For the future of solar, we’ve got the tech – it’s the economics

http://arstechnica.com/science/2015/10/for-the-future-of-solar-weve-got-the-tech-its-the-economics-stupid/

by shawndumas • 11 years ago

65 81 11 years ago

afarrell• 11 years ago

Basore also noted that you can meet some of the evening surge simply by pointing photovoltaic panels to the west instead of the south. But since all electricity is priced equally, everyone tries to point theirs south for maximum productivity.

Does California not use Location Based Marginal Pricing like New York, New England, and Texas?

mikeyouse2• 11 years ago

We do;

http://www.caiso.com/pages/pricemaps.aspx

Not sure how the pricing varies over time, but the data is available at least.

maxerickson2• 11 years ago

I think if the economics don't work out you can make an argument that you don't actually have the tech.

Which is why there are all those people working on storage technology.

lukeschlather• 11 years ago

Economic costs of switching are always higher than maintenance costs. Solar can totally be good enough to stand on its own while not being good enough to justify de-commissioning perfectly good power plants.

001sky2• 11 years ago

but its not good enough, then

thats like saying a stone wheel would be good enough

if we didn't have pneumatic/michelin tires

anything is good enough when its the only option

roymurdock2• 11 years ago

The biggest challenge with going to half renewables is overgeneration. The state receives power from a number of sources that simply can't be shut down—combined heat and power systems and nuclear plants, for example. Layered on top of that are renewable sources like solar that generate power whether you want them to or not.

What? The biggest problem is the cost of storage, not the fact that the underlying technology is not yet efficient enough to compete with non-renewables cost wise?

Can someone please summarize and explain this article to me? I saw no data, and there was no serious discussion of the underlying technology or economics of solar power.

mtgx• 11 years ago

Indeed. The biggest "problem" right now is storage, but anyone saying it's too big of a problem that won't be overcome soon would be as foolish as saying solar can't take off 6 years ago...which is apparently what the International Energy Agency did say then, and its estimates were overshot by 9x.

At that point the International Energy Agency (IEA) was still predicting that solar power would struggle to reach 20 gigawatts by now. Few could have foretold that it would in fact explode to 180 gigawatts.

http://www.telegraph.co.uk/finance/economics/11958916/Paris-...

Battery storage for solar power plants and even homes is going to explode over the next 5 years.

jws4• 11 years ago

"Overgeneration" is not a problem with photovoltaic panels. You simply open circuit the panel and let it sit. In my own off grid solar installation I routinely fill my batteries, and after doing any high power tasks, like vacuum the rugs, the panels just go idle.

To a grid connected system it means you can't sell your power during the solar peaks, but it also means that you have enough capacity to sell more power during the edges of the solar periods.

Certainly any business which invests in long lived capital equipment would like to operate it at 100% capacity all the time, but most industries realize this doesn't happen. Solar will adjust.

For off grid people "excess" capacity means getting by better on partly cloudy days. I'll probably double my capacity next spring for just this reason.

toomuchtodo3• 11 years ago

Could you dump excess energy into a hot water heater? Preheat with thermal on the roof and with excess solar PV power, and then the final temperature lift with propane or natural gas?

Natanael_L• 11 years ago

The idea is that it isn't profitable to focus on building out a network of renewable energy supply when you'll take a short-medium term loss on shutting down what it is replacing.

Regarding storage, that doesn't entirely come into play until the big power plants are scaled down enough that your total available supply is less than the usage, which is not the case on most places most of the time. The risk is that you try to rely on renewables when renewable energy supply is at a minimum and load is at a high, and it exceeds your margin. That's when you need to tap into stored energy. Again, you can usually plan against that.

IkmoIkmo2• 11 years ago

So I'm not sure how familiar you are but solar and wind are intermittent energy sources. Particularly solar peaks around noon while usage peaks in the morning and evening, and around noon when everyone is at work, usage is relatively low.

