“…a small think tank with a knack of spotting new trends…” – Geoffrey Lean, Telegraph.co.uk.
Chapter 5. Stabilizing Climate: Shifting to Renewable Energy: Solar Cells and Thermal Collectors
Energy from the sun can be harnessed with solar photovoltaics (PV) and solar thermal collectors. Solar PV cells—both often silicon-based semiconductors and thin films—convert sunlight directly into electricity. Solar thermal collectors convert sunlight into heat that can be used, for example, to warm water, as in rooftop solar water heaters. Alternatively, collectors can be used to concentrate sunlight on a vessel containing water to produce steam and generate electricity.
Worldwide, photovoltaic installations jumped by some 5,600 megawatts in 2008, pushing total installations to nearly 15,000 megawatts. One of the world’s fastest-growing energy sources, solar PV production is growing by 45 percent annually, doubling every two years. In 2006, when Germany installed 1,100 megawatts of solar cell generating capacity, it became the first country to add over 1 gigawatt (1,000 megawatts) in a year. 32
Until recently PV production was concentrated in Japan, Germany, and the United States. But several energetic new players have entered the field, with companies in China, Taiwan, the Philippines, South Korea, and the United Arab Emirates. China overtook the United States in PV production in 2006. Taiwan did so in 2007. Today there are scores of firms competing in the world market, driving investments in both research and manufacturing. 33
For the nearly 1.6 billion people living in communities not yet connected to an electrical grid, it is now often cheaper to install PV panels rooftop-by-rooftop than to build a central power plant and a grid to reach potential consumers. For Andean villagers, for example, who have depended on tallow-based candles for their lighting, the monthly payment for a solar cell installation over 30 months is less than the monthly outlay for candles. 34
When a villager buys a solar PV system, that person is in effect buying a 25-year supply of electricity. With no fuel cost and very little maintenance, it is the upfront outlay that requires financing. Recognizing this, the World Bank and the U.N. Environment Programme have stepped in with programs to help local lenders set up credit systems to finance this cheap source of electricity. An initial World Bank loan has helped 50,000 homeowners in Bangladesh obtain solar cell systems. A second, much larger round of funding will enable 200,000 more families to do the same. 35
Villagers in India who lack electricity and who depend on kerosene lamps face a similar cost calculation. Installing a home solar electric system in India, including batteries, costs roughly $400. Such systems will power two, three, or four small appliances or lights and are widely used in homes and shops in lieu of polluting and increasingly costly kerosene lamps. In one year a kerosene lamp burns nearly 20 gallons of kerosene, which at $3 a gallon means $60 per lamp. A solar PV lighting system that replaces two lamps would pay for itself within four years and then become essentially a free source of electricity. 36
Switching from kerosene to solar cells is particularly helpful in fighting climate change. Although the estimated 1.5 billion kerosene lamps used worldwide provide less than 1 percent of all residential lighting, they account for 29 percent of that sector’s CO2 emissions. They use the equivalent of 1.3 million barrels of oil per day, equal to roughly half the oil production of Kuwait. 37
The cost of solar energy is falling fast in industrial countries. Michael Rogol and his PHOTON consulting firm estimate that by 2010 fully integrated companies that encompass all phases of solar PV manufacturing will be installing systems that produce electricity for 12¢ a kilowatt-hour in sun-drenched Spain and 18¢ a kilowatt-hour in southern Germany. Although these costs will be dropping below those of conventional electricity in many locations, this will not automatically translate into a wholesale conversion to solar PV. But as one energy industry analyst observes, the “big bang” is under way. 38
After starting with relatively small residential rooftop installations, investors are now turning to utility-scale solar cell complexes. A 20-megawatt facility completed in Spain in 2007 was the largest ever built—but not for long. A 60-megawatt facility, also in Spain, came online in 2008 and tripled the ante. Even larger solar cell installations are being planned, including 80-megawatt facilities in California and Israel. 39
In mid-2008, Pacific Gas and Electric (PG&E), one of two large utilities in California, announced a contract with two firms to build solar PV installations with a combined generating capacity of 800 megawatts. Covering 12 square miles, this complex will generate as much electricity at peak power as a nuclear power plant. The bar has been raised yet again. 40
And in early 2009, China Technology Development Group Corporation and Qinghai New Energy Group announced they were joining forces to build a 30-megawatt solar PV power facility in remote Qinghai Province. This is the first stage in what is eventually expected to become a 1,000-megawatt generating facility. For a country that ended 2008 with only 145 megawatts of installed solar cell capacity, this is a huge leap into the future. 41
