Solar Savior

By Robin Hanson · March 22, 2011 9:00 am · Comments (41) · ·

Averaged over 30 years, the trend is for an annual 7 percent reduction in the dollars per watt of solar photovoltaic cells. … In the lab, researchers have achieved solar efficiencies of as high as 41 percent, an unheard of efficiency 30 years ago. Inexpensive thin-film methods have achieved laboratory efficiencies as high as 20 percent, still twice as high as most of the solar systems in deployment today. … Historically, the cost of PV modules (what we’ve been using above) is about half the total installed cost of systems. The rest of the cost is installation. Fortunately, installation costs have also dropped at a similar pace to module costs. …

The cost of solar, in the average location in the U.S., will cross the current average retail electricity price of 12 cents per kilowatt hour in around 2020, or 9 years from now. In fact, given that retail electricity prices are currently rising by a few percent per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America. 10 years later, in 2030, solar electricity is likely to cost half what coal electricity does today. (more)

This should be fantastic news for folks worried about carbon emissions or running out of oil. After all, projecting that a thirty year trend will continue for another ten years seems pretty safe. This isn’t some mere speculation. Why don’t we hear more about this?  Do people not like hearing good news about the future?

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37 Comments

  1. Wesley
    March 22, 2011 at 9:20 am | Reply

    Do people not like hearing good news about the future?

    See the news at any point in the last 5 years for your answer. Greece will explode the EU! No, Iran is going to nuke us all! Haiti is dead! New Zealand is exploding! No, Japan!
    (and now, we’ll cut to a 5-minute fluff piece about Bingo the Dog who saved his owner)

  2. denis bider
    March 22, 2011 at 9:44 am | Reply

    How about the cost, and feasibility, of storing the electricity generated by the solar panes? The prospect of cheaper and more efficient solar power sounds great, but if I understand correctly, the variability of the supply is its biggest problem.

    • nazgulnarsil
      March 22, 2011 at 9:53 am | Reply

      even used in conjunction with the regular power grid it will be a massive boon. millions of households using much less of the grid’s capacity during peak hours.

    • Chris T
      March 22, 2011 at 1:53 pm | Reply

      Where solar really shines is off-grid use. There are many, many applications that have relatively low and constant power requirements that could be powered by nothing more then a few solar cells and a small battery. External lighting using LEDs could be entirely taken off-grid.

      This focus on massive arrays for centralized power is a terrible use of a promising technology.

  3. Max Bolingbroke
    March 22, 2011 at 9:47 am | Reply

    If this dollars/watt reduction comes mainly from reducing the numerator rather than increasing the denominator it is not very exciting news, though it is certainly welcome.

    David McKay estimates that at 10% efficiency we would have to cover 20% of the UK with solar panels to supply our domestic energy needs (see http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_39.shtml, http://www.inference.phy.cam.ac.uk/withouthotair/c18/page_103.shtml). If we were cheaply achieving higher panel efficiencies that would be a game changer as they would mitigate this unreasonable requirement, though the best we could probably hope for is a still-large 5% of the country being covered, given 40% efficient solar panels.

    I’m not sure how the economics of solar panel manufacturing would change at this scale – silicon is plentiful and so production can be scaled up to match demand but I’m not sure about the other inputs.

    • davidc
      March 22, 2011 at 10:59 am | Reply

      Isn’t the UK about the worst possible place for solar power? Presumably Spain, Florida, Brazil and India would be places with big future energy requirements that might be more suitable for solar?

    • dirk
      March 22, 2011 at 12:24 pm | Reply

      You make a good point, which leads to the question: is the cost of real-estate included in the equation? It will likely take a lot of surface area to generate a lot of watts. But hopefully the main gains come from increasing the denominator.

    • dirk
      March 22, 2011 at 12:33 pm | Reply

      If we are at 40% already then we can’t do much more than hope to double that. So most of the gain is necessarily cost, which means they might work great where it is sunny and real-estate is vast and cheap but not so much where real-estate is pricey.