So you've got an issue, you generate a bunch of energy that's not being used, so it's thrown away. That means the effective cost of an average kwh of solar electricity goes up a lot because you're not just paying for when you're using it, you're also paying (not really, but in a way when you average it) for electricity that's generated and then wasted. i.e. if I build a machine that produces energy for $1 per unit on average, but half my units are generated when I'm not there (and wasted), my actual average cost per unit of energy is $2. The $1 may be competitive with non-renewables, but because half is wasted, the actual $2 price is not.

But of course you don't have to waste it, you can store it, but then you need large amounts of storage and that's not easy or cheap. Take the Tesla powerwall for example, roughly has the capacity to run 1 clothes washer + dryer cycle, and it costs $3k (and doesn't last forever, either). Paying for battery storage for everyone (for when renewables are a big part of total energy production), would put the cost in my hypothetical example somewhere between $1 and $2.

For the actual data (rather than my silly numbers above) you're better off using google, there are a ton of studies that look at the kwh premium when running storage in different contexts. A quick back of envelope calculation for example for home-consumer storage prices... the above powerwall, $3k, lifetime of around 3500 cycles, at 7 kwh capacity, you're talking about the ability to store and use about 24.5k kwh of electricity at a cost of $3k before the device dies, or 12c per kwh. Now 12c per kwh is roughly the average price of a kwh in the US, so a powerwall essentially doubles the cost of of any unit of electricity you want store (the excess power solar generates around noon which can become very significant if we increase renewables a lot). Doubling in price for those kwh is massive, on average it makes little economic sense. In Hawaii, it makes total sense because prices of electricity are much higher. But this is a consumer solution, utility scale is cheaper, and some things can be much, much cheaper (like pumped hydro, way cheaper than a powerwall in general, and way way cheaper if you've got the natural resources like Norway does to build cheap pumped hydro capacity).

So why not turn off the power plants (e.g. coal/natgas) when solar production is high at noon? Because these plants can take 24-48 hours to startup, they provide base power and you can't just shut them on and off.

So yeah, storage is essential and it's not quite there yet. Battery tech has always lagged behind, and now we need it at a massive scale.

curiousphil• 11 years ago

Couldn't this low demand peak noon energy be used to power something of value to someone somewhere? Perhaps a folding at home type setup? Maybe its a distributed cloud computing platform of some sort? I would think there are many clever ways that this low demand power could be used to generate some income that offsets the price.

lumberjack3• 11 years ago

The quote is talking about a problem the utility companies are facing with the adoption of personal PVs.

Right now, the way your electricity bill is structured is heavily biased towards consumption. The service charge is a small part of the overall bill.

What happens if 50% of the costumers have PVs is that the utilities will lose a lot of revenue but they will still have exactly the same amount of costs because they are not able to turn down their plants during the day and the PV people will still consume the same amount of peak grid energy during the night.

So there is two ways to fix this. One of them is for the plants to downsize their constant power generation methods like coal fired boilers and get a bunch of gas peaker plants.

The other one is to increase the service charge on your electricity bill.

jws4• 11 years ago

This gets into the other billing problem with domestic solar.

In rough numbers, half of your electric bill is for energy, the other half is to pay for all the grid and capacity. Billing is purely on energy consumption. The effect of this is that low electric users get subsidized by high electric users.

When someone installs a domestic solar system they reduce their payments, but they still depend on the grid infrastructure. The system reaches its ultimate perversion when a grid tied domestic user achieves a negative bill. Not only have they been paid for their energy, they have been paid for the utility having a grid.

You can solve this economic distortion by a couple of ways:

• split billing into a grid-tie fee and an energy consumption charge: This accurately covers the solar houses, but it also raises the bills of the poor and cuts those of the wealthy (generally larger consumers).

• only pay domestic solar producers half what you charge for power: This works out asymptotically for a huge producer where the grid portion vanishes, but it doesn't work for people reducing their consumption but maintaining a grid tie or selling a little bit.

