February 21, 2010
Cheap Solar Cells Alone Do Not Make Cheap Solar Power

Writing at greentechmedia.com Craig Hunter outlines an argument for why even if solar cells become almost free the current PV panel approach has so many other costs that competitive PV electric power remains a distant prospect.

Framed in this way, the litmus test for any solar energy technology is its ability in the next 10-20 years to be deployed in hundreds of gigawatts per year, delivering electricity at $.05-.07/kWh, even in areas that aren't very sunny. Given the load factors of PV installations, not to mention the possible need for storage, we need to consider a target installed system price of no more than $1/Wp.

Panel prices have indeed come down significantly, but the PV "experience curve" (15% cost reduction for each doubling of production) is too slow, requiring us to get to 40-80GW per year production just to reach sub-$1/Wp panel pricing. And unless we see disruptive improvements in conversion efficiency, the "balance-of-system" costs (i.e., all the system costs other than the solar panel itself) will make it impossible to achieve a $1/Wp system price even if the panels are nearly free.

So are PV's prospects really that bad? On homes will PV integrated into roofing tile provide the way to avoid most of the physical packaging costs of solar panels? I would expect PV tiles to enable avoidance of lots of labor costs - at least with new roofs where the labor is already getting paid to put up roofing tiles anyway. Even if that happens how much of the total cost is the panel packaging? Will grid-tie inverter costs come down far enough to enablesub-$1/Wp total system cost?

Share |      Randall Parker, 2010 February 21 10:21 PM  Energy Solar


Comments
Among the cows in Iowa said at February 22, 2010 9:12 AM:

There are many places in the world where power costs much more than 7 cents per kilowatt hour (especially during daylight hours), so those prices are unrealistically low even for competitive systems. They may be 2-3 times too low!

Tom H. said at February 23, 2010 12:44 PM:

Roughly twenty years ago central AC was thought to be out of reach by a majority of folks. But now every home largely has this necessity! Three simple components/items are needed for a system: Solar PV panels on the roof (also could be micro wind mill) - to get energy, Storage battery/fuel cell - to store energy the Alternator - DC/AC converter - The DC electric is converted to house 120 AC power.

If you can knock of 20%-30% off your electric bill each year, over 10-20 years thew is a big savings. Home solar/wind will be like your home HVAC system, replace in every 30 years, but it saves you on utility bills.

KTWO said at February 23, 2010 1:27 PM:

For now I think conservation, heat management - better attic fans, etc -, and insulation can be the most effective means to save energy.

However subsidies and rebates for insulation work are magnets for corruption, fraud, and lax but expensive administrative costs. I believe recent reports show costs well over $50,000 per existing home.

We can expect that will keep rising even after if costs exceed the value of the homes themselves.

The electric utilities often have a financial stake in grid-tied PV rooftops. So they have reason to monitor both cost and quality.

Otherwise the news is sunny. PV prices are declining and a glut of batteries is expected for the next three years or so. Too many firms are rushing into lithium-ion production. That should be good news for rooftop solar. IMO utilities have better options than battery storage.

Minor Heretic said at February 24, 2010 3:29 PM:

KTWO is right - conservation and efficiency are the first items on the agenda. They are cheapest, fastest, and have the least side effects. After that, we still need energy.

The natural gas shale plays that everyone is crowing about will prove to be expensive, meaning expensive electricity. Likewise the upcoming uranium shortage with the end of the Megatons to Megawatts program. And, of course, net coal energy is flat or slightly declining as the quality of our coal reserves goes down. So, the upshot is that 10-15 cents per kWh retail is going to look like a nickel Pepsi.

If we can get the installed cost per watt of PV below $3.90 it is breakeven with 13 cent per kWh utility power. Most of the installations today have no batteries, just direct-to-grid inverter technology.

Concerned Citizen said at February 25, 2010 2:21 PM:

Here in California the marginal cost of electricity under the socialist residential pricing model is $.40 per kWh, once you have more than a 1500 sq ft. home. It doesn't take long to realize you need to quit running the lights and powered equipment to save money.

10-15 cents IS a nickel Pepsi out here.

Pawn said at February 25, 2010 2:35 PM:

Around 25 years or so ago either Westinghouse or GE came out with a "solar shingle". It was tested at MIT in an actual roof. It was a total failure. Electrical interconnects don't like water. Solar panels don't integrate well into buildings.

Michael Chaney said at February 25, 2010 2:53 PM:
If you can knock of 20%-30% off your electric bill each year, over 10-20 years thew is a big savings.

At what cost? If I have to pay $5000 for solar panels, over a 10 year time span at 10% interest (what I could get in mutual funds) I'd have 2.71x the money, or around $13,500. If I could save $5000 during that 10 year time period (which would be approximately 20% of $200/month), then I don't have a good deal. If I invested the savings I would come up to around $10,000. In reality, the savings are nowhere near that much, the panels cost too much, and most people are talking about a 30-year timeframe to recoup the cost (which, as I showed with the example above, means that you're losing money since "recouping" means only that you got back the original investment, not the lost opportunity).

It's only a big savings if your alternative is to bury money in your back yard.

Rob said at February 25, 2010 2:58 PM:

Even if the solar power is free, the battery to store the power certainly won't be. If you don't do any storage, it's very hard to have solar power make up a large part of total energy use. A big storm can roll in on a sunny day and reduce solar output to nothing in a few minutes. Even your normal, passing clouds on a sunny day can cause your local output to fluctuate by several percent. Without batteries, there isn't a way to make solar power a large fraction of our mix.

And, of course, it gets dark at night...

Anonymous 1 said at February 25, 2010 3:00 PM:

[NOTE: FuturePundit added "1" to the commenter name because I do not want people just calling themselves Anonymous. If anyone else calls themself Anonymous I will delete the comment]

It ain't the cost of solar power.

It's the freedom of 'alternative energy'. The freedom to tell Mrs. Grundy to take a hike. Simple cost, sheer dollars and the fabled Bottom Line ain't hardly the whole answer. FREEDOM from dependency is more precious than any amount of pure-cost mechanics. FREEDOM.

