Solar Revolution: The Economic Transformation of the Global Energy Industry

"When I was researching for my book The Switch , I tried to find what people had written about the future of solar energy. And I asked myself, was there anybody out there who had put the evolution of the costs of solar photovoltaics in some sort of robust intellectual framework which allowed him or her to predict the decline in costs that’s actually occurred? And, to my mind, this was the best one out there. But it still comes up with numbers for the costs of solar photovoltaics now or in 2045 which look absurdly high. So, for example, Bradford estimates that a watt capacity of solar photovoltaics by 2045 will cost $1.50. And it’s now fair to say that a good quality Chinese panel now sells in world markets in 2017 at about $0.35. Nevertheless, Bradford understood that the cost of photovoltaics was being driven downwards by the learning curve effect and said it’s inevitable that solar will become by far the cheapest source of electricity, and energy generally, for the bulk of the world. The sun doesn’t shine at night. There are monsoons. There are places in China—for example—which are remarkably cloudy. So this by itself does not solve the problem, however cheap solar photovoltaics become. However it does definitely solve part of our problem. For example, in India about twenty percent of current electricity demand is to pull water up from wells and use it for irrigation. And you didn’t have to have that activity going on all the time so, for that type of application and solar is absolutely suitable. Indeed, for a large fraction of the world, the point of highest daily energy demand is in late afternoon when the air conditioning is working at its hardest. For those places, solar is useful; the sun is still above the horizon. We here in the UK have a different perspective, of course. When we need energy, the sun generally isn’t shining. For the bulk of the world, solar is pretty good. But, everywhere is going to need storage. It’ll either be storage in the form of things like concentrating solar power, which is where the sun heats a liquid or fluid of some form during the day and that heat — we’re talking about hundreds of degrees centigrade here — is used at night to create steam to drive a turbine. That is being taken up in various parts of the world, such as Morocco, South Africa, China, Saudi Arabia, and Dubai. That’s a way of capturing the sun’s energy during the day and using it at night. “Renewable energies do not lend themselves naturally — or are not thought to lend themselves naturally — to exploitation by big centralised multinational behemoths.” But the most important thing is batteries for short-term overnight storage. There, we have seen exactly the same phenomenon as we have seen with PV, with costs coming down in a way that nobody predicted, driven by the iron law of the learning curve. The mathematics behind the learning curve gives you a figure for the amount that the cost of something will fall that is derived from how much of it is produced. So, a learning or experience curve typically says that once the production of a commodity such as PV panels has cumulatively doubled, the cost will fall by a predictable amount. In the case of PV, in Travis Bradford’s book he suggests that every time the accumulated volume of solar photovoltaics panels that has ever been produced has doubled the cost has fallen by about 18 percent. Today this number is thought to be nearer 20 percent but he got the number basically right over ten years ago. That means, if solar panel production is growing at 40 percent a year—which is what solar has done for the last fifty years—very roughly the cost will go down by 20 percent every two years—indefinitely—in a relatively smooth decline. And that’s happened with batteries as well. There are lots of other different forms of storage. One that’s attracting a lot of attention at the moment is storage in compressed air. There are some technical problems with that but it looks as though it’s going to be fairly widely used. You pump air when electricity is available from the sun at high pressure into a salt cavern or something like that beneath the surface and it comes out, when you need the electricity, and drives a turbine. So, batteries and other short-term storage mechanisms are there and available to us. But long-term storage is more of a problem and that’s what the last chapters of my book deal with."