9 ms·

Hi. I'm the author of this blog post. Happy to answer questions people have, as time allows, on Wednesday. Upcoming posts will look at the future of wind power

Hi. I'm the author of this blog post. Happy to answer questions people have, as time allows, on Wednesday. Upcoming posts will look at the future of wind power, the future of energy storage, and what the missing pieces are. If you don't want to wait, you can read my thoughts on energy storage here: http://rameznaam.com/2015/04/14/energy-storage-about-to-get-big-and-cheap/ http://rameznaam.com/2015/04/14/energy-storage-about-to-get-...

newman314 11y ago
So given the Fed 30% solar subsidy is set to expire at the end of 2016, have you modeled (or know of a model) that shows when the price of solar will crossover the loss of subsidy? I.e. I'm trying to figure out if going solar now is better (in California) or just waiting a few more years. I'm in no particular hurry since my electric bill vs. sq/ft is already pretty good.
- deleted 11y ago
  [deleted]
- furyg3 11y ago
  It appears that all his calculations in the article are done without subsidies factored in.
- RamezNaam 11y ago
  UBS has done some modeling on this for their clients. They believe utility-based solar will take a hit for a 2-3 years and then rebound. The Fed ITC will drop from 30% to 10%. Making up that 20% cost change will take a little over one doubling of solar scale. Rooftop solar will probably also take 2-3 years to make up for the cost lost to the subsidy reduction. It may even be 4. So after 2016, I'd expect rooftop prices to rise before slowly dropping, and getting back to 2016 levels around 2019 or 2020.
Jedd 11y ago
Your post focuses on PVC's - what's the impact of / where does thermal solar fit in with these projections?
- RamezNaam 11y ago
  It's difficult to say. Solar thermal is not dropping in cost the way that solar PV is. For now, at low penetrations, solar PV is a far better bet. But solar thermal has the advantage of integrated storage. When solar overall is at some reasonably high penetration (say, 10-15%) storage will become important. At that point, it depends on the cost curve of storage technologies. If batteries or other energy storage technologies have gotten cheap enough, PV + storage will be cheaper than solar thermal. If batteries haven't dropped in price enough, solar thermal may see a resurgence. My bet is on PV + storage, though there is no certainty here.
  - Jedd 11y ago
    Great, thank you Ramez. I know they're different technologies, but I wonder on the cross-over effects of the two. If people see a solar thermal plant going up near their town, will it encourage or discourage them from installing PVCs? Are nation states that encourage / subsidise large-scale solar thermal deployments more likely to encourage end-user scale (PVC-based) systems? Entirely agree managing storage is increasingly the pain point - in both scales of systems (thermal just rides out cloudy / dark periods more smoothly, I believe). Is it still true that the most $-effective large-scale power-storage mechanism is to pump water up a hill?
    - pjc50 11y ago
      If people see a solar thermal plant going up near their town, will it encourage or discourage them from installing PV? I don't think this will make much difference - individual PV installation is an investment decision (just like other big home improvements) based on cost of energy and subsidies. It makes some difference to how "green" people feel, but the cost matters more. It may have an effect in planning battles. Here in the UK (esp Scotland) it's all about the wind farms. European solar thermal is currently struggling against low natural gas prices: http://www.estif.org/statistics/st_markets_in_europe_2014/ http://www.estif.org/statistics/st_markets_in_europe_2014/ Pumped storage requires naturally occuring suitable locations (not too many available) and incurs environmental damage of damming a river. (Calling it "PVC" is really confusing me with the flexible polymer)
minthd 11y ago
When we look at figure-1(levelized PPA), we see steady price reductions until mid-2013 , and than none. That is probably due to soft costs starting to dominate. So since the cost drivers changing - why does it make sense to model future price on old cost drivers ?
- RamezNaam 11y ago
  The graph doesn't have an 2015 data on it, but the average in 2015 has dropped further. I initially set out to model soft costs on their own, separate from module costs. However, that effort revealed other factors. Solar capacity factor is rising and operational costs (which are not included in soft costs are dropping. There are more variables at play. For some of those variables, there isn't robust data available over lon times. All of those variables ultimately feed into electricity prices, in the end, which is why I chose that modeling approach.
nroets 11y ago