And I'm wetting myself laughing at the idea that invention and engineering won't overcome the obstacles outlined, here. For pity's sake ... 70 years ago if you had been told that compressing sand and passing electricity and ones and zeroes through it would produce a multi-trillion dollar industry and utterly remake the world as humans have known it ... you'd be fitted for a canvas coat with extra long arms.

Good grief ... THINGS CHANGE, people. And you're arguing against the inevitable. Against certainty. Someone, somewhere will blow your sock off. Like this ...
http://business-technology.suite101.com/article.cfm/bloom-box-green-energy-fuel-cell - Google is already powering a campus with it. But oh ... hydrogen is a non-starter in many pundit's minds. Like solar cells.

Discovery consists of seeing what everybody has seen and thinking what nobody else has thought. - Jonathan Swift

Sigivald said at February 25, 2010 3:21 PM:

A Bloom Box still can't compete with real power, anonymous. Google's using it as a "green" money-sink for posturing purposes.

(And there's no "freedom" in "having to buy natural gas to dump in the fuel cell" as opposed to "having to buy electricity directly".

The average person/family will always be "dependent" for energy, until someone invents a pocket-sized fusion generator. And that's okay - people are also dependent for food, medicine, and everything else. Why? Because being a subsistence-farmer freeholder sucks and that's why nobody wants to do it.

[Yeah, if you have a giant farm, you can use waste methane to run your fuel cell... but where's the pig food coming from? The fuel for the combines to harvest it? Autocracy is a bad goal.]

Freedom that costs more than energy from the grid or from a generator isn't going to be real popular, because pretty much nobody gives a damn about that "freedom".

And the real reason hydrogen is a non-starter is that it's a transport mechanism, not a source of energy. That's not pundits, that's science. Unless you have a source of "free" hydrogen you're willing to share with the rest of the class, hydrogen is going to remain one, until someone comes up with it.)

Note that while it's true that progress happens, it's also true that lots of low-hanging fruit has already been gathered, and energy generation is not quite the same as "inventing semiconductors". Handwaving and saying "it'll happen because of invention!" is just as pointless as saying "nothing will ever change!".

All I say is "I don't see it from here and I'm not holding my breath".

(Remember every promised invention of the past 50 years that never came?

Hell, remember "solar power" as The Future's Energy Source (and Always Will Be)?)

CA solar owner said at February 25, 2010 3:23 PM:

We installed a solar roof in the S.F. Bay Area in CA recently. Without the state and federal subsidies it wouldn't have paid out in any reasonable amount of time. We should make about 10%/year (including depreciation) on our investment, which is much better than we can get with a CD (about 1-1.5%). With the cost of energy in CA likely to grow much faster than inflation due to out of control legislature & governor pushing green energy and taxing CO2, it is a good hedge against electricity rates going up.

We switched to time of day metering which in the summer time means $.34/KWh during the peak period 1-7 PM. Part peak (10AM 1PM & 7PM 10PM week days in summer and 5PM 8PM weekdays in winter) is $.15/KWh in summer and $.12/KWh in winter, and Off peak all year round is about $0.11 KWh. The more power you use during a period (peak, part-peak, off peak) you push up into higher tiers which cost more.

A solar roof does two things:

1) For the homeowner: Lowers your marginal rate of power. Even if you produce power during off peak periods (most of the winter), you are moving the part-peak power into lower tiers as well as reducing the amount of off peak power you have to buy.

In the summer, you can produce a lot of power during in the peak period (when the value is the highest) and really offset a lot of power usage during off peak periods.

2) For the power company: Solar roofs are going to produce most of their power when it is needed most: summer peak periods. The power company has to size its entire infrastructure to handle the worst second of the worst minute of the worst hour of the worst day of the year. The rest of the year, that capacity sits idle and is wasted.

When everyone has their A/C on and power demand peaks (i.e. sunny days), solar PV systems should be producing their maximum power. Shaving off the power requirements at this peak situation is worth big bucks to the power company.

Gerry N. said at February 25, 2010 3:31 PM:

Solar shingles are great. On paper. What is the service life? What are the cost of batteries or other power storage and voltage regulation? What is going to keep your neighbors from burning your house to the ground to get rid of that butt ugly roof that's dragging everyone else's property values down?

Lina Inverse said at February 25, 2010 4:28 PM:

Anyone who can do math and physics and who has bothered to run the numbers knows they're just not there for terrestrial solar power at currently foreseeable conversion rates. Why this is suddenly a surprise after we've sunk who knows how many billions into this bottomless pit is the only surprise.

O Bloody Hell said at February 25, 2010 4:31 PM:

Solar power is an IDIOT's pipe dream.

The solar constant is roughly 1kw/sq-m. There's only 12 hours of sunlight, on average, and no solar setup is likely to even make 50% conversion efficiency, so you're looking at FOUR square METERS of panel per kw of power -- that's just in a very rough calculation.

In reality, there's notably less useful sunlight than that almost everywhere, you have conversion inefficiencies/losses due to the cells not being "clean" (meaning someone has to get up there and CLEAN THEM on occasion, AND guess what, after auto accidents, is the most common cause of accidental death in the USA? Accidental falls, that's what. So what happens when everyone and his brother has someone up on the slippery roof cleaning these things?), and if you're powering yourself at night that means expensive battery storage systems AND the in-and-out efficiency of THAT.

Further, the highest demand is during winter, when the sun is providing the LEAST amount of power.

In short, there's NO POSSIBLE WAY to make solar effective, based on physical laws as fixed and immutable as the law of gravity. You ain't engineering around them, you ain't tricking the universe into making them work better than any of that -- solar sucks, is going to continue to suck, and will always S-U-C-K-, suck. The only solar power concept that anyone should be sinking any money into is Ocean Therman (OTEC), and even that's pretty "iffy".

ck said at February 25, 2010 4:45 PM:

It will always be "designer" power. It works for those that wear $100 jeans. It is very successful for what it is designed to do, give trustifarians self esteem.Not only that, you can get some poor construction worker to subsidise the power to your mini-mansion through his taxes.Robbing the poor to subsidise the "self esteem class" what could be better? And, you get to show your parents(who actually made the money your spending) how much cooler you are than them.

