olar energy is one of the greatest investing opportunities of our generation with well over a trillion dollars in annual market potential around the world. But with all that potential comes tremendous risk, particularly as new technologies emerge.
Over the past decade, we've seen solar technologies rise and fall and companies have risen and fallen along with them. Now that this industry is competing with fossil fuels on a cost per kW-hr basis it's important to look at what technologies dominate the industry and what investors should be betting on in the future.
Massive solar farms like this one from SunPower are now competitive with other energy sources on the grid, opening up a huge opportunity for the solar industry. Source: SunPower.
Silicon solar, the leader in the clubhouse
The vast majority of solar panels today are made using silicon semiconductor technology. At its core, this technology has been around for decades, it just hasn't been efficient or cheap enough to be economically viable versus the grid. But that's changed in the last few years as panel prices have plummeted below $1 per watt.
Inside a silicon solar cell the sun's energy excites the semiconductor, knocking an electron loose. If properly built, a cell then captures that electron and turns it into a voltage potential and electric current. cont'd..
The solar industry is bracing for a global drought in photovoltaic panels after a series of high supply years that pushed prices to all-time lows and encouraged installations.
Solar panel adoption is supposed to increase as much as 29% this year, which has top manufacturers and installers anticipating a drop in availability of panels. This would be the first such shortage since 2006 when the nascent solar energy industry was just taking hold, reported Bloomberg News.
Eight years ago, only about 1.5 gigawatts of solar energy capacity was installed. This year as much as 52 gigawatts is expected to be hooked up and another 61 gigawatts in 2015, according to estimates by Bloomberg New Energy Finance.
That is compared with about 70 gigawatts of production capacity currently available, though that estimate could be high since some manufacturers’ equipment is out of date or obsolete.
The shrinking supply could hinder the growing rooftop solar panel industry. The scarce supplies often get routed to larger-scale utility projects and leave the residential side with limited availability.
China has bet on solar energy as a cleaner alternative to coal, but whether installed solar panels can meet the country's need for energy is becoming a troubling question.
China had installed nearly 19.5 gigawatts of solar panels as of the end of 2013. However, "many solar installations failed to generate as much electricity as planned," said Ji Zhenshuang, deputy director at the Beijing-based China General Certification Center, which examined 472 Chinese solar projects over the past four years.
Ji would not specify the percentage but said the figure is not small. The solar projects his company examined include those under Golden Sun, a government-led program that was introduced in 2009 to demonstrate the use of solar energy, as well as utility-scale solar farms run by Chinese energy giants.
Although China in recent years has surpassed many countries in adopting solar technology, in a move to help Chinese factories survive tougher export markets and to cut the country's dangerous reliance on coal, there is little public information available on how well the Chinese solar projects function. However, some experts did not seem surprised by Ji's findings. Cont'd..
It's a truism among renewable energy wonks that in order to run our society on renewable energy, we'll need a revolution in energy storage technology.
The reason? Solar and wind are intermittent power sources. The sun goes down and the wind stops blowing, but we don't ever stop using electricity. That means, so the thinking goes, that either we need to get most of our power from something other than solar and wind, or we need to store electrical power generated on bright windy days for use on calm nights. Problem is, storing enough power to supply an energy demand the size of California's would be mind-bogglingly expensive.
But an expert who just might be the world's foremost renewable energy wonk says the truism is wrong, and that society can be kept fully powered entirely on renewables, using minimal storage. There will be no technological revolutions required; just a bit of choreography.
Amory Lovins, who's been a widely respected renewable energy expert since the 1970s, offers a persuasive argument that we need not worry about the intermittent nature of wind and solar power. The grid can handle it, he says, using current technology to forecast both power production and demand, shifting from one solar plant or wind turbine to another as wind and sunshine vary from region to region.
Instead of relying on expensive base-load power plants to generate most of our supply, which usually means natural-gas-fired plants in California, that carefully choreographed use of energy from renewable sources over a wide region can supply almost all of the power an industrial society needs. Cont'd..
Grappling with its worst energy crisis in more than a decade, Brazil is making its first big move to develop a local solar power industry that could help reduce its dependence on a battered hydro power system.
In October, Brazil will hold an auction to negotiate energy to be produced exclusively by solar farms, the first ever of the kind in the South American country.
Power companies have registered some 400 projects for the auction, but many remain wary of the outlook for solar power in Brazil and say they need more clarity on investment conditions and financing before signing any deals.
The auction could negotiate up to 10 gigawatts (GW), although industry sources estimate final volumes at a much smaller level, varying from 500 megawatts (MW) to 1 GW.
Sun-kissed Brazil has one of the highest solar radiation factors in the world and plenty of land for solar farms, plus large reserves of silicon, used to make solar panels.
Yet the country has almost no solar power generation, while its BRICS partner China, for example, added 12 gigawatts last year alone – enough to supply around 10 million homes. cont'd..
