Cheaper solar energy will help combat climate change


Although Google has completed the transition from R&D to deployment, it can be said that it is still betting on expanding the wrong technology. In the early 2010s, the solar race looked like a fierce competition. Solar photovoltaic (PV) and Utility-scale concentrating solar (CSP), which uses fluid heated by the sun to drive power turbines. Google quickly invested more than $1 billion in a series of renewable energy companies and utility companies, including large investments in CSP companies BrightSource Energy and eSolar. Ten years later, such a choice does not look optimistic, because CSP has also lost to the continuous and rapid cost reduction of photovoltaics.

Google is not the only company that has repeatedly misjudged the decline in solar cell prices over the past few decades and its impact on how we view clean energy. The cost of solar photovoltaics has fallen by approximately 10 times in the past ten years, and the previous cost reduction has been impressive. Since US President Jimmy Carter announced solar panels at the White House, the total cost has fallen by approximately 100 times in 1979. (Ronald Reagan overthrew them during the second president in 1986.)

Putting it another way, if the price of gasoline had also fallen from the 1979 level, it would cost a few cents per gallon today. Gasoline is of course a commodity, and its price fluctuates due to technical, economic and political reasons. Solar photovoltaic prices are also driven by all these factors, but for many years, technology has clearly dominated. (This year, due to the temporary tightening of the silicon supply chain, the price of solar photovoltaic modules has risen by about 18%.)

In its latest year World Energy Outlook, The International Energy Agency announced that solar photovoltaic is “the cheapest source of electricity in history”, suitable for sunny areas and low financing costs. These two qualifications are very important. Solar energy is obvious — solar energy in Phoenix, Arizona is always cheaper than New York City — but the report concludes that solar energy is now cheaper than coal and natural gas in many places.

Solar energy needs to be very cheap so that new solar capacity can be built and coal and natural gas power plants that are still making money for owners can be shut down.

Financing is why this is really the key. The operating costs of other renewable energy sources such as solar photovoltaics and wind energy are very low or close to zero-upfront costs have always been the biggest obstacle, and financing is also an important reason. Thanks in part to various government policies, solar investment has greatly reduced the risk in the past ten years or so, releasing cheap funds.

As a result, the deployment of solar photovoltaics is increasing rapidly; it is now the fastest growing source of electricity in the world, and it is expected to remain so for some time to come. However, its installed capacity base is very low, lagging far behind coal, natural gas, water power, nuclear power-even wind power, which has always been cheap. This is one of the biggest problems facing solar photovoltaics. For many people, this may be the cheapest form of electricity, but for this alone, the transition to clean energy is not fast enough.

We need further technological progress. Why stop at grid parity, that is, the construction and operation of solar photovoltaic power generation is as cheap as electricity supply through fossil energy? Why not 10% cheaper? Why not work hard to cut costs by another 10 times in ten years? This decline is necessary because the sacred goal of grid parity is misleading-the real question is when utilities will actually abandon existing coal-fired power plants and switch to solar power, not just avoid adding new coal capacity . Solar energy needs to be very cheap so that new solar capacity can be built and coal and natural gas power plants that are still making money for owners can be shut down.

All of these require policies to promote existing solar technology and support the research and development of new technologies. The entire package includes technical research, development, demonstration, deployment and dissemination. Every step in this chain should be directly supported by the government. Remember, the more you go down the chain, the higher the cost.

How to be cheaper

In order to better optimize investment to obtain cheaper solar energy, it is necessary to understand what factors have reduced the cost of renewable energy in the past few decades.

Energy Systems Scientist, Massachusetts Institute of Technology Jessica Transic Her team found that the dramatic decline in solar cell costs in the past 30 years is mainly due to three factors: R&D directly leads to improvements in module efficiency (how much sunlight is converted into electricity) and other basic technological advancements; economies of scale are attributed to Because of the increase in the scale of solar cell manufacturing plants and the increase in silicon and other inputs; and the progress made through learning by doing.

All this is not surprising, but what is less obvious is that the relative contribution of each person varies greatly over time. From 1980 to 2000, R&D accounted for about 60% of the cost reduction, economies of scale accounted for 20%, and learning by doing accounted for about 5%; other largely unattributable factors contributed to this balance. That makes sense; that was a period of significant improvements in solar cell efficiency, but not a significant period of manufacturing and deployment. Since then, the pendulum has shifted from R&D and basic technology improvements to manufacturing economies of scale, and now accounts for more than 40% of the cost reduction. However, it is worth noting that research progress still accounts for about 40% of the decline.

The lesson of future investments aimed at making solar energy cheaper is that direct support should be provided to all three, biased towards economies of scale. Trancik’s discovery only considered the solar photovoltaic module itself. This still leaves installation, connection to the grid, and other factors that make up the total cost of the system. As technicians and companies become more experienced, these areas may be improved. Although the results of increased subsidies for solar photovoltaic installations seem to be mixed, policies such as feed-in tariffs provide favorable long-term contracts for solar photovoltaic producers, and renewable energy mix or clean energy standards set targets for the volume of solar photovoltaic power generation. Renewable energy has shown obvious results in promoting overall deployment.

No free lunch

Although the price of solar energy has fallen, the cost of transitioning to renewable energy remains high. Of course, the biggest question is how high the cost is compared to climate change-climate change also comes with costs. If the social and environmental costs of fossil fuel carbon emissions are taken into account, cheap solar power is more financially attractive to developers.

Much here depends on the social cost of carbon (SCC), that is, statistics on the economic, social, and environmental economic losses per metric ton of carbon dioxide emitted today—and, by extension, how much emission per ton of carbon dioxide should cost. This figure fully illustrates the true cost of coal and other fossil fuels—and the appropriate support for solar photovoltaics and other renewable energy sources.


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