O Bloody Hell said at February 25, 2010 4:49 PM:

> http://business-technology.suite101.com/article.cfm/bloom-box-green-energy-fuel-cell - Google is already powering a campus with it. But oh ... hydrogen is a non-starter in many pundit's minds. Like solar cells.

It's not even hydrogen, you nitwit. That thing runs off of natural gas. Can you *read*?

> We should make about 10%/year (including depreciation) on our investment, which is much better than we can get with a CD (about 1-1.5%)

Then you need to seriously look into your options, because I'm not particularly well connected and I could get 12% even two years ago, probably a lot better now (not financially able to put money into investments so I can't tell you what rate I could make if I could, since I haven't asked). Slightly higher risk than a CD, I grant, but certainly just as good as betting that those idiot panels will pay for themselves.

BTW, in relation to the above calculation for actual power generation: Solar Insolation for major US cities -- For simplicity, call this figure "Sun Hours / Day"

Telling is Tucson's figure: AZ Tucson 7.42 6.01 6.57

In other words, make that EIGHT square meters per kw...

Balun said at February 25, 2010 5:02 PM:

Why is "What's the ROI going to be?" the first question about solar panels? It is one of those nonsense questions like "What about their socialization?"

What's it worth to you if there is a blackout? If it is only a few hours, probably not much.
What if the blackout lasts for 3 days and the food in the frig is spoiling? 2 weeks?
That's happened before, it will happen again.

And don't forget "electricity rates must necessarily skyrocket under my plan."-BH Obama

shannonlove said at February 25, 2010 5:05 PM:

The Achilles heel of solar and wind power remain their inability to efficiently store the energy the episodically produce. Energy is useless if it is not were its needed when you need it. Solar and wind produce power on mother nature's erratic schedule. This is why despite all the hoopla, there is not a single community or facility anywhere in the world that runs exclusively off solar and wind. If your anything more than a hippie commune (factory, transportation, hospital, whatever is people you money to do) wind and solar fail miserably.

For this reason, baring any currently unforeseen storage technological breakthrough, solar and wind will never, ever be a main load power source for our civilization.

Never.

Ever.

Solar and wind power today have to factor in not only the cost of producing the base load but also the enormous redundancy required to deal with mother natures erratic behavior. Then you have to have more redundancy so you can route power from the place it occurs in nature to where you need. Then of course you have to have a 50% - 70% completely non-solar/wind redundancy (something that can provide power at midnight in an ice storm) for the times when the systems just craps out.

All this redundancy means that the cost of the total system is enormous, far ,far more costly than the alternative. Considering that the alternative is a technology we have been using safely for 70 years and which does work in all places in all kinds of weather.

It's almost like some people want to wreck our society and are going for the jugular of our energy sources.

Greg F said at February 25, 2010 5:30 PM:
Why is "What's the ROI going to be?" the first question about solar panels?

Because it is an efficient way to allocate scarce resources. If a blackout is a concern then a generator is a far more economical alternative. Additionally the generator will give you power when you need it (like lighting at night when the solar panels would be useless).

Teddy said at February 25, 2010 6:24 PM:

Here in Arizona, where available solar energy is high, we have our two utility companies providing "incentives" which are added to state and federal tax advantages.

We planned on a 5KW solar panel array on our south facing patio. The patio structure needed upgraded, including structural engineering, prints, and building permits. The solar panel brackets had to be certified by a registered engineer. The installation had to be performed by a licensed contractor. This brought the installed cost to around $30,000, plus about $7,000 in site preparation. Due to high summer operating temperatures, the panels produce less power than specified.

Total incentives brought the cost down to about half, effectively covering about 90% of the solar panel cost. Using "real world" power output estimates the system would save about $800 per year in energy use, not too bad of a return on investment. As energy costs go up the rate of return gets better. However, long term operating cost, plus depreciation have to be figured. A new roof would require removing all the panels, a major expense. The inverter, a $2,500 item has a ten year warranty so replacement has to be anticipated. In addition, solar panels do fail, and operating at the high end of the temperature range during summer makes failures more likely.

Even with the incentives which dropped the price of the solar panels themselves to "almost" free, the related installation and long terms costs made the installation unattractive.

Additional insulation has a much better rate of return and no long term headaches.

dscott said at February 25, 2010 6:31 PM:

Exactly, Shannonlove, specifically the efficiency of modern batteries from charging to storage to output starts dropping off dramatically at high outputs. Anything over 2 amps per cell and your efficiency drops to 65%. http://www.pluginhighway.ca/PHEV2007/proceedings/PluginHwy_PHEV2007_PaperReviewed_Valoen.pdf So not only do you have to contend with getting only 10 or 15% efficiency of the solar cell to begin with in converting sunlight to electricity, you then lose up to 65% of that in attempting to "USE" the stored electricity from a battery. And we haven't even discussed the efficiency of inverters (12VDC to 115VAC) which averages around 90%. That's .15 x .65 x .9 = .08775 or 8.8% over all system efficiency. What makes solar so unattractive and expensive is the total system inefficiency. Either make the battery more efficient or chose another storage medium like compressed air or hydraulic fluid where you loses are mostly confined to the electric motor which run from 50 to 90% efficiency.

Ari Tai said at February 25, 2010 6:35 PM:

And at the end of the day, the price competition will be with the marginal cost of production of the next barrel or kwh (i.e. $2 at the wellhead and less than a penny per kwh). Currently there's little price competition with the cartel / oligarchies, when there is, the price of fossil will drop thru the floor - what happened in the 80s. Also, what exploration company announced earlier this year that they've never failed to "prove" more new oil to be pumped than they pumped the year before? And with coal that's never been an issue. The replacement has to be so cheap it is almost too cheap to meter. No government will be powerful enough to cartelize the price and hold it high (save if they have a navy willing to enforce it world-wide). Bill Gates understands that the 2B poor that he wants to help need a Moore's law in energy. And expects that cleaner, faster, cheaper by definition is required (per reading-between the lines of his TED talk).

