Thoughts on economics and liberty

Solar energy is not currently viable without subsidies. May take another 35 years or so to become worthwhile.

[This is a placeholder post for my personal research on this topic]

ADDENDUM

Unreliable Nature Of Solar And Wind Makes Electricity More Expensive, New Study Finds – Forbes, 22 April 2019

Total Flop: 20 years & $60 Billion in Subsidies, Wind & Solar ‘Deliver’ Risible 7% of Australia’s Power Demand 

===ORIGINAL===

I’ve been somewhat under the impression (based on books and articles such as Rifken’s Third Industrial Revolution) that solar energy is on the cusp of becoming commercially viable, even for homes. For instance, Rifkin states:

The commercial growth in solar and wind technology is reminiscent of the dramatic growth in personal computers and Internet use. The first personal computers were introduced into the mass market in the late 1970s. By 2008, there were more than one billion. Similarly, the number of Internet users more than doubled in the first decade of the twenty-first century, reaching two billion in 2010. Now, solar and wind installations are doubling every two years and are poised to follow the same trajectory as personal computers and Internet use over the next two decade

Feed-in tariffs have opened the commercial floodgates for solar and wind-generated power by giving early adopters lucrative incentives to enter the market.

In Aragon, Spain, GM’s production facility has installed a 10-megawatt solar plant on its roof, which produces enough electricity to power 4,600 homes. The initial investment of $78 million will be paid back in less than ten years, after which electricity generation will be virtually free.

Even homeowners can now turn their houses into mini power plants. For an upfront cost of around $60,000, a homeowner can install solar panels on his or her roof and generate enough electricity to power much or all of the home. Any surplus can be sold back to the grid, and payback can run anywhere from four to ten years.

Twenty-five years from now, millions of buildings—homes, offices, shopping malls, industrial and technology parks—will have been converted or constructed to serve as both power plants and habitats.

For example, plans are being developed for a multibillion dollar project, called Desertec, which will bring energy generated from solar and wind technologies from the Sahara desert, via interconnector cables, to Europe—providing more than 15 percent of the European Union’s total energy needs by 2050.

Elisabeth Rosenthal, writing in the New York Times, recounts the story of a rural woman living in Kenya who had to walk two miles once a week to get a motorcycle taxi and drive for three more hours to a town to recharge her cell phone battery for a 30 cent fee. Recently, her family sold some farm animals to buy an $80 solar power system. A single solar panel now affixed on the tin roof of her hut provides enough electricity to not only charge the cell phone but also power four overhead electric lights. Although the statistics are still spotty, it appears that families across Africa are installing solar panels and analysts predict a quick scale-up as millions of others follow suit into the Third Industrial Revolution. What’s going on in Africa heralds a historic transformation as households leapfrog from the pre-electricity era directly into the TIR age.

Now, from this it would appear that this technology is either viable or very close to viability.

Then, there are write-ups which claim grid parity has already occurred. What is grid parity?

Grid parity (or socket parity) occurs when an alternative energy source can generate power at a levelized cost of electricity (LCoE) that is less than or equal to the price of purchasing power from the electricity grid.

A news report in 2012 announced that grid parity had been achieved in Australia. Deutsche Bank has announced that grid parity will be achieved in all 50 US states by 2016.

UBS has proposed a model in which solar energy becomes viable by 2020, if it is linked to an electric vehicle (EV). It assumes a 20-year life for the solar energy system, a 10-year life of the car, and 4% cost of capital.

The cost of producing solar energy has apparently plummeted (source)

Grid parity is illustrated below:

 

But Matt Ridley is a powerful thinker and when he says that all this is pure hype, I decided to investigate briefly on my own.

Both wind and solar are entirely reliant on subsidies for such economic viability as they have. World-wide, the subsidies given to renewable energy currently amount to roughly $10 per gigajoule: These sums are paid by consumers to producers, so they tend to go from the poor to the rich. [Source]

COSTS

Claim:

A solar watt in 1970 cost something like $66.00. This afternoon, a solar watt is $0.66 to produce, and it’s going down, down, down. So it’s on a 20-year exponential curve. [Source]

Well, that sounds nice. What is the truth?

Truth

See this: http://en.wikipedia.org/wiki/Cost_of_electricity_by_source. We first need to understand the concept of levelised cost of electricity

The levelized cost of electricity (LCOE), also known as Levelized Energy Cost (LEC) is the cost to build and operate a power-generating asset over its lifetime divided by the total power output of the asset over that lifetime. It is the cost at which electricity must be generated from a specific source to break even over the lifetime of the project.

The truth is that solar energy levellised cost is still huge. MASSIVE.

Is the Tesla solar battery a good idea – today?

No. This article makes it clear enough.

Solar will need subsidies till beyond 2050

This is a bit shocking.  This chart (taken from the article linked in the previous sentence) shows that solar will need subsidies till beyond 2050. That’s not good!

solarchart

 

Conclusion

Solar energy is definitely going to be ONE of the various cheaper forms of energy IN THE FUTURE.

But it is currently not cheap enough for people to install on their rooftops (along with a battery).

When will the system (PV generation plus battery) become cheap enough to compete with electricity networks? Probably within the next five years.

But at the moment, don’t install solar without a someone else paying you for it (generally, some type of subsidy that rips taxpayers).

 

ADDENDUM

Grattan Institute

Grattan Institute shows that governments have wasted money on solar subsidies

Governments’ support for the development of solar PV technology was poorly considered and implemented. [Source]

It shows that solar COULD become viable – but not there yet. The report is quite exhaustive.

the cost of solar PV take-up has outweighed the benefits by almost $10 billion.

By the time the subsidies finally run out, households and businesses that have not installed solar PV will have spent more than $14 billion subsidising households that have. Australia could have reduced emissions for much less money. Governments have created a policy mess that should never be repeated.

Kurzweil

Kurzweil thinks solar will constitute 100 per cent of our energy production by 2033

2033: 100 per cent of our energy from solar
We are applying new nanotechnologies to the design of solar panels, and the costs are coming down dramatically. A recent report by Deutsche Bank said that ‘the cost of subsidized solar power is about the same as the cost of electricity from the grid in India and Italy. By 2014 even more countries will achieve solar grid parity. So I do believe that within 20 years we could get all our energy from solar energy. I presented this not so long ago to the Prime Minister of Israel, Benjamin Netanyahu, who was actually my classmate at MIT’s Sloan School of Management, and he said: “Ray,do we have enough sunlight to do this with?” and I said: “Yes, we’ve got 10,000 times more than we need. [Source]

I don’t quite see it this way. I believe fusion could well be 100 per cent by then.

Could be 10 years away

Solar Power Viable Within A Decade, Says IEA

“The take-off is around 2025 to 2030,” the agency said. “By then the cost of solar will be $100 per megawatt hour (MWh) and will compete with fuels facing carbon prices of $50 a tonne.”

That sounds like a long time away. Much longer than 10 years.

It’s never there. Always ten years away.

Will renewables become cost-competitive anytime soon?

The answer: No!

Viable Battery Backup for Rooftop Solar Still Years Away

Solar Energy Delivers Too Little Bang For Billions Invested

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Sanjeev Sabhlok

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