On average, PV has a ways to go. However, the lowest regional cost of PV is 119, while the highest regional cost of coal is 115 and advanced nuclear is 119.  
So there are probably places today where PV is cost competitive. But the market can surely figure this out at least as well as the government.
If these numbers are right, it means that we are just now hitting the point where solar power makes economic sense in a few places without any government subsidies. That's pretty amazing, if you ask me. I wonder how many of those places there will be in 7 years...

117 comments:

  1. I'm a right-winger (libertarian) and have no problem with solar power at all. If I could obtain all my energy needs through a solar panel at a cheap price that would be fantastic -- I'm up for anything that saves me a buck. My only problem with it is that I don't believe in government subsidies for it. That Germany derives a lot of its electricity isn't surprising -- they've subsidized it out the wazoo. You subsidize something you get more of it.

    I say, if the Germans (or Chinese or whoever) are willing to subsidize solar energy, go ahead and let them. Then, should the technology ever reach the point where it can compete with fossil fuels we go ahead and adopt it. In the meantime, I have no problem imposing a Pigouvian tax on fossil fuels that accounts for their pollution so that renewables and fossils compete on a level playing field.

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    1. Niklas3:45 AM

      Do you, as a libertarian, have any thought about this passage in the blog post:
      "But far-sighted people knew that technologies often require lots of government support to develop (basic research being, after all, a public good), and they saw that fossil fuels would have to start getting more expensive someday."

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    2. Colin —

      As a libertarian (although not necessarily a right-winger), I think government support for decentralising technology is a good thing. It's quite ironic — the state pays to create systems and technologies that lead to society being more decentralised, and less dependent on the central power. This has already occurred once with the internet. It will happen again with solar people.

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    3. Niklas,

      Yes, I do have some thoughts. It seems to me that the incentives for the development of solar power are already in place, so I don't see the point of US government support for research. If solar power is such a slam dunk and obvious future energy source there should be no shortage of greedy companies out there pouring money into it so that they will be positioned to make a buck. Plus, if the Germans and others are already throwing their money at it, why should the US government spend money on such research? Let's let them pay for it and then use the resulting technology.

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    4. So you want us to wait and then once again be dependent on another country for our energy needs? Say China now?

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    5. Do you think that one country in the world will have a monopoly on solar technology? Worst-case scenario we just buy it after it has been perfected and reverse engineer, just as the Chinese have been doing.

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    6. Colin,
      have you heard of intellectual property laws? Ask Philips or Bell Labs if being the innovator always pays off in the end.

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    7. Aziz
      "It's quite ironic — the state pays to create systems and technologies that lead to society being more decentralised, and less dependent on the central power."

      This is only ironic who think of "the state" as something unitary with interests distinct from the interests of the population as a whole. To the extent that that is true it is because (our democratic) government is disfunctional. Not because that is its nature.

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    8. Libertarian here – the prospect of cheap (or cheaper) solar is highly encouraging. Nothing says freedom like the ability to live off the grid, and if solar can develop to the point that homes can be powered mostly by solar alone, the economic effects will be tremendous. Not to mention, one of our key vulnerabilities is the safety of our power grid – imagine if we could live modern lives without reliance on it.

      I have similar reservations as Colin as to the subsidy issue. It’s not that government can’t, in theory, provide needed assistance to development of new technology. It’s just that our current system funnels money to allied interests and campaign contributors, who often aren’t the best investments. Many of the most notorious subsidized failed green companies just happened to be generous campaign donors. When you can get your funding by donating and not innovating, there is no incentive to innovate.

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    9. No mention of the decades of subsidies that the oil and gas industry has received from the government? If you are going to call yourself a libertarian that does apply across all aspects of government, not just the ones you like.

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    10. DuaneBidoux12:23 PM

      Unfortunately government has been required over and over to create civilization. Thank-god Libertarians had no power when the first six civilizaitons began forming or we would likely all still be in caves.

      Business existed long before government (although then in a sense IT becomes the government) but civlization did not. The activities that created the first civilizations required actions larger than any single busienss could ever take. It wasn't always pretty and "civilized" but I'm glad it happened.

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  2. There are a thousand innovations for fossil fuels and other sources of energy that are just as exciting as these. You haven't heard about them because they are useful enough that their developers keep them a secret.
    People chasing grants tell us about their potential inventions on NPR Science Friday. People creating value tell rich people about their potential inventions in private conference rooms. It would be wonderful if some of these innovations pay off, but it seems reasonable for people to be skeptical after 40 years of hearing these kinds of reports. If people have a skeptical heuristic that would be overturned if they looked at the details more closely, it can be reasonable for them to consider the cost of researching the issue to be higher than their expectation of the value of what they might find out. When the world changes, you can brag that you were an early believer. But, there are many, many issues which you, by necessity, treat with this kind of heuristic. To treat detractors as some sort of political know-nothings in service of personal feelings of superiority strikes me as a bit unseemly.

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    1. There are a thousand innovations for fossil fuels and other sources of energy that are just as exciting as these. You haven't heard about them because they are useful enough that their developers keep them a secret.

      If they were marketing them, they wouldn't keep them secret. Also, there's lots of govt. funding for fossil fuel innovations. For example, methane hydrate fracking, which could be a much, much bigger deal than current fracking, and is getting a lot of govt. funding right now.

      To treat detractors as some sort of political know-nothings in service of personal feelings of superiority strikes me as a bit unseemly.

      Hey...I might be wrong, and the detractors might be right!

      That doesn't mean they aren't politically motivated...well, not really "politically motivated" in this case, just caught in a partisan thought bubble that doesn't really have much motivation...it's just a legacy of the 70s.

      I mean, even if solar never pans out ever, that doesn't mean George Will isn't a dork for scoffing at it. See what I mean?...

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    2. "I mean, even if solar never pans out ever, that doesn't mean George Will isn't a dork for scoffing at it. See what I mean?" Yes, I do see what you mean but it isn't what you said, is it? Take a look at your headline again. (And at this point, demonstrating that George Will is a dork is redundant.)

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  3. Solar power didn't produce half of Germany's power at peak hours, Noah. It just generated an amount of power on average that might have equaled 50% of Germany's power output if the capacity was there. Moreover, it only did that on a non- business day.

    As for ever cheaper solar panel costs, much of that is because the Chinese government is heavily subsidizing their production, to the point where they're all taking losses at their prices, and would quickly go bankrupt if the government cut off the tap.

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    1. Sorry, that wasn't clear (and I'm now at my PC instead of trying to type that out on a tablet). What it did was generate an average rate of power (22 GW) that would be equal to 50% of Germany's power output at peak hours (on a saturday), if the capacity was there to actually do that.

      As for the rest, those five particular break-throughs are all still in the lab, with no idea on how to scale production (or even whether their results will pan out - some of them in particular sound like "company looking for investors" hype).

      But the point is that there are now lots of companies and academic labs making claims like this, and the rate appears only to be increasing

      There were a lot of companies and labs decades ago promising that cheap, clean nuclear fusion was around the corner.

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    2. Solar power didn't produce half of Germany's power at peak hours, Noah. It just generated an amount of power on average that might have equaled 50% of Germany's power output if the capacity was there. Moreover, it only did that on a non- business day.

      But that is still a very very big deal! Germany uses a crap-tonne of electricity, and is not a very sunny or spacious country!

      As for ever cheaper solar panel costs, much of that is because the Chinese government is heavily subsidizing their production, to the point where they're all taking losses at their prices, and would quickly go bankrupt if the government cut off the tap.

      It's true about the Chinese companies and subsidies, but it's also the case that many less-heavily-subsidized non-Chinese firms are succeeding in staying alive.

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    3. There were a lot of companies and labs decades ago promising that cheap, clean nuclear fusion was around the corner.

      Reeeeeeeeeally?

      (delivers skeptical look)

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    4. Yes, really. Why do you think both laser fusion and tokamak research got a fair amount of funding until the 1990s?

      And then, of course, there was fision, with the promises that it would be "too cheap to meter".

      But that is still a very very big deal! Germany uses a crap-tonne of electricity, and is not a very sunny or spacious country!