• put a surcharge on each watt of solar capacity: This works out accurately, but feels abusive. 1 watt of solar panel is going to make about 100 wHr of power a month. If grid-tie privilege includes a surcharge to cover the grid portion of 100wHr then this 1 watt solar panel user will end up paying the same for the grid as he did before. If a domestic solar installation is a net producer, it will end up getting paid for the energy and the grid fees will cancel.

Even before we get to a point where the power company may say "no thank you" to a domestic user that wants to sell power at 1pm on a sunny day, we still need to straighten out the billing. The current system ends up with the utilities (and by extension all grid users) subsidizing solar installations by forgiving their grid costs. I'm in favor of that now, but in a future where our carbon emissions are under control the distortions will need to be smoothed out.

CaptSpify• 11 years ago

they are not able to turn down their plants during the day

Why is this? Can they not regulate how much output they produce by shutting down "sections" of the plants?

melling3• 11 years ago

Forty years later and solar is still the future.... Now we're only 15 years away. That's about the period of time it took humans to learn how to fly then break the sound barrier.

I like the observation that it's about the economics because it's always about economics. If solar could have had a consumer product like personal computers, cell phones, or big screen TVs, we would be using a lot more solar today. There was nothing to bootstrap the industry. No Intel of solar energy was ever created.

maxerickson2• 11 years ago

Cell phones weren't really a mass market product until sometime around 2000. Then almost everyone had them by 2010.

(In the US anyway, but I guess they weren't so widespread in Europe in 1990 either, so it has an at least similar adoption profile.)

So it could be that the moment for solar is still coming. I guess there is a good chance that a consumer storage product tips the scales, if people buy storage to save money on grid power, they benefit from incrementally installing solar even in the absence of net metering.

melling3• 11 years ago

Yes, I wasn't saying that it's not going to happen, it's just that it's taking an incredible amount of time. Once cell phones took off there was an arms race to build a supercomputer in your pocket. That R&D will carry over to wearables, which will fuel more R&D.

Solar seems to be on its own little island without anything to drive it into the mainstream. If some sort of affordable consumer product existed, that could drive research.

maxxxxx• 11 years ago

It took humans from 1903 to 1947 to break the sound barrier. That's a little more than 15 years.

melling3• 11 years ago

You need to add in the other number. Let me rephrase:

"40 years later and solar is still the future.... Now we're only 15 years away."

For some context, the President of the United States wanted to stress solar energy in the 1970's:

http://www.scientificamerican.com/article/carter-white-house...

We could probably dig up a few issues of Popular Sciences

vinceguidry• 11 years ago

You're just counting heavier-than-air flight. Dirigibles date back to 1783.

ZenoArrow2• 11 years ago

"There was nothing to bootstrap the industry."

Apart from government subsidies. Which, at least in some countries, worked very well. Germany being a key example.

Check out this graph showing growth in installed solar generation capacity:

http://www.nippon.com/en/files/a01505en_fig011.gif

This growth is at least in part due to the German Renewable Energy Act, which came into force in the year 2000:

https://en.wikipedia.org/wiki/German_Renewable_Energy_Act

diafygi• 11 years ago

I work in solar, and here's some quick facts:

1. 1 out of 78 jobs created in the U.S. last year were solar jobs[1].

2. There are more solar employees in California than utility employees[2].

3. Soft costs (non-hardware) are 64% of the installed cost of solar[3].

4. Solar is expected to reach a load defection point (i.e. cheaper to leave the grid) in most places in the next 10-15 years[4].

Like OP's article states, this industry's hardware has gotten so good, the software in the industry hasn't kept up. So much so, in fact, that an entire startup accelerator program in the bay area, Powerhouse[5], has been created to try and attract tech entrepreneurs into the solar industry to make the next generation of solar software. My startup recently went through the program, and being a part of this industry is one of the most empowering and rewarding things I've ever done. It's one of those extremely rare instances where you can have a solid business model and a positive impact on the world.