More and more countries, states, and provinces are setting solar installation goals. Italy’s solar industry group is projecting 16,000 megawatts of installed capacity by 2020. Japan is planning 14,000 megawatts by 2020. The state of California has set a goal of 3,000 megawatts by 2017. New Jersey has a goal of 2,300 megawatts of solar installations by 2021, and Maryland is aiming for 1,500 megawatts by 2022. 42
With installations of solar PV now doubling every two years and likely to continue doing so at least until 2020, annual installations, at nearly 5,600 megawatts in 2008, will climb to 500,000 megawatts in 2020. By this time the cumulative installed capacity would exceed 1.5 million megawatts (1,500 gigawatts). Although this may seem overly ambitious, it could in fact turn out to be a conservative goal. For one thing, if most of the nearly 1.6 billion people who lack electricity today get it by 2020, it will likely be because they have installed home solar systems. 43
A second, very promising way to harness solar energy on a massive scale is simply to use reflectors to concentrate sunlight on a closed vessel containing water or some other liquid, heating the liquid to produce steam that drives a turbine. This solar thermal technology, often referred to as concentrating solar power (CSP), first came on the scene with the construction of a 350-megawatt solar thermal power plant complex in California. Completed in 1991, it remained the world’s only utility-scale solar thermal generating facility until the completion of a 64-megawatt power plant in Nevada in 2007. As of early 2009, the United States has 6,100 megawatts of solar thermal power plants under development, all with signed long-term power purchase agreements. 44
In mid-2009 Lockheed Martin, an aerospace defense and information technology contractor, announced that it was building a 290-megawatt CSP plant in Arizona. This plant, like many other CSP plants, will have six hours of storage, enabling it to generate electricity until midnight or beyond. The entry into the solar field of a company with annual sales of $43 billion and vast engineering skills signals a major new commitment to harnessing the earth’s abundance of solar energy. 45
As noted earlier, the government of Algeria plans to produce 6,000 megawatts of solar thermal electrical capacity for transmission to Europe via undersea cable. The German government was quick to respond to the Algerian initiative. The plan is to build a 1,900-mile high-voltage transmission line from Adrar deep in the Algerian desert to Aachen, a town on Germany’s border with the Netherlands. 46
The first plant under construction in Algeria is a solar/natural-gas hybrid, with the natural gas taking over power generation entirely after the sun goes down. Although the first few plants in this massive new project will be hybrids, New Energy Algeria, the government firm specifically created to encourage renewable energy development, plans soon to switch exclusively to solar thermal power. These plants will likely use molten salt or some other medium for storing heat in order to extend generation several hours beyond sundown and through the high-demand evening hours. 47
The U.S. plants under development and this announcement by the Algerians were the early indications that the world is entering the utility-scale solar thermal power era. By the end of 2008, there were some 60 commercial-scale solar thermal power plants in the pipeline, most of them in the United States and Spain. Among the 10 largest proposed plants, 8 are to be built in the United States. Ranging in size from 250 to 900 megawatts, most of them will be in California. The early months of 2009 brought many more announcements. BrightSource Energy announced a blockbuster package with Southern California Edison of seven projects with a collective total of 1,300 megawatts of generating capacity. Shortly thereafter, it announced an identical package with PG&E. NRG, a New Jersey–based firm, and eSolar announced that together they would develop 500 megawatts of CSP at sites in the southwestern United States. 48
Spain, another solar superpower, has 50 or so plants, each close to 50 megawatts in size, in various phases of development. There are a scattering of proposed CSP plants in other countries, including Israel, Australia, South Africa, the United Arab Emirates, and Egypt. At least a dozen other sun-drenched countries now recognize the potential of this inexhaustible, low-cost source of electricity and are mobilizing to tap it. 49
One of the countries for which CSP plants are ideally suited is India. Although this nation is not nearly as richly endowed with wind energy as, say, China or the United States, the Great Indian Desert in the northwest offers a huge opportunity for building solar thermal power plants. Hundreds of plants in the desert could satisfy most of India’s electricity needs. And because it is such a compact country, the distance for building transmission lines to connect with major population centers is relatively short.