      Like I said, it didn't produce 50% of Germany's power during that period. It just produced power at a average rate over a particular time period that would have been 50% of Germany's power output . . . if the capacity was there to actually produce it. Which it's not - as the article mentioned, it's only 4% of Germany's capacity.

      It's sort of like how the lasers at Livermore Laboratory can produce a power output in the 500 terawatt range . . . for a fraction of a second.

      It's true about the Chinese companies and subsidies, but it's also the case that many less-heavily-subsidized non-Chinese firms are succeeding in staying alive.

      With extremely high subsidies themselves, Germany being a key example of that. If they curtailed the subsidies (as they almost did in 2012), then almost the entire sector would go belly-up. Same goes for the US solar sector, and the major solar plant projects (some of which weren't profitable even with loan guarantees and subsidies).

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    5. No, Brett. what the writer probably meant was that solar power accounted for 50% of the peak power supply over midday hours on a sunny weekend in May but only meets 4% of annual demand (because there's such things as night, winter, rain, snow, clouds...). Now, since not all midday hours are equal even when there are no clouds, the total rated solar power capacity must be somewhat higher than 50% of peak demand. That's a lot of capacity for 4% of total demand, which is why I think that 1) R&D is so important and 2) it's not smart to get locked into old, inefficient technology, like the Germans did.

      On another point while I'm here, my understanding is that intermittency was not talked about too much largely because there was too little to affect the grid or lead to significant underutilization of existing fossil fuel capacity.

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    6. Anonymous9:37 AM

      But Brett, solar power efficiency improvements are not just future projections. This has been going for some time now. On average you have seen a 7%/year increase in efficiency in the last 30 years: a total of about 7x (or 700% if you like big numbers) improvement between 1980 and 2010. If this trend continues, solar power would reach the average elecricity cost somewhere around 2020.

      Check this article for details:
      http://blogs.scientificamerican.com/guest-blog/2011/03/16/smaller-cheaper-faster-does-moores-law-apply-to-solar-cells/

      By contrast, nuclear fusion would be great, but it's still far off because it requires a huge amount of R&D investment upfront. Governments are investing and are even pooling their money, but even then the progress is really slow.

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  4. The early railroads were subsidized. The military subsidized lots of research (including very large scale microprocessor design through DARPA - not to mention DarpaNet). The AT&T monopoly operated as an inefficient subsidy for Bell Labs - which still generated enormous benefits. There is nothing wrong with subsidies to encourage important research. We should do more of it.

    The opportunities to get more performance out of fossil fuels are limited. The diesel engine approaches thermodynamic limits and fossil fuels produce carbon dioxide.

    The fall in the price of solar cells seems to be simply in line with the general advance of other solid state devices. We can hope it will continue. If we can get down to $1.00 per kilowatt hour all found cost that would be useful. If we could get down under $0.10 per kilowatt hour that would be huge. If we get under $0.01 per kilowatt hour that would be transformational.

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    1. John S10:21 AM

      "There is nothing wrong with subsidies to encourage important research. We should do more of it."

      What if it's inefficient and actually environmentally destructive, like ethanol subsidies?

      http://www.motherjones.com/kevin-drum/2012/01/ethanol-subsidies-not-gone-just-hidden-little-better

      "The early railroads were subsidized."

      Actually, Britain, the early leader (by a longshot), took a laissez-faire approach to railroads. Britain led the world in total track mileage for many years. There was actually so much private investment that there was a "Railway Mania" boom/bust in the 1840s. Most other European nations subsidized railroads primarily out of military concerns. However, Britain's experience is evidence that private investment was sufficient to lead to a thriving railroad system. (Check out the books by Christian Wolmar, such as "Blood, Iron, and Gold").

      Govt subsidies did lead to many useful tech spin-offs, no doubt. But that is not evidence that w/o govt subsidies things like the transistor would never have been invented.

      If we really want to promote technological innovation, we should abolish the patent system. The govt should not be able to award 20 year monopolies on new patents. Economists Boldrin and Levine (hardly libertarians or Austrians) have researched this issue in-depth. http://www.theatlantic.com/business/archive/2012/09/the-case-for-abolishing-patents-yes-all-of-them/262913/

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    2. John S10:24 AM

      "monopolies on new patents" --> "monopolies on new technology"

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    3. John S - I am in favor of subsidizing research. Subsidizing research into ethanol production from forest and agricultural waste would make sense, subsidizing production of ethanol from food stuffs does not.

      When I referred to subsidies for rail, I was referring to North America. The economic landscape in Britain was very different - in part because the geography was very different. Subsidies which make sense in one country, may not make sense in another.

      I agree that the transistor would have been invented without subsidies (probably in a university laboratory) - the question is when? I think it was independently invented three or so times. Inventing sooner/faster is important for those of us who are not immortal so if subsidies accelerate the process, there is a benefit in that.

      I have mixed feelings about the patent system, but I certainly agree that "software" patents should be abolished.

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  5. Amdahl's Law.

    Solar is not just panels. Balance-of-system costs now exceed panel costs for new installations: land leasing or purchase, design, EIAs, approvals and releases, groundwork, installation and grid connection.

    These costs have not been falling exponentially for decades, and they can't fall exponentially*. Amdahl's Law applies: even if panels are free, solar costs won't fall by more than half.

    It's a pity: PV uses the only really significant invention of the twentieth century besides the contraceptive pill: the solid-state semiconductor junction. I like solar on aesthetic grounds: fission and the rest use those hopelessly retro, teak-and-brass Victorian-era steam engines to generate electricity. Wind...talk to a bat-man about wind. I _like_ solar PV.

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    * In fact, once solar gets to be big enough, BoS costs will increase. Solar projects will have to include the purchase of capacity from fast-start gas turbine generators, in order to meet grid stability needs. Similarly, once the best PV sites are gone, capacity factors will fall and/or connection costs will rise.

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    1. While this is true, a lot of these costs exist for other kinds of power plants too. Yes, solar covers more land, so that will probably always be a higher cost than fossil fuels.

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    2. They're not necessarily as bad as solar's is, though. Nuclear power, for example, has steep capital costs, but the actual operating costs are quite low, and you can run plants for decades (just look at the US's plants, all of which are more than 40 years old).

      Solar panel set-ups, by contrast, at least theoretically can last for 25-30 years at this point . . . but in practice they tend to need to be replaced every ten years at this point, and that's if water doesn't get in and screw with them. Other parts to them don't last that long.

      Gas plants, of course, are the best at this point. Lower operating costs, relatively low capital costs, easy scalability, easy to start and stop, easy to provide both baseline and peak period power, and so forth.

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    3. The point is not that the costs exist, it's that they _can't fall_ at the same rate as the cost of panels--or much at all.

      Therefore, large-scale solar PV can't ever be much less than half its current cost. Amdahl's Law. Wikipedia has a page on it.

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    4. (BTW, "About this Blog" was me. That's what one gets for messing with Blogger...)

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    5. Greg:

      Sure...but I'm not sure all those costs are irreducible. Connecting to the grid, for example, seems like a cost that can be reduced as our infrastructure degrades and we rebuild and expand it. Design costs certainly will come down, as optimal technologies are discovered and design becomes standardized. Groundwork and installation themselves cost mainly energy, which will be cheaper if solar becomes much more efficient (and assuming other forms of energy also become cheaper, like gas). Regulation can be cut in order to accommodate the new technology.

      The only really irreducible cost of solar I see is land. Solar will always take more land than plants that burn high-energy-density fuel. We can, of course, find cheap crappy unused land, to some degree, though this is only a partial solution because they you have to run electricity from those places, which eats up some of the savings.

      Then again, inventions like rooftop solar, window thin-film solar, etc. might even significantly reduce the land costs, by dual-using land.

      So a lot of this remains to be seen, there are know fixed, known quantities here.

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    6. Greg: I think there are lots of reasons to believe that balance-of-system costs for solar have a long way to fall. Look how much lower Germany's BoS costs are than ours!

      http://www.forbes.com/sites/toddwoody/2012/07/05/cut-the-price-of-solar-in-half-by-cutting-red-tape/

      And this appears to be an area that solar companies and researchers are aggressively tackling, as solar cells themselves become less and less of the cost of solar.

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    7. Agreed, no certainties, except for the law of low-hanging fruit. But...