Mt Top Patriot said at February 25, 2010 7:41 PM:

I built my own wind turbines, solar panels off ebay for reasonable bucks, scrounged up a forklift battery for scrap price, built my own regulator/diversion load, burn wood and coal in a home made wood furnace, all the little bits came from various places for cheap, my diversion load goes into a preheater for domestic hot water. The inverters are military surplus.
I haven't bothered to figure the costs, I just bought the components as I had the cash and built everything I could to save money.
Did everything I could to insulate and get rid of drafts, that was a big savings. Disconnected all the little parasite loads like stove clocks, microwave clock, etc. That alone saved 10 bucks a month. Extra Insulation on the hot water tank and lines saved saved another $15. Bought a stove top coffee percolator, put the freezers out on the porch, and those crystal clear window plastic kits up in winter.

I'm not energy independent, but let me tell you our electric bill is $25 per month, our heat bill went from $150+ to less than $50. Thing is, even if it is not a great savings, every penny is mine! Until you experience this you have no idea how awesome it is to give the powers that be the finger and reduce how many of your hard earned bucks go to enrich everyone but yourself.
I have security of self reliance and independent energy source, my house is wicked toasty warm, the money saved makes a huge difference that enables me to live debt free. I raise my own pigs chickens turkeys goats, make my own beer and hard cider and mead, cheese, cure and smoke my own bacon and hams, shoot a deer or two. We have a small garden and can up a lot from it. It is really easy once you get into the swing of it, just takes a little time management and ingenuity. One way or another you got to spend money on all these things, why not use your money to enrich yourself first? It is profound the scope of the savings and pride you get, never mind the quality of life.

Skeptic said at February 25, 2010 9:50 PM:

Bloom Energy - a lot of BS; it's "competitive" only so long as it gets big subsidies from the government; it's sensitive to contaminants in the supply stream (what's it going to cost to supply the clean fuel the fuel cell needs?); it's longevity is unknown and questionable; it's not any cleaner than a modern large scale power plant using the same fuel source; it requires high operating temperatures, etc. - other than that, it's a great product. Like the Segway, it is mostly hype. It will survive only because fools in the government will keep supporting it. You can probably still make good money shorting it when it comes to the IPO.

Krusty Krab said at February 26, 2010 12:10 AM:

I think it's a great idea to compare unsubsidized solar power to heavily subsidized grid power and to conclude from that the solar power has no chance of being economically viable. And while you're at it remember that for every dollar you spend on oil-based products maybe 1/2 of that goes to rich oil sheik who in turn passes part of that on to his terrorist buddies (and like all rich people, he will have many friends).

And then I noted how many locations have restrictive zoning requirements designed to make solar power unattractive even if the solar panels were free.

When reading this piece, check your brain at the door please.

Joseph Somsel said at February 26, 2010 8:11 AM:

In the mid-80's, the Electric Power Research Institute did a study of solar power that essentially came to the same conclusion - even if the CELLS are free, the supporting costs would still make it non-competitive.

So it's taken the Greenies 25 years to figure this out?

As to electric storage, the basic economics support nuclear and coal, NOT wind or solar.

http://www.energypulse.net/centers/article/article_display.cfm?a_id=1808

Maybe that's why the pumped storage units are almost always built in conjunction with a large coal or nuclear unit.

Joesf said at February 26, 2010 9:09 AM:

Kristy Krab.
A subsidzed company is one which pays no tax and receives outside money to operate. Oil companies pay taxes which is something solar companies will probably never be able to do becasue they operate at a loss without government help. Companies that pay taxes are not subsidized.

Greg F said at February 26, 2010 12:46 PM:

Krusty Krab wrote:

I think it's a great idea to compare unsubsidized solar power to heavily subsidized grid power and to conclude from that the solar power has no chance of being economically viable.

Krusty it would be a good thing to get the facts right before making assertions. The EIA has analyzed subsidies (pg. 16 of the PDF file).
Chapter 5. Subsidies per Unit of Production(dollars / mega watt hour)
http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap5.pdf

Coal - $0.44
Nuclear - $1.59
Natural Gas - $0.25
Hydroelectric - $0.67
Solar - $24.34
Wind - $23.37

Point of reference. Wholesale prices for a mega-watt-hour range from $30 to $100. The heavily subsidized grid power is a green myth.

Krusty Krab wrote:

When reading this piece, check your brain at the door please.

Then we would could all be like Krusty.

melee said at February 26, 2010 12:57 PM:

Solar power is unsubsidized? What? It's almost entirely subsidies. Don't you see all the people above making calculations including a huge chunk of subsidy? Solar is an obvious non-starter in places that do not subsidize heavily, and poorly received even where it is. Why? The numbers.

That said, if you're making your calculation of ROI compared to a 10+% CD interest rate, you're also delusional. If you know a CD that gets 12-15%, please please show me where. I can't find one even reaching 1.75% right now. Even if you think that won't last (and it won't), they won't rise that far. Highest avg. CD rate in the last couple decades: 7%. It doesn't take a lot of energy savings to beat a current CD.

But: a solar installation is a fairly fixed return, with the possibility of repairs that can eat savings (or even exceed them, depending), which should put it in the company of low-grade bonds. And those can have interest rates in the 10-20% range. Even if the competition weren't that good, would you invest $50,000 in low-grade bonds? That's what a "solar power calculator" at a solar advocacy site estimated it'd cost for me. I wouldn't. Especially considering the return for that $50k investment is about $100/mo. That's a 2.4% APY. And that's before any repairs I might have to make--in the next 22.5 years.

Sorry, I like the concept, and wish it were otherwise, but the numbers are atrocious. It's a luxury good at best unless and until the cost/benefit ratio improves dramatically.

Greg F said at February 26, 2010 2:13 PM:

melee,

It is worse then that. Solar cells degrade about 0.7%/year so I degraded your $1,200/year ($100/month) for my calculations. It would take 50 years to generate enough power to recover the $50,000 investment. Over the same time period the same money at 1% annual yield would have grown to about $81,417.

