Comments on: Grid parity

By: Ronald Brak

Ronald Brak — Thu, 07 May 2009 06:04:43 +0000

I’m sorry everyone, but I think my estimates for how much return a PV system in Moree would get might be a bit off. Firstly, I forgot to account for losses resutling from conversion from DC to AC which might be around 7%. And secondly, the figure that I have for insolation in Moree is so high that I suspect that it is for direct beam insolation, which would apply for a solar panel that moves through the day to track the sun rather than for a typical fixed flat panel. Panels that track the sun are more expensive as they have more parts, but generate about a third or so more electricity than a flat panel.

By: Zamfir

Zamfir — Tue, 05 May 2009 11:58:42 +0000

Edit: Those are Australian dollars and cents, I realize. Makes the story a lot better looking, but still a bit too far off for most areas… Just for comparison, a 1500 W setup in the Netherlands produces in practice around 1400 kWh a year.

By: Zamfir

Zamfir — Tue, 05 May 2009 11:55:27 +0000

Ronald, those numbers look realistic, but also not too encouraging for most of the world. 25 years of service, without significant maintenance costs, seems like a big assumption, and 25ct/kWh is many times the price industries pay in most areas.

Still, it is good to know that there are (perhaps isolated) cases where solar panels do make business sense at this moment. That helps to get experience in the field.

By: John Quiggin

John Quiggin — Tue, 05 May 2009 11:28:55 +0000

Quite right, Ronald, I meant price on CO2, but (at least in Australia) carbon price is often used as a shorthand.

As regards First Solar, I suspect you’re right. And 5.5 per cent real is a perfectly adequate return- pre-GFC expectations of more are no longer relevant.

By: Ronald Brak

Ronald Brak — Tue, 05 May 2009 06:12:07 +0000

John, I think there is an error in your figures on how much a price on carbon will increase the cost of electricity. A $50 a ton price on carbon dioxide will increase the price of electricity from coal by about 5 cents a kilowatt-hour, but a $50 a ton price on carbon will only increase the price by about 1.3 cents a kilowatt-hour. (Coal plants burn about 260 grams of carbon and emit about 953 grams of CO2 to produce a kilowatt-hour of electricity.)

By: Ronald Brak

Ronald Brak — Tue, 05 May 2009 05:56:16 +0000

I’m afraid First Solar only used the cost of their solar panels and not the cost of installation when claiming they had achieved grid parity, which doesn’t really count. (I’m afraid I have no idea what their costs of installation were.) But point of use solar PV may be starting to obtain parity with retail electricity prices in some parts of Australia. According to Solarbuzz, the cheapest solar panels cost about $3.54 Australian a watt. If a business has a large flat roof that results in a low installation cost equal to the price of the solar panels, then a 1,000 watt system would cost about $7,100 installed. In a sunny place such as Moree that system would generate about 2,700 kilowatt-hours per year. I believe electricity costs about 25 cents per kilowatt-hour in rural NSW, so it would produce about $675 worth of electricity a year. If the system has a 25 year life span then investing in solar PV would provide a return of about 5.5%. This doesn’t seem like a lot, but government subsidies for solar power, feed in tariffs and the introduction of carbon trading in the near future make it much more attractive. If prices continue to drop as they have, then in a decade point of use solar might be the cheapest source of electricity across wide parts of Australia.

By: John Quiggin

John Quiggin — Mon, 04 May 2009 10:53:02 +0000

One big problem with Lomborg’s suggested reliance on technology is that he wants this all to happen without any price incentives, which would be pretty silly if you took his “sceptical environmentalist’ self-description as being genuine. I’ll post more on this soon, I hope, but I long ago came to the conclusion that it’s a big mistake to treat Lomborg as someone arguing in good faith.

By: mpowell

mpowell — Mon, 04 May 2009 10:00:00 +0000

17: Yeah, that comment is pretty ironic. The timing could make a big difference here. If we had done a better job of encouraging solar development so that the transition away from carbon could be happening now, the difference could be a billion lives saved. If it takes long enough that the transition is more or less forced by the exhaustion of carbon based fuels, we bear the environmental risk of using all of those resources within a relatively narrow time window. It’s not as if the time constants involved in solar technology development are magical properties of nature. They are largely driven by the research investment available.

By: L

Mon, 04 May 2009 09:56:48 +0000

Re solar as a resource for Africa: it’s been discussed fairly loudly for Algeria, which however has loads of hydrocarbons anyway. Eg: http://www.cbsnews.com/stories/2007/08/11/tech/main3158809.shtml .

By: Alex

Alex — Mon, 04 May 2009 09:28:09 +0000

Tim: it was also predicted by a hell of a lot of other people, including essentially the entire green movement and anyone who knew anything at all about solar, and especially the people who have been struggling on working on it through the 80s and 90s whilst the politicians you support (and who support you, TCS boy) did their damndest to get in the way.