Solar thermal electricity costs are falling fast. Today it costs roughly 12–18¢ per kilowatt-hour. The U.S. Department of Energy goal is to invest in research that will lower the cost to 5–7¢ per kilowatt-hour by 2020. 50
We know solar energy is abundant. The American Solar Energy Society notes there are enough solar thermal resources in the U.S. Southwest to satisfy current U.S. electricity needs nearly four times over. The U.S. Bureau of Land Management, the agency that manages public lands, has received requests for the land rights to develop solar thermal power plants or photovoltaic complexes with a total of 23,000 megawatts of generating capacity in Nevada, 40,000 megawatts in Arizona, and over 54,000 megawatts in the desert region of southern California. 51
At the global level, Greenpeace, the European Solar Thermal Electricity Association, and the International Energy Agency’s SolarPACES program have outlined a plan to develop 1.5 million megawatts of solar thermal power plant capacity by 2050. For Plan B we suggest a more immediate world goal of 200,000 megawatts by 2020, a goal that may well be exceeded as the economic potential becomes clearer. 52
The pace of solar energy development is accelerating as solar water heaters—the other use of solar collectors—take off. China, for example, is now home to 27 million rooftop solar water heaters. With nearly 4,000 Chinese companies manufacturing these devices, this relatively simple low-cost technology has leapfrogged into villages that do not yet have electricity. For as little as $200, villagers can have a rooftop solar collector installed and take their first hot shower. This technology is sweeping China like wildfire, already approaching market saturation in some communities. Beijing plans to boost the current 114 million square meters of rooftop solar collectors for heating water to 300 million by 2020. 53
The energy harnessed by these installations in China is equal to the electricity generated by 49 coal-fired power plants. Other developing countries such as India and Brazil may also soon see millions of households turning to this inexpensive water heating technology. This leapfrogging into rural areas without an electricity grid is similar to the way cell phones bypassed the traditional fixed-line grid, providing services to millions of people who would still be on waiting lists if they had relied on traditional phone lines. Once the initial installment cost of rooftop solar water heaters is paid, the hot water is essentially free. 54
In Europe, where energy costs are relatively high, rooftop solar water heaters are also spreading fast. In Austria, 15 percent of all households now rely on them for hot water. And, as in China, in some Austrian villages nearly all homes have rooftop collectors. Germany is also forging ahead. Janet Sawin of the Worldwatch Institute notes that some 2 million Germans are now living in homes where water and space are both heated by rooftop solar systems. 55
Inspired by the rapid adoption of rooftop water and space heaters in Europe in recent years, the European Solar Thermal Industry Federation (ESTIF) has established an ambitious goal of 500 million square meters, or 1 square meter of rooftop collector for every European by 2020—a goal slightly greater than the 0.93 square meters per person found today in Cyprus, the world leader. Most installations are projected to be Solar-Combi systems that are engineered to heat both water and space. 56
Europe’s solar collectors are concentrated in Germany, Austria, and Greece, with France and Spain also beginning to mobilize. Spain’s initiative was boosted by a March 2006 mandate requiring installation of collectors on all new or renovated buildings. Portugal followed quickly with its own mandate. ESTIF estimates that the European Union has a long-term potential of developing 1,200 thermal gigawatts of solar water and space heating, which means that the sun could meet most of Europe’s low-temperature heating needs. 57
