This final article in Philip Wolfe's short series brings together the technological, economic and political influences to project the future pathway for utility scale solar's contribution to global electricity generation.
In my previous article, I showed that there are no technological, resource or land area constraints that would prevent solar power from delivering any proportion of the world's electricity needs, up to and including 100 percent. My follow up article illustrated how its viability is a function of the solar resource, declining capital costs, and their relation to traditional electricity prices. It showed why solar is already the low-cost option in places like Chile, and projected that this so-called 'grid parity' will progressively extended to other parts of the world. How fast that happens will depend in part on logistics, but primarily on regulatory issues; so this final article addresses in particular the politics of rolling out utility scale solar generation.
The Accelerating Pace of Change
Before developing the key proposition further, let me briefly note how fast the sector is progressing. When the first article was published in April it showed that installed utility scale solar capacity was equivalent to 0.3 percent of global electricity usage. That figure has climbed to 0.33 percent.
More countries are now active in utility-scale solar, with nearly 30 countries boasting a capacity of 100 MW or more. The U.S. has again lost the top spot to China, where much of the expansion is in clusters, like that at Qili (shown below).
The 'Qili Photoelectricity Park' outside Qilizhen in Gansu has been expanding since 2012 and now hosts more than 650 MW of projects.
Courtesy: WolfeWare & Google
The first cost assessments, published in June, calculated the indicative levelized cost of energy (LCOE) of $181/MWh in China and dollar $222 in the U.K. In less than three months, these figures have declined to $121 and $190 respectively, and other countries with less explosive deployment have seen slower improvements.
The Endgame: Solar as the World's Primary Energy Source
Returning to my main narrative, I believe the inevitable outcome of these trends is that solar power will become the dominant source of electricity production within the next generation, progressively overtaking other renewables, nuclear power, oil, coal and gas. Of course the variability of the incoming solar resource means that storage, demand management and other forms of generation will all be needed too.
Having noted that the sector's current contribution to global electricity generation currently stands at only one third of one percent, that projection may sound like a bold claim. What makes it safe is that rapidly improving economic viability can now be added to the strong credentials solar power always offered in climate change mitigation and conservation of natural resources.
So, if the technology is already proven, and grid parity is progressively being reached; why is political intervention relevant?
There are three main reasons. First, most parts of the world have yet to reach grid parity. Such markets are therefore reliant on economic, fiscal or regulatory incentives to accelerate the deployment of solar generating assets. Those that do so contribute to a virtuous circle by boosting capacity and thereby lowering costs.
A second and related issue is the comparative status of solar with respect to other renewables and energy technologies generally. Successive reviews by the International Energy Agency have consistently shown that, even today, fossil fuels receive substantially more in the way of subsidies than renewables get in total. The longer this situation continues, the more investment will continue to flow into obsolescent energy technologies. That change will leave a legacy of outdated capacity, which will inhibit the deployment of new sustainable technologies.
Third, solar, in common with most other renewable technologies, lends itself to modular decentralized deployment. That characteristic offers benefits in terms of energy security and transmission losses; but requires changes to energy grids and the regulations governing connections to them. Policy intervention would enable those changes to be embraced far more rapidly.
Countries and States; Winners and Losers
To finish off, let's look at how the big picture might play out in different parts of the world.
Previous articles have shown how local variations, in particular in sunlight intensity and energy pricing, affect the potential. Those variations can be just as significant within countries as they are between nations. My second article, for example, showed that on average grid parity might be achieved in the U.S. in about 2018.
If we replicate the analysis for individual states, the graph below shows that grid parity has already been achieved in Hawaii, and is imminent in California. Those two states have shown markedly different levels of regulatory support for solar power with the result that California now obtains 5.2 percent of its electricity from utility scale solar, while the equivalent figure in Hawaii is just 0.6 percent. Recent announcements indicate that in Colorado (not shown on the graph) new solar power generation is now cheaper even than gas.
Extrapolation of typical 'grid parity' date for selected North American states and provinces
The potential in parts of the world with lower levels of per capita electricity consumption and production could be even more significant. India, for example, still has some 200 million people without access to a reliable electricity source. Its prime minister, Narendra Modi, pioneered a huge increase in the deployment of solar in his previous capacity as chief minister of Gujarat, and is now seeking to do the same throughout India. That change would enable the country to bypass the inefficient and expensive step of rolling out large-scale centralized transmission and distribution networks.
Various European countries have also taken different approaches. The early leader Spain remains in the doldrums having introduced retrospective changes to its feed-in tariffs, which destroyed investor confidence in new energy assets. The other pioneer, Germany, incurred a relatively high cost in installing its 4 GW of utility scale solar capacity. However that move has bought it an early-mover advantage, in that German project developers and EPC contractors continue to take a significant share of the world market.
The U.K., by contrast, has installed its 4 GW relatively cheaply, but few of its companies have any position on the world stage. It is now threatening to throw away any advantage that might have been derived by dropping all support for renewables in favour of nuclear power and hydraulic fracturing instead. When the inevitable renewable era comes, U.K. is in danger of having to start again from scratch, rather than now bridging the short gap to grid parity.
The Sun Has Risen
The terrestrial solar power industry was born in the 1973 ‘oil shock.’ Its first 35years were spent refining the technology, improving efficiency and reliability, and reducing costs from the astronomical levels that had been acceptable for space cells. Apart from a few isolated projects, utility-scale PV applications only started in about 2006. In just ten years, it has become a multi-billion dollar sector with almost 50 GW installed.
As this series of articles has shown, there are no technological, practical or land-use issues to prevent it becoming the world’s primary energy source. Rapidly improving economics suggest that solar-as-a-primary-resource is now inevitable. I still marvel at the large-scale projects popping up around the globe; my children and grand-hildren will see them as commonplace!
The basis for the figures in this series of articles
This analysis is based on the Wiki-Solar Database, which details 47 GW-ACof solar capacity in 3,000 operating plants and a further 1,400 planned projects totalling 67 GW-AC. The capital costs, capacities, annual yields and other data are the design figures reported to national registration agencies or published by the owners, developers and contractors. That data is purely based on design; actual measured output figures are not widely available.