Is solar power an economical alternative to conventional energy?
PRO (yes)
CON (no)
Nathan Furr, MBA, PhD, Business Management Instructor at Brigham Young University, and Travis Bradford, MBA, President of the Prometheus Institute, stated the following in their Dec. 1, 2008 report “PV Innovation in North America,” available at www.greentechmedia.com:
“The $50 billion global PV industry is fast approaching a critical juncture in its history. Buoyed by climate change, national security concerns and slowing productivity in traditional, fossil fuel-based power generation, PV has emerged over the last 20 years as an economically and environmentally sustainable source of energy…
The ability of PV to generate electricity closer to the point-of-use than any other power generation technology, in addition to exponential cost decreases and performance increases driven by efficiency gains at the technology level, were identified as the primary forces behind this emerging revolution in electricity generation. The fundamentals of this argument have proven true — the PV industry has demonstrated annual growth rates of 30 percent to 40 percent for the past 20 years, while revenues are expected to increase 10-fold between 2007 and 2012…
[I]t is important to recognize the growing set of economic constraints associated with traditional power sources. A global regulatory regime is developing that will place considerable economic costs on the use of fossil fuel-based generation. PV represents a viable alternative to this increasingly costly problem…
The emergence of robust PV sectors in Europe and Asia has created millions of jobs ranging from high-technology researchers to specialized electricians and construction workers. As North America prepares to enter the worst recession since the Great Depression, the ability of its economy to survive this financial malaise will be inextricably linked to the development of a dynamic PV industry.
These macro-level trends highlight an important aspect of PV technology. Compared to traditional fossil fuel-based generation technology, PV is inherently economically sustainable.”
Greenpeace International and the European Photovoltaic Industry Association stated the following in their Sep. 2006 report “Solar Generation: Solar Electricity for Over One Billion People and Two Million Jobs by 2020,” available at www.epia.org:
"Solar power is a prime choice in developing an affordable and feasible global power source that can substitute fossil fuels in all the world’s climate zones. The solar radiation reaching the earth’s surface in one year provides more than 10,000 times the world’s yearly energy needs...
In many cases solar electricity is already cost competitive...
The cost of manufacturing both solar cells and modules and other components has been falling steadily. As a result, the price of PV systems has fallen by an average of 5% per annum over the last 20 years. It is expected that this rate of price decrease can be maintained in the future…
One of the main arguments heard from critics of solar electricity is that its costs are not yet competitive with those of conventional power sources. Clearly it is an essential goal for the solar industry to ensure that prices fall dramatically over the coming years and decades. However, there are many examples of innovative products and services where offering customer choice has led to their popular uptake at a price considerably higher than that previously available...
With the right product, therefore - offering customers the type of added value they are looking for, coupled with innovative marketing - technologies such as solar electricity should be able to compete with grid power in industrialised countries."
Clean Edge, an energy research and publishing firm, and Co-op America, a non-profit environmental organization, stated the following in their June 2008 study “Utility Solar Assessment (USA) Study Reaching: Reaching Ten Percent Solar by 2025,” available at www.cleanedge.com:
“Solar power has been expanding rapidly, growing an average of 40 percent per year since the beginning of this decade. In the past five years, global solar installations have expanded more than fourfold from approximately 600 megawatts (MW) in 2003 to nearly 3000 MW (the equivalent of three conventional power plants) in 2008…
Our research indicates that the solar contribution could be quite considerable, realistically reaching 10 percent of total U.S. electricity generation by 2025 by deploying a combination of solar photovoltaics (PV) and concentrating solar power (CSP)…
As conventional electricity sources such as coal, natural gas, and nuclear become increasingly expensive and solar technologies continue their inexorable price decline, the promise of a solar future beckons. Already, solar power can compete in regions with high electricity rates and with favorable incentives. It can compete effectively today for peak power production, in grid-constrained territories, and for applications that are off the grid. Indeed, solar offers a number of significant benefits to utilities struggling with the complex issues of today’s energy landscape…
Compared to coal, nuclear, and gas-fired power plants, solar has no fuel costs, low maintenance costs, and will provide credits, rather than costs, in a carbon-regulated world…
[S]olar cost parity is within the planning horizon of most every utility in the U.S. Based on projected trends in declining costs of solar and increasing retail electricity rates… solar PV—beginning to reach cost competitiveness in just a few U.S. regional markets today—will be cheaper than standard grid power in most U.S. markets by 2025.”