  4. gwern
    March 22, 2011 at 10:04 am | Reply

    Perhaps it’s simple solar fatigue – like how one would not hear about progress in fusion research (assuming there is any) just because people have been hearing about how fusion (solar) is just a decade or two away for the last half-century.

    (Outside View for the masses, as it were.)

  5. TJIC
    March 22, 2011 at 10:24 am | Reply

    I always doubt pricing figures from research groups. The price often tends to include only materials, not process, maintenance, cost of capital, depreciation, distribution, marketing, sales, HR, lossage, etc.

    All of which is to say that – with no further data than what’s quoted above – I’d bet $20 that the cost of solar-to-the-outlet will not cross the price of oil-to-the-outlet before 2040.

    • DBishop
      March 22, 2011 at 8:32 pm | Reply

      I’ll take that bet any day. I’ll even put up $100 to your $20. I’m a PhD student studying thin film solar cells and although I chose this field and therefore clearly have a selection bias, I have reviewed the literature and economics multiple times in depth.

      From the comment about oil — Even today we don’t produce electricity from oil because it is WAY above the cost of energy produced from coal (or natural gas). The solar part of the bet is where I am more confident…
      Although I agree with the scientific american article to a great extent, they fail to mention certain important points.
      1) Installation costs are quickly becoming a larger portion of total installed cost. They have not tracked the great cost reductions made in the last few years in solar module cost. There still is a ways to go on simplifying installations, but this may total cost reductions.
      2) Production cost reductions are capped by the raw materials cost (of course related to scarcity). The cheapest solar modules available are made by First Solar (as mentioned in the article). Not mentioned was that First Solar uses CdTe which is a thin film using Tellurium which is very very scarce. Currently it is not too expensive because there are few uses, but as production grows (First Solar has been literally doubling every year for almost a decade), the Tellurium price will inevitably curtail cost reductions. In fact, we will run out of Tellurium far before solar is the dominant energy source. The good news is there are many competing technologies, some without visible resource constraints. The dominant technology, Silicon, is very abundant, but requires significant refined material which will continue to be a challenge for 5x reduction in total costs necessary.
      3) variability is a concern for major market penetration (read local areas of power from solar >20%. We are nowhere close to that. Not even in Germany which has had incredible subsidies for the last half-decade. But compared to wind, the sun is EXTREMELY reliable. The Sun WILL come out every day on schedule, and even in cloudy days, the panels produce a significant amount of energy (generally >50% of best days unless the weather is very severe). These variabilities can be eased at ~no cost by demand response from a hopefully some-day “smart-grid”. In the long-term, energy storage will be needed, but even today it is only adds a few cents/kwh (which will decrease). That doesn’t change the equation too much, and in fact grid-parity will be achieved in many areas before storage is largely necessary. Without reaching grid-parity, >20% market penetration (which suggests the necessity for storage) would be highly unlikely.

    • Eric
      March 26, 2011 at 5:53 pm | Reply

      Is that even a fair bet?

      Prices of oil don’t really take into account all sorts of negative externalities.

      I’d love it if solar could be competitive, even without considering externalities. Since let’s face it, negative externalities are really hard to deal with politically as politically connected oil companies will fight tooth and nail not to pay for the externalities, nor would oil consumers really want those costs passed down to them.

  6. Curt Adams
    March 22, 2011 at 10:46 am | Reply

    The prices mentioned don’t account for storage or for the diurnal cycle and variability. Coal is the wrong thing to compare near-term cheap solar to; coal is for 24-hour constant power. What will be replaced is peaking power in hot areas, which is mostly natural gas. In cold areas you could reduce emissions but not peaking power, because you’ll still need other forms of peaking power for cold snaps. I suspect the economics will not be good there; you pay installation costs and get mostly only a part-time reduction in the least carbon-emitting fossil fuel, natural gas.

    It will mean the end of electricity crises on hot days due to air conditioning. Otherwise, we’ll have to wait for major electricity storage improvements.

  7. jb
    March 22, 2011 at 11:06 am | Reply

    Travis (TJIC), I’d take you up on that bet.

    I’ll be 70 years old then, and that extra $20 will buy me a whole quart of gas!