Electricity is the perfect form of power in all respects but one. It can be produced and used in many different ways, and it can be transmitted easily, efficiently, and economically, even over long distances. However, it can be stored directly only at extremely high cost. With some clever engineering, however, we should be able to integrate energy storage with all the important modes of generation, particularly wind-generated power.
Right now, to store electricity affordably at grid-scale levels, you need to first convert it into some non-electrical form: kinetic energy (the basis forflywheels), gravitational potential (which underlies all pumped-hydro storage), chemical energy (the mechanism behind batteries), the potential energy of elastically strained material or compressed gas (as in compressed air energy storage), or pure heat. In each case, however, you lose a significant percentage of energy in converting it for storage and then recovering it later on.
What if instead you were to completely integrate the energy storage with the generation? Then you wouldn’t have to pay for the extra power-conversion equipment to put the electricity into storage and recover it, and you wouldn’t suffer the losses associated with this two-way conversion. One of the most attractive ideas, I believe, is to integrate storage with wind-generated power. I’ll come back to that in a minute. cont'd
A group of artists, scientists and engineers have proposed a novel solution to help Copenhagen's achieve its goal of becoming a carbon-neutral city: a 12-story-high solar energy farm in the shape of a duck.
So, why a duck? According to LAGI:
The common eider duck resides in great numbers in Copenhagen; however, its breeding habitat is at risk from the effects of climate change. Energy Duck takes the form of the eider to act both as a solar collector and a buoyant energy storage device.
Solar radiation is converted to electricity using low cost, off-the-shelf PV panels. Some of the solar electricity is stored by virtue of the difference in water levels inside and outside the duck.
When stored energy needs to be delivered, the duck is flooded through one or more hydro turbines to generate electricity, which is transmitted to the national grid by the same route as the PV panel-generated electricity. Solar energy is later used to pump the water back out of the duck, and buoyancy brings it to the surface. The floating height of the duck indicates the relative cost of electricity as a function of citywide use: as demand peaks the duck sinks.
Britain, a land of cloudy skies and reliable rain, is fast becoming the hottest spot in Europe for many investors in solar energy. Germany is overcrowded with panels. A sudden end to subsidies killed Spanish solar. A sluggish economy is dragging on Italy.
But the U.K. has benefited from a combination of stable subsidies since 2011, public support for solar, amenable planning authorities and creative finance.
In 2010, there were under 100 megawatts of solar capacity in the U.K.—barely enough to power the homes of a modest town. Now, there is between 3.2 and 4 gigawatts. This year, market-research firm Solarbuzz projects that the U.K. will overtake Germany as Europe's largest installer of solar panels, putting in 6% of the world's new solar.
Panasonic Corporation and Tesla Motors, Inc. have signed an agreement that lays out their cooperation on the construction of a large-scale battery manufacturing plant in the United States, known as the Gigafactory.
The Gigafactory is being created to enable a continuous reduction in the cost of long range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles. The Gigafactory will be managed by Tesla with Panasonic joining as the principle partner responsible for lithium-ion battery cells and occupying approximately half of the planned manufacturing space; key suppliers combined with Tesla's module and pack assembly will comprise the other half of this fully integrated industrial complex.
The expected recovery in China, which accounts for more than 60 percent of global solar panel output, offers an early sign that manufacturers are succeeding in soaking up supply by building their own projects. The government’s push to promote developments closer to regions where electricity is needed most -- so-called distributed solar projects -- may also spur orders.
Panel prices in China declined about 10 percent in the first six months of the year compared with the second half of last year, according to Bloomberg New Energy Finance.
Higher tariffs imposed in the U.S. have had the opposite affect to what’s happened in China. Panel prices have increased about 15 percent since early June when the U.S. decided to apply preliminary duties on Chinese solar equipment imports, according to a global measure of panel prices.
The U.S. Commerce Department acted again on July 25, proposing expanded penalties on some Chinese solar-energy imports in a victory for the U.S. unit of SolarWorld AG, which accused China of shifting production to Taiwan after it lost an earlier case.
China is the world’s largest producer of electricity, surpassing the United States in 2011, with demand increasing alongside its strong, sustained growth in GDP. Electricity generation in China has increased 9.6% annually, from 2005 to 2013, reaching 5,425.1TWh of electricity. Coal-fired plants currently make up over two-thirds of power generation, which is partly the result of an abundance of coal in China. Despite this growth, the country expects demand to continue to increase at a rapid pace, reaching 7.295TWh of demand in 2020 and 11,595TWh in 2040.
However, the growth in electricity production from coal-fired plants has resulted in an increase in air pollution and general lack of efficiency. China is now moving aggressively to curb pollution and increase the supply of renewable power. The central government has prohibited new coal-fired plants to be built around Shanghai, Guangzhou and Beijing, which is currently in the midst of having all of its coal plants being converted to natural gas. Its 12th Five Year Plan, running through 2015, targeted non-fossil fuel energy to account for 15% of total energy consumption. One of the key industries expected to help meet these goals is wind power.
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