SUNRGI, a solar power company, stated the following in its Apr. 29, 2008 press release “New Solar Energy System Makes It Possible to Produce Wholesale Electricity at a Cost Competitive with Fossil Fuels,” available at www.sunrgi.com:
“A new solar energy system will soon make it possible to produce electricity at a wholesale cost of 5-cents per kWh (kilowatt hour). This price is competitive with the wholesale cost of producing electricity using fossil fuels and a fraction of the current cost of solar energy.
XCPV (Xtreme Concentrated Photovoltaics), a system that concentrates the equivalent of more than 1,600 times the sun's energy onto the world's most efficient solar cells, was announced today by SUNRGI, a solar energy system designer and developer, at the National Energy Marketers Association's 11th Annual Global Energy Forum in Washington, DC. The technology will enable power companies, businesses, and residents to produce electricity from solar energy at a lower cost than ever before.
‘Solar Power at 5 cents per kWh would be a world-changing breakthrough,’ said Craig Goodman, president, National Energy Marketers Association. ‘It would make solar generation of electricity as affordable as generation from coal, natural gas or other non-renewable sources, without requiring a subsidy.’”
The Palo Alto Research Center stated the following in its 2006 research paper “Technology Advances in Delivering Cost-Competitive Solar Energy,” available at www.parc.com:
“Rising fossil-fuel prices, recent geopolitical developments, and environmental concerns have led to growing demand for renewable energy sources such as solar. Not only is solar energy secure, widely available, and carbon-free, but more energy from the sun strikes the earth every hour than is consumed on the planet in a year...
Increasing global investor interest has helped bring solar energy into the mainstream. In 2005, solar investments were thirty times higher than a decade ago and already twice the 2004 level. Solar sector investments represented more than one-third of the total money invested by venture capital firms in the entire U.S. energy industry. Furthermore, the top three initial public offerings (IPOs) of 2005 were all solar companies…
In Japan, subsidies have gradually been reduced and solar electricity is considered to be competitive with conventional electricity…
Flat-plate silicon PV is dominant today, but silicon feedstock shortages and rising wafer prices have highlighted the need for technologies which can lower costs...
CPV [Concentrated Photo-Voltaic] technologies use relatively inexpensive optics such as mirrors or lenses to 'concentrate' or focus light from a relatively broad collection area onto a much smaller area of active semiconductor PV cell material. Since the PV semiconductor material dominates the costs of the solar PV system, reducing the amount of PV material required to capture a given amount of sunlight leads to substantially lower system cost and resulting cost per watt of output…
CPV modules promise to lower the costs of solar electricity to less than half what is available today, and position PV to be competitive with electricity from conventional sources.”
Jay Lehr, PhD, Science Director for the Heartland Institute, stated the following in his June 2005 article “Solar Power: Too Good to Be True,” available at www.heartland.org:
“There is an old adage that if something sounds too good to be true, it probably is. That adage is especially applicable to solar energy.
For decades, there have been delirious proclamations that the world would soon run on solar energy. Those statements always have sounded too good to be true...and, sure enough, they always have been false…
[T]he sun’s energy is too widely dispersed and the land area required to collect it too vast for solar to become a large-scale power source. At best, a pleasant niche exists in the remotest of places and for the most affluent enviro-zealots.
In reality, solar and wind power remain on today’s radar screen only as a result of wasteful tax breaks to appease the green community…
There are not many people left who believe acres and acres of mirrors following the sun will ever answer any of our energy needs. Some of us still cling to the idea that we can efficiently heat a swimming pool or hot water for the home with direct sunlight, though the numbers of such solar-collecting devices are declining…
[T]he solar problem is that no matter how you design the system it will always be inefficient and capture only a small, uneconomical amount of solar energy…
There is a seductive fallacy about solar cells: that more exotic materials and increasingly clever computer-type designs will cause the price of the cell to drop dramatically… this just is not so.”
David Schneider, Senior Editor at the Institute of Electrical and Electronics Engineers (IEEE) Spectrum, stated the following in his Jan. - Feb. 2008 article "Solar Energy's Red Queen: Conventional Photovoltaic Panels Will be Hard Pressed to Displace Fossil-Fuel Use Anytime Soon. But a Different Kind of Solar Cell Might Well Do So," published in the American Scientist:
"The power in the sunlight falling on the Earth exceeds civilization's needs by almost four orders of magnitude. If we harnessed even a tiny fraction of a percent of that total, we could dispense with the more messy and problematic forms of energy that we rely on so much today.
One of the more attractive ways to do so is to use photovoltaic cells, which convert light directly to electricity. These cells are safe, have no moving parts, operate at ambient temperature and last for decades. The obvious roadblock preventing their widespread application is expense: Electricity generated from photovoltaic cells is getting cheaper, but it still costs several times the going rate in most places...
