SPECIAL REPORT
SOLAR GAINS Why solar PV will be our cheapest form of power as soon as 2016
2050 magazine - solar gains
SOLAR GAINS ‘Solar PV soon to be the cheapest source of power,’ says Kees Van Der Leun For a long time, the holy grail of solar PV, the direct conversion of sunlight into electricity by means of solar cells, was ‘grid parity’, a term used to describe the point at which it becomes cheaper to generate one’s own solar electricity than to buy electricity from the grid. Indeed an important market milestone, being achieved now in many places around the world. But
recently it has become clear that PV is likely to become the cheapest option to generate electricity, beating other large-scale power generation technologies. Working on PV solar energy at Ecofys since 1986, I have seen a steady progression in terms of But it was only on a 2004 visit
to Q-Cells’ solar cell factory in Thalheim, Germany, that it dawned on me that PV could become very cheap indeed. They gave me a stack of 100 silicon solar cells, each capable of producing 3.8 Watts of power in full sunshine. I inch high! I realised how little silicon was
Figure 1: a stack of 100 solar cells, good for 380 W of PV solar power. (Photo: Ariane van Dijk.)
needed to supply the annual electricity consumption of an average European family (4,000 kWh). Under European solar radiation, that would take 1,400 cells, totalling less than 14 kilograms of silicon.
are distributed over all users of the grid, nationwide. Successive governments, in varying coalitions, have always kept the principle alive, periodically lowering the
Of course you need to cover the cells with some glass, add a frame, a support structure, some cables, and an inverter. But the fact that 14 kilos of silicon, an amount that costs € 500 to produce, is enough to produce a lifetime of household
Contrary to what some believe, competition on the German PV-
years, the family would pay at least € 20,000 for the same 100,000 kWh of electricity from fossil fuels, and its generation cost alone would total over € 6,000! To unleash this potential, you need a market driver when costs are still high, and we should all be grateful that Germany has played the role of engine since the introduction year 2000. Under the feed-in scheme, a family, or a company, investing in a PV solar system, of solar electricity that they supply to the grid. The additional costs
came down.
which of course is a driving factor behind the ensuing cost (and 2.) shows how system costs have come down by more than 60% in the last 6 years. The graph assumes a current cost to the consumer for a small solar system of € 1.97 per Watt prices can be substantially lower already, but for the purpose of this €/W. Average annual solar radiation in the sunniest parts of Germany, where most of their PV systems are installed, is 1,000 to 1,100 kWh per m², measured on a horizontal plane. Taking into account the higher irradiation for a tilted solar panel, and some system losses, it
SOLAR DATA
The technology behind Photovoltaics (PV) – the direct conversion of sunlight observed by AlexandreEdmond Becquerel in 1839. The Earth receives approximately 10,000 times as much energy from the sun than it needs to feed its entire energy habit. By the end of 2005, total global PV capacity reached 5,400 megawatts (MW) – an approximate contribution to global power requirements (13,400,000 MW) of just 0.04%. By the end of 2011, total global PV capacity reached 674,000 MW, 0.5% of global requirements. PV installations now exist in more than 100 countries around the world.
The fact that 14 kilos of silicon, an amount that costs € 500 to produce, is enough to produce a lifetime of household electricity pay at least € 20,000 for the same 100,000 kWh of electricity from fossil fuels, and its generation cost alone would total over € 6,000!
The world’s largest PV power station is the Golmud Solar Park in China with a 200 MW capacity. Dubai recently announced plans to build a single 1,000 MW capacity facility - the Sheikh Mohammed Bin Rashid Al Maktoum Solar Park.
means that 1 W of capacity will roughly produce 1 kWh per year. At capital costs (depreciation + interest) of 10% per year, this means one solar kWh now costs around € 0.20 to produce. Since that’s roughly what consumers pay for electricity from their utility, that’s grid parity.
The cost of PV solar electricity needs to drop to below $ 0.06 per kWh to make it the cheapest source of electricity. In sunny regions, we will from the present solar PV cost to make that happen. That will take another 4 years, so
In a sunnier region, like the Southwest of the US, the solar radiation is double that in Germany, so the same installed capacity (in Watts) will produce twice as much solar electricity (in kWh). As a consequence, the cost of a household solar kWh in Arizona is only half that in Germany, breaks. Large solar PV power plants, now being built up to the scale of hundreds of MegaWatts, are cheaper, but they have to compete with conventional power plants, and wind farms. since that’s not applicable for a power producer. In sunny regions, like Arizona, this will already produce bulk power at € 0.07, or $ 0.09, per kWh. It should also be remembered that it is highly unlikely that fossil fuels will get away without any charge for CO2emissions in the long run, and in a growing number of countries, such as the 27 countries of the European Union and Australia, this market distortion has already come to
Source: BSW Solar.
Solar power in Germany has been subsidised by the government since 2000, a policy which now sees 79% of installations owned by private individuals, communities and farmers.
an end. But without attaching a cost to CO2, the cost of PV solar electricity needs to drop to below $ 0.06 per kWh to make it the cheapest source of electricity. In sunny regions (such as Arizona) current solar PV costs to make that happen. That will take another 4
regions in which it is the cheapest option to generate electricity! Total global PV capacity reached 68 GW (68,000 MW) at the end of last year. In just 5 years, the PV capacity added to this total annually, grew from 1.6 GW (2006) to 28 GW (2011), an average growth rate of 77% per year (REN21, 2011).
As can be seen from the map in radiation include most of Latin America, Africa, the Middle-East, Australia, and large swaths of Asia, including all of India. For all those regions, PV will be the cheapest increases in cumulatively installed capacity will drive PV costs down
Now solar PV is becoming huge. Total new power generation capacity installed in the world is around 200 GW per year, so in 2011 solar PV’s share was already 14%. New constraints will show up, not least in grid connection, so down somewhat. It is feasible however that we could reach
Sources: REN21, 2011. Renewables 2011 Global Status Report. http://www.ren21.net/Portals/97/documents/GSR/REN21_GSR2011.pdf WWF/Ecofys, 2011. The Energy Report: 100% renewable energy by 2050.
1,000 GW (1 Terawatt) of solar PV by 2020, even at a growth rate slowed down to 33% per year. Developing a world energy system that runs on 100% renewable energy by 2050 is a major and large investments in energy infrastructure, as we have shown in The Energy Report (WWF/Ecofys, 2011). But this rapid development of solar PV sure helps a lot! (Kees Van Der Leun is the COO and a director at Ecofys, an international consultancy.)