The PV market is approximately $3.5 billion worldwide today, and is expected to grow to over $20 billion by 2012 to 2015. The rate of growth of PV products has increased by 25 percent annually over the last 5 years and is expected to continue at this rate or greater for the next few decades.

Photovoltaics - Part Two

Peter Lynch

Photovoltaics


by Peter Lynch

In my last article "Photovoltaics: A Key to Safe, Secure & Reliable Electricity Generation" I wrote a summary overview of a technology called Photovoltaics (PV).

Photovoltaics (PV) or Solar Electric as its name implies, is a technology that converts sunlight directly into electricity: photo = light and voltaic = electricity.

I explained the many advantages of PV and how it would become a critical and complimentary technology for the future hydrogen economy.

Understanding the True Value of Photovoltaic Technology

To understand the enormous value that PV technology represents, and the huge role it can play in the U.S. and world economies, we must understand how it can generate critical distributed power and also optimize the value of current and future fuel cell technologies.

What is a fuel cell?

A fuel cell is an electrochemical energy conversion device. In a fuel cell, hydrogen and oxygen are combined forming pure water and creating electricity in the process. The excitement about fuel cells is based on the elegant simplicity of combining the most abundant element in the universe (hydrogen) with ordinary air (oxygen) to produce pollution free electricity.

Unlike oxygen, which exists in ordinary air, hydrogen must be extracted from compounds such as natural gas, methanol or water. The process of extracting hydrogen from these substances requires energy; a fuel cell cannot produce its own hydrogen. The question is: where is the energy going to come from to produce the hydrogen?

Currently, fossil fuels--oil, natural gas, propane, methanol, etc are used as the "feedstock" for fuel cells. Ironically, fuel cells, conceived as an alternative to the widespread use of fossil fuels, requires those very same fuels to produce the hydrogen, thus continuing to pollute the atmosphere, compounding health problems, prolonging our dependence on foreign oil, and delaying the desired transition to the "hydrogen economy".

Photovoltaics: Key to Optimizing Fuel Cells

Rather than relying on fossil fuels to create the massive amounts of energy necessary to supply sufficient hydrogen to power fuel cells, the optimal solution is to produce the energy from a renewable source of energy, ideally at the actual site of use. This generally means utilizing either wind or solar. The economic and environmental impact of on-site, on-demand energy in inexhaustible supply is a technological evolution more dramatic than the fuel cell itself.

If hydrogen, the key ingredient for powering the fuel cell can be produced on site, then it can greatly reduce the need for massive hydrogen production plants around the country and the need for a cumbersome hydrogen distribution infrastructure similar to what is presently required to deliver refined oil and gas to gas stations nationwide.

Renewable energy will be the input for fuel cells and the future hydrogen-based economy. This is where photovoltaics will play a critical role. Lower cost photovoltaics will be a key facilitator in the emergence of environmentally benign and economically viable fuel cells. It is the only technology that has the flexibility to be used anywhere (unlike wind which generally must be produced at locations remote from use and then delivered over long distances) PV can be used in an unlimited numbers of places, in a fully distributed manner, for an unlimited number of uses at any scale necessary.

Illustration of the Role of Photovoltaics

To understand the impact of this "energy revolution", let's examine the way we use energy in our own homes today. Currently most of us have a tank of home heating oil or a natural gas connection in our basement that provides fuel for our furnace or oil burner to heat our homes. In addition, our local utility burns oil, coal or natural gas (all fossil fuels) to generate electricity, which is brought long distance to our homes by our local utility company.

In the future, we will have a storage tank filled with hydrogen (instead of fuel oil or natural gas), a fuel cell in our basements and low cost photovoltaic solar cells on our roofs. During the day the photovoltaic cells will provide the power to break water into hydrogen and oxygen. The hydrogen will be stored in your basement tank for use in the fuel cell at night to generate heat and power

As a result, the hydrogen will replace the fuel oil or natural gas, the fuel cell will replace the furnace and photovoltaics will replace the utility company. We will achieve the same amount of energy we have today, without burning any fossil fuels, without creating any pollution, eliminating power plants that are subject to operational breakdowns and terrorist attacks, and, all this at a dramatically reduced cost to the environment. When the technology is fully developed, with a high speed manufacturing processes it will be more efficient and cost effective than the current process of fossil fuel extraction, refinement, distribution and use in the home.

Reasons Why Photovoltaics Should be in your Future

Now that we understand a few of the possible applications of photovoltaics, why should you be interested in photovoltaics? Why would you want to purchase photovoltaics? Below are some reasons why photovoltaics technology might not be a bad investment for you and for America and also why photovoltaics may soon be a part of your future.

Energy Security

Photovoltaics will increase energy security for you, your family, and the country as a whole. The more we utilize solar and other renewable energy sources, the less dependent we are on our local utility and foreign supplied nonrenewable fossil fuels, such as oil from the volatile Mideast. Photovoltaics can be used to power your house or charge an electric vehicle. All of which, will reduce your electric bill, reduce air pollution and decrease our need for foreign oil. In addition, photovoltaics produce the "highest value" power - peak electricity. What this means is that photovoltaics is at its best, when demand is the greatest i.e. in the summer between 11 am and 3 pm, when everyone's air conditioners are running.

Protection against future price increases and resultant economic disruption

Electricity prices across the country are increasing every year at an average rate of approximately 2% per year. In California a combination of deregulation, population growth, increased consumer demand and construction of fewer new power plants caused electricity costs to skyrocket. All other states are seeing similar trends and prices can be expected to increase in the coming years. Once you install Photovoltaics your electricity costs will NEVER increase.