IIRC all the efficient solar cells we currently have contains some rare materials. Once a particular solar technology reaches grid parity, the demand for the relevant rare material will increase, placing a floor under the price of that solar cell. In the case of Moore's Law, a transistor can be any size. By contrast, solar cells absorbs too little energy if they are too thin. TL;DR: There are real physical limitations to solar cells.
- RamezNaam 11y ago
  Two things have happened in this area recently. 1. The grams of rare earths required per watt of solar have been dropping steadily. And Solar PV panels with no rare earths at all have been developed, though they are not yet common. 2. "Rare earths" are not so rare. Their prices have tumbled substantially as new mines have opened up and substitutes have been found.
  - joshuapants 11y ago
    > 2. "Rare earths" are not so rare. Their prices have tumbled substantially as new mines have opened up and substitutes have been found. Yes, but mining them is an environmental disaster.
    - danmaz74 11y ago
      Which is nothing compared to the environmental disasters that a 3 or 4 celsius degrees increase in the World temperature will bring us.
    - mikeash 11y ago
      Can you quantify that? I'm seeing comments in this thread saying, over and over again, that manufacturing these things is an environmental disaster. But without numbers, the statement is meaningless. We are currently poisoning pretty much the entire planet for our energy needs. If we cut that down to, say, poisoning an area the size of Texas for our energy needs, that would be a massive win.
netcan 11y ago
What's the interaction between the home solar market and the grid solar market. Is the cost p/kw following the same curve? Even if these two use the same basic technology, I think they are essentially two completely separate "markets."
- symfrog 11y ago
  The actual solar panels used are almost identical. Generally in the residential solar market you may use a slightly more expensive panel for aesthetic reasons, but the improvement in the underlying solar panel technology in terms of efficiency and cost are available in equal terms to both markets. The inverters used in the residential market versus the solar plant market are usually quiet different and, IMHO, form two distinct markets. Reductions in the inverter cost for solar plant deployments would result in a reduction in the home market, but the relationship is not as direct as the relationship between the panels since you would rarely be able to use the same inverter in both markets.
vilda 11y ago
The price of energy storage, an impact of energy storage technologies to environment, and costs of unpredictable energy distribution in the network does not seem to be calculated at all. They are not trivial. Germany claims one trillion EUR direct costs on network upgrades to cope with renewable energy. They do not take into account energy storage costs. Even now (at least in my country) 75% of energy costs are distribution costs.
- EwanToo 11y ago
  I believe almost 70% of that cost is in feed-in tarriff payments, not network upgrades, and is spread over the next 25 years? http://www.world-nuclear-news.org/NP-Trillion-Euro_cost_of_German_energy_transition-2002137.html http://www.world-nuclear-news.org/NP-Trillion-Euro_cost_of_G...
- RamezNaam 11y ago
  Germany gets roughly as much sunlight as Canada, and started installing solar when costs were 5-10x what they are today. They paved the way for future installations at lower costs, but their experience isn't directly applicable. Energy storage is indeed going to be vital once solar exceeds 10-20% of capacity. Energy storage, fortunately, is also dropping fast in cost:http://rameznaam.com/2015/04/14/energy-storage-about-to-get-big-and-cheap/ http://rameznaam.com/2015/04/14/energy-storage-about-to-get-... I have future posts coming with closer looks at the future of storage prices, wind prices, and possibly one on nuclear.
le_clochard 11y ago
If you could add the trendlines of conventional power sources (thermal, hydel, nuclear) it would give a better idea of when we can expect solar to emerge from the competition.
kefka 11y ago
Greetings, I do agree that Moore's Law generally holds true. However a better model is an approximation of multiple S-curves, where each S curve represents the beginning, growth, and maturation of each step in technology. The smearing of S curves and integration of new lines of tech allow for what appears an exponential growth. Also, I'd like your opinion on http://www.bioinspired.net/ http://www.bioinspired.net/ -- Commercially available memristors, albeit high priced.
VLM 11y ago
Assuming solar panels always require weather sealed sheets of glass, it would be interesting to look at graphs of cost of LCD displays per Sq Meter vs year compared to graphs for plain old house windows per sq meter over the years. Its likely it'll never be cheaper to build traditional sealed glass panels cheaper than house windows, although per sq meter it might get cheaper than televisions. Some of the more optimistic claims outside the article seem to have very unusual assumptions about the cost of glass.
Grantarvey 11y ago
Thanks Ramez! Cool of you to come on here.