The U.S. rooftop solar water heating industry has historically concentrated on a niche market—selling and marketing 10 million square meters of solar water heaters for swimming pools between 1995 and 2005. Given this base, however, the industry was poised to mass-market residential solar water and space heating systems when federal tax credits were introduced in 2006. Led by Hawaii, California, and Florida, U.S. installation of these systems tripled in 2006 and has continued at a rapid pace since then. 58
We now have the data to make some global projections. With China setting a goal of 300 million square meters of solar water heating capacity by 2020, and ESTIF’s goal of 500 million square meters for Europe by 2020, a U.S. installation of 300 million square meters by 2020 is certainly within reach given the recently adopted tax incentives. Japan, which now has 7 million square meters of rooftop solar collectors heating water but which imports virtually all its fossil fuels, could easily reach 80 million square meters by 2020. 59
If China and the European Union achieve their goals and Japan and the United States reach the projected adoptions, they will have a combined total of 1,180 million square meters of water and space heating capacity by 2020. With appropriate assumptions for developing countries other than China, the global total in 2020 could exceed 1.5 billion square meters. This would give the world a solar thermal capacity by 2020 of 1,100 thermal gigawatts, the equivalent of 690 coal-fired power plants. 60
The huge projected expansion in solar water and space heating in industrial countries could close some existing coal-fired power plants and reduce natural gas use, as solar water heaters replace electric and gas water heaters. In countries such as China and India, however, solar water heaters will simply reduce the need for new coal-fired power plants.
Solar water and space heaters in Europe and China have a strong economic appeal. On average, in industrial countries these systems pay for themselves from electricity savings in fewer than 10 years. They are also responsive to energy security and climate change concerns. 61
With the cost of rooftop heating systems declining, particularly in China, many other countries will likely join Israel, Spain, and Portugal in mandating that all new buildings incorporate rooftop solar water heaters. No longer a passing fad, these rooftop appliances are fast entering the mainstream. 62
Thus the harnessing of solar energy is expanding on every front as concerns about climate change and energy security escalate, as government incentives for harnessing solar energy expand, and as these costs decline while those of fossil fuels rise. In 2009, new U.S. generating capacity from solar sources could exceed that from coal for the first time. 63
32. EPIA, op. cit. note 10, pp. 3–4.
33. Prometheus Institute and Greentech Media, “25th Annual Data Collection Results: PV Production Explodes in 2008,” PVNews, vol. 28, no. 4 (April 2009), pp. 15–18.
34. IEA, World Energy Outlook 2006 (Paris: 2006); “Power to the Poor,” The Economist, 10 February 2001, pp. 21–23.
35. Sybille de La Hamaide, “Bangladesh Seeks World Bank Loan for Solar Power,” Reuters, 26 April 2007.
36. “Solar Loans Light Up Rural India,” BBC News, 29 April 2007.
37. Emissions include kerosene and other fuel lamps, from IEA, Light’s Labour’s Lost: Policies for Energy-Efficient Lighting (Paris: 2006), pp. 201–02; DOE, EIA, International Petroleum Monthly, at www.eia.doe.gov/ipm/supply.html, updated 13 April 2009.
38. “PV Costs Set to Plunge for 2009/10,” Renewable Energy World, 23 December 2008; “PV Costs Down Significantly from 1998–2007,” Renewable Energy World, 23 February 2009; Christoph Podewils, “As Cheap as Brown Coal: By 2010, a kWh of PV Electricity in Spain Will Cost Around 9¢ to Produce,” PHOTON International, April 2007.
39. Ines Rutschmann, “A Country of Megawatt Parks,” PHOTON International (September 2008), pp. 32–39; Cleantech America, Inc., “KRCD Enters Long Term, Zero Emission Solar Power Plan,” press release (San Francisco, CA: 6 July 2007); Ehud Zion Waldoks, “IEC Approves Arava Company’s Proposal for World’s Largest Photovoltaic Field,” The Jerusalem Post, 15 February 2009.