      Design is already pretty standardized. Of course, there is a lot of thought going into it, so it's possible that costs might fall a few percent per year, for a while.

      I expect approvals costs to rise, as the projects get larger and more visible, attracting more NIMBYs. The historical trend has been for regulatory costs to rise for everything, thanks to the idea that everyone must be allowed their say.

      Installation is also quite efficient. Grid connection is going to get worse, as the mean distance to a suitable grid tie point goes up, thanks to the law of low-hanging fruit.

      It's possible that PV might be exceptional in this regard, but I don't see how. Certainly, many proposals have already attracted opposition. I expect costs to rise.

      Rooftop retrofits have ridiculous labour costs compared to large-scale plants, and we're not going to replace our entire building stock just so we can cut PV installation costs. Window thin-film has this problem too, compounded with an abysmal capacity factor and durability problems. Neither will compete with big PV farms, except in the likes of Bangladesh, where there's no infrastructure of any kind to speak of.

      So: no certainties, agreed. Some costs may fall, others will probably rise. There's no sign of an exponential trend. Amdahl's Law is relevant.

      Covering shopping-mall carparks in redneckland with PV panels would be a great (and cheap) dual use. Will it happen?

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    8. We can, of course, find cheap crappy unused land, to some degree,

      Neveda, Arizona, Texas, New Mexico, the Mojave desert, ...

      There is a start.

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    9. Oops. Please mentally swap paragraphs four ("Installation is") and five ("It's possible that").

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    10. I expect approvals costs to rise, as the projects get larger and more visible, attracting more NIMBYs. The historical trend has been for regulatory costs to rise for everything, thanks to the idea that everyone must be allowed their say.

      Well, that's a fatalistic way of looking at things, when most big infrastructure improvements in the past have come from massive govt. bitchslapping of NIMBYs (often during wars or depressions, yes)...

      Installation is also quite efficient. Grid connection is going to get worse, as the mean distance to a suitable grid tie point goes up, thanks to the law of low-hanging fruit.

      Not sure either of these is true...Installation depends on energy. And as grids expand, the number of tie points increases, does it not?

      I expect costs to rise.

      OK, but think carefully whether you expect costs to rise faster or slower than alternative energy sources such as coal and gas...and why.

      Covering shopping-mall carparks in redneckland with PV panels would be a great (and cheap) dual use. Will it happen?

      That's an amazing idea. How about roads?

      See, a lot of these cost items are really more about government, institutional efficiency, and political will than anything else. If we pooh-pooh solar, we're unlikely to be able to muster that will, since politicians will think the technology is unworkable for fundamental technical reasons. But if people get excited in a positive way about solar, there seems to me to be much more of a chance that the political will can be assembled to overrule NIMBYs, rewrite regulations, and shell out money for grid infrastructure, etc.

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    11. Fair enough. I debated with myself as to whether I should keep quiet about the objections...but I won. Or lost.

      Some politicians take the concept of representation seriously: the idea that they should do what they think is best for their constituents, and not what their constituents tell them to do. But enough of them? I don't think we can ever rely on the will of politicians. Still less their wisdom.

      Germany got where it is by massive bribery: a 57 eurocent payment for each unit of electricity injected into the grid from domestic PV installations. Yesterday, there was much anger in the Bundestag, as politicians suddenly discovered that Germans pay the highest price for electricity in Europe.

      As Colin said first up, what we need is a level playing field. Pigovian taxes on the fossils.

      Bait and switch: point out that a coal-fired power plant kills more people _every year_, *when it's working properly*, than an equivalent nuclear plant does *once*, when it has a meltdown. (Josh Mason's co-blogger had a good post on this a few months back.)

      Get those taxes! Pick losers; let the winners pick themselves. PV makes huge sense in the developing world. In "Annex I" countries, things are not so clear.

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    12. On energy transitions, I recommend Vaclav Smil. For example: "Energy Transitions: History, Requirements, Prospects", http://www.amazon.com/Energy-Transitions-History-Requirements-Prospects/dp/0313381771/ref=ntt_at_ep_dpt_7

      or "Energy Myths and Realities: Bringing Science to the Energy Policy Debate" http://www.amazon.com/Energy-Myths-Realities-Bringing-Science/dp/0844743283/ref=pd_bxgy_b_text_y

      or any of several other books.

      I get the impression Smil is a reluctant sceptic--he'd like the world to be other than it is, but...it isn't.

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    13. Some politicians take the concept of representation seriously: the idea that they should do what they think is best for their constituents, and not what their constituents tell them to do. But enough of them? I don't think we can ever rely on the will of politicians. Still less their wisdom.

      Of course, but I'm not talking about grassroots pressure for solar, I'm talking about putting in politicians' minds the idea that solar is a Real Thing. See what I mean?

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    14. Noah and Absalon,

      “We can, of course, find cheap crappy unused land, to some degree, …”

      “[C]heap crappy unused land”? What seems always to follow is “we can always find cheap crappy unused” people. As a living, breathing biospheric planet, Earth has no “cheap crappy unused land . . .” or “cheap crappy unused” anything else.

      Delete
  6. Anonymous4:51 AM

    Germany also subsidized nuclear energy A LOT. One study said ~80 billion euro, another one said around 200 billion! a lot of that went into research.

    There's an interesting graph on wikipedia comparing the german research expenditures over time: http://commons.wikimedia.org/wiki/File:Forschungsausgaben_bund_deutschland_zeitreihe_74bis08.jpg (green= renewables, orange & yellow: nuclear power, blue= fossil fuels)

    ReplyDelete
  7. Lulz4l1f38:59 AM

    I wouldn't invest a lot on coal or nuclear power going forward (though I own some stock it utilities that do). And it's not just because of falling solar prices. You have to begin to factor in externalities like Climate Change which is likely to force additional costs to reduce emissions onto coal-based suppliers.

    I think a more decentralized grid is pretty much a given going forward. Part of the reason is Climate Change, and a more important part of the reason is that people interested in addressing Climate Change have been working to bring down costs of other technologies.

    On thing that stands out as a probable bridge to renewable energy sources is Fuel Cell cogeneration, and that too is a push toward less centralized sources of electric power (though the cells will be reliant on natural gas which is not decentralized).

    Firms like Bloom (USA) and Ceramic Fuel Cells (AUS) are pushing forward with plans for consumer units over the intermediate term, but the real barrier with residential fuel cells right now is the purchase cost (they are already practical small businesses) which should come down if they are mass produced.

    It's easy for me to imagine a near-future with high-temp ceramic fuel cell cogeneration units producing more and more decentralized power using natural gas and feeding any excess power back to the grid complimented by solar (both centralized and decentralized) and wind (centralized) given that reducing CO2 emissions is desirable and has huge external costs which lawmakers will be forced to address.

    ReplyDelete
    Replies
    1. Lulz4l1f39:03 AM

      Sorry for bad grammar/editing. I have a needs dog determined to stop me from posting. lol

      Delete
    2. Lulz4l1f39:04 AM

      needy dog. See what I mean?

      Delete
  8. Anonymous9:27 AM

    I think what you will see is that, as solar power gets more and more competitive, the politics of it will become even more polarized and nasty because a lot of money will be at stakes. The next time Republicans are in power, you can be sure that they will try to get rid of these subsidies. After all, does anybody else believe that conservatives' true objection to wind power is bird protection and landscape beauty? From the same people who favor mountaintop mining and offshore drilling? Come on. This is just pure made-up BS from folks who want to protect their business and their political coalition partners.

    ReplyDelete
  9. a Newsreader9:49 AM

    If solar power sources become profitable, conservatives' opinions on them will be completely irrelevant. So will liberals' opinions. People will just buy them.

    Hardly anyone on the right opposes basic research. Most just see the error in subsidizing companies using unprofitable technologies. Most conservatives would gladly throw whatever money we are currently using to subsidize solar production toward more basic research (if they didn't have to conform to the posture of the day, and deal with pork spending, etc.).

    Also, I don't think anyone criticizing solar right now is worried about "Crypto-socialism". The current bogey-man is called "Crony-capitalism".

    ReplyDelete
    Replies
    1. If solar power sources become profitable, conservatives' opinions on them will be completely irrelevant. So will liberals' opinions. People will just buy them.