newman314 11y ago

So given the Fed 30% solar subsidy is set to expire at the end of 2016, have you modeled (or know of a model) that shows when the price of solar will crossover the loss of subsidy? I.e. I'm trying to figure out if going solar now is better (in California) or just waiting a few more years. I'm in no particular hurry since my electric bill vs. sq/ft is already pretty good.

deleted 11y ago
[deleted]
furyg3 11y ago
It appears that all his calculations in the article are done without subsidies factored in.
RamezNaam 11y ago
UBS has done some modeling on this for their clients. They believe utility-based solar will take a hit for a 2-3 years and then rebound. The Fed ITC will drop from 30% to 10%. Making up that 20% cost change will take a little over one doubling of solar scale. Rooftop solar will probably also take 2-3 years to make up for the cost lost to the subsidy reduction. It may even be 4. So after 2016, I'd expect rooftop prices to rise before slowly dropping, and getting back to 2016 levels around 2019 or 2020.

Jedd 11y ago

Your post focuses on PVC's - what's the impact of / where does thermal solar fit in with these projections?

RamezNaam 11y ago
It's difficult to say. Solar thermal is not dropping in cost the way that solar PV is. For now, at low penetrations, solar PV is a far better bet. But solar thermal has the advantage of integrated storage. When solar overall is at some reasonably high penetration (say, 10-15%) storage will become important. At that point, it depends on the cost curve of storage technologies. If batteries or other energy storage technologies have gotten cheap enough, PV + storage will be cheaper than solar thermal. If batteries haven't dropped in price enough, solar thermal may see a resurgence. My bet is on PV + storage, though there is no certainty here.
- Jedd 11y ago
  Great, thank you Ramez. I know they're different technologies, but I wonder on the cross-over effects of the two. If people see a solar thermal plant going up near their town, will it encourage or discourage them from installing PVCs? Are nation states that encourage / subsidise large-scale solar thermal deployments more likely to encourage end-user scale (PVC-based) systems? Entirely agree managing storage is increasingly the pain point - in both scales of systems (thermal just rides out cloudy / dark periods more smoothly, I believe). Is it still true that the most $-effective large-scale power-storage mechanism is to pump water up a hill?
  - pjc50 11y ago
    If people see a solar thermal plant going up near their town, will it encourage or discourage them from installing PV? I don't think this will make much difference - individual PV installation is an investment decision (just like other big home improvements) based on cost of energy and subsidies. It makes some difference to how "green" people feel, but the cost matters more. It may have an effect in planning battles. Here in the UK (esp Scotland) it's all about the wind farms. European solar thermal is currently struggling against low natural gas prices: http://www.estif.org/statistics/st_markets_in_europe_2014/ http://www.estif.org/statistics/st_markets_in_europe_2014/ Pumped storage requires naturally occuring suitable locations (not too many available) and incurs environmental damage of damming a river. (Calling it "PVC" is really confusing me with the flexible polymer)

minthd 11y ago

When we look at figure-1(levelized PPA), we see steady price reductions until mid-2013 , and than none. That is probably due to soft costs starting to dominate. So since the cost drivers changing - why does it make sense to model future price on old cost drivers ?

RamezNaam 11y ago
The graph doesn't have an 2015 data on it, but the average in 2015 has dropped further. I initially set out to model soft costs on their own, separate from module costs. However, that effort revealed other factors. Solar capacity factor is rising and operational costs (which are not included in soft costs are dropping. There are more variables at play. For some of those variables, there isn't robust data available over lon times. All of those variables ultimately feed into electricity prices, in the end, which is why I chose that modeling approach.

nroets 11y ago

IIRC all the efficient solar cells we currently have contains some rare materials. Once a particular solar technology reaches grid parity, the demand for the relevant rare material will increase, placing a floor under the price of that solar cell. In the case of Moore's Law, a transistor can be any size. By contrast, solar cells absorbs too little energy if they are too thin. TL;DR: There are real physical limitations to solar cells.