Randall Parker said at February 26, 2010 6:25 PM:

Shannon Love,

Solar does not have to compete against low cost baseload generators. Solar has to compete against peaking generators on warm summer afternoons when the wholesale price of electricity is 2-3-4 times higher than it is in the middle of the night.

Ari Tai,

If oil prices are high due to a cartel then why haven't countries outside the cartel revved up their oil production to take advantage of the high prices? The cartel argument doesn't explain why oil was very cheap in 1998 but very expensive the last 6 years. The cartel has not become more effective. So why the higher prices?

Sigivald,

Bloom Boxes receive a tax subsidy. They wouldn't be competitive otherwise. Whether fuel cells can beat natural gas electric power plants in the long run by converting natural gas into electricty at a higher conversion efficiency with a similar capital cost remains to be seen.

Greg F,

The degradation rate for PV varies by material used. I do not know what the various degradation rates are. But I think the CdTe thin films that First Solar sells degrade more rapidly than PV made from silicon crystals. Anyone know a good source for PV degradation rates?

Greg F said at February 27, 2010 1:40 PM:

Randall,

The degradation rate can be inferred from the manufacturers data sheets. The manufacturers are going to pick a number that is low enough that they don't end up having to replace a bunch of them. The warrantee for your standard silicon panel (most of the market) usually says that the output will be a minimum of 85% of it's rated power after 20 years. The 0.7% which I used is about 87.5% after 20 years. I didn't pick that number out of the air as I have seen it used in published papers (none of which I can cite off hand). I know the thin films are worse but I don't know any numbers for them. First Solar doesn't have any data sheets available on their web site that I could find which raises a big red flag for me.

The oil cartel tends to go through cycles. They all agree to some cap on production but eventually someone cheats. Eventually they are all cheating on their quotas and have to get together again to divide the pot up once again. A short history of OPEC well worth the read.

http://www.wtrg.com/opecshare.html

Minor Heretic said at March 1, 2010 1:27 PM:

Geology wins every time. The earth hasn't made oil or natural gas for the last 12 million years and it hasn't made coal for the past 200 million years. It isn't making any now. The planet had some amount of uranium in its crust when it formed and it has less now.

There is less of these substances available every day. We humans naturally tend to go after the easiest to get resources first, so we are observing a steady increase in the energy cost of energy, or conversely stated, a decrease in the energy return on energy invested for mined fuels. That generally means an increase in economic cost. it also posits a point in the future when newly discovered mined fuels will have a 1:1 energy return on investment, rendering them useless. (In practical terms a resource becomes useless at some return higher than that. Some scholars propose 5:1.) We are also observing that the rate of extraction for an oil well or mine tends to slow down after it reaches the half depleted point. That means that the flow rates we require for business as usual won't be available at some point.

All this naysaying about the economic viability of solar ignores the geologic facts bearing down upon us. If we wait for semi-subsidized renewables to be directly competitive with semi subsidized fossil fuels we'll have to suffer through a period of severe energy shortage before we get the new infrastructure up and going. Price signals are like the car hitting the wall - too late to install the seat belt.

Will we be able to afford renewable energy? Wrong question. Renewable energy is renewable and non-renewable energy isn't. At some point we will have no choice. The question is, will we be ready when non-renewable energy becomes too scarce and too expensive to be viable?.

Greg F said at March 1, 2010 2:50 PM:

Minor Heritic,
You created a logical straw man. The first 3 paragraphs could have been written in 1900 and would be just as true then as now. Oh, and solar panels require silver which is not exactly in abundance. You conveniently ignore the "geologic facts bearing down upon us" with respect to silver. You also fall into the trap a lot of alternative energy advocates fall into. You fail to notice the reason alternative energy is more expensive is because it is resource intensive to build. "Renewable energy" becomes unrenewable when you deplete the resources required to build the infrastructure. Price signals are NOT "like the car hitting the wall". Price signals divert the resources to their most efficient use which is a gradual process (unless the government sticks its nose in) since the resources don't disappear overnight.

Minor Heretic said at March 2, 2010 7:30 AM:

Greg F,

There is a difference between ignoring a fact and not writing a complete PhD thesis in an online comment.

Renewable energy infrastructure is capital intensive because we are building a collector for a diffuse energy source that should last 20-30 years. Energy intensive, certainly, but the energy return on renewables is increasing over time (technological development) as the energy return on mined fuels is decreasing (inevitable depletion). We are going to have to do a great deal of recycling of strategic minerals. Eventually our descendants will be engaged mostly in recycling instead of mining.

By your line of argument, eventually we will have no high tech sources of energy, which may end up being true. It's called the Olduvai theory. If we don't have the resources to develop renewables we certainly won't have the resources to ride the present fossil fuel/uranium hot rod. Renewables do offer the opportunity to leverage our present non-renewable resources into a long term renewable energy flow. Blowing our present supply on the desires of the moment is like eating our seed corn.

Resources don't disappear overnight, but we can go from surplus resource *flow rate* to insufficient resource flow rate in a year. It takes about 85 million barrels of oil a day to keep the world economy going as is. When we can only extract 80 million the price will have to rise until 5 million barrels a day of demand is destroyed. That can happen in a year or two, but it will take a couple of decades to make a switch to renewables. Same goes for coal, NG and uranium extraction rates. The amount left in the ground is one thing, but the amount we can get out this year to actually use is the immediate limiting factor. Relying on price signals would leave us with lost decades of destructive sawtooth price swings as the economy crashed and recovered. Price signals don't have long term vision.

Greg F said at March 2, 2010 2:38 PM:

Minor Heretic,
1. "Renewables" are not "high tech sources of energy". They are mature technologies which will improve in small increments. They are totally useless without the present infrastructure due to their intermittency.

2. Nuclear is the only "renewable" that is capable of replacing our present sources. Nuclear could replace our present sources without the intermittency problems inherent in "renewables".