      This is true, but before that happens, a lot of NIMBYs and regulatory hurdles need to be overcome, and this will be easier to do if more people are positive about the prospects of solar.

      Delete
    2. "Hardly anyone on the right opposes basic research."

      Want a bet.

      http://thehill.com/blogs/on-the-money/appropriations/222205-house-gop-unveils-cuts-to-nasa-science-funding

      Delete
  10. bury the lede much? "Despite the feat, it is worth noting that solar power still only accounts for around four percent of Germany's annual electricity generation"

    anyway, solar is intermittent. One day here, next day gone. Solar capacity in the US is typically 12%, meaning its only generating electricity one of every 8 hours. Even if you made that 100% its still only generating electricity 8-12 hours a day with no way to store the excess. And you also have to tell me about the efficiency of these storage devices because if a charge cycle is 70% efficient (pretty darn good) then a charge-discharge only produces 50% of the power stored.

    We will need something to generate electricity the hours when the sun doesn't shine, until we can built several thousand GW-sized batteries safely in the US (and I am sure the environmentalists will be all over stopping that). In the desert its fine, but is cutting down trees and covering grass in NJ and MD and replacing it with solar panels manufactured in China with coal-fired electricity, *really* carbon friendly? I doubt it. Yes, we are always on the "verge" of a breakthrough... we have been for 40 years. There are lots of companies making claims... maybe because subsidies are higher than they've been in 30 years. hmmm.

    ReplyDelete
    Replies
    1. Lulz4l1f310:55 AM

      New Jersey is moving on more localized Fuel Cell CHP (Combined Heat/Power--cogeneration) plants.

      Hurricane Sandy really drove home the down-side of being too reliant on long grid distances.

      It's a plus that Fuel Cell CHPs are more efficient than traditional power generation (although still reliant on natural gas), and has fewer emissions.

      This paves the way, also, for more decentralized renewables which operate in peak hours.

      Win-win. Easy to miss the forest with all the trees in the way.

      http://www.chpa.co.uk/chpfuel-cell-grant-program-launched-in-new-jersey_1150.html

      Delete
    2. fuel cells are basically gas-fired distributed generation. They are great, but they are not "more efficient than traditional power generation." They are about the same or worse than a modern gas-fired combined cycle gas plant, with the same emissions profile.

      Delete
    3. anyway, solar is intermittent. One day here, next day gone. Solar capacity in the US is typically 12%, meaning its only generating electricity one of every 8 hours. Even if you made that 100% its still only generating electricity 8-12 hours a day with no way to store the excess.

      So what? Solar can generate electricity when the sun shines, and then gas-powered or other plants can take over when the sun isn't shining. An electrical grid can be fed by multiple plants at the same time. I don't see the problem here.

      Delete
    4. Lulz4l1f32:39 PM

      Newer fuel cell CHP designs can be more efficient once you factor in grid transmission losses alone, and that's without considering that CHPs are being used for heating/hot water as well.

      More importantly, they decentralize power generation, boost resilience, and reduce demand across the grid overall.

      Delete
    5. Lulz4l1f33:02 PM

      Proof:

      The BlueGen unit produces fewer greenhouse emissions than the use of current grid
      electricity in Victoria and NSW, or grid electricity in combination with 2 kW of solar panels,
      when offsets are considered, assuming that there is no leakage of natural gas during operation
      of the BlueGen units.

      http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CEgQFjAB&url=http%3A%2F%2Fwww.cfcl.com.au%2FAssets%2FFiles%2F20100621_CFCL_CSIRO_Report_BlueGen_Emissions_Savings.pdf&ei=CDIEUaGTI_HZyQG7x4HoAg&usg=AFQjCNEf_uE5YQhIhaONWLmINKAPwaN3EA&sig2=VzFaiAoyzbf1yWJwgGxF9Q&bvm=bv.41524429,d.aWc

      Delete
    6. "So what? Solar can generate electricity when the sun shines, and then gas-powered or other plants can take over when the sun isn't shining"


      It's not that simple. intermittentcy is not just a day to day phenomenon. Its an hour to hour and minute to minute phenomenon (eg cloud cover). That means you need to have a gas-fired gen plant hot and ready-to-run (that means: the gas plant is at around 95% of operating temp i.e. burning a lot of gas, just not generating) and ready to ramp up to power the grid to replace the lost power when the sun goes behind the clouds. To be sure, wind is a lot worse. But since the "intermittency" in an area tends to be highly correlated (clouds affecting my panels affect my neighbors as well), you dont get a lot of diversification benefit from scaling up solar installation. Depending on the region, for every 10 MW of solar one needs 1-3 MW of gas fired gen to maintain grid reliability depending on the region- that means 1-3 MW of gas plants actually burning gas to maintain 95% of operating temp at the same time the sun is shining, just to be ready. Intermittancy is not a fall back argument, its a real grid reliability issue. remember those wind-driven blackouts in TX a few years ago...it caused the texas power authority in charge of grid reliability (ERCOT) to change the rules to ensure power plants were paid more to be on standby, to make sure there was enough stand-by gas gen available. PJM PA-NJ-MD-OH and the mid atlantic) has appx 160 GW peak summer and 80 GW off-peak demand (night). If we had 80 GW of solar, we would need more, not fewer, new gas plants built to support all that solar.

      Delete
    7. A smart grid could distribute solar power from large swaths of land with varying weather. Electric vehicles could act as batteries when not used.

      Delete
    8. depends on how large the swaths you mean . a 765 kv transmission line can reliably transmit 1500 mw about 550 miles, and loses about 1% every 100 miles. if you had a hurricane Sandy that wiped out solar for most of the mid atlantic, whats the plan? I know dilithium crystals are fun to imagine... but solar is not practical until we have efficient cheap storage.

      Delete
    9. Depending on the region, for every 10 MW of solar one needs 1-3 MW of gas fired gen to maintain grid reliability depending on the region- that means 1-3 MW of gas plants actually burning gas to maintain 95% of operating temp at the same time the sun is shining, just to be ready.

      Doesn't sound like much of a problem to me. Just provide a bit of electricity with gas at peak, and then ramp that up quickly if the sun suddenly vanishes...and the gas plant is already hot.

      Delete
    10. again... its not as simple as that. Load (electricity demand) has an hourly curve not just a daily curve. You can see for yourself ('cause PJM makes it public) what the demand curve looks like: http://www.pjm.com/markets-and-operations/energy/real-time/loadhryr.aspx

      1. Peak weekday demand occurs at 5PM or 6 PM in jun-jul-august, when people get home from work, and does not taper off much. It does NOT occur at noon. Over 2010-2012 the peak for july averaged 133 GW at 5pm, and averaged 121 GW, 91% of the peak at 9PM, slightly higher than noon. (I did not temperature adjust or account for 2009 recession which lowered demand). Now go over to NREL PV watts data and at 5 PM solar output is only 70% of peak and at 9 pm is zero. A realistic amount of solar only serves the 5PM peak, when sun and demand coincide.

      The point is, HOURLY demand and HOURLY intermittancy matter. Regardless of all the smart grid and hourly pricing theories, consumer demand for electricity at 5PM when they get home from work is very inelastic, no pricing or other scheme will move much to noon as they are not in their house to enjoy it.

      2. That 1-3 MW is a big deal because a) its not included in anyone's cost analysis (the gas, the construction, or the transmission); b) its very expensive and utilities need to recoup costs; and c) its only an average and the first time half the eastern seaboard goes behind the clouds (think hurricane sandy) and there is no gas backup, you will have the entire eastern seaboard say f@&^! solar and get rid of it....

      As much as I would LOVE to believe in solar, it is highly unlikely solar or wind will ever be more than 15-20% of electricity supply (until we have reliable cheap mega-batteries). You would not even WANT it to be because you WANT diversified electricity supply to maintain reliability.

      Delete
    11. link: i used ther sterling VA site for PV watts, 2 axis tracking array, with a .8 derate factor.
      http://rredc.nrel.gov/solar/calculators/PVWATTS/version1/US/Virginia/Sterling.html

      Delete
  11. 1. I'd be more impressed by these examples if people hadn't been saying such things forever. Crying wolf, etc.