RamezNaam 11y ago
Two things have happened in this area recently. 1. The grams of rare earths required per watt of solar have been dropping steadily. And Solar PV panels with no rare earths at all have been developed, though they are not yet common. 2. "Rare earths" are not so rare. Their prices have tumbled substantially as new mines have opened up and substitutes have been found.
- joshuapants 11y ago
  > 2. "Rare earths" are not so rare. Their prices have tumbled substantially as new mines have opened up and substitutes have been found. Yes, but mining them is an environmental disaster.
  - danmaz74 11y ago
    Which is nothing compared to the environmental disasters that a 3 or 4 celsius degrees increase in the World temperature will bring us.
  - mikeash 11y ago
    Can you quantify that? I'm seeing comments in this thread saying, over and over again, that manufacturing these things is an environmental disaster. But without numbers, the statement is meaningless. We are currently poisoning pretty much the entire planet for our energy needs. If we cut that down to, say, poisoning an area the size of Texas for our energy needs, that would be a massive win.

netcan 11y ago

What's the interaction between the home solar market and the grid solar market. Is the cost p/kw following the same curve? Even if these two use the same basic technology, I think they are essentially two completely separate "markets."

symfrog 11y ago
The actual solar panels used are almost identical. Generally in the residential solar market you may use a slightly more expensive panel for aesthetic reasons, but the improvement in the underlying solar panel technology in terms of efficiency and cost are available in equal terms to both markets. The inverters used in the residential market versus the solar plant market are usually quiet different and, IMHO, form two distinct markets. Reductions in the inverter cost for solar plant deployments would result in a reduction in the home market, but the relationship is not as direct as the relationship between the panels since you would rarely be able to use the same inverter in both markets.

vilda 11y ago

The price of energy storage, an impact of energy storage technologies to environment, and costs of unpredictable energy distribution in the network does not seem to be calculated at all. They are not trivial. Germany claims one trillion EUR direct costs on network upgrades to cope with renewable energy. They do not take into account energy storage costs. Even now (at least in my country) 75% of energy costs are distribution costs.

EwanToo 11y ago
I believe almost 70% of that cost is in feed-in tarriff payments, not network upgrades, and is spread over the next 25 years? http://www.world-nuclear-news.org/NP-Trillion-Euro_cost_of_German_energy_transition-2002137.html http://www.world-nuclear-news.org/NP-Trillion-Euro_cost_of_G...
RamezNaam 11y ago
Germany gets roughly as much sunlight as Canada, and started installing solar when costs were 5-10x what they are today. They paved the way for future installations at lower costs, but their experience isn't directly applicable. Energy storage is indeed going to be vital once solar exceeds 10-20% of capacity. Energy storage, fortunately, is also dropping fast in cost:http://rameznaam.com/2015/04/14/energy-storage-about-to-get-big-and-cheap/ http://rameznaam.com/2015/04/14/energy-storage-about-to-get-... I have future posts coming with closer looks at the future of storage prices, wind prices, and possibly one on nuclear.

le_clochard 11y ago

If you could add the trendlines of conventional power sources (thermal, hydel, nuclear) it would give a better idea of when we can expect solar to emerge from the competition.

kefka 11y ago

Greetings, I do agree that Moore's Law generally holds true. However a better model is an approximation of multiple S-curves, where each S curve represents the beginning, growth, and maturation of each step in technology. The smearing of S curves and integration of new lines of tech allow for what appears an exponential growth. Also, I'd like your opinion on http://www.bioinspired.net/ http://www.bioinspired.net/ -- Commercially available memristors, albeit high priced.

VLM 11y ago

Assuming solar panels always require weather sealed sheets of glass, it would be interesting to look at graphs of cost of LCD displays per Sq Meter vs year compared to graphs for plain old house windows per sq meter over the years. Its likely it'll never be cheaper to build traditional sealed glass panels cheaper than house windows, although per sq meter it might get cheaper than televisions. Some of the more optimistic claims outside the article seem to have very unusual assumptions about the cost of glass.

Grantarvey 11y ago

Thanks Ramez! Cool of you to come on here.