Solar Basics

Why Solar power is really cheap ?

Why Solar power is really cheap ? 1

It’s astonishing, but clean energy from the sun, solar energy, has become the cheapest way to generate electricity. It’s even cheaper than coal.

And yet it produces only three percent of the world’s electricity.

Why aren’t we using way, way more of it?

How did it get so cheap?

And what does all this have to do with… ducks?!

Let’s find out.

First, let’s take a look at how much the price for solar has fallen. “I started this job as an analyst for solar in 2005 and then I thought solar was ridiculously expensive.”

Jenny Chase is the head solar analyst at research firm BloombergNEF.

“You’d pay about 4$ a watt for a solar panel. And today, you’d pay about 20 cents for that same watt.”

And that is just the last fifteen years. If you look further back, the price drop is even more impressive.

How did this happen?

“It’s been a long story – but it’s unbelievable!” Gregory Nemet has written a book about this.

“No one country did it. It was an exchange of one country building on another.

1 : The US created the technology.”

The modern-day solar cell made from silicon was invented in the US in 1954, back then it mainly got used in the space industry and was still super expensive, but as the technology progressed, prices started to fall.

2 : Germany created a market. 

In 2000, Germany passed a law to boost renewable energy development, this was big because it put a fixed price on energy generated from sources like wind or solar, that gave people and companies a reason to set up solar panels, and for them to do that, someone needed to build these solar panels.

3 : China made it cheap.

Once the German law had come into force, China really started to pump out those solar cells.

“So basically it built the whole industry for this on a scale that the West really didn’t keep up with.”

“China was almost a non-existent player 20 years ago. And today they’re the biggest producer of solar panels, about 70 percent of the world’s production.”

So this is how we ended up where we are now – with clean energy that also makes business sense.

But if solar is so great, why don’t we rely on it much, much more and just switch off all these dirty power plants?

Well, solar has always had this one big problem, It only really works  when the sun is shining.

When it’s cloudy or – even worse – dark, even the best solar cells are pretty useless.

And that’s a real shame because that’s when we’d need them the most.

Let’s take a look at how we use energy. In the morning, when most people get up and get ready, we need energy.

The so-called duck curve charts our demand for power from non-renewable sources like coal and gas throughout the day – first, in places without much solar, after the morning spike, it stays pretty level.

When people come home in the evening, it goes up again and then drops at night.

At this point, you might get an idea why they call it the duck curve.

Because it kind of looks like a duck.

Anyway, in places with lots of solar, like California, this curve changes.

The mornings are pretty much the same.

Then the sun rises and solar energy production kicks in.

This lets demand for non-renewable energy drop, until the sun sets, that is.

That is when conventional demand shoots up again, way steeper than in the first curve.

Two problems with this.

One: traditional power plants suck at ramping up this quickly.

That means you have to keep them running at a certain output all day, even though there’s lots of solar.

And that means… “…you can end up with actually more power produced in the middle of the day than is used.”

And that leads to the second problem.

There are limits to how much energy you can put into the grid.

Too much solar could overpower it, so it needs to be thrown away,

This has always made it super difficult to add lots of solar to power systems.

But guess what, there is now a solution to this.

And chances are you have part of it in front of you right now, a lithium-ion battery.

“We’re just taking the same construction, stringing together many, many of those cells and making battery packs that we can use for cars.

And then we can also scale that up to use for stationary power to go next to wind parks or solar farms.”

“What’s been quite good over the last few years is that batteries have gotten a lot cheaper as well.

And we’re now seeing solar projects built with a couple of hours of storage in the battery so that they could shift some generation from the middle of the day to the evening – where there’s often a peak in electricity demand.”

In the US, for example, the state of New Mexico just decided to shut down a coal plant – and instead build new solar farms that store large amounts of the energy they produce in batteries.

Lithium-ion batteries have become a lot better and a lot cheaper than expected in the last few years.

They’re now a viable option for storing and shifting at least a few hours’ worth of solar energy as needed.

So, the storage problem that solar always had is actually not that much of a problem anymore.

Sometimes, though, we might want longer-term storage in places without much sunshine, for example.

And that’s why companies are offering other solutions.

Let’s just run through a few.

Another type of battery, called a flow battery, separates the charge outside a cell.

That has two advantages: It can store more energy – and for longer.

The problem is: they’re still relatively expensive.

Then there’s pumped hydro storage, which is already used quite a bit. You need two lakes and one of them needs to be on a hill.

During the day, you use solar energy to pump water from the lower lake up to the higher lake.

When you need energy at night, you can just let it run down through a turbine.

But for that you need to find lakes and, well, a hill.

Another solution using gravity comes from a Swiss company. It’s working on a tower that raises building blocks with solar energy, and then releases the energy by lowering them again.

But for this too, you need space.

And there’s also the option of using solar to produce hydrogen.

And with that hydrogen you could then do a number of things, like fuel cars or even make steel.

But the whole process is still pretty costly. “I think that the storage will mostly be lithium-ion with some hydrogen and maybe a few other options.”

“There are alternatives. It’s just that lithium-ion batteries are becoming so flexible and so inexpensive that it’ll be hard for these alternatives to compete.

But they do have other attributes, like they hold a charge longer, which could turn out to play a pretty important role in some applications.”

So solar has become cheap and has pretty much fixed its biggest problem.

So what’s next? “It’s going to be big, It’s going to be everywhere. We forecast that even with no further policy, solar would supply about

23 percent of global electricity by 2050.

I personally think it’s going to be much higher than that.” “I would not be surprised if by 2030, we’re talking about solar making up a large part of the world’s electricity supply.”

Solar has come a long, long way.

But now that the technology is in place, it really looks like it’s time to shine.

Now we’d like to hear from you!

What are your thoughts on solar energy?

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