40. Matthew L. Wald, “Two Large Solar Plants Planned in California,” New York Times, 15 August 2008.
41. China Technology Development Group Corporation, “CTDC to Build 30MW On-Grid Solar Power Station in Qaidam Basin,” press release (Hong Kong: 2 January 2009); EPIA, op. cit. note 10, p. 10.
42. Svetlana Kovalyova, “Italy’s Solar Power Flourishes with State Help,” Reuters, 12 March 2009; EPIA, op. cit. note 10, p. 8; “Chapter 8.8: California Solar Initiative,” in California State Legislature, Statutes 2006, SB1, Chapter 132 (Sacramento, CA: 21 August 2006); California Public Utilities Commission, California Solar Initiative Program Handbook (San Francisco, CA: January 2009), p. 91; Sara Parker, “Maryland Expands RPS: 1,500 MW Solar by 2022,” Renewable Energy Access, 12 April 2007; New Jersey’s Clean Energy Program, “FAQ: NJ Solar Financing Program,” fact sheet (Newark, NJ: New Jersey Board of Public Utilities, 12 September 2007).
43. Calculated from EPIA, op. cit. note 10, pp. 3–4; people who lack electricity from IEA, op. cit. note 34.
44. Rainer Aringhoff et al., Concentrated Solar Thermal Power—Now! (Brussels, Almeria, and Amsterdam: European Solar Thermal Industry Association (ESTIF), IEA SolarPACES, and Greenpeace International, September 2005), p. 4; NREL, U.S. Parabolic Trough Power Plant Data, electronic database, at www.nrel.gov/csp/troughne/power_plant_data.html, updated 25 July 2008; “Largest Solar Thermal Plant in 16 Years Now Online,” EERE Network News, 13 June 2007; Solar Energy Industries Association, US Solar Industry Year in Review 2008 (Washington, DC: March 2009), pp. 1, 7.
45. Lockheed Martin Corporation, “Lockheed Martin to Support Utility-Scale Solar Power Plant in Arizona,” press release (Moorestown, NJ: 22 May 2009); Arizona Public Service, “APS, Starwood Energy to Collaborate on Major Concentrating Solar Plant,” press release (Phoenix: 22 May 2009).
46. “Algeria Aims to Export Power,” op. cit. note 4; Maclean, op. cit. note 4.
47. “Algeria Aims to Export Power,” op. cit. note 4; Maclean, op. cit. note 4; Oak Ridge National Laboratory, “New Energy Algeria (NEAL),” at www.ornl.gov/sci/eere/international/neal_index.htm, viewed 17 April 2009.
48. Douglas Fischer, “Solar Thermal Comes Out of the Shadows,” The Daily Climate, 20 November 2008; Jonathan G. Dorn, “Solar Thermal Power Coming to a Boil,” Plan B Update (Washington, DC: Earth Policy Institute, 22 July 2008); “NRG Energy to Develop 500 MW of Solar Thermal,” Renewable Energy World, 25 February 2009; Vanessa Lindlaw, BrightSource Energy, e-mail to J. Matthew Roney, Earth Policy Institute, 3 June 2009.
49. Alok Jha, “Power in the Desert: Solar Towers Will Harness Sunshine of Southern Spain,” Guardian (London), 24 November 2008; proposed plants from Dorn, op. cit. note 48; EER, “Global Concentrated Solar Power Markets & Strategies, 2009–2020,” study announcement (Cambridge, MA: April 2009).
50. Renewable Energy Policy Network for the 21st Century (REN21), Renewables 2007 Global Status Report (Paris and Washington, DC: REN21 Secretariat and Worldwatch Institute, 2008), p. 14; DOE, Office of Energy Efficiency and Renewable Energy (EERE), “Concentrating Solar Power Funding Opportunity Announcement,” news release (Washington, DC: 25 May 2007).