    2. As fracking has demonstrated, there are still ways to drastically decrease the cost of fossil fuels. Maybe the rate at which solar has fallen has been faster as of late, but that is with massive subsidies, in comparison to minor subsidies and an anti-innovation regulatory structure for fossil fuels.

    3. You must use an extremely expansive definition of "basic research" for this to make sense. If your definition of basic research is correct, my response is that we should marvel at how much more we should be subsidizing basic research everywhere else in the economy, not that we should be especially optimistic about solar power.

    ReplyDelete
    Replies
    1. I'd be more impressed by these examples if people hadn't been saying such things forever. Crying wolf, etc.

      Well, remember, in the story of the Boy Who Cried Wolf, eventually the wolf shows up and eats all the sheep!

      As fracking has demonstrated, there are still ways to drastically decrease the cost of fossil fuels.

      Hmm, I don't think fracking has, overall, drastically decreased the cost of fossil fuels. Fracking has brought gas prices back to the low levels of the early 1990s:
      http://gailtheactuary.files.wordpress.com/2012/03/us-natural-gas-price-in-jan-2012.png
      But that is a far cry from actually decreasing overall fossil fuel energy costs, which also include coal and oil, both of which have gotten a lot more expensive in recent years.

      Also keep in mind that although we'll always have fracking technology, the shale gas revolution is temporary.

      Delete
    2. I would say that the townspeople were correctly Bayesian updating in response to the actions of the Boy Who Cried Wolf.

      Delete
    3. They should have taken the moral hazard (pun intended) into account ex ante...

      Delete
    4. John S2:30 PM

      "the shale gas revolution is temporary."

      What evidence supports this? And how do you define temporary? 10 years? (unlikely) 20?

      If solar power is ultimately viable (which I believe it is), then why won't the market steer investment into solar power if it becomes clear that fossil fuel reserves are running on empty?

      In the meantime, why waste money subsidizing since it appears we have plenty of gas and oil in the meantime? Or at least, why don't we free ride on the research of other countries that are subsidizing solar energy research?

      Delete
    5. What evidence supports this?

      See for example this report by Schlumberger:
      http://www.slb.com/~/media/Files/dcs/industry_articles/201105_aogr_shale_baihly.ashx

      And how do you define temporary? 10 years? (unlikely) 20?

      Years before what??

      If solar power is ultimately viable (which I believe it is), then why won't the market steer investment into solar power if it becomes clear that fossil fuel reserves are running on empty?

      It will.

      In the meantime, why waste money subsidizing since it appears we have plenty of gas and oil in the meantime?

      Well, I think money is better spent on research than on subsidies, and I also think regulatory reform will be more important than subsidies.

      Or at least, why don't we free ride on the research of other countries that are subsidizing solar energy research?

      Haha, but not every country can free-ride at once! And ours is a big country.

      Delete
    6. Troublesome Frog3:32 PM

      If solar power is ultimately viable (which I believe it is), then why won't the market steer investment into solar power if it becomes clear that fossil fuel reserves are running on empty?

      I'm quite sure that it will. The question is, what will that look like? If we get a really good idea of what "running on empty" means far enough in advance, it will be a steady increase in fossil fuel prices that make it worth doing more solar research on a nice tidy schedule.

      My guess is that it will look a whole lot more like a very steep supply curve shifting inexorably against a very steep demand curve at an unpleasant speed. It will definitely incentivize solar and other alternative energy research. Good and hard.

      Delete
    7. It's probably not going to happen without at least 1-2 years warning, even with gas (where wells can taper off really quickly compared to oil derricks). That's a lot of time to get the ball rolling on new plants, and to arrange for imports and even potential rationing in the transition.

      Delete
  12. Noah,

    If solar power truly became cheap, and if SpaceX and other companies succeed in lowering the cost of delivering cargo to orbi, would interest in space-based solar power revive?

    http://en.wikipedia.org/wiki/Space-based_solar_power

    ReplyDelete
    Replies
    1. It would have to lower the price of cargo to orbit a lot, as in several orders of magnitude. I don't think that's going to happen.

      The costs of not just launching the panels into orbit, but also assembling the array, maintaining it, and replacing panels when they stop would be exorbitant. You could probably build a fair amount of ground-based power plants for the cost of one space-solar array, and it would be vastly easier to maintain the ground ones.

      It's the same type of reason that the US and other powers with nuclear weapons and launch capabilities didn't try putting them in orbit (treaty aside). The launch and maintenance costs are staggering.

      Delete
  13. Great discussion. I am a conservative and I own a solar energy company. I do not understand your premise on conservatives aversion to solar power. By nature most conservatives I know desire to break free from the control of the energy,environmental, foreign wars and government lobby, and solar allows us to get there.

    In Hawaii, solar is already competitive non subsidized, the problem is now it is destabilizing their grid through unknowable power surges and stops (clouds).

    In CA, we are close.

    Regarding future price drops, it can continue pretty steadily for a few more years. Manufacturers are engineering out the installation costs at the same time panel density and efficiency rises.

    Dual use hot water/photovoltaics are coming, as well.

    Engineers are adding intelligence into the solutions, as well.

    But where the really big innovations are coming from is in LED lighting and HVAC. 30-40% of the cost of home electricity is lighting. That is where the true ROI is for the customer, and that is where the utilities are focused. They don't ever want to build another power plant, and home efficiency is where they want to focus.

    MIT is great, but watch Israel, they are getting their products to market.

    ReplyDelete
    Replies
    1. Great discussion. I am a conservative and I own a solar energy company. I do not understand your premise on conservatives aversion to solar power. By nature most conservatives I know desire to break free from the control of the energy,environmental, foreign wars and government lobby, and solar allows us to get there.

      That's awesome! Of course I'm just talking about conservatives in the media, who are the ones I interact with.

      Delete
    2. I would add that in general where oil is used to generate electricity then solar is competitive, such as the USVI and other Islands in the Caribbean. In particular on the smaller islands more than the larger ones. The issue of managing the gird is of course part of what smart grids are about, but also the folks running the grid have to think differently about running it. Just like with wind, for example on wind after the blackouts a few years ago the Texas grid got more precise on their wind forecasting, and on what backup is needed. When an operator joins the grid they have to pay for what is called ancillary services which includes the backup. (Texas has a deregulated grid for energy). But solar will take some rethinking of how the grid is managed, and definitely with distributed solar will take smart meters to report back the way the load is shifting, so the grid operator can take action. Full sky cameras could be set up as well to detect clouds every square mile or so in cities.

      Delete
  14. Noah, reading your retorts to people show you have zero real world experience with solar. You can have the greatest technology in the world but if it infringes on powerful turf like the utilities (who hate solar)and have the money to move politicians around, you will be stymied.

    Politician are already alarmed at what they are spending on solar in the age of austerity, and are rapidly slashing support.

    I live it daily.

    ReplyDelete
    Replies
    1. Noah, reading your retorts to people show you have zero real world experience with solar. You can have the greatest technology in the world but if it infringes on powerful turf like the utilities (who hate solar)and have the money to move politicians around, you will be stymied.

      Sure...but remember, actually overcoming those forces takes outside pressure from people like me who have not experienced that frustration and thrown up their hands.

      Delete
    2. Anonymous11:13 PM

      Utilities don't hate solar. A lot of individuals working at utilities like solar. Utilities hate worrying about rate recovery. Utilities hate when solar prices drop and people point at the prices they contracted solar for in 2008 and say "Why are you charging people so much?" Utilities dislike being the back door for policy implementation, where industries are subsidized through rates rather than directly because no one is willing to pay for things with taxes.

      I work for a utility that contracts for a lot of solar and agree with the general gist of your post -- the NREL in particular has made advances recently that seem to promise a continuing slide in the price of solar for a few years. However, concerns about intermittency and capacity value are real, and can be exaggerated by the natural conservatism of utilities. Re: Kevin Dick's comments below, the EIA cost estimates do not include environmental cost/benefits, which is a reason to continue subsidies/RPS requirements/carbon programs. I agree we should not view the solar industry as a startup any more, but we should fund research into production technologies for the same reasons we would fund coal gasification research but at a higher level because they're better bets for environmental improvement.

