How solar became world’s best hope for post-fossil fuel energy system

Print Friendly


Solar Impulse

Solar Impulse

Just a few years ago experts the world over bemoaned the prohibitive cost of solar power.

But today it is widely considered to be the best and most affordable hope for decarbonising the world’s energy system.

Solar prices are down 62% in the last eight years, according to a recent Bloomberg analysis, and on track to beat the cost of coal within a decade.

In fact it’s already achieved that milestone in more than 30 countries, according to the World Economic Forum.

So what happened?

We asked a few experts.

Economies of scale

“All aspects of solar power generation are getting cheaper with scale,” says Dr Jonathan Marshall, an analyst at the Energy and Climate Intelligence Unit (ECIU).

“A larger market means there is more enthusiasm to improve module technology, that there is more research taking place to increase invertor lifetimes and that ‘soft’ costs such as financing, site planning and installation are tumbling as experience grows.”

This is echoed by Professor Keith Barnham of Imperial College London, who singles out the Chinese government for “funding bigger production lines and new supply chains.”

The enormous fall in silicon solar panel prices at the beginning of the decade was, according to Professor Barnham, “mainly down to Chinese government and investors funding bigger production lines and new supply chains.”

The US Department of Energy estimates that China spent $47 billion in loans and tax incentives for its solar sector between 2008 and 2013 — and it paid off.


This development, Professor Barnham explains, worked in tandem with subsidy schemes such as the Feed-in-Tariff, with a number of countries – Germany, for instance – “experiencing an exponential rise in demand and supply, with market forces bringing panel prices down further.”

The UK government has dramatically slashed the very renewable energy subsidies that has helped its solar and wind sectors break all sorts of records in recent years.

Barnham was dismayed by the subsidy cut, explaining that “the fall in the wholesale price electricity caused by solar [something called the merit order effect] is a problem for commercial investors who will get a poor return on investment” because additional solar will be generating at the time when existing solar is too.

“They need the certainty of the subsidies that the government has removed.”

Marshall, though quick to credit those subsidies that helped kick-start the solar sector, says “the industry is now moving ahead under its own steam” — and sounded hopeful for the future.

Investor confidence

“Just a few years ago solar was considered to be a niche alternative technology, but it is now a major element of our energy system,” according to Kristina Thoring from industry group Solar Power Europe.

The solar sector in Europe is “more exposed than ever before” and stressed that it is “crucial that risk factors are minimised for those looking to invest.”

Things like the recently repealed ‘sun tax’ in Spain, or the solar tax hike for schools and businesses in the UK are profoundly damaging.

Thoring continues: “In the past few years, we have seen a decline in the European solar market in terms of jobs, installations and gross value added.

“This is due to several factors: the phasing out of support schemes, retrospective policies and the trade measures currently in place on solar modules and cells imported from China into the EU which makes solar in Europe much more expensive than necessary.”


As developed economies transition from one type of renewables support scheme (FiT) to another (tendering), the financial case for solar is increasingly tied to storage.

Because the sun only shines some of the time, and because at peak times it may provide even more power than the grid knows what to do with, there really needs to be a way of capturing that excess energy and dispatch it in cloudy and night times.

Batteries are the most popular storage tech, though pumped and power-to-gas are in there as well.

Paul Massara, the ex RWE nPOWER chief who now runs solar business North Star Solar, is bullish about the prospects of the sector.

“It’s really important,” he argues, “and combined with solar, it will be the cheapest form of energy for the UK.”

“The cost of storage has been falling by 20-30% a year recently and is likely to keep going at that rate for the next few years.”

Thoring agrees: “Storage in combination with solar means that consumers can produce their own energy, which will fundamentally reshape the relationship between retailers and their customers.”

In fact, if anything’s going to trip up the rise of the solar, it’s a failure to really get storage right, as Marshall believes.

“The greatest challenge will be the infrastructure surrounding solar. Without grids that are more flexible, efficient storage techniques and links to move power from the point of generation to the point of use, the growth of solar could be stymied.”


Marshall, however, is positively giddy about the kind of scientific progress is being made in the solar sector.

“The most exciting breakthroughs are yet to hit the commercial market: cells made of multiple materials to harvest more light; the remarkable increase in perovskite cell performance; and development of organic materials that can produce flexible, semi-transparent and extremely thin devices.”

And though commercial solar cells haven’t gotten *that* more efficient in the last few years, there are all kinds of encouraging signs coming out of the lab, as Marshall explains.