3. Do you know that a fast breeder reactor produces more fuel then it consumes? Sounds renewable to me.

4. Thorium can also be used in nuclear power and is 3 or 4 times more abundant then uranium.

5. Energy returned is always going down because we always exploit the easiest first

6. Point #5 applies to "renewables" since the locations with the most wind or sunshine will get exploited first.

7. You need to take a basic economics course. You have no understanding of supply and demand and how it affects prices. Your argument is basically I will scare you into agreeing with me. My argument is the renewable solution won't work. The renewable solution has all the complexity of a comic book. Reality is far more complex.

8. Oil is irrelevant to solar or wind. It is a red herring. None of the "renewables" have a snowballs chance in Hades of replacing even a small percentage of the oil.

9. Nuclear plants have a 40 to 60 year life. Considerably longer (with considerably more energy generated) then the 20 to 30 year money pit called "renewables" with its pathetic output.

10. When I was in high school (early 70's) we were suppose to run out of oil about oh 10 years ago. Spare me your fear mongering predictions.

11. It goes without saying but I will say it anyway. The advocates for "alternative energy" always want to force me to pay for their hair brain energy schemes by the force of government. Tell you what. We end all subsidies for all energy sources and let the chips fall where they may. If you want to dump your money into renewables you are free to do so.

Minor Heretic said at March 2, 2010 8:55 PM:

Greg F,

Thanks for keeping up the debate. I'm fairly sure everyone else has gone home.

1. By high tech I mean as opposed to burning wood in a fireplace. Intermittency is a problem we will have to deal with by combining short-cycle variable sources such as wind and PV with longer cycle sources such as hydroelectric, wave, tidal and biomass. We'll also have to get a lot smarter about dynamic demand control, both in terms of opportunistic use and load shedding.

2. Anything that runs on a resource that doesn't replenish itself is by definition non-renewable.

3. Sounds renewable, but it isn't. That "produces more fuel than it consumes" is an unfortunate phrase that confuses people. A fast breeder uses a fission reaction of a particular type to turn non-fissionable U-238 into fissionable U-235. It also produces a lot of Plutonium. U-238, although more abundant than U-235, is still a non-renewable resource.

4. Thorium is more abundant than uranium, but it is still non-renewable.

5. Absolutely true, and a big problem with all mined fuels.

6. At least in the U.S., we could get the equivalent of our entire present electrical demand times about 2 before we started relying on the second tier wind sites. There is so much room in the world compared to the acres of PV modules we need that the concept doesn't apply. The concept doesn't really apply anyway because the resource (the sun) doesn't behave like a mined resource. In fact, even as the EROI of fossil fuels and uranium keep going down, the EROI of PV and wind keep inching up. Both PV and wind are somewhere above 12:1 and rising.

7. When demand exceeds supply, prices tend to go up. The supply, in billions of barrels per year of oil, cannot rise indefinitely. That's a basic geophysical fact. The same goes for coal, NG, and uranium. The demand for these resources tends to rise until checked by price increases, which occur when rising demand meets the inevitable fall off in yearly supply. It's not about being scared. It's about preparing for geological inevitability. If you can convince the geologists of the world that a new and incredibly fast fossil fuel producing geological era is upon us, I'll eat my words.

8. Something will have to replace oil, something that doesn't deplete, or we will have to learn to do without the quantities of energy we presently enjoy. I'd agree that renewables won't be able to replace all the thousands of years of stored sunlight we pull out of the ground every year, so we will have to learn to get by on less.

9. The life span of an investment in years is less important than the energy out compared to the energy in. Nuclear, by all the various estimates I've seen, is well below 10:1 and dropping, mostly due to the dropping ore percentages. Renewables like PV and wind are above 10:1 and rising. Total energy generated per power plant is irrelevant.

10. I'm not concerned with running out, at least not any time soon. It's not what I have been talking about. We'll give up fossil fuels before we run out due to low EROI and high cost compared to renewables. The wall we are going to hit is the yearly supply flow of mined fuels dropping below the demand.

11. Yes, let's get rid of all energy subsidies. We can start with the Price-Anderson Act. That's the law that limits the liability of the companies that insure nuclear plants. After an accident, the first few million in claims would come from a private insurance company and the rest would come from the taxpayer. No private insurer would touch a nuclear plant otherwise. Repeal the P-A insurance subsidy and all 104 U.S. nuclear plants would close that day. Unsubsidized wind power is about $0.04 to $0.06 a kWh right now, which is competitive with heavily subsidized NG.

Fat Man said at March 2, 2010 10:34 PM:

Uranium and thorium may not be "renewable" by your definition, but, there is more than enough to last for thousands of years. This was first detailed in a 1956 paper by M. King Hubert, the patron saint of peak oil. By that time, our descendants will have figured something out, most likely fusion.

"We can start with the Price-Anderson Act. ..."

Your description of PA was both tendentious and wrong. http://nei.org/keyissues/safetyandsecurity/factsheets/priceandersonact The act provides for $300 million in private insurance and then a $100 million per reactor payment from all reactor operators for a total of $10 billion. Payments would be made on a no-fault basis. Of course, there have been no payments in since 3 mile island thirty years ago.

"Unsubsidized wind power is about $0.04 to $0.06 a kWh right now, which is competitive with heavily subsidized NG." Unless you need the power right now. I note that Greg F provided a link to and numbers from the definite EIA study on subsidies.

Fat Man said at March 2, 2010 10:50 PM:

I do need to add that even if the solar cells were free, it would cost thousands of dollars to put them up on a roof. We put a new asphalt shingle roof on our house a few years ago. It cost about $15,000. I can't conceive of a generating material that would be as cheap as asphalt roofing, which is about as generic and low tech as it gets. Furthermore the roofing business labor pool is also generic and low tech. Getting licensed electricians involved will only drive up labor costs.

I think Teddy's story above tells us what we need to know. Of course he is in Arizona. Those of us who live in dank cold places where the sun seldom shines will be even harder pressed to on the economics.

Finally, check out "Are we really going to let ourselves be duped into this solar panel rip-off?" by George Monbiot, the environmental writer at the UK Guardian on Monday 1 March 2010

http://www.guardian.co.uk/commentisfree/2010/mar/01/solar-panel-feed-in-tariff

Fat Man said at March 3, 2010 10:15 AM:

That last comment needed a bit more context to make sense. We have a nice house, but it is nowhere near the algore mansion category. We live in central Ohio and have four seasons of weather, at least two of which are very unpleasant. Our electric bill averages about $200/mo. Solar panels, with out any energy storage equipment, or a feed in tariff, might reduce that bill by a quarter or even a third. but that won't pay off the upfront cost of installation.

As for the feed-in tariff, read the Monbiot piece linked above. With the right set-up it will be an open invitation to scam.

Fat Man said at March 3, 2010 10:48 AM:

Forget thousands of years for nuclear power:

"Breeder reactors: A renewable energy source by Bernard L. Cohen, American Journal of Physics, 1983 ... Uranium can last for 5 billion years with a withdrawal rate of 6,500 tonne per year from the oceans [with breeder reactors this would be double current world electricity usage]. This estimate does not include using Thorium which is more common in the earth's crust than Uranium."

http://nextbigfuture.com/2008/08/how-long-can-uranium-last-for-nuclear.html

Within five billion years, the Sun will go red giant on us, so we will need a new planet.

Also a link for the Hubbert paper: Nuclear Energy and the Fossil Fuels by M. King Hubbert (1956)

Greg F said at March 3, 2010 4:22 PM:

1. You do a lot of hand waving. It is also clear you don't understand the technical side of intermittency issue.

2. Machines that extract energy from wind and solar are not "renewable".

3. Fat Man sufficiently disassembled you nuclear ignorance.

4. Fat Man sufficiently disassembled you nuclear ignorance.

5. True for "renewables" also. Your still hand waving past the problem.

6. You said " At least in the U.S., we could get the equivalent of our entire present electrical demand times about 2
before we started relying on the second tier wind sites". More hand waving. Show me the numbers. You also said the EROI for "both PV and wind are somewhere above 12:1 and rising". I can assure you the solar panels are no where near 12:1. Once again, show me the numbers.

7. More hand waving. When is this " geological inevitability"?

8. This post was about solar energy so oil was a red herring.

9. Show me the numbers.

10. Show me the numbers

11. Fat Man sufficiently disassembled you nuclear ignorance. You completely avoided "The advocates for "alternative energy" always want to force me to pay for their hair brain energy schemes by the force of government". Why is that?

Randall Parker said at March 3, 2010 7:47 PM:

Guys,

A few points:

A) For generating electricity solar costs more than wind. Wind costs more than coal or natural gas. Nuclear probably costs more than wind from highest quality sites but less than wind from offshore. That's today. See my recent post New Wind Power Maps For United States for some details on comparative costs.

B) But the various energy sources won't have the same relative costs in the future. That's important. Wind's cost might go down with the use of even bigger propellers. Solar is dropping at the fastest percentage rate per year but is still at a much higher cost point. Solar's probably going to fall the farthest.

C) Solar and wind vary far more in cost by location than nuclear, natural gas, and coal. Still, all electric power sources vary in cost by location for a variety of reasons (e.g. distance to transport coal, amount of wind available, amount of sunshine available, etc).

D) Geological inevitability: Remember the story of the boy who cried wolf? Even though the boy was premature the wolf eventually came. The guy who first made a Peak Oil claime for the US did so in the mid-1950s and predicted the exact year for the US peak (1970). Many other countries have peaked and gone into decline since then. The list keeps getting longer. The global rate of oil discovery peaked in 1963. The rate of consumption passed the rate of discovery in 1981. We have been gradually eating away at the backlog of previous discoveries. The result is that land-based oil production has peaked. World oil production has been kept up by increasingly deeper offshore and also unconventional sources (e.g. tar sands and natural gas liquids). This means costs are rising and quality of sources is declining. The average barrel today has much more sulfur and is heavier. This costs more to refine.

E) Yes, we have lots of thorium and also uranium that can be upgraded in breeders or in other reactor types. We can use uranium and thorium for much longer than it'll take to perfect fusion. So nuclear power definitely has a big future.

F) Intermittent power sources are still useful (fast spin-up peaking power can come on when the wind stops blowing) and likely to become more useful in the future. Why more useful? A few reasons. For example, smart grid appliances can shut down when power generation falters. Also, batteries for electric vehicles can be charged when demand falls below available power. Cars sit most of the time. A lot of electric car recharging will happen when people are sleeping.

G) Solar is not baseload but it maps very well (though not perfectly) do day-time peak demand. On a summer day with heavy air conditioner demand cheap solar (whenever it happens) will work well. Keep in mind that wholesale electric power prices are higher during the day. So solar isn't really competing against baseload. Solar competes against peaking generators.

Ken Royall said at March 21, 2010 9:14 PM:

The numbers for power generation for 2009 have been posted. The total contribution from solar power was 0.0204% of electricity for the US. Here are the numbers:

http://www.eia.doe.gov/cneaf/electricity/epm/table1_1_a.html
http://www.eia.doe.gov/cneaf/electricity/epm/table1_1.html

So after billions in taxpayer subsidies, total solar power generation doesn't even amount to a rounding error. It is a total disaster and will never pan out on a large scale. If it were viable, there would be more than enough private investment behind it and it wouldn't need to be subsidized. There will be some hobbyists and others that will install it in their homes but again, without tax credits it won't make sense financially.

Wind isn't much better, coming in about 1.78% of supply. This after government subsidies, mandates and tipping the scales in favor of renewables by exempting those sources from the fines levied on conventional providers when they are not supplying power. In effect this puts NG plants in the position of subsidizing wind as they are a common backstop for the intermittent wind power.

Wind and solar are merely more expensive, less reliable alternatives for sources of energy we have in ample supply, coal, NG, and nuclear. These alternatives, even if they were viable, would not decrease our dependence on foreign oil in the least as is often touted by lying politicians and the wind power lobby. The so-called "green jobs" are being created mainly overseas, subsidized by American taxpayers. The lying needs to stop. Given the current state of the art, there are no viable alternatives to fossil fuels at this time in terms of cost, reliability or supply.

