Look back just 20 years in time. The year is 1991. There is no Google, no lap-tops or indeed many other things that now look like they’ve been here forever. Cell phones are only for the happy few and the World Wide Web, or what we now call 'the internet’, has only just been launched in August of this year. Then, in the twenty years from 1990 to 2010, worldwide mobile phone subscriptions grew from 12.4 million to over 4.6 billion. And between 2005 and 2010 alone, the number of internet users doubled, and was expected to surpass two billion in 2010. Looking back it looks like a complete revolution has taken place. But if you are old enough to have fully experienced this period, you’ll remember that it just felt that developments were progressing fast but also very smoothly.
So what can this ICT revolution teach us for the application of solar energy? Everybody loves solar energy, but the cost is still an obstacle. It’s not surprising so few people in the world are using photovoltaic solar energy. Will this cost-issue be solved soon? Will there be a revolution?
Looking into the future, ten years from now, the answer is a resounding yes. Let’s assume a conservative 5% cost and price reduction year on year from now on for Pv Systems or solar electricity. This calculation is based on technology improvements, economies of scale and other optimizations such as reduced transportation cost etc. And this is a conservative estimate, since in the past 10 years the yearly cost reductions have been higher. The astonishing and convincing result is that within ten years solar energy, even in the less sunny northern European countries, will be available at around €0.15/kWh. Compare this to today’s current cost of electricity from the grid! And would any sane person predict that the cost of fossil fuel-derived grid electricity will decrease over the coming decade? In the sunnier Southern European countries the cost will be even less than €0,10/kWh within this period. So, who then will still want to buy grid-electricity when solar energy is half the cost?
In 10 years, solar energy will be competitive in all residential PV markets in at least Europe and America. And in 20 years solar energy will be so cheap it will be competitive in any application; residential, commercial and utility scale power plants. Solar cells and modules will be so cheap they will become available in any size, form and color. How will this impact our lives?
Since it will be attractive to generate solar energy from any roof, facade or even any indoor and outdoor surface absorbing (day)light, all industries and consumers will be thinking electric. Solar electricity will become available everywhere at low cost. Small and large scale convenient energy-storage solutions will make the availability of cheap (solar) electricity possible anytime and anywhere in and outside buildings.
Excess solar energy which you don't use immediately can be saved for later, or for charging your electric vehicle - with this cheap solar energy, within 20 years the EV will be much cheaper to drive than an 'old timer' running on gasoline. And the car industry, already investing millions, will have kept up with this power revolution. Mass production will bring down the price of EVs to a level lower than the antiquated fossil fuel cars.
So, we’re looking forward to cheap sustainable energy for everybody around the world, an energy revolution, but has this revolution already started? The solar industry is growing like crazy. And this is not just due to its novelty or to a green commitment. Prices for solar systems are decreasing rapidly. Because of the scale of current investment (much of it Chinese), industrial companies and banks can predict that solar panels and systems will soon be produced competitively, and without depending on subsidies or government support. The investors are not all opportunists either, or crazy. With hundreds of millions being invested today in building new manufacturing plant, the global industry already includes hundreds of manufacturers. They all want to have a share of a market which will take a substantial percentage of the world energy mix within 10-20 years.
And then suddenly, in twenty years, solar energy will be there as if it had existed forever. It will be competitive and it will seem completely normal to everyone to rely on solar systems. Today, we may not see a solar revolution. But, we are already part of a solar evolution - and it’s developing fast.
Posts tonen met het label future. Alle posts tonen
Posts tonen met het label future. Alle posts tonen
woensdag 20 juli 2011
vrijdag 24 juni 2011
Who will help PV development more: the green or the greedy?
"We will enable, help and secure the development of a sustainable future with clean energy supply for our children". Does this sound familiar to you? The websites of the solar investors and sustainable and solar energy funds all declare this great ambition. But, in the end, what counts are the financial numbers. "We need at least 12% ROI on the project. Certainly with all the risks involved". There is this great chorus line, saying "it’s all about the money...".
Better than 2% at your savings account
Have you ever seen a solar fund promoting an offer of a 6-7% guaranteed return on your deposit? It would still be a much better alternative to the 2% on your savings account at the bank, and I bet there is a great future for such an initiative. No one would become very rich, but it would enable solar project developments for private people at a decent return. It would make green and clean solar power development attractive for many people.
The green or the greedy?
Investors could be put aside as greedy people/companies. But the reality is that they accounted for maybe even around 50% of the global market volume and development in the last 10 years. Without the ‘greedy’ investors probably only a handful of large scale projects would have been built. This means the global market demand would have been much smaller. And the market volumes and industry dynamics would have been different. Module and system prices would definitely have been substantially higher. If it was just aimed at the green sustainable-inspired people and customers, the global PV market development would be focused on residential PV applications, on many small PV systems, with just a few exceptions for companies looking for a green image. So, who will help the development of the solar industry and markets more - the green or the greedy people?