“New research on silicon cells,” which are the ones used on rooftop panels, “has reported devices nearing their theoretical maximum efficiency — the observed 26.6% conversion of light to current is nearly double that of devices currently on sale.”

There’s also the more experimental solar technologies.

“Thin film devices are now more than 20% efficient, while perovskites have breached this marker just several years after first being tested in a cell, becoming the fastest-advancing solar technology seen yet.”

So the best may yet be ahead.

Source: EnergyDesk. Reproduced with permission.  

RenewEconomy Free Daily Newsletter

Share this:

  • George Darroch

    It’s good to know just how much ‘reserve’ improvement is in the pipeline. Real-world improvements of 0.5-1% conversion efficiency per year (from the low teens) should make a huge difference.

  • Brad

    It would be great to see a graph or similar with how it is taking vs estimates from ages ago. For example, 8 years ago were they saying about 60% which it what is was or 80% ect. When ever I see an article with ….. in 2030 I always think its just mostly guessing that far away but there was plenty of articles in 2000-2005 that would now have had 10 year predictions come true/ false

  • thebeastie

    This article is quite misleading, it doesn’t even try to compare to an old energy generating technologies like a 1960s era 1600MW Hazelwood coal powerstation.
    Looking at real world data a 25km2 solar farm produces an average MW output of 125MW as quoted on Wikipedia but an old coal powerstation generates 1600MW which is 12.8 times more power anytime it wants. Thus to “compare” you need a solar farm that is 320KM2 sized solar farm. I am willing to bet that once you start getting to that size your going to have to start thinking about replacing the depleting performance panels. It would be nice if you referenced renewable energy farms with their expected average output in MW otherwise your deliberately being misleading and wasting peoples time.

    • John Norris

      Google Lazard LCOE 2016.

      Solar ranges from 46 to 61 USD per MWh and falling. Coal is 60 to 143 USD per MWh. Your comment is quite misleading; it would be nice if you referenced the LCOE costs of coal …

      • thebeastie

        If that was true we would need anything like RET ( The Renewable Energy Target scheme ) or any renewable subsidies at all because private companies would be all over solar with no ones help, but instead renewable energy is so chockablock full of subsidies that when a 1960s era coal power station shuts down our power bills jump massively.
        Your only real defense is the same as the Chewbacca defense

        • wholisticguy

          This has more to do with electricity market rules than cost of energy. There are many articles about the price distortions caused by fossil fuel generators on this site.
          In a fair market, increased diversity and distribution of generators lowers the costs. We have a market with concentrated large scale generators holding out to the point of causing blackouts to drive up electricity prices.

        • John Norris

          >> Solar ranges from 46 to 61 USD per MWh <<

          The top 8 solar PPAs in this list are even lower, at 24 to 45 USD per MWh:

          So why isn't Australia on the list?

        • neroden

          Actually, you’re the one making the Chewbacca defense. We present actual prices and you wave your hands and incoherently mumble.

          Solar doesn’t need any subsidies at this time. It just needs the government to stop subsidizing fossil fuels, stop rigging the market in favor of fossil fuels, and generally let solar compete on an even playing field.

  • wholisticguy

    “the observed 26.6% conversion of light to current is nearly double that of devices currently on sale.”
    We might have different definitions of “nearly” but mainstream, commodity, sold by the millions solar pv panels are 17%+ efficient. Another 9% would be amazing, but double is theoretically impossible.

    • neroden

      In fact, 95% conversion of sunlight energy to electricity is theoretically possible — that’s the Carnot limit. It’ll take a while for the tech to get there. It might get stuck at the Chambadal-Novikov efficiency limit of 85%, or it might not.

      We aren’t even close to the limits of solar efficiency. The best research cells are currently at 46% (for a four-junction concentrator). This can be doubled, theoretically.

      Most effort has been put into making panels cheaper, not more efficient — silicon heterojunction seems to be the best tech considering the price/efficiency/durability tradeoffs right now.

      • wholisticguy

        I agree with you. But it’s important to note that economically, cheaper IS considered more efficient.

        More energy efficient panels already already exist in the lab, and while that’s great, more energy efficient panels will not be produced in large quantities unless that additional electrical conversion efficiency translates into $/W efficiency.

        The Shockley Queisser limit for single junction panels matters more than the Carnot limit because the majority of production capacity is based around single junction solar.

        On top of that, there is already an overcapacity of production, meaning those manufacturers can drive down prices without the capital costs that face new more energy efficient technology.