Are We Entering the Photovoltaic Energy Era?
Nations from all regions reported to the International Energy Agency for the first time that their markets for solar-generated electricity were growing
The outlines of a global market for solar-generated electricity are beginning to emerge.
An industry that has long been little more than a dream for governments, environmental activists and other strategists hoping to find ways to curb global warming blossomed into worldwide reality last year. Nations from all regions reported to the International Energy Agency for the first time that their markets for what is known as photovoltaic energy were growing.
According to a “snapshot” of this spurt of activity released by the Paris-based agency, nations in Africa, the Middle East, Latin America, and South and Southeast Asia reported the world market for “PV,” as it’s commonly called, is setting a variety of records. It grew by 25 percent in 2015 as the price for solar panels, the basic unit needed to make electricity, continues a stunning eight-year drop.
PV energy is a stream of moving electrons captured when sunlight excites certain materials. The main one being produced is polysilicon, which is primarily composed of silicon crystals. The phenomenon was first observed and experimented with by scientists in Bell Laboratories in the United States in 1953, and its development was pioneered in U.S. military and space programs to provide power for space satellites during the 1960s.
As the nation reached for the moon, it also began to develop domestic uses for PV, but for over 50 years, solar energy remained too expensive for widespread use. It made only a tiny dent in the United States, where conventional electricity was relatively cheap.
Since 2008, the price of solar panels has dropped almost 80 percent, and the main reason for that, according to the IEA, is China. For three years, it has led the world in manufacturing and exporting ever-cheaper solar panels. At the same time, its domestic market shot up from the minor leagues of solar buyers to pass Germany as the world’s leading market for installed solar capacity in 2015.
The swiftly plummeting prices, which some experts have dubbed the “solar coaster,” were not a good thing for companies that were not prepared for it. Some large U.S. panel manufacturers have been pushed into bankruptcy, and others appear to be heading in that direction, judging from the dramatic plunge in their stock prices. According to U.S. Department of Energy experts and reports, the remaining two large American panel makers are now outsold by at least six Chinese competitors. China produces 40 percent of the world’s panels versus 20 percent by U.S. companies, and it is continuing to expand its lead. Meanwhile, the world’s solar market is generally regarded to have grown into a $100-billion-a-year business.
“The ultimate point of all of this is that PV is quickly positioning itself to be a really big player in the world,” predicts Gregory Wilson, co-director of DOE’s National Center for Photovoltaics. “For anyone who cares about climate change and carbon emissions, but who also cares about quality of life and not upending the economy, it [PV] is going to be a very desirable thing. Wind power right now has also been pretty amazing, but wind will top out. PV won’t.”
According to Wilson, the United States will have to set policies to push innovation to stay in the rough-and-tumble PV market.
“We argue so much about the silly politics of climate change and fail to recognize the gargantuan economic opportunity that this presents. The energy system is going to get re-engineered, and someone is going to do it,” he said. “The Chinese seem to have recognized the significance of this opportunity.”
PVs, Wilson asserts, will usher in an era of cheaper, cleaner energy that will be used for powering and even heating our homes; powering electric cars; and splitting hydrogen out of water that serves as a feedstock for making synthetic fuels for cars, trucks and airplanes.
“We see a lot of opportunities in front of us, but we seem slow or even paralyzed when it comes to acting on them. We have not always been this way,” he said.
‘ON THE FRONT END OF A REVOLUTION’
The mathematics have long shown that solar power is the Earth’s most abundant energy resource. What is new is that the economics of making it into electricity have improved to the point where it is beginning to attract bigger buyers as the price for silicon panels falls.
In the United States, for example, electric utilities are now the nation’s largest customers for solar panels, constituting 60 percent of the market that was, until recently, dominated by homeowners and commercial buyers of rooftop solar installations.
Because utility-scale systems can be installed at lower costs when compared with commercial or residential systems, the price of solar-generated electricity by utilities is now close to competitive with conventional sources in some locations.
David Mooney, director of strategic energy analysis for DOE’s National Renewable Energy Laboratory, said a swan dive from $20 a watt for an installed solar panel to under $2 has made it happen.
“We’re at least on the front end of a revolution of the power businesses,” he said. When he began his research into PV back in 1987, Mooney recalled, “I used to joke that this is a time we all dreamed about. I never thought it would happen, but it is actually happening.”
The Electric Power Research Institute, which works for the nation’s utilities, has tracked the emerging solar technology for over 40 years, but recently its work has expended to helping utilities understand the best ways to buy and get a better grasp on how to operate utility-scale solar power plants, according to Michael Bolen, a senior technical leader at EPRI.