Randall Parker said at March 21, 2010 11:03 PM:

Ken Royall,

The scales haven't been tipped in favor of wind that heavily for very long. Wind subsidies used to get taken away every other year until about 5 years ago. Wind's growth has been very rapid since the Production Tax Credit was renewed for a longer period of time.

Those links are interesting for a number of reasons. Notably, coal's losing market share. It is down to 44.64%. Wind combined with other renewables now make up 3.56% of market share. That's over half of hydropower's market share.

One can also see the lost market share of petroleum liquids as the oil price spike spurred a shift to cheaper substitutes. My guess is that's a permanent mark share loss.

The only two energy sources gaining substantial market share are wind and natural gas. That's good news for air quality.

Nick G said at March 22, 2010 9:42 AM:

Ken, Randall,

Don't forget that the DOE numbers for solar don't include distributed generation on the client side. They only include generation from utilities and other large generators.

Randall Parker said at March 23, 2010 10:10 PM:

Nick G,

Any idea what percentage of solar PV capacity is for utilities? My impression is that almost all Concentrating Solar Power is for the utilities.

Parenthetically, solar's electric power drop-off in winter is huge. How's that supposed to scale? Granted, there's summer afternoon peak demand. But Maine and the Maritimes (as well as much of Europe) experience peak demand in the winter.

I suppose more aluminum could be smelted in the summer. But the potential for load shifting from winter to summer seems pretty limited to me.

Nick G said at March 24, 2010 9:11 AM:

Yes, I think CSP is almost entirely utilities, though Bill Gross's Sunflower is taking a shot at it. I think most PV is non-utility. In California, 80% of installations are small, but 85% of capacity is larger I/C installations (like Walmart and Google), where you get decent economies of scale.

I don't think that EIA data is useful - I'd look here: http://www.nrel.gov/gis/solar.html

Not that I'd suggest that solar can provide most power in northern regions any time soon. Fortunately, wind is nicely negatively correlated with solar: slightly stronger at night, in winter, and when it's cloudy. There are a lot of things that can be done to mitigate wind's variance, but as a last resort we could just keep coal plants, and run them for the 5% of KWH demand that couldn't be met when both wind and sun are low for an extended period.

Greg Nulik said at June 15, 2010 1:07 PM:

For a look at one of the more promising Nuclear technologies (canceled by Bill Clinton) is the Integral Fast Reactor (Gen 4). Granted from what I've read, it's more complicated and possibly more risky then the current version. But it's so much more promising in that, if I read correctly, we could actually stop mining uranium/plutonium and rely on all that nuclear waste for power once the IFR is up and running sufficiently. Also, it shortens the half-life by quite a bit of the material. Way better then a Breeder Reactor (Gen 2) which only recycles a limited amount of fuel.

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

http://www.nationalcenter.org/NPA378.html

I myself am hopeful on Solar/Wind power, but I agree that short of high-density/high-efficiency/long-life batteries or other storage technology it's really debatable on reliability. However, there has been some development in $1/watt solar panels and others that convert additional bands of the EM Spectrum. Nanosolar has developed one of the $1/watt technologies, and among the efficiency advances are converting UV and Infrared light, which are NOT blocked by clouds, much. Basically, if someone could layer visible spectrum over infrared and UV layers, it's possible the efficiency COULD be above 50%. Just saying.

Greg Nulik said at June 16, 2010 11:34 AM:

I have to agree with an earlier post mentioning energy efficiency. Efficiency is something that the U.S. is definitely lacking. For example, my previous clock/radio uses 8 watts an hour. Doesn't sound like much until I get to my new one; it runs ENTIRELY on batteries. AA/AAA and since I use Low Self Discharge NiMH it's continuously operable up to the point I need to swap them for the back-up set of batteries, but other then that it's entirely off-grid operation. Runs for weeks before I need to swap batteries. I have only one incandescent flashlight, which uses rechargeable batteries; the rest are LED and one of those I use Rechargeables as well. What do I use for radio if my clock/radio is left merely for timekeeping? Radios that also run on rechargeable batteries. I have a battery powered CD player that uses them also.

The only things I have currently that need AC power are my desk lamp, my laptop computer (because lets face it, the battery is still mainly a backup device, not a dependable operation device, as a result of inefficiencies), and of course the standard Edison base bulbs. But as far as the lights are concerned, they're all instant-on mini-spiral (or sub-compact fluorescents for those who have an older PopSci magazine) which are nearly as quick as incandescents.

But basically you're better off getting your home more energy efficient first before you actually consider Solar/Wind. For every watt you reduce with efficiency that's one less watt you need an expensive panel or windmill to produce. Triple-pane windows, Poly-iso insulation, Instant-on CFL bulbs and battery powered electronics could go a long way towards making Solar/Wind packages look more appealing.

Also, where are all the 60mpg vehicles already? After the last oil shock in the seventies people figured out how to get vehicles with 30mpg and, while at first performance was lacking, they eventually brought back performance and kept the mileage.
For instance, BMW currently makes a Turbo-Diesel car that gets somewhere in the middle 50s mpg, and it's a performance diesel. Now, if that was switched over to just being a regular car for the masses instead of a performance car, what might it get? Something in the 60s, 70s mpg?

And why not have ALL vehicles be Flex-fuel vehicles? I understand mileage might drop at first, but imagine the freedom from dependence on a single fuel for our cars/suvs/trucks/whatever. Not to mention the money that'd be saved at the introduction of competition and oil fuels having to compete with whatever you use that isn't from oil.

It really gets right down to how we all use energy and if we go about our day like energy neanderthals, then we're going to be affected by energy prices like neanderthals hoping to grab a sufficient kill.

Scott Markham said at November 23, 2010 10:34 AM:

Solar panels and wind powered generators are indeed very helpful to us. This is a good solution to the continuous increase of energy price in the market. It give life long benefits and very environmental friendly. I have developed a keen interest in this entire area. I find it very interesting how many people are so passionate about alternative and green energy sources.

I have recently posted my thoughts about this here: solar power lights

Thanks,
Scott

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