    :)

  8. jb
    March 22, 2011 at 11:12 am | Reply

    I suspect that it’s solar hype fatigue. People have been talking about Solar power as the “cure all” for energy since I was a child in the 70s.

    I suspect solar will become a significant part of our daytime power needs, and we’ll still rely on coal and oil for our nighttime power needs. The end result will be a reduction in electricity cost, but only to the average between the two.

  9. Ben Albahari
    March 22, 2011 at 11:45 am | Reply

    It seems reasonable to believe that solar and other intermittent energy sources such as wind can exponentially increase—to a point. These energy sources will then require considerable innovation and investment in both energy storage and redistribution to compete with base-load power. Bill Gates estimates that renewables can contribute to about 20-30% of the electricity needs of the US before hitting this problem. Steven Chu reckons that “there’s no way [renewables] can become 50 percent [of base load electricity].” If they’re right then it looks like we need nuclear power if we want to satisfy our energy needs without using fossil fuels.

    I summarized a few expert opinions on renewables here

  10. Douglas Knight
    March 22, 2011 at 12:45 pm | Reply

    This should be fantastic news for folks worried about carbon emissions or running out of oil.

    This doesn’t help with running out of oil. For electricity generation, oil is easily displaced by other fossil fuels. It only really matters as a portable fuel for vehicles. (though you could similarly complain that they don’t talk about “Moore’s law for batteries”)

    People worried about carbon emissions say “build solar now,” so they can’t admit that it is not cost-effective now. But they also say “invest in alternative energy research,” which is not very different from acknowledging this trend!

  12. Chris T
    March 22, 2011 at 2:01 pm | Reply

    I just wish we could get away from thinking in terms of massive solar arrays for centralized power. This is not even close to the best use of the technology. There are myriad applications where a few cells and a small battery would be enough.

    Use them in place of diesel generators in outlying areas (as the military in Afghanistan has started doing).

    • Chris P
      March 23, 2011 at 4:38 pm | Reply

      I could be mistaken, but I don’t believe that most of the massive solar arrays use photovoltaic cells, which is what this article focuses on. Instead, they are solar thermal power plants, which require large, concentrated arrays to be efficient.

      • Chris T
        March 24, 2011 at 2:11 pm |

        You are correct about most solar arrays being solar-thermal, but the article was about photovoltaics:

        Averaged over 30 years, the trend is for an annual 7 percent reduction in the dollars per watt of solar photovoltaic cells.

  13. Aron
    March 22, 2011 at 4:04 pm | Reply

    If we don’t start switching to solar now, we won’t be able to scorch the skies when the machines take over.

  14. Benjamin Cole
    March 22, 2011 at 4:55 pm | Reply

    If the trends continue…great.
    Lithium batteries have been improving at about an 8 pecent annual rate…do the math. In 10 years, they should become competitive.

    Also, corn yields have been rising at a 2 percent rate for generations…ethanol may become only a bad idea, not a terrible idea. Palm oil yields have been rising at 4 percent annual rates.

    Actually, there are at least two websites that feature generally “positive” news about energy, GreenCarCongress and NewEnergyandFuels. A wonderful tonic for what ails you.

    I suspect the future is cleaner and more prosperous.

  15. Ted
    March 22, 2011 at 7:21 pm | Reply

    Fun fact from someone who’s worked on both PV technology and utility integration:

    Only roughly half the value of PV comes from the energy produced. The other half comes from reducing the peak load on the grid. And as more PV is added, this second benefit will shrink.

  16. pete heureux
    March 22, 2011 at 8:31 pm | Reply

    Solar power…blah, blah, blah, … wind power…blah, blah, blah… Maybe we could harness all the heat from this useless debate to power up the global economy.

    This cry for alternate fuel sources has been going on since the Arab oil embargo in the 70′s. Has anything really changed? No?

    That is because REALITY has not changed. The reality known by all rational scientists is that nothing we have available at this time can even come close to matching the energy density of oil, with the exception of nuclear power ( at least from a joules/gram point of view). That being the case there is no incentive for the best scientific minds to come up with a replacement for a technology that shows no evidence of disappearing within their lifetimes.