It's tempting to imagine that one day soon prices will drop to the point that economic considerations alone allow photovoltaic panels rapidly to displace much of today's fossil-fuel-fired electric-power generation. But the true situation is more complicated...
The inherent problem with conventional photovoltaic cells is that they are composed of silicon. Although abundant in the form of silicon dioxide (say, from sand), the pure element requires considerable energy to extract. Analysts differ somewhat in their estimates, but the consensus is that it takes about three years for a conventional silicon photovoltaic panel and the equipment associated with it (the rigid frame used to mount it and the power-conditioning electronics that attach it to the grid) to produce the amount of electrical energy required to manufacture this equipment in the first place--assuming that it is set up in a reasonably sunny spot."
The Institute for Energy Research stated the following in its fact sheet “Solar,” available at www.instituteforenergyresearch.org (accessed Jan. 13, 2009):
“The power of the sun’s radiant energy is what makes life on earth possible. Efforts to harness it in concentrated form and direct it to man’s ends have long been a human pursuit. The current state of technology generally uses two approaches: solar thermal collectors and the more complex design and manufacture of photovoltaic cells…
Today, solar energy provides less than one-tenth of 1% of the total energy consumed in the United States…
Although solar energy is fueled freely by the sun, the cost of the technology relative to the amount of energy produced makes solar significantly more expensive than other more widely used energy sources. Further, often the costs of requiring back-up energy are not generally included in the assumed production costs of solar energy, making comparisons of true production costs with other energy sources even more difficult…
For the foreseeable future, solar energy is likely to make up a very small part of our overall energy mix because its costs and reliability place it at a disadvantage to other forms of electrical generation. However, it may gain favor in isolated applications for certain uses, and its use has been growing as government mandates compel consumers to use more renewable forms of energy without regard to cost.”
The Cambridge Energy Research Associates (CERA) stated the following in their Feb. 5, 2008 press release "Global Climate Change Response Can Spur $7 Trillion in Clean Energy Investment by 2030: CERA Analysis," available at www.cera.com:
"...[S]olar PV–generated electricity costs significantly more than conventional power generation and requires subsidies to compensate.
Concentrating solar power (CSP) is a large-scale, centralized power production technology that concentrates sunlight to generate heat that is used to produce steam-generated electricity. Although solar PV is more widely known, CSP technologies are actually much less expensive and more appropriately sized for utility-scale generation. However, they still require subsidies in order to compete in the marketplace."
Amy Kjose, Director of the Civil Justice Task Force at the American Legislative Exchange Council, stated the following in her article “Issue in Brief: Renewable Portfolio Standards,” available at www.alec.org (accessed Jan. 12, 2009):
"Like wind power, solar power is a very appealing form of energy. It is abundant, clean, and renewable. Electricity from solar power is created without moving parts, it is silent, and solar power units can be moved nearly anywhere.
Between 2000 and 2004, solar energy production increased 17 percent, but it represents only a very small portion of the overall energy picture. As of 2004, solar energy produced only 0.06 percent of energy consumed in the United States…
Like all renewable energies, solar energy is expensive. While the price of solar energy is decreasing, it is far more expensive than traditional power plants. In order to provide incentives for companies to develop this form of energy, either the government would have to provide subsidies, or the consumer would have to directly pay for the increase in price."
The Sandia National Labratories stated the following in their article "The US Photovoltaic Industry Roadmap," available at www.photovoltaics.sandia.gov (accessed Jan. 12, 2009):
"Currently, solar electricity is not cost competitive with bulk, baseload power...
We need to develop low-cost high-throughput manufacturing technologies for high-efficiency thin-film and crystalline-silicon cells...
Other technical barriers include the need for an improved manufacturing infrastructure to increase throughput and yield. The rate at which PV components are manufactured is still too low, and the projected steady increase in manufacturing output will create even higher demands. Process controls are inadequate, and automation is still insufficient to improve the cost efficiency of production..."
Robert L. Bradley Jr., PhD, Founder and Chairman of the Institute for Energy Research, stated the following in an Aug. 27, 1997 policy analysis for the Cato Institute titled "Renewable Energy: Not Cheap, Not 'Green'," available at www.cato.org:
"A multi-billion-dollar government crusade to promote renewable energy for electricity generation, now in its third decade, has resulted in major economic costs and unintended environmental consequences. Even improved new generation renewable capacity is, on average, twice as expensive as new capacity from the most economical fossil-fuel alternative and triple the cost of surplus electricity. Solar power for bulk generation is substantially more uneconomic than the average; biomass, hydroelectric power, and geothermal projects are less uneconomic."