51. Mark S. Mehos and David W. Kearney, “Potential Carbon Emissions Reductions from Concentrating Solar Power by 2030,” in Charles F. Kutscher, ed., Tackling Climate Change in the U.S.—Potential Carbon Emissions Reductions from Energy Efficiency and Renewable Energy by 2030 (Boulder, CO: American Solar Energy Society, 2007), pp. 79–90; U.S. electricity consumption from DOE, EIA, Electric Power Annual 2007 (Washington, DC: January 2009), p. 1; U.S. Department of the Interior, Bureau of Land Management, Nevada State Office, “Energy,” Arizona State Office, “Arizona, the New Frontier!” and California Desert District, “Solar Energy Projects,” all at www.blm.gov, updated 19 March 2009.
52. Christoph Richter, Sven Teske, and Rebecca Short, Concentrating Solar Power Global Outlook 2009 (Amsterdam, Tabernas, and Brussels: Greenpeace International, SolarPACES, and ESTIF, May 2009), pp. 53–59.
53. Werner Weiss, Irene Bergmann, and Roman Stelzer, Solar Heat Worldwide: Markets and Contribution to the Energy Supply 2007 (Gleisdorf, Austria: IEA, Solar Heating & Cooling Programme, May 2009), p. 21; “Sunrise or Sunset?” China Daily, 25 August 2008; Ryan Hodum, “Kunming Heats Up as China’s ‘Solar City’,” China Watch (Washington, DC: Worldwatch Institute and Global Environmental Institute, 5 June 2007); Emma Graham-Harrison, “China Solar Power Firm Sees 25 Percent Growth,” Reuters, 4 October 2007.
54. Rooftop solar water heaters have a capacity of 0.7 kilowatts per square meter and a capacity factor similar to rooftop photovoltaics (22 percent); nominal capacity from Weiss, Bergmann, and Stelzer, op. cit. note 53, p. 4; capacity factor from DOE, NREL, op. cit. note 1.
55. Ole Pilgaard, Solar Thermal Action Plan for Europe (Brussels, Belgium: ESTIF, 2007); Weiss, Bergmann, and Stelzer, op. cit. note 53, p. 21; U.N. Population Division, op. cit. note 23; Janet L. Sawin, “Solar Industry Stays Hot,” in Worldwatch Institute, Vital Signs 2006–2007 (New York: W. W. Norton & Company, 2006).
56. Pilgaard, op. cit. note 55; Weiss, Bergmann, and Stelzer, op. cit. note 53, p. 21; U.N. Population Division, op. cit. note 23.
57. Uwe Brechlin, “Study on Italian Solar Thermal Reveals a Surprisingly High Contribution to EU Market: 130 MWth in 2006,” press release (Brussels: ESTIF, 24 April 2007); Sawin, op. cit. note 55, p. 38; Les Nelson, “Solar-Water Heating Resurgence Ahead?” Solar Today, May/June 2007, p. 28; Pilgaard, op. cit. note 55; Ambiente Italia, STO Database, ProSTO Project Web site, at www.solarordinances.eu, viewed 3 June 2009.
58. Nelson, op. cit. note 57, p. 27; Larry Sherwood, U.S. Solar Trends 2007 (Latham, NY: Interstate Renewable Energy Council, August 2008), p. 9; Jackie Jones, “Such an Obvious Solution,” Renewable Energy World, 2 September 2008.
59. Weiss, Bergmann, and Stelzer, op. cit. note 53, p. 21; incentives from Jones, op. cit. note 58.
60. If in 2020 the 5 billion people in developing countries outside of China match China’s 0.08 square meters of rooftop water and space heating capacity per person, this would add 400 million square meters to the world total. Assumptions based on Weiss, Bergmann, and Stelzer, op. cit. note 53, p. 21, and on U.N. Population Division, op. cit. note 23.
61. Nelson, op. cit. note 57, p. 26.
62. Ibid., p. 28; Ambiente Italia, op. cit. note 57.
63. EPIA, op. cit. note 10, p. 6; Richter, Teske, and Short, op. cit. note 52, p. 83; Shuster, op. cit. note 31.
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