COMMENTS

September, 2013:

From my friend "Digg," who emailed a continuation of the online debate we held in the Comments section here:

Sorry another long response, just enjoy researching this issue (and I have academic and industry experience with PV which makes the question of its true viability interesting on a personal level).

"From a system perspective, the $35–$157 million cycling cost increase [required by wind/solar] is a small percentage of the annual fuel displaced by wind and solar of approximately $7 billion."

 http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/25/what-happens-if-you-add-lots-of -wind-and-solar-power-to-the-grid/

 The quote you provided above comes from an NREL report (examined in the washington post link above) which examines a specific scenario in which the western US generates 30% electricity from wind and 5% from solar. The fuel savings are enormous but are more than offset by the ammortized capital cost of wind and solar infrastructure. Even the NREL report admits that such a venture would be very expensive and result in a rise in electrical rates, and the report is based on a very specific implementation of renewables which minimizes grid modification. The political hurdles in doing this specific implementations are quite large (land use issues, utilities losing profitiability, etc.). To realistically scale clean energy in a free market it simply needs to be cheap or we need a price on carbon. In the realm of practicality NREL admits that aside from energy efficiency measures large-scale implementation of Natural Gas is the most cost-effective means of creating large emissions reduction in the short term in lieu of a carbon price: 

http://www.greentechmedia.com/articles/read/is-natural-gas-the-cheapest-path-to-clean-grid -power

 We are quite a ways off from $1/watt installed PV, current cost is over 3x that on average for US residential systems. I do not think it is possible to get there with the current inefficient and energy intensive Crystalline-Silicon cell wafering method. China spent over $35 billion between 2010 and 2012 in PV manufacturing susbsidies to get to the low market prices we have today (Europe and US provided hundreds of billions in deployment subsidies primarily for Chinese product). This is an unprecedented amount of money to be given to an industry. All told the subsidies given to PV in the past few years rival national bailouts, which is pretty insane considering that PV contributes less than 1% of global electicity generation. 

 The US and EU have since enacted dumping tarrifs on China to rid the market of artificially low selling prices (China is more than willing to sell at a loss to gain complete market share). The 'soft costs' of permitting and installation are one area where costs will drop, but the hard costs of equipment are not likely to see a significant decrease in the short term because their is little remaining area to cut cost without selling for a loss (which of course is illegal). I don't believe the price of current PV technology will drop 70% based on my engineering experience in the PV manufacturing sector and in-depth knowledge of module construction. I do not see where further price cuts in conventional PV technology can occur especially considering that the average market price already represents a low quality product that won't meet warranty in most cases (we are talking about China after all). 

 http://www.greentechmedia.com/articles/read/GTM-Researchs-Module-Cost-Outlook-36-Cents-Isn t-As-Low-As-You-Think

read especially the comments section in the above link for full insight into PV manufacturing costs and projections. 

Technological breakthroughs in the types of semi-conductors that are used, or advancement in cell wafering / vapor deposition processes could allow the $1/watt installed PV  benchmark to be met , but transition to such technology on a large scale will require huge amounts of new manufacturing infrastructure - basically a partial repeat of the Chinese manufacturing subsidy scenario seen in 2010. This is a real possibility, but will take some time to occur if the prerequisite technology breakthroughs occur first. 

More importantly considering future cost of PV, any future cost drops in permitting, installation, or  hardware will be largely offset by the expiration of government and utility subsidies:

1. Net-metering (a subsidy) will not exist in its current generous form in the US within a few years time. APS, NVE, and CA-Edison have already announced their intent to buy-back PV electricity at the wholesale rate rather than the retail rate in the near future, this alone has an enormous impact on the economic viability of PV. The utilities will battle with customers, and some sort of compromise will be met, but buyback at retail rates will undoubtedly be a thing of the past.

2. The US Production Tax Credit (covers 30% of investment in PV) is set to expire in 2016, and an extension that maintains current levels is unlikely.

3. Some states are approaching Renewable Portfolio Standards

4. A littany of state and municipal subsidies (tax credits, FiTs etc.) are set to expire as well. 

5. PV has real reliability issues, the results of which won't be known on a widescale for another decade, but the industry as a whole is likely to go through some sort of upheaval in the future as un-met warranties for modules manufactured by companies that no longer exist will become commonplace. To save face manufacturers industry-wide will be forced to move toward more expensive and durable materials, more automated processes, and costlier certification and reliability demonstration regimes. With the majority collapse of the EU and US PV manufacturing industries there are only a handful of manufacturers pumping out high-quality modules these days, and the price points for them are above market average. 

Basically, the lavish honeymoon period for PV economics is soon coming to an end. 

With continued enormous effort PV could perhaps approach the comprehensive cost of creating large amounts of grid compatible electricity that nuclear power currently enjoys. So if that becomes a reality that is great. But in the bigger picture of providing affordable electricity to a global population of 7 billion and growing it is quite obvious to anyone with a mind for science that subsidizing research and development in Nuclear energy has much more potential to yield globally viable (cheap, clean, scalable, land-friendly) electricity generation. 