      My highest probability (semi-)utopian future involves coal dying in the next 15 years from the onslaught of shale gas, low cost solar, and general understanding of coal's ickiness, and capacity/intermittency issues more or less handled by large amounts of local small-capacity storage in the form of self-driving electric cars. A (national) carbon tax or feebate would really help.

      Delete
  15. Very plausible, but why try to outguess where technology and the market will go? Instead off subsidizing one technology or family of technologies, why not convert all our CO2 mitigating subsidies (Solyndra-type firm picking, ethanol/biofuels, hybrid cars) into a per kilowatt subsidy of electricity generation such that coal=$0, not as good as a carbon tax, but a big improvement.

    ReplyDelete
  16. Anonymous6:18 PM

    Solar offers the possibility of a household generating, on net, more electrical power than it consumes. If the excess power is a source of income for the household will this provide an added incentive for conservation?
    Crude economic models claim a reduction in expenses from $20 to $10 may provide the same incentive as a change from an expense of $5 to an income of $5. However it seems the second case has a much stronger instinctive appeal for most people. If this is correct the widespread installation of solar generation at a residential level may coincide with an increase in conservation.

    ReplyDelete
  17. Two observations. First, it's pretty clear that the solar industry has been jumpstarted. So now is the time to withdraw subsidies. Note that I am all for eliminating fossil fuel, ethanol, and other subsidies as well. Government R&D funding for other advanced energy sources is fine with me. But full scale production should be on a level playing field.

    Second, the US DOE actually tries to calculate the cost of various energy sources using a complicated levelized cost model. See http://www.eia.gov/forecasts/aeo/electricity_generation.cfm. For power plants coming on line in 2017, their nationwide average estimates in $/MWH are:

    Conventional Coal: 98
    Convenional CC Gas: 66
    Solar PV: 153

    On average, PV has a ways to go. However, the lowest regional cost of PV is 119, while the highest regional cost of coal is 115 and advanced nuclear is 119.

    So there are probably places today where PV is cost competitive. But the market can surely figure this out at least as well as the government.

    ReplyDelete
  18. Great post!

    There are also important unique personal finance aspects to solar. If you think about it, home solar is like an inflation adjusted bond, but with a potentially far higher expected return. And even today, with the tax spiffs, in my home state of Arizona, these panels can pay for themselves in under 7 years in some cases, and are warrantied for 25. For more on this, see:

    http://richardhserlin.blogspot.com/2012/03/unique-personal-financeinvestment.html

    ReplyDelete
  19. Also, it really looks like these tech pessimists will be very wrong. Huge advances in solar, robotics, nanobotics, genetic engineering, supercomputers, computer driven cars, and more, a good chance of enormous advances over the next 25-50 years. But a huge issue is will it all go to the elite few, while the vast majority lives nightmarishly insecure lives outside of the gated compounds of the rich. Depends on whether we wake up and stop voting Republican so much, and whether economics throws off its libertarian biases.

    ReplyDelete
  20. I fear you may be falling into a trap common with movement conservatives in assuming that the other side is always wrong. There are actually some good reasons to be skeptical that solar power is our saviour -- the low energy density requires large areas to be dedicated to it, which jacks up the installation costs: try looking what Saul Griffith says about building "Renewistan" some time [1].

    It'd be nice to be proved wrong about the potential for solar-- and solar proponents should be given every chance to prove that I'm wrong, technical research is cheap, and installation subsidies don't strike me as hugely expensive. I have a feeling that your reasoning that multiple promising technologies imply that there's got to be an ace in the deck doesn't really work, though.

    If nuclear technology is "stalled", it's stalled almost entirely for social reasons, not technical ones: going strictly by the numbers, you'd have to conclude that a rational world would be replacing nuclear with coal. But we are decision-making is not rational, and *that's* the central problem, the one that no one seems to have a way to fix.

    [1] Quoting Stewart Brand on Griffith: "Two terawatts of photovoltaic would require installing 100 square meters of 15-percent-efficient solar cells every second, second after second, for the next 25 years."

    ReplyDelete
  21. What a stupid way to start the article. Typical American centric never seen the rest of the world viewpoint.
    Politics has nothing to do with whether solar becomes dominant but technology certainly can help achieve it.
    While it may be conservatives in the US who are against solar it was a socialist government in Australia that wound back solar subsidies at the same time as introducing a carbon tax, wtf?
    It is simple economics and not what colour of government that will decide it's future.

    ReplyDelete
  22. Anonymous5:33 PM

    From Seattle-
    Some recent work in macro looks at attempting to develop a link of a macro theory with microfoundation support. I think this has a major flaw in the problem that basic micro theory, especially the supply/demand/cost curve concept relies on the supplier side requirement for rational decision making. As any mathemetician who runs a restaurant will tell you, appetite driven consumer consumption follows the Poisson distribution, not the supply/demand curve. Where these two curves are in agreement, everything looks great to the supplier. BUT, once the Poisson behavior tops out, the suppliers prescriptive/predictive cost function will lead to a massive oversupply. Since the breakdown occurs at a maximum on the curve match, there will be a serious discrepancy between cost, supply and consumer appetite (demand). To test for this review the recent housing collapse and, using the magic of integration determine which curve was most accurate in predicting the number of housing purchases, and which most accurate in predicting price and starts. As noted, choosing the appropriate model will have best results. To best utilize the Poisson curve a supplier should attempt to match purchases not to the supply/demand curve that determines his optimal price, but the consumer appetite curve that determines future purchases. Try a double integral of the Poisson curve for demand, and the suppl/demand curve on the z axis. Integrating under both curves should show the aggregate value of the market.

    ReplyDelete
  23. This is interesting. I mean, the point that "intermittency" is a new talking point because solar is getting cheaper too fast to keep up the old objections. Combine that with the assertion that this is a talking point of detractors - well, were does this come from? I pretty much thought that those detractors publish in peer reviewed journals and are economists with expertise in the field. See e.g. this issue of Energy Economics:

    http://www.sciencedirect.com/science/journal/01409883/34/supp/S1

    This is not to say that there is much talk about the intermittency of solar in particular. But intermittency of renewables is identified as their one remaining weak point, and nowhere do they say:"Except solar. For solar, this is only what detractors say." - and the reason why an optimal (modeled) energy mix under the constraint of a certain emission path (i.e. as under a certain carbon tax) or a cap is not purely renewables (or solar).

    What, exactly, tells you that this is a mainly political talking point of conservative "detractors"? Are you really sure that this is nothing emerging from the literature? I.e. are you sure that calling out alleged "detractors" is not _your_ friggin' political talking point as a detractor from very real problems regarding the implementation of solar (and renewables in general)?

    P.S.: On average solar provides only 5 percent of German power. So let's double that. Any idea what they should do with the 100+ percent during the next record without suitable storage? Is this just my fake concern as a detractor? Any idea what the backup capacity between peak and minimum should do in between? Who should pay for its not running efficiently, but merely as back-ups - the backups themselves, or providers of solar? Clearly, if I do not have prove that this alied me ten years ago, this cannot be a real concern, I must be a detractor.

    Also, demand peaks not in May, but in winter. The fact, that this peak occured during daytime ignores the fact that it did not peak in the season when demand peaks (or you chose to ignore it). You chose a local demand maximum at best and were not, well, quite clear about that. Tell me again about conservative talking points...

    And for the record: I am not conservative. Don't you dare call me one.

    ReplyDelete
    Replies
    1. What, exactly, tells you that this is a mainly political talking point of conservative "detractors"? Are you really sure that this is nothing emerging from the literature?

      The problem is real! But I've seen lots of people wave their hands and dismiss solar because of this problem. Those people have tended to be political conservatives in the media who don't really know the technical details or read the peer-reviewed literature!

      The problem is real, but it is almost certainly not so severe that it dooms solar power. And additionally, people are trying to address the problem technologically, and they may succeed.

      I.e. are you sure that calling out alleged "detractors" is not _your_ friggin' political talking point as a detractor from very real problems regarding the implementation of solar (and renewables in general)?

      Pretty sure, yeah.

      And for the record: I am not conservative. Don't you dare call me one.

      U mad, bro?

      Delete
    2. Yes, I am mad. The more mad as I see how you think you can mark this feeling as inappropriate with a silly meme.