    True scientific advancement is driven by NEED. And there is no need. We have enough oil to last hundreds of years (scientists know this despite the media hype). The methodology for extracting and refining it is mature, reliable and CHEAP.

    Solar power DOES fill a need in very specific places; that is why it continues to be developed. It is not, however, a reasonable or viable substitute for the global uses of oil (electrical power plants, airplanes, ships, and cars) .

    Given the fact that nuclear power is a viable replacement for oil (for electricity, at least) I do not imagine we will be seeing any significant change in technological advancement along other lines. Don’t bother whining about the environmental impact of nuclear. All you have to do is look at countries where technological advancement is not throttled by ignorant politicians and activists to see all the beautiful nuclear plants working day in and day out. The only reason that this ridiculous anti-nuke stance continues in the U.S. is precisely BECAUSE we have not come close to running out of oil. If we were getting close the politicians would have a VERY different opinion. Just ask the U.S. Navy what there preferred power plant is.

    By the time we actually run out of oil there is no telling what new things we may have learned. I can guarantee you that it will be alot better than photo-voltaic cells.

  17. Carl Shulman
    March 22, 2011 at 8:37 pm | Reply

    Ray Kurzweil and Larry Page have been talking about this for several years.

  18. Robert Koslover
    March 22, 2011 at 9:33 pm | Reply

    For those of us old enough to remember: Well, of course technology will get better, and it will make our lives better, like it always has!.

  19. Robert Ayers
    March 22, 2011 at 11:50 pm | Reply

    Historically, the cost of PV modules (what we’ve been using above) is about half the total installed cost of systems. The rest of the cost is installation
    The above tells us that the article is talking about grid-tie systems, and not off-grid, since it does not mention batteries.
    As Curt Adams noted, you need to factor in storage or the equivalent. In a residential off-grid system of today, batteries are half of the total system cost. And they don’t last all that long, either — Concorde, a leading manufacturer of PV batteries, says that if you discharge their batteries to 50% of full, they should be good for 1000 charge-discharge cycles; 28% gets you 2000 cycles. That’s only a few years of day-night cycles.
    PV power would really take off with good storage — but it is not here yet.

    • Douglas Knight
      March 23, 2011 at 12:09 am | Reply

      The cost of storing electricity in a battery is similar to the cost of buying it from the grid, though I think it bit larger. I don’t think there’s any reason to expect this to change soon.

  20. John Maxwell IV
    March 23, 2011 at 9:39 am | Reply

    They might like hearing good news but be more inclined to spread bad news. (Which makes some sense; feels like our attention should be concentrated on problems that need solving, not problems that are solved.)

  21. Floccina
    March 23, 2011 at 11:18 am | Reply

    IMO the Hallowell Heat pump is a great advance that is now and is ignored.

    Another promising energy source is geothermal.

    • billswift
      March 23, 2011 at 12:57 pm | Reply

      Heat pumps are extremely limited. They are less efficient at cooling than pure air conditioners. In humid areas, their outdoor units become huge blocks of ice in the winter, greatly reducing their efficiency, and requiring large amounts of “auxiliary” heating. In fact, in seriously cold areas, they require additional heating even if they don’t ice up. They are fairly useful in very dry areas and in cool but not cold humid areas; and even in those they may not be worth their much greater costs.

  22. Ben
    March 23, 2011 at 2:36 pm | Reply

    Why don’t we hear more about this? Do people not like hearing good news about the future?

    My Hansonian interpretation: a lot of the supporters of Climate Change policy are more concerned with hurting people they don’t like than with solving the problem of Climate Change. If solar cells will save us, we don’t get to punish the Koch brothers. Policy preferences are not about policy results.

  23. MichaelG
    March 24, 2011 at 5:23 pm | Reply

    One of the utility pages I find via Google describes peak use as 1-8 pm summer (AC, I assume), and 5-9 am, 5-9 pm during winter.

    Those winter peaks are a problem. Those are both times when you get less sunshine.

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