Every recession in recent history has been immediately preceded by an oil or natural gas price run up. These "oil shocks" result in the loss of hundreds of billions of dollars for our economy and the economies around the world. These problems can be politically driven or supply driven, but in either case it is the result of our excessive dependence on a non-renewable source of energy. This repeated volatility of oil prices is a major "hidden" cost and a very significant risk factor for the stability of the world's economies.

In addition, with nuclear power plants being decommissioned or phased out because of the high costs and high risks related to nuclear waste disposal, new sources of electricity are needed. Even though many new gas-fired power plants have been constructed, many analysts see natural gas shortages emerging that will require expensive drilling and pipeline construction and will cause increased short-term price volatility and periodic gas shortages.

Government Rebates

Many states are finally getting serious about supporting renewable energy options. Government rebates; tax credits and grants can cut the cost of photovoltaics on your roof by as much as 50 to 60 percent in some areas.

To learn what's available in your state, go to the Database of State Incentives for Renewable Energy (DSIRE), www.DSIREUSA.org.

Selling peak power to your local utility via net metering

Net-metering rules and regulations are in place in 38 states, allowing homeowners to run their electric meters backward when they send electricity to the grid from a solar-electric rooftop. When the homeowner uses electricity from the grid at night or on cloudy days, the meter runs forward. The monthly bill is based on the net difference. This is called "distributed energy generation" where the energy is generated as close as possible to the point of end use.

Distributed electrical generation provides more security for homeowners and for the electrical network (the grid). It generates cleaner, locally produced electricity and reduces the load on the grid, thereby helping to prevent brown outs and blackouts like the massive August 2003 blackout in the Northeast.

Global Warming reductions

Global warming is a very serious and growing problem for the United States and for the entire world. If we do not take strong positive steps to halt the spread of global warming the entire world may be faced with chaotic and destructive climate changes and the resultant natural disasters around the world.

According to the Department of Energy (DOE), electric power plants emitted 42 percent of all carbon dioxide (CO2) emissions in the United States in 2001, making them the largest single-source contributor to global warming. In addition, coal-fired plants (the dirtiest of all fossil fuel plants) produced 53 percent of all electricity in the United States in 2001. These plants produced 80 percent of all the CO2 emissions resulting from electricity power generation. DOE also reports one-quarter of all types of air pollution emissions nationwide are caused by burning fossil fuels (coal, natural gas and oil) to generate electricity.

Photovoltaics are pollution free, silent, have no moving parts and have virtually no negative environmental impact. We must accelerate the transition from polluting power sources to "clean" sources of power, such as Photovoltaics, if we are to stem the tide of Global Warming.

Greater Flexibility and Less Financial Risk.

Conventional power plants and transmission lines take years to plan and build, and most people do not want them in their back yards. As a result, the financial risk of a longer-term project is far greater and will likely cost taxpayers far more than a technology like photovoltaics that can be implemented incrementally and quickly.

As we all know, and have seem recently, power distribution systems feeding metropolitan areas are operating near capacity during peak demand periods. Onsite power production via home solar-electric installations, part of a "distributed generation" scenario, offers a positive solution for elected officials seeking to prevent blackouts and brownouts, improve air quality and enhance the economy by producing jobs.

Homeland Security

In these times of increasing political volatility it makes absolutely no sense to have our county held hostage to the unstable oil countries in the Middle East.

Over the past 35 years every single American President has promised to reduce our dependence on foreign oil imports. What have the results of these "efforts" been to date? The amount of oil we import has not gone down at all, in fact, it has doubled as a percentage of the oil we use. This is a truly miserable track record and a growing nightmare for national security.

Moreover we are vulnerable to attack on our power plants because of their conspicuous size and strategic value. Decentralization of power production, the cornerstone of the "Hydrogen Economy" will dramatically reduce that risk.

Support the future of Solar Power and American Energy Independence

The PV market is approximately $3.5 billion worldwide today, and is expected to grow to over $20 billion by 2012 to 2015. The rate of growth of PV products has increased by 25 percent annually over the last 5 years and is expected to continue at this rate or greater for the next few decades. This would make Photovoltaics the fastest growing industry in the world and the industry that will have the greatest positive benefit to the most people worldwide.

Approximately 1/3 of the world's population (2 billion people) has no access to electricity and another 1/3 have electrical service that is far inferior to the "normal" service here in the U.S. With widespread adoption of PV technology it would dramatically improve the well being of billions of people worldwide, enhance their communities and economies.

This growth should spur additional investment, contribute to economies of scale in the industry and help make systems even more affordable and make a significant contribution to a better world for all of us to live and work in.

Conclusion

We cannot wait for a "crisis" to happen, we cannot afford to wait; we have to plan ahead and be preemptive. These problems will NOT go away, they will only get worse.

We have to encourage government leaders with vision to teach their colleagues and the public the real cost of delay in transitioning to the world of renewable energy. This will result in people clearly seeing and finally realizing, that renewable resources are by far the cheapest "real total cost" alternative and also the best for them, the planet and future generations.

"There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction." - John F. Kennedy

The U.S. should lead the way by setting an example for all other countries to follow. We can be the "birthplace" of the next generation of solar electric technology, the generation, which will finally make electricity from the sun cheaper and cleaner than any other source available.

"We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy-sun, wind and tide. I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that." - Thomas Alva Edison (1847-1931)


Mr. Lynch has worked, for 27 years as an independent securities analyst and investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in PV that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He is currently a consultant to a number of companies, among them DayStar Technologies (www.daystartech.com), a company developing the next generation of Photovoltaics. He can be reached via e-mail at: solarjpl@aol.com.


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