By: derrida derider

derrida derider — Mon, 04 May 2009 02:01:18 +0000

I know there has been considerable talk of massive solar farms in the Sahara with very-high-voltage DC lines under the Mediterranean to supply Europe. There are definite economies of scale in electricity transmission – once you get enough to make it worth sending over this sort of cable (you need a lot) transmission loss is not such an issue. Locating your power source close to users is then not so vital.

That also suggests power lines running along lines of longitude might be a way to match peak demands. That might be a good thing for some Arab states to put their money into as a hedge for when the oil runs out.

By: lemuel pitkin

lemuel pitkin — Sun, 03 May 2009 22:24:58 +0000

This is very interesting, and has important implications for the debate between carbon taxes and carbon permits. In static terms the two schemes are equivalent but they behave differently depending on how responsive emissiosn turn out to be.

If you’re worried that it may be harder to decarbonize than we expect, tradable permits are good, because they guarantee you’ll hit the goal. On the other hand, if you suspect—as this post suggests—that it may turn out to be easier than we expect once the incentives are there, that’s a strong argument for taxes. Because with a carbon tax, improvements in renewables mean you get greater carbon reduction; with permits, they mean you get less revenue.

By: Zamfir

Zamfir — Sun, 03 May 2009 19:34:43 +0000

Just to add another data point: here in the Netherlands, there is a (limited) subsidy for alternative electricity that is designed to make each of them cost-competitive with traditional sources, to generate some experience.
From the top of my head, the amount ( so on top of market prices) for land-based wind is 9 cents per kWh, for off-shore a bit more, for biofuel from garbage a bit less, but PV-solar needs something like 40 cts/kWh subsidy, so a complete order of magnitude more than the market price. I can’t personally judge how likely this number is to go down, just that it needs to go down a lot to make solar a serious player.

One thing that I have seen in Danish wind power that might affect solar when it becomes a larger part of the grid, is that the market price for electricity goes down a lot when the wind blows strongly, so you always produce most of your power when demand for your power is low, because all those other wind parks are also generating a lot. Basically the economic side of the storage issue.

What it means is that these sources have to be significantly cheaper on average then coal to be competitive on their own, and this effect becomes stronger the more power of the same kind you have installed. Denmark can partially compensate by exporting, but Australia won’t have that luxury.

By: gmoke

gmoke — Sun, 03 May 2009 19:18:25 +0000

from http://www.dailykos.com/story/2009/5/3/727270/-Small-Scale-LED-Lighting-+-Off-Grid-Cell-Phone-Charging-in-Mali:

“There are a lot of amazing NGOs doing work to address the issue of rural household lighting but I think they are at best a fill-gap to an existing market gap. The mass market solution (LED + small rechargeable battery + 1 W solar panel) that will really make a difference will be Chinese and at a price that will encourage extremely fast adoption rates. This is evident from the introduction of LED flashlights in Mali that completely took over the market in less than six months.”

This kind of product (LED, battery, small solar) will be marketed within a year is my guess.

As for lifecycle costs of PV, see http://solarray.blogspot.com/2008/03/lifecycle-costs-of-photovoltaics.html

The financing of solar electricity is the main sticking point to market penetration, IMHO. The mechanism that may break that open is the application of an energy services management or ESCO model to homeowners. Through purchase power agreements (PPA), a company will install and maintain PV on your property and sell you electricity at a competitive (or better) price. This is a model that Sun Edison has used successfully with commercial entities and that other companies are now taking to individuals.

As for pricing carbon, the auctions of carbon permits in the Regional Greenhouse Gas Initiative (RGGI) here in NE has been on the order of about $3 per ton but still may be counted a success with the last quarterly auction bringing in something over $100 million.

I have one room off-grid for reading lights and radio, plus battery charging, and did it for less than $200 nearly four years ago. The day I got my solar LEDs, the power went out for a couple of hours but I still had light. How should I account that?

Here’s a Solar Market Snapshot from a March 2009 conference on renewables:
http://www.dailykos.com/story/2009/3/13/708324/-Solar-Market-Snapshot

PS: Solar IS Civil Defense and you can learn more about what I mean by that at http://solarray.blogspot.com/2008/05/solar-is-civil-defense-illustrated.html

By: Omega Centauri

Omega Centauri — Sun, 03 May 2009 19:17:27 +0000

Those who think rooftop solar is going to be the big savior need to recognize that BoS (Balance Of System) costs are about half the price of a current installation. Even if the photovoltaics were free, such systems are never going to be cheap. Only for larger scale systems will the economies of scale allow for the best economics. Renewables are unlikely to ever have much penetration at the level of individual homes, but mostly be delivered over the grid. Storage will always be difficult and expensive. Stored and reused power will be much more expensive than power utilized as it is produced. A few areas have pumped hydro available -or have nearby hydro plants that can be turned on/off as needed, but those will be the exception, not the norm. Giving every house enough batteries to bridge gaps is very expensive and environmentally destructive as well. Storage for minutes to hours may be feasible and economic, storage from season to season will not be. Eventually, unless we go for advanced cycle nuclear in a big way, we will have to face up to significant time varying availbility.