 Here is the important thing to understand - The energy density of nuclear fuels give nuclear reactors the potential to operate with orders of magnitude less raw material, land, and human labor inputs than solar and wind per unit of energy (especially when considering storing renewable energy). This means that the economic implications for scaling nuclear energy to global demand are much better than any other clean energy source. It is why Bill Gates believes nuclear is the most likely solution to global warming and poverty. Why James Hansen feels the same. 

In short, yes let's continue to support solar PV. It has many great attributes (local generation, no fuel) I'm sure it will be a part of our future. But if we want to act with any urgency to the real environmental crisis we are facing we sure as hell better be giving more support and attention to nuclear energy. 

Here's some food for thought:

 http://vimeo.com/28295409

(^ Strongly recommended) 

This is what we are up against in regards to global emissions:

http://www.greentechmedia.com/articles/read/can-renewables-grow-fast-enough-to-make-a-diff erence

(hence why I think we need a breakthrough, and nuclear seems to have the most potential to that end)

Promising reactors under development:

http://www.nei.org/Issues-Policy/New-Nuclear-Energy-Facilities/Small-Reactor-Designs

And here you have it, an independent third party study mandated by the CA state government concludes that net-metering is indeed a large subsidy that raises rates for the non-solar owning customer base. 

MY RESPONSE:

Simply delighted to hear from you, and even more so that you've taken the time to compile your best arguments and share them with me.  I am just now getting to this email account on the weekend (busy day job and such), and I have preserved all of what you've sent here, so that I may more fruitfully respond, hopefully soon:

 

https://sites.google.com/site/freemarketsolarpower/home/comments

 

But for now, I want to impart to you this: I own no stock or interest in any company at all, let alone a Solar PV firm.  Nor am I a Solar Fanboy, ideologically driven to pump solar no matter what.  


It's just that this is a trillion-dollar market, and my conclusion thus far is that, if Solar PV can "free-market-work" at all, it will be at the mass-consumer-commodity level, because I believe that's where its best chance can be found: Millions of private citizens investing their OWN money as a personal-wealth generation vehicle, and at a widely dispersed, "grid-friendly" pattern that can be feasibly blended with the best base load power generation (nukes, natural gas evidently) we can get.

 

Mass-consumer-commodity Solar PV will either make ecologic/economic sense -- because of the free fuel source -- or it won't. With the latest panel efficiency claim of 44% and the fact that I personally can erect another 10KW system right now -- without subsidies -- for $2/watt (and yes, that's assuming that $.08/KWH is a fair, free market price for my backfed power), I'm encouraged.  


But as you say, all the subsidies have made Solar PV a possible market phantom.  And even at $2/watt, Solar PV may not make sense to many, especially in Georgia, where retail electricity is $.13/watt or so. Plus I want a solid, 30-year warranty on my investment, and I don't see the industry responding to that indispensable prerequisite -- yet.


I'll respond further, I just wanted to thank you again for your time and efforts.


10/3/13: Digg, what do you think of this piece on nuclear power's economic uncompetitiveness compared to natural gas?  More here.  


Also, this October, 2013 article touts its solar program a success thus far, and it book-ends this piece that you cited above, no?


Anyway, a few days later, I'm inclined to stick to my analysis and forecast.  Direct subsidies (tax credits, grants) and indirect subsidies (inflated FITs) and government fiats (RPS standards) should all naturally die away, we agree, and let the free market sort and sift the winners and losers -- though I believe distributed residential Solar PV will be the greatest growth field, and have developed a marketing blueprint for it here.


However, the Chinese have no choice but to subsidize green energy, they're choking on their own massive pollution.  The U.S. should enable their huge wealth transfer (cheap labor, heavy subsidies) by quietly removing trade barriers to their solar panels. Also, I think we agree that gas will step up as the base load source until next-gen (read: cost-competitive) nukes come along.  


An installer company in Savannah, GA, just contacted me and is claiming they can get solar at $1/watt for the wholesale hardware. I suspect it's omitting inverter costs (I can get panels and racking for just over $1/watt right now).


Meanwhile, here is a "mass-consumer-commodity" like ad sprouting up by the very Dublin, Georgia company that sold me 54 185/watt panels in September, 2010.  Note that its doing what I've prescribed (I've been corresponding with one of its executives): Re-market solar by the watt ($.89/watt), just like meat's sold by the pound, gas by the gallon, etc., so that "Joe" can quickly price-shop what Solar PV is becoming: a mass-consumer-commodity good.


Do you see the pattern emerging that will enable my residential Solar PV vision at the mass level, and unsubsidized (by American governments) at that?  


Right, we still need warranty and other consumer-gaps plugged here.  Also, remember that my farm's county is ground zero (no permitting costs, $.08 cent "avoided cost" reverse meter rate, Do It Yourself labor), so I'm nicely positioned to see the market take off around me, with my own home as a "showroom" model.