Wednesday, October 24, 2012
I've been reading so much bad press about solar energy that I wonder if we have reached Peak Solar. For example:
1. Siemens (of Germany) just announced they would be divesting almost everything that has to do with solar. This is both symbolically crushing and a sign of a rather sudden solar decline. Such action makes you wonder whether the country is on the verge of phasing out their incredibly generous feed-in tariffs for the renewables. While there has been some reductions over time, in the early days, homeowners got as much as 65 cents/kilowatt for just feeding back electricity from their solar photovoltaic system. Let me repeat this: while Americans might get the equivalent cost of what they pay for electricity for what they return into the grid, Germans got at least THREE times the utility rate. Very quickly, Germany became the #1 country in PV. This is a country not particularly endowed with great sunlight, so where the money was coming from was from taxpayers. They finally figured out that this generosity was crazy, and are thus pulling back.
2. Solar electricity in Hawaii makes sense because we do have excellent insolation. More importantly, our average electricity cost is heading towards 40 cents/kWh, more than three times the national average of 12 cents/kWh. Does the electricity rate of 28 cents/kWh in Germany give you a hint of their problem? Electricity prices make little sense: Argentina (6 cents/kWh), Brazil (34 cents/kWh, with all their hydro???), Denmark (40 cents/kWh), Russia (10 cents/kWh), China (less than 10 cents/kWh), Tonga (58 cents/kWh), Ukraine (less than 4 cents/kWh), USA (5 to 37 cents/kWh). The rule of thumb varies with who you ask and when, but something in the range of 20 cents/kWh is as good as any these days for solar PV. Thus, if you live in a location where the local utility sells you electricity for greater than that price, go ahead, install a PV system on your roof, especially if those generous tax incentives are still there. The chances are overwhelming that the cost of electricity will go up over time.
3. Why then are more and more solar companies going belly up? Just those that obtained part of the $800 economic stimulus grants include Solyndra, Evergreen Solar, SpectraWatt, Mountain Plaza and Olsen's. Most of these companies blamed China. Plus, SunPower is reducing it's workforce, solar inverter manufacturer Satcon just filed for Chapter 11 and 180 global PV module manufacturing firms are expected to fold or be acquired by 2015. China, again, is mostly cited as the problem. They are too efficient, meaning that their labor and power costs are lower, sometimes by government decree.
So is the world reaching Peak Solar? Well, daily it does with respect to light available. There are also clouds. But no, these are just normal growth pains for the industry. Keep in mind that 150 American computer companies failed in order to get us here today. Solar won't be as profitable in the U.S. because there is not much more intellectual worthiness left into the future.
Solar PV is getting cheaper, but for sure, don't believe those headlines that project future solar cells cells making electricity too cheap to monitor. Turns out that the labor and peripheral expenses of a PV system could well be 75% the cost of the installation, so even if the cells were free, the rate paid will remain ABOVE the current average price of electricity in the country. So should you complement your PV with, say, a wind energy conversion system (also known as a windmill)? The chances are low that you live in a home or apartment where the average wind speed exceeds 14 miles per hour. Forget residential wind devices, except that a simple exhaust fan should minimize your need to use air-conditioning.
While the equivalent of 17 nuclear powerplants (note, though, that the comparison is at peak solar, so divide by three for a reality check) have already been replaced by solar, don't get too excited about solar saving the world, for the European Photovoltaic Industry Association and Greenpeace indicated solar energy could generate 2.5% of the world's electricity BY 2025!!! You want to guess what this percentage is today? 0.05 %. You need to multiply the current installed capacity by 20 just to get up to 1%. Then, too, electricity is but 40% of the energy consumed, so what about ground and air transport?
Tomorrow I will wonder about what happened to Peak Oil.
There are four ocean storms, but only Hurricane Sandy at 80 MPH:
and soon to be Typhoon Son-tinh are causing any grief: