Yves here. Deflation, here we come….don’t let the fact that it’s solar panels take your eye off the ball. The expected solar price cuts don’t look to be driven by greater production efficiencies but by the desire of Chinese producers to replace fallen domestic demand and gain share.
By Haley Zaremba, a writer and journalist based in Mexico City. Originally published at OilPrice
The solar market is becoming supersized, with the size and scale of solar projects soaring and some of the biggest names in the tech industry getting behind the renewable energy boom. Despite the high-profile failure of the $1 billion Crescent Dunes solar plant developed by SolarReserve way out in the Nevada desert, which was going to be the biggest solar plant in the world, the solar industry is moving forward in its belief that, in most cases, bigger is better.
Along with the scale of these projects, investment in major solar developments is also growing, with the tech sector leading the charge. As lead sustainability analyst at BNEF Jonas Rooze told PV Magazine, “corporations have purchased over 50 GW of clean energy since 2008. That is bigger than the power generation fleets of markets like Vietnam and Poland. These buyers are reshaping power markets and the business models of energy companies around the world.” Of those, “Google signed contracts to purchase over 2.7 GW of clean energy globally, followed by Facebook (1.1 GW), Amazon (0.9 GW) and Microsoft (0.8 GW).”
Now, Bloomberg Green, a “new multiplatform editorial brand focused on climate change news, analysis, and solutions” which debuted in January, reports that “an aggressive expansion by the world’s biggest solar manufacturers is under way, spurring a battle for market share and push to cut costs that signal more pain ahead for the industry.”
At the center of all this competition sits China. As the industrial center where the lion’s share of the components of solar cells and solar panels are manufactured, global expansion of the solar industry relies heavily on the nation. “China is by far the leader in the global solar supply chain, from the production of ingots to wafers, cells and panels,” says Bloomberg Green. “Of the top 10 cell makers for instance, nine are mainly Chinese companies. “Despite the havoc currently being wreaked on the Chinese economy by the COVID-19 coronavirus, however, top Chinese solar producers announced plans to significantly expand the sector.
China is determined to stay competitive; coronavirus be damned. As Robin Xiao, an analyst at CMB International Securities Ltd., told Bloomberg, these expansions are intended to “block rivals from adding new capacity.” According to this strategy, thirteen Chinese firms are to add a combined 40 gigawatts (at least) of yearly capacity “in ingots, wafers and cells each by the end of 2020, according to data from BloombergNEF.” However, this could have some negative unintended consequences, such as exacerbating the already problematic glut of photovoltaic products, which, in turn, could lead to price wars. “The plans were already in place before the coronavirus outbreak,” reports Bloomberg Green. “Companies tend to take a long-term view on expansions, and while growth in China is currently taking a hit as the world’s biggest market moves away from a reliance on subsidies, there are bets the global solar industry will see brighter days from next year through 2025.”
China is deciding to ramp up solar capacity in spite of the fact that domestic solar installations have dropped in the past two years, leading to what will more than likely be major overproduction in the short term. “The government is adopting a more market-oriented approach to ease its financial burden after years of subsidies that allowed the country to add more solar capacity than anywhere else in the world,” says Bloomberg Green. Experts expect a subsequent price war, followed by an acceleration of industry consolidation.
While China’s approach may seem overly optimistic, it would certainly be a good thing for more Chinese industry (as well as global industry) to make the switch over to renewable energy. With peak oil and the tipping point toward catastrophic climate change looming right around the corner, sometimes a little optimism is needed.
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It’s a bit of a mixed bag. Unless things have changed, my buddies in the solar industry used to tell me how the Chinese panels were much lower quality, prone to defects etc.
I am not a huge fan of giant solar farms. I believe the best solution is for homes to have solar + battery and disconnect from the grid. Solar farms while still needed ideally should be pulled into double duty where possible (solar + agriculture?).
The future should be in geothermal as a base load (instead of nuclear) due to existential solar risk issues (super volcano, meteor, nuclear war). At the same time, I don’t expect geothermal power to happen in any meaningful way.
Need big solar farms in the south to supply people in the north.
And you need big solar farms in the Mojave Desert counties to supply Los Angeles. We have a couple of big ones here in Kern County, the Beacon Project, run by Doosan out of S. Korea and owned by LA Dept of Water and Power.
10 miles south of Ridgecrest in Kern County, but all of the output goes to LA County… just like the water on the east side of the Sierras.
While its good for people to have their own solar panels and there is a resiliance argument for more domestic generation/storage, the economics of large scale solar farms make them far more cost effective and efficient.
Ignatio here I’m sure can tell us more as its his area of expertise, but I’ve heard that while Chinese panels are not nearly as good as their Japanese or German counterparts, they are now of acceptable quality for most uses, and far cheaper than their competitors.
Well you’re going to be right sooner or later, but at this point in time “the economics of large scale solar farms” do not seem to necessarily work out, as described in the very second sentence of the post.
Weird world we live in. Something is trying to be born, not sure what. If Henry Ford had tried his mass production like 10 years earlier, I wonder if it would have been subject to a parallel type of disaster?
The Crescent Dunes plant was a solar thermal plant, not a solar photovoltaic plant. Its failure, as noted in the second sentence of the article, tells us nothing about the merits of large photovoltaic solar installations.
The reference is to Crescent Dunes, which was a CSP plant – this is an entirely different technology to photoelectric cells.
Too true, the Beacon Project is estimated at around 3.6 cents per kw. Pretty cheap compared to nat gas.
Here’s a PR blurb on the project – http://www.ladwpintake.com/beacon-of-light-solar-plant-shines-in-mojave-desert-while-first-grid-scale-battery-gets-connected/
They don’t mention actual costs to the public here (it’s PR, after all) but I’ve seen other references to the utility costs for LADWP at around the $03.6 level with panels and battery storage.
The quality of Chinese and Southeast Asia modules has improved very much and can be considered as “quite good” and “best your money can buy” for industries and utilities. I believe that most modules in utilities are manufactured in these regions. This said, the parameters for household purchases are quite different and here, i regret to say, I cannot help much. Household PV instalations do not benefit from economy of scale and the cost of the workforce + cables & safety elements + inverters can be the biggest chunk compared with the modules. This means that for houses it is a good idea to try to find modules which are champions on durability (instead of focusing on module price) and select for inverters and other equipment that give the best conversion and A/C delivery rates. This said I have really now idea which modules are the best. SunPower ranks high in American rankings but I have no personal opinion on these.
One of the reasons of lower prices in modules has been the ability to build them thinner. Not only the cells but other layers, for instance protective layers. This raises questions on durability. Current modules are more efficient in many senses but these may not be as durable as modules made in the past century. Currently 75% of existing modules are less than 5 years old. According to an independent study by some measures, modern modules are less reliable than elder modules.
Here I leave a ranking made by TUV Rheinland that ranks the best 6 modules according to their examination called the PV+Test (spoiler alert: the best are all German and Japanese)
PV-Test List
I think think this must be dated info as it seems in direct contradiction to all the info I could find over the last 15 mins. Virtually all solar panel manufacturing is done overseas (mostly in China) and all comments on quality I could find indicate that the Asian panels are the best.
Products from any nation state vary in Quality, and QC.
I think we can be vulnerable in falling in to race and/or nation-state negative stereotypes.
Might be protectionist, might be racism.
Our panel output has dropped significantly, but its from tree shade— those darned trees keep growing!
Site carefully!
If your gonna have EV cars and no carbon fuels, then there needs to electricity produced by something. And either local micro grids or an entirely new national grid. I guess large solar farms are part of this but clearly not all of it. Life as we now know it is going to change.
With that said, we could have a long term switch to direct current (DC). Before anyone pounces, let me say that I haven’t thought it through. But, my small craft ran nicely on DC power and had a pop on 1.5 amp. solar panel for keeping the back-up battery charged. Scale up. And, the big benny, DC would help to get us off the economic and soul grinding grid.
Just sayin’.
Is this meant to be thought of as stand-alone DC systems for individual houses or other individual uses? Running DC appliances and / or machinery, lights, etc.? And air-gapped from any trace of contact with the grid?
At least in my experience there are many times when the power is out when my powerwall will turn off the solar, even though it isn’t fully charged because it is concerned about an overage and damage to the system. If you are connected to the grid then the batteries can charge to 100% and any excess can go to the grid.
I think going off grid is like growing ALL your own food or making all your own clothes from crops you grew. Yes, you can, but why? Someone else can do it cheaper some of the time and it is wasteful and inefficient to do it that way. Unlike food, there are no health concerns for mass produced solar. There are many deserts with awesome solar and poor food production capacity unlike your house. Off grid is not a good idea unless you have to.
Why doesn’t your Powerwall turn off the solar when it reaches 100% charge and not before?
It’s bad for battery longevity to charge to 100% so you normally only do it if you’re expecting an outage, planning a long trip in your e-car, or whatever. Optimal is to charge to around 80% and discharge to around 20%. Tesla cars and presumably powerwalls manage this stuff very carefully. Cell phones charge to 100% and that’s why you have to replace the battery every couple years. It’s unfeasible to do that with an expensive thing like a powerwall or the battery pack from a car. The thing about charging to 100% when grid connected doesn’t sound right if done routinely.
Geothermal power that which uses the average 50 degree ground temperature to provide a constant reliable source for either a heat sink or a heat source when coupled with a heat pump is efficient and effective. The cost of the buried ground source is often prohibitive. The ones which seem to be effective are facilities such as schools, military bases, government installations. Other installation such as residential have a large sunk cost that can be hard to recoup.
Heat pumps, like rooftop PV, are easy to recoup on new construction in many states. It’s installation on existing housing stock that is economically difficult
I believe the best solution is for homes to have solar + battery and disconnect from the grid.
This is not particularly feasible in densely populated cities, especially in high-rises – minimal area per person, many people – around half the world?
Here’s what we should do. Cover the Southwest desert with solar panels, at least the state of Nevada, which could supply all our energy needs. Use solar to convert water to hydrogen and then pump the hydrogen through upgraded gas pipelines to the rest of the nation. I’m not sure where we get the water.
The water certainly won’t come from Nevada. It has the driest geography in the nation.
From the exhaust pipes of all the SUVs that burn the hydrogen?
See “Do The Math” from Professor Timothy Murphy at San Diego State University.
https://dothemath.ucsd.edu/
And paint a big bullseye on it (with transparent paint to let the sun shine through).
I just love centralized power solution ideas.
A good location for your proposal is Baha California. Much sun, the sea for water, very large coastline, and small population.
Possibly the Sonora Desert and the Atacama deserts as well.
And some of Australia, possibly focused on the Nullarbor plain.
There are plans to build a 10GW solar plant in Australia’s Northern Territory for export of electricity to Singapore via a high voltage direct current “Sun Cable”.
It might sound ‘batshit insane’ but Australia could soon export sunshine to Asia via a 3,800km cable
NB 10GW is enormous; five times the capacity of the world’s largest PV plant today.
There was a similar plan a few years ago for a series of huge solar farms in North Africa to supply Europe. Sadly, it foundered, but as panel prices fall it could possibly revive again. Its probably more practical than the Australian proposal as the distances are substantially less.
p. fitzsimon – not a good idea at all. Unless the power is meant to be used regionally. I’m not sure you understand the energy cost in terms of transmission of power over long distances. It’s not practical and not done. Believe it or not in the US now we have two grids one for the East and one for the West. These grids are no way interconnected and that is by design. One thing that would be nice to know is an energy accounting of how much energy we actual use and for what. Going local is the only thing that is going to work and each region of the country has different and preferred ways to produce power. My guess is in no way can we use as much energy as we use now.
There is talk of a high voltage super grid to enable less costly intracontinental transfer. This is a good way to diversify away regional weather liabilities.
The weather liability here is solar weather- we have had unusually mild sunspot activity and it could be much worse than it is. Severe sunspot weather means that those long cross-country cables absorb electrons along their length and overload both the cable and the terminating equipment.
This is why the electric grid should be less inter-connected. Our governance systems for the electric grid are as profit-oriented and pathetic as you would expect. The only way to run it safely is regional disconnection.
Solar storm set off mines in the Vietnam War?
(I worked at Enron but was not involved in this first-hand :)
re: “Believe it or not in the US now we have two grids one for the East and one for the West.”
Three grids. Texas has its own (just found this out from an old episode of ‘How the States Got Their Names.’ Great show BTW).
If Hawaii even has a grid, even for just a couple of the biggest-population islands, would that be a Fourth Grid? And if Alaska ( or parts of Alaska) has ITS own grid, would that be a Fifth Grid?
Yes, its three primary grids, with lots of ‘sub’ grids beneath that due to poor internal connections. Better grid interconnections are vital for renewable investments as the greater the level of interconnection, the more intermittent power the grid can handle without requiring substantial amounts of storage or redundancy.
Don’t think you need nearly that much space to be covered to generate the needed amount of electricity for the US.
and then pump the hydrogen through upgraded gas pipelines to the rest of the nation
The gas pipelines would need some full-on upgrading – totally replacing, more like, I’d guess. Hydrogen is a very small molecule, able to leak through various materials that are relatively impermeable to most gases, and can embrittle many metals. It’d be easy to lose half of it before it reached its destination.
Crescent Dunes was long in development. I was a Nevada state official involved with discussions about solar/thermal technology with State engineers back in the 1990’s. I was attempting to persuade them to select standard photovoltaic (PV) panels over the complexity of the solar/thermal concept. Of course I’m gloating now.
The 2 mile diameter of the Crescent Dunes mirror array has an enormous environmental impact. And there aren’t enough carnival fun-houses still operating to re-purpose those mirrors. Nevada has long been the land of discarded toxic projects; the nuclear test site nearby Tonopah is Example One. Since the land around Crescent Dunes is now wholly disturbed (the essential microbial crust of the top soil is now gone), I imagine PV arrays will replace the mirrors and concentrating tower. (Or the land will be used for another federal prison.)
I believe distributed solar PV with rooftop, parking canopy, and mixed agriculture/wind/solar generation is the better method of electricity generation that is sustainable and catastrophe-proof.
COVID-19 is Going to wipe out prison populations, kind of a nightmare scenario if it gets a foothold, so sadly, as I don’t want anyone else to die of this but know that they will, my guess is they’ll be plenty of prison capacity.
The old and infirm anyway. It isn’t anthrax.
The prison doctors will be so overwhelmed, that chances are plenty of prisoners in middle age who would have been able to be treated are unable to be due to all being sick at one time.
One of the commonest plants in the Mojave is the Creosote (Larrea tridentata). It has been shown to fix carbon (calcium carbonate) through a mycorrhizal process. Covering Creosote areas with solar panels disrupts this process, so, surprisingly, there is little to no net carbon benefit to solar in the Mojave.
Shrubs grow very slowly in the desert and can be many hundreds to thousands of years old. A Creosote ring in the Mojave is one of the oldest living things. Desert shrub alliances are the only things which grow in these environments and fix carbon long-term. Removing them for short-term (~30 years) solar panels is foolish.
Distributed solar as described above, rooftop, parking canopy and on degraded or agricultural land also minimizes what can be large transmission losses from long power lines. Solar in the desert is, as the the poster says above, an environmental disaster.
Okay, I’m going to try again but I’m not optimistic that WordPress won’t eat my comment.