      There is absolutely nothing in your post suggesting that you accept "intermittency" of renewables to be a real problem (on the contrary you play it down). You just mention it as a talking point of conservative detractors. Your only answer is:"So, were have you been 10 years ago? Huh? HUH!?" This is just intellecutally lazy. For intermittency means that the cost curve for the implementation of renewables is not constant, but convex (who pays for it, is another question). So this whole "solar gets competetive" talk really is too simplistic if you look at the whole energy sector and not only at the costs of solar panels. And it is offensive, as it puts everybody who addresses this problem in a conservative dettractors' corner.

      Also, people try to address the problems of nuclear fission as a power source technologically. So what? Of course, there was not any real breakthrough in this technology ever since they started exploring it. But there hasn't been one for storage, either. So what is the moarl of this story? "Yes, economists say so and so - but there really is a technological side they surely are not able to gauge appropriately. And even though I really didn't point out why, I did strongly imply that with all the progress regarding solar there is a corresponding progress in storage technology. Moreover, whereas I am probably most qualified to talk about the economics side, I will completely ignore it and just talk about the technological side, so screw economics. So, here are a couple of links. And grist, of course, a place where ideology and spin really do not exist." - ?

      And for the record: I did not say it dooms solar. But if you put a price on emissions and optimize the energy mix, renewables get less important as they become expensive via their backup emissions (see link providded above). The higher the price, the more expensive. Reading your post one might think one has to be a conservative to address intermittency - that's true only if conservatives are overly concerned about global warming. In the long term renewables are the only solution. In the short time, we have to figure out how to bring down emissions rather rapidly. This won't be easy if a source of emissions due to renewables' intermittency is simply ignored as a conservative talking point.

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    3. "long term" and "short time" mean "long run" and "short run", respectively. Not easy to be French in this world...

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    4. Yes, I am mad. The more mad as I see how you think you can mark this feeling as inappropriate with a silly meme.

      You should chill out...stress is bad for your health...

      There is absolutely nothing in your post suggesting that you accept "intermittency" of renewables to be a real problem (on the contrary you play it down).

      Of course it's a "problem" in the sense of something that could make solar better if it didn't exist, it just doesn't preclude solar power being cost-competitive with fossil fuels. At all.

      And it is offensive, as it puts everybody who addresses this problem in a conservative dettractors' corner.

      Well, what can I say...

      The higher the price, the more expensive.

      Damn, and I thought I was the hotshot economist here...

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    5. Also, people try to address the problems of nuclear fission as a power source technologically. So what? Of course, there was not any real breakthrough in this technology ever since they started exploring it.

      There actually have. We're on the third- or fourth-generation reactors now, and some of the newer plants (the pebble bed reactors) literally can not undergo meltdown.

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    6. Brett,

      with "breakthrough" I mean progress that allows the conclusion that the technology will be ready for market competition in forseeable time. Last time I looked, even current construction sites like Flamanville had HUGE cost overruns. If you take into account that nuclear famously suffers from a "negative leraning curve", and thus cost escalation, I am not quite sure about those alleged breackthroughs. I don't know of any really successful generation III or III+ reactor projects. And generation IV exists on paper only. But if you have any sources, I'd be interested!

      But my comment males much more sense if you take into account that I am dense and confused: I meant to say "fusion", but of course, I wrote "fission", because that makes me look much more silly, perhaps even more silly than I am, but not sure about that...

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    7. "For intermittency means that the cost curve for the implementation of renewables is not constant, but convex (who pays for it, is another question)."

      exactly. Also, your point about European power peaking in winter is a good one... they don't have the summer cooling demand the USA does. People who hype solar dont realize that the technology to beat is combined cycle gas (in the DOE analysis, 1/2 the expense of coal and nuke). Nuke is dead for a while and nobody wants to touch coal, the Obama EPA basically makes it impossible to have an existing coal plant let alone a new one. Now if I need some gas CC built to manage the intermittancy of solar and wind, then renewables have to be *cheaper* than gas CC before they are cost competitive.

      As for who pays, its the ratepayers. Whether i like solar or not i dont see the economics case for subsidies. its not a public good... like ethanol subsidies, its an employment program.

      Delete
    8. Well, that cost is not constant is not exactly a surprise. I don't know why this is talked about here in terms of single numbers that are compared to one another. More problematic is that the article works in the realms of the mother of all market failures: if you want to talk about a functioning market you have to assume a price on carbon. And there the whole "intermittency" thing gets really, really important. But it is completely ignored instead.

      Grist is a perfect example: just a week or so ago they argued against shale gas as a transitory lower carbon energy source because very ambitious mitigation targets cannot be reached that way. Why the ambitious target? Because no other than James Hansen suggested so. Of course, James Hansen knows that in the short run renewables don't do the job: he calls for massive deployment of nuclear. Look up what grist have to say about nuclear. Hansen is a dummy that serves them as long as they can base their case against shale on him. When it is pointed out that renewables themselves are fossil dependent (that's the problem with intermittency) and therefore not yet suitable for a very low emission economy there is a subtle shift: the new aim is a sustainable energy sector in a much broader sense. That is, the urgent case for emission reduction is substituted for the long run aim of a completely sustainable economy.

      Put a price on carbon and renewables get rather less important than other low-carbon alternatives (yes, nuclear) in the short run (at least that is what simulations indicate). I.e. optimising the sector with a sharp constraint on emissions and a fast transition to a "green" economy do not combine as a first-best option. The detailed reasons are complicated, but intermittency (and thus backup emissions) are a reason. To ignore intermittency as a conservative talking point allows environmentalists to ignore this. Thus, I was quite serious when I asked Noah if he is really sure that he is not regurgitating a talking point here himself, because this is exactly what it is.

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    9. Btw, I got into this trap myself above. The refusal to work with an inherent price on carbon also concerns the so called nuclear renaissance. There is a lot of talk now that it did not materialize, so that's that, let' move on. But ever since the first conceptual study from MIT surfaced some ten years ago, the necessary precondition for a rise of nuclear was a price on carbon. And we really do not have a price on carbon, nowhere (the price of emission certificates in Europe has completely imploded). So, virtually no nuclear is what one would expect under current conditions. Nobody said that it would somehow rise magically.

      Instead, there is implementation of renewables in Europe on a massive scale. Put that together with the de facto defunct cap and the refusal to deal with shale gas, and what you get is a renaissance of - - - coal, that has recently seen a revival so remarkable as to make the success of solar look like a minor event, and that's a really bad thing. So I am not quite sure that this turned out well.

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    10. bena gyerek4:48 PM

      the alternative to storage technology would be room-temperature superconductors. if we can crack that nut, then solar energy intermittency could be diversified away via a global grid.

      Delete
  24. The last sentence you quote is nothing else than a conclusion of optimisation studies (with emission constraints) under certain models of the energy sector, e.g. one of the papers you can read above. You know, the kind of papers that did never cross your eyes.

    Cost competetive? But how much of it? It's not the same if solar make up 5 or 50 percent of your energy sector. This is a hollow statement. If you internalize discoutned marginal damage costs of CO2 emissions you do have a situation where solar does already have a role in the energy mix - "cost competetive", if you want. Perhaps 10, perhaps 30 percent, I don't know - put not 100. "Cost competetive" without specifying the percentage... I mean... really? You cite single numbers as if you could read out anything usefulout of them without considering the systemic costs of ramping up implemented capacity of solar. And yes, as backup for renewables has to run inefficently (that is well below its capacity and with a lot of ramping up and down as it adapts to renewable output) there is indeed a point where solar with backup is more expensive than the backup "alone".

    The rest of your comment consists of silly jokes. Have fun.

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  25. Oh, now I get it. That last comment was a willful misunderstanding. Of course, the senctence means that the implementation of renewables gets more expensive with a rising price on carbon, via their backup emissions. Impossible to read or quote in context if you can churn out a vacuous gotcha instead, I guess.

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  26. As someone that lives in Germany, I just want to point out that there a still an awful lot of suitably alligned rooves in Germany without solar panels on them. Despite the fact that there is in America a lot of "low value" land with lots of sunshine - that is not the case in Germany - the installed panels will basically have to be on rooftops.