And we need all the help it can get. Solar expected to grow 100-200x over the next 25 years[6], but it won't happen if smart people don't join in. If you're a tech entrepreneur, and want to do something that matters, please please please consider doing a startup in solar.

[1] http://energy.gov/eere/articles/1-78-new-jobs-america-solar-...

[2] http://www.calseia.org/index.php?option=com_content&view=art...

[3] http://energy.gov/eere/sunshot/reducing-non-hardware-costs

[4] http://blog.rmi.org/blog_2015_04_07_report_release_the_econo...

[5] https://powerhouse.solar/

[6] http://www.bloomberg.com/news/articles/2015-06-23/the-way-hu...

AnkhMorporkian• 11 years ago

I feel point 2 is a bit misleading. That solar count includes all solar manufacturing jobs. Utility companies don't engage in manufacturing, so the comparison doesn't really seem to have any utility, if you'll pardon the horrible pun.

If you included all coal, natural gas, oil, and other non-renewable equipment manufacturing, I'm positive they'd beat solar by quite a margin.

savanaly3• 11 years ago

Also, requiring jobs is a downside of something, not an upside. But it seemed like he was trying to plug solar by bragging about how many jobs it would create.

lumberjack3• 11 years ago

4. Solar is expected to reach a load defection point (i.e. cheaper to leave the grid) in most places in the next 10-15 years[4].

How can it be cheaper to leave the grid? Won't energy storage be much cheaper if it is done on scale by buy and selling energy as required and letting utility companies figure out energy storage and load balancing?

jussij2• 11 years ago

Here in Australia we have one of the highest per capita uptakes of household solar panels in the world. At some point during the day, most of those households produce excess power and that power is sold back into the grid.

But because there is so much power being generated, the householder is only paid a fraction of the equivalent price of extracting an equivalent amount of electricity from the grid.

At present those householders have no choice but to put up with that dud deal, as they have no where else to put that excess power. But move on a few years when battery technology starts to take off and battery prices come down, that will change.

When that happens, total household electricity costs will be coming down and they will be one very big step closer to being off grid.

epistasis2• 11 years ago

If a utility has invested large fixed costs in a long-term investment, then their prices may be a bit inflexible for the foreseeable future. A classic example would be nuclear, which has a huge upfront cost, but then cheap running costs for 60 years.

ianferrel• 11 years ago

Utilities are often heavily regulated, with large fixed costs and legal requirements to serve many customers with the same price structure.

Some of those customers are going to be better served by doing something else. As the price of solar and local storage goes down compared to the legacy cost structure of utilities, it can make more sense for more of those customers to leave.

chiph• 11 years ago

What sort of software? Firmware for the charger-inverter, load scheduling & management, something else?

jonawesomegreen• 11 years ago

The OP's company appears to be: UtilityAPI.com.

Some more info about solar tech companies here: https://powerhouse.solar/companies/

mbostleman• 11 years ago

Point 4: "load deflection", aka "grid parity" sounds good on paper but doesn't reflect the fact that the cost of conventional sources is a moving target controlled by governments and monopolies (not that there's much of a difference). No doubt that solar cost is dropping fast given huge investments in R & D. But the cost of conventional sources can be dropped with the stroke of a pen.

seivan• 11 years ago

What problems are there that software engineering can help fix? You sorta left us hanging there :)

pyoung• 11 years ago

Worth mentioning, a major tax credit for US solar installations will expire at the end of 2016.[1] No one knows for sure how this will impact the industry, but before you dump all your money into solar stocks, or quit your day job to start a solar startup, you might want to do some research. The general consensus is that things are going to get pretty crazy over the next year as companies try and get installations done before the tax credit expires. And after that, no one really knows what is going to happen.

[1] http://www.seia.org/policy/finance-tax/solar-investment-tax-...

bootload• 11 years ago

@diafygi, what type of problems are need to be solved?

aidenn02• 11 years ago

Come on Ars; Giga-Watts of