I think perovskites are going to make conventional solar cells obsolete in the next few years. They’re much cheaper to manufacture, are more durable, take less energy and produce fewer pollutants in manufacturing, and have comparable efficiency now. They can be made flexible so they require less mounting hardware and are easier to install.
As for covering Nevada in solar cells, you night want to do some serious climate modelling before embarking on such a project.
Don’t most perovskites contain lead, making pollution during their life cycle a problem?
I hope they do advance, but I do worry that the enormous Chinese investments will essentially ‘crowd out’ better alternative technologies. The history of engineering is full of examples of inferior technologies dominating because of first mover and scale issues (e.g. internal combustion engine cars, light water nuclear reactors, VHS, etc).
This is a key reason why continuing government investment and anti-dumping regulations are vital. Lets take advantage of cheap Chinese panels for now, but we shouldn’t put all our eggs in one basket.
To what extent do the Chinese efforts to corner rare earth metals production more or less lock-in their ability to dominate the production of solar panels? And how many of the constituents of a solar panel does the U.S. produce? Where will the silcon wafers come from? The Chinese have multiple levers for dominating the solar market besides lower prices.
Unless something is done to fix our electric power Grid I tend to view large solar and wind farms as added sources of power disturbances complicating and adding risk to maintaining the Grid.
So far as I understand it, rare earths don’t feature much in solar panels.
Indium definitely plays an important part in solar panels and you said nothing of silicon wafers which though not rare earths are definitely a part of conventional solar panels and definitely are not made here any more. I still maintain that the Chinese hold us over many barrels.
And what of our Grid? It cannot accept too much more solar energy without failures under present laws.
Yesterday, a friend of mine whose company is betting on solar farms was asking me (me?) if there is a bubble. And yes, in Spain there is a kind of a bubble, at least in the number of modules and nominal solar power asking for installation license. The government was planing to have about 35 GW installed by 2035 but these plans look now outdated. If I recall correctly, by December 2019 there were more than 200GW asking for license, suggesting a bubble at least in the number of people competing. There are worries about periods of time when energy prices are too low (weekends and when wind goes wild) but we are still far from midday saturation by solar energy.
My guess would be not half such a ginormous bubble as the fossil fuel industry. That’s had its heyday, and one way or another it’s on its way out. And the sooner the better, IMO. Solar surely has a big future ahead of it, whatever the antics of the market or the machinations of the evil Chinese, daring to sell the world cheap solar technology.
Bubbles aren’t necessarily bad. They can result in lots of tulips, or they can result in huge railway networks (as the mid 19th Century bubbles left us as a legacy). The Dotcom collapse may have left use pets.com, but it also laid the groundwork for high capacity fibre optic networks. So, if we are to be optimistic, a solar bubble could leave lots of investors bankrupt, but all their solar farms still in place.
Unfortunately, this seems the inevitable outcome of a process depending on the private sector to fight it out for licenses and permissions. Its the exact same situation in Ireland, where there are several GW of permitted solar farms awaiting connection licenses (yes, hard to believe, but solar is viable in Ireland). Various companies still advertise in farmers newspapers seeking appropriate sites and offering around 2,000 euro per hectare annually (double what you can earn from dairy farming), so long as there is at least a 30KW line running through the site.
This leads to a lot of community unhappiness and waste. Most of these sites are not really viable, the companies are making multiple applications on the basis that only a few will turn out to be viable. In the meanwhile, local communities are angered by what they see as a threat to their landscape and communities, and farmers are angered by the loss of good land (some of the best land for solar panels is also the most fertile south facing slopes). Our governments have become allergic to sensible central planning of power systems.
One interesting little sting in the tail in Ireland is that because there is no planning guidance for solar farms, Irish authorities have been using published UK guidance for convenience. But post Brexit, there are legal moves to declare the use of ‘third country’ guidance as illegal. So potentially all the permissions could be ruled invalid by the courts! its unlikely, but just another possible unpredictable result of Brexit.