    As a home owner who could potentially install some panels - I'm not likely to do it without renovating the roof. It is a significant capital investment. It will take a considerable time to create the stock of installed panels on which the future energy supply will be based. It will still be a centralised system, because of the intermittent nature of the supply - the storage mechanisms are primitive - so homeowners will sell excess to utilities during the day (particularly in summer) and buy electricity at night and in winter.

    Given the time this will take, and the urgency from global warming (where the prognosis seems constantly to be getting worse), I'm not so sure that capital subsidies (not running subsidies) don't make sense.

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    Replies
    1. I live in the Texas Hill Country and have a roof with an excellent southern exposure on the top of a hill. However I ran the numbers and because of no state subsidy its a 20 year payout. Hail problems they say have been addressed but I have not checked out the cost of insurance. (Where I live the record says that a shingle roof gets trashed every 8 to 10 years because its on a hill top and attracts winds and hail). But if you could get the payout for the system down to 10-12 years I would likely go for it, but being 62 I don't see 20 years of living where I live and its not clear if you could get a higher price with the system.

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  27. Anonymous7:26 PM

    How did I end up on this crappy blog again? All it does is pull at your political heartstrings rather than address issues.

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    Replies
    1. How did I end up on this crappy blog again?

      I'm guessing someone put a gun to your head and forced you to click the link...

      Delete
  28. "Despite the feat, it is worth noting that solar power still only accounts for around four percent of Germany's annual electricity generation"

    Yeah.

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  29. Though I too am hopeful about solar power, energy is a small part of the economy so i do not expect it to be all that transforming. I would guess that your projections are too optimistic. I would guess that it will take about 20 years for solar to be economical here in sunny central Florida.

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  30. Even if solar power were used only in certain areas -- like the larger desert Southwest, from Southern California to Central Texas -- it could have a pretty beneficial effect nationally: less use of oil, lower carbon dioxide emissions, lower risks of nuclear accidents, and so on. The intermittancy problem can to some extent be dealt with through the fact that its causes are largely predictable -- when know when sunset occurs, we can see clouds on the radar, and so on. Where I live in Santa Fe, we have ~290 full sunshine days annually, and ~350 with at least partial sunshine. If you have a clear day and thousands of solar panels spread over a hundred square miles, you probably don't have to keep that gas plant on instant stand-by. Many of the major metro areas in the desert southwest have similar potential, and could feed areas as far away as Dallas-Fort Worth, Denver, and San Francisco, on the periphery of the desert. Construction and maintenance costs would still be there, but much of the land in the desert is government-owned, and therefore (subsidized) acquisition costs could be as low as zero.

    I think there are a lot of problems with solar, but there are a lot of problems with the other forms of power generation as well.

    I do think thorium reactors might be a better solution to the problem.

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  31. Anonymous7:54 PM

    Well, lets try to look at the numbers. The http://www.eia.gov/forecasts/aeo/electricity_generation.cfm document suggests a levelized cost 152.7 for Solar PV, at a capacity factor of 25%. Unfortunately, Germany sees CFs of 12-13%, NE USA of 13-15% and even sunny Arizona of 19%. Solar capacity factors are set by the latitude and weather, so if we want to be generous, and include a most of the continental US, a more honest value would probably be 16%. Raising the Solar PV price to ~238.

    But it gets worse. Storage is a completely unsolved problem (http://www.theoildrum.com/node/8237). But let us assume that, MIRACLE, we manage to get enough storage to smooth out second and minute scale fluctuations! Solar has a low CF, but produces almost %100 of its full capacity during a few short sunny hours around noon near the spring solstice. Let us assume we don't want to spill any of that precious electricity (which would lower solar's CF a lot, raising its price even further). Then for every MW of Solar, we need 1/CF MW of "backup" (as 1/CF>>1, calling it "backup" is misleading). Lets make this backup Coal (levelized cost 97.7 of which only 27.5 goes away if the plant isn't being used). So to go from (1/CF-1) MW of Coal to (1/CF-1) MW of Coal +1 MW of solar PV, we actually need 1/CF MW of Coal (only 1/CF-1 MW generated) and 1 MW of solar. Final price of the 1 MW of power? 152.7*25/CF+97.7-27.5 ~ 308. Or over triple the cost of coal.

    And of course, to *get* that price, we needed to assume a Miracle (short time-scale smoothing) and we need the total amount of solar to be negligible: if solar produces more than CF% of the total power, electricity WILL be spilled, and the price will go up. We have also neglected the additional wear-and-tear (and fuel costs) associated with rapid, massive ramping up and down of the coal plants which forces them into inefficient operation modes.

    So, you can spend an absurdly huge amount of money to generate a harshly limited amount of your electricity through solar, without ever shuttering a single coal plant. Win! For the coal industry.

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  32. Anonymous11:34 PM

    The possible future success of solar energy is not a bedrock belief of conservatives of the world or even American ones specifically. It is a belief that some people might hold or they might find subsidies distasteful but there is nothing in particular about solar energy that if succesful would cause much opposition from conservatives. This is not a dogma issue.

    Seems like another excuse to bash the other side in a tribalist fashion, Noah.

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  33. Anonymous11:40 PM

    Also in regards to success of solar energy in my experience there is both optimism and doubt for the right obvious reasons, from people of different political views. There are some problems but there is also room for it becomign cheapper and quite more widespread.

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  34. Anonymous12:48 PM

    The mention of a thermal solar that could be 8 times as efficient as the best solar panel is an issue - that would be more than 100% efficient! Anyways, the second law of thermodynamics limits thermal solar efficiency unless temperatures are in the thousands of degrees.

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  35. bena gyerek4:15 PM

    my concern: does solar actually reduce global warming? think about the loss in reflectiveness of the earth's surface. this may not be an issue with current technology, but what if one day we cover the sahara in super-efficient panels? that could mean we end up trapping a lot of solar energy on the earth's surface that currently gets reflected back out into space. most of that trapped energy ultimately gets converted into thermal energy, one way or another.

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  36. First Solar announced that it would layoff almost a third of its workforce early last year, as it was planning on shutting down operations in Germany completely, and on letting its operations in Malaysia sit idle. The European market for green energy had deteriorated for too much to sustain business operations, according to the company.

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  37. I am searching for my assignment and found your blog post ( Solar: It's about to be a whole new world. ) on google search your post is informative an give me lots knowledge for my current assignment thanks for sharing such a wonderful information keep updating share the knowledge whole world including me.

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  38. I applaud you, Noah, for taking on a real-world problem, and particularly for being one of the few econbloggers to worry seriously about energy. I think you're probably way overoptimistic about pretty much everything, including solar, but you're looking in the right places, and you're never boring. Cheers!

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  39. Anonymous3:17 AM

    Noah,

    I think that you have missed the main driver in the story of the decrease in the cost of photovoltaics. It has very little to do with any of the new technology - plain old crystalline silicon PV has something above 90% market share, and growing. This is an interesting economic story (why don't you write something about it? I'd like to hear your explanation of Chinese factory investment, there is an interesting story of regulatory capture on the grid side too) but it isn't the one you are telling. Cheaper panels, and lower installation costs are mostly a story of scale, not fancy new technology.

    When it comes to solar competing with fossil fuels, since PV can be installed on the customer side of the meter, solar is competing with the retail cost of electricity. In some places with good sun and expensive power, like here Australia, "socket parity" has already been reached.

    As an aside, transparent solar cells are stupid.

    Regards,

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  40. There is really a need of cheaper systems as they will cause a huge boom among essentially all industries in every country. Energy powers everything. So far, with nuclear technology stalled, we don't have anything cheaper than coal and gas for producing electricity. With cheap solar thing will change. The Great Stagnation - which many suspect is really just an energy technology stagnation - would suddenly be a lot less scary. Great post. Keep sharing.
    Sterling Energy

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  41. Many people should be aware of what solar energy can give us. I believe that this can really help us in many ways and I am positive that it can go a long way.

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  42. That last comment was a willful misunderstanding. Of course, the sentence means the implementation of renewable gets dearer with a rising worth on carbon, via their backup emissions. not possible to browse or quote in context if you'll be able to churn out a vacuous gotcha instead, I guess.

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