Higher returns now lead to quicker competitive prices
The higher the returns offered to investors now, the faster the global market and industry will grow, and the sooner module and system prices will decline due to economies of large scale production; and the sooner green people can buy their clean energy at low prices. Besides this, the investors and financial institutions and banks will get used to solar as an easy, reliable, predictable, trusted, low maintenance technology - a reliable asset with interesting returns. This will be helpful when solar energy becomes competitive and when further market development requires the involvement of big companies, investors and banks.
Global energy hunger
The more investors are facilitated with good returns [RJW1] on their large scale projects now, the faster the industry will grow; and the sooner this will lead to lower production costs and, finally, competitive price systems. Thus, we can sooner reach grid parity where incentives are no longer needed at all. And the investors will have found out that solar PV is a superb, reliable and sustainable asset for further investments, even if the returns are less. They will stay in this growth business because the world’s energy hunger can only increase.
Money makes the PV world go around
Money does not only make the world go round. With solar energy, higher subsidized returns speed up achievement of grid-parity, where government support is no longer needed. A 'quick money shot' with good returns will fire up the PV market and keep it running forever. This 20 year period of FiT-payments will still be ‘nothing’ compared to the incentives, tax advantages and environmental tax exceptions that the fossil fuel industry received over the last 70 years. The PV industry will be like a gasoline engine. The initial ignition takes some (money) fuel. But once it runs, it’s hard to stop. And with solar PV it will never stop as the energy source is infinite and the cost competitive.
Better than 2% at your savings account
Have you ever seen a solar fund promoting an offer of a 6-7% guaranteed return on your deposit? It would still be a much better alternative to the 2% on your savings account at the bank, and I bet there is a great future for such an initiative. No one would become very rich, but it would enable solar project developments for private people at a decent return. It would make green and clean solar power development attractive for many people.
The green or the greedy?
Investors could be put aside as greedy people/companies. But the reality is that they accounted for maybe even around 50% of the global market volume and development in the last 10 years. Without the ‘greedy’ investors probably only a handful of large scale projects would have been built. This means the global market demand would have been much smaller. And the market volumes and industry dynamics would have been different. Module and system prices would definitely have been substantially higher. If it was just aimed at the green sustainable-inspired people and customers, the global PV market development would be focused on residential PV applications, on many small PV systems, with just a few exceptions for companies looking for a green image. So, who will help the development of the solar industry and markets more - the green or the greedy people?
Higher returns now lead to quicker competitive prices
The higher the returns offered to investors now, the faster the global market and industry will grow, and the sooner module and system prices will decline due to economies of large scale production; and the sooner green people can buy their clean energy at low prices. Besides this, the investors and financial institutions and banks will get used to solar as an easy, reliable, predictable, trusted, low maintenance technology - a reliable asset with interesting returns. This will be helpful when solar energy becomes competitive and when further market development requires the involvement of big companies, investors and banks.
Global energy hunger
The more investors are facilitated with good returns [RJW1] on their large scale projects now, the faster the industry will grow; and the sooner this will lead to lower production costs and, finally, competitive price systems. Thus, we can sooner reach grid parity where incentives are no longer needed at all. And the investors will have found out that solar PV is a superb, reliable and sustainable asset for further investments, even if the returns are less. They will stay in this growth business because the world’s energy hunger can only increase.
Money makes the PV world go around
Money does not only make the world go round. With solar energy, higher subsidized returns speed up achievement of grid-parity, where government support is no longer needed. A 'quick money shot' with good returns will fire up the PV market and keep it running forever. This 20 year period of FiT-payments will still be ‘nothing’ compared to the incentives, tax advantages and environmental tax exceptions that the fossil fuel industry received over the last 70 years. The PV industry will be like a gasoline engine. The initial ignition takes some (money) fuel. But once it runs, it’s hard to stop. And with solar PV it will never stop as the energy source is infinite and the cost competitive.
maandag 4 april 2011
Imagine the “Impossible” PV Growth Scenario
Without a vision there is no mission; without a mission there is no action. The vision of a world being powered by solar energy might seem impossible - but it makes sense to seek a way to make it possible.
Man on the Moon
In most cases, the impossible is in fact feasible, if we just try. If you had asked in the 1950s whether it was possible to send a man to the moon, people would most likely have laughed in your face. Only a little over a decade later it happened. Although there are some skeptics who still believe it all happened in a Hollywood studio... but who can blame the disbelievers? In the USA anything is possible.
Now, let’s take a look at solar PV. All of the last decade’s forecasts in global market growth have been surpassed. With the exception of the somewhat modest growth experienced during the “crisis-year” 2009, 2008 to 2010 saw the global market growing an astonishing 100%. Numerous markets, for example Italy and Germany, have demonstrated that a growth rate of over 100% is indeed very feasible. So, if they are in a position to do so, more countries will hopefully follow suit. It is a proven model. The solar industry is growing with increasing speed - so fast, in fact, that analysts are worried about an oversupply situation this year for solar cells and modules.
The “Impossible” Scenario
Now, let’s think of “the impossible.” Let’s envision a scenario of a yearly market growth of 100% for the next decade. How impossible is that in fact? It has been done before. What would be the result within one decade?
Well, that would lead to an annual market size of 30,000 GW (yes, gigawatts, not megawatts) in 2021, just a decade ahead. Conservatively estimated, that is equal to the output of around 8,500 GW of new coal fire plant capacity, or equivalent to 8,500 coal plants of 1 GW capacity each. Not bad. And enough to cover up to seven times’ the forecasted growth in global electricity demand till 2020 according to IEA studies. This means we would cover the growth and part of the current electricity demand. It means in fact closing down fossil power capacity for solar power. If we did just two years at 100% growth - and indeed the industry is eager for growth - it no longer seems so “impossible” after all...
33 Trillion Kilowatt Hours of Solar Energy
According to the IEA, the electricity consumption forecast by 2030 will be around 33 trillion kWh. In order to provide this totally by solar PV, based on an average of 1,600 kWh/kWp system yield (assuming most of this power is installed in sunny regions such as India, China, the Sahara, etc.), this would require 20,600 gigawatts of cumulative installed solar PV power. According to the 100% year-on-year growth scenario, this cumulative amount of solar power will be installed by 2020...
The conclusion can therefore be drawn that a continued rate of 100% year-on-year growth until 2020, which has proven possible during the last three years, will be sufficient to cover the entire world electricity consumption in 2020 and onwards. Imagine... this would not only mean unlimited, clean, cheap, reliable, predictable green power for everybody in PV, but also in grid management, energy storage, etc.
Nike and McDonalds
Like the global market, the Germans, Italians and several other countries have demonstrated that 100% year-on-year growth is possible for a few years in a row. There are over 150 more countries to follow suit. The solar industry proved it is possible in 2010, with 118% cell production growth. And I bet the industry is ready to take up this challenge for another decade. The task is to prove that the “impossible” scenario is in fact possible. We are investing in sending people to Mars - it makes sense to clean up the mess on Planet Earth home first, within the coming ten years.
Nike said it in an advertisement campaign: “Just do it!” And to add another famous slogan to that one: “I’m loving it!” too...
Man on the Moon
In most cases, the impossible is in fact feasible, if we just try. If you had asked in the 1950s whether it was possible to send a man to the moon, people would most likely have laughed in your face. Only a little over a decade later it happened. Although there are some skeptics who still believe it all happened in a Hollywood studio... but who can blame the disbelievers? In the USA anything is possible.
Now, let’s take a look at solar PV. All of the last decade’s forecasts in global market growth have been surpassed. With the exception of the somewhat modest growth experienced during the “crisis-year” 2009, 2008 to 2010 saw the global market growing an astonishing 100%. Numerous markets, for example Italy and Germany, have demonstrated that a growth rate of over 100% is indeed very feasible. So, if they are in a position to do so, more countries will hopefully follow suit. It is a proven model. The solar industry is growing with increasing speed - so fast, in fact, that analysts are worried about an oversupply situation this year for solar cells and modules.
The “Impossible” Scenario
Now, let’s think of “the impossible.” Let’s envision a scenario of a yearly market growth of 100% for the next decade. How impossible is that in fact? It has been done before. What would be the result within one decade?
Well, that would lead to an annual market size of 30,000 GW (yes, gigawatts, not megawatts) in 2021, just a decade ahead. Conservatively estimated, that is equal to the output of around 8,500 GW of new coal fire plant capacity, or equivalent to 8,500 coal plants of 1 GW capacity each. Not bad. And enough to cover up to seven times’ the forecasted growth in global electricity demand till 2020 according to IEA studies. This means we would cover the growth and part of the current electricity demand. It means in fact closing down fossil power capacity for solar power. If we did just two years at 100% growth - and indeed the industry is eager for growth - it no longer seems so “impossible” after all...
33 Trillion Kilowatt Hours of Solar Energy
According to the IEA, the electricity consumption forecast by 2030 will be around 33 trillion kWh. In order to provide this totally by solar PV, based on an average of 1,600 kWh/kWp system yield (assuming most of this power is installed in sunny regions such as India, China, the Sahara, etc.), this would require 20,600 gigawatts of cumulative installed solar PV power. According to the 100% year-on-year growth scenario, this cumulative amount of solar power will be installed by 2020...
The conclusion can therefore be drawn that a continued rate of 100% year-on-year growth until 2020, which has proven possible during the last three years, will be sufficient to cover the entire world electricity consumption in 2020 and onwards. Imagine... this would not only mean unlimited, clean, cheap, reliable, predictable green power for everybody in PV, but also in grid management, energy storage, etc.
Nike and McDonalds
Like the global market, the Germans, Italians and several other countries have demonstrated that 100% year-on-year growth is possible for a few years in a row. There are over 150 more countries to follow suit. The solar industry proved it is possible in 2010, with 118% cell production growth. And I bet the industry is ready to take up this challenge for another decade. The task is to prove that the “impossible” scenario is in fact possible. We are investing in sending people to Mars - it makes sense to clean up the mess on Planet Earth home first, within the coming ten years.
Nike said it in an advertisement campaign: “Just do it!” And to add another famous slogan to that one: “I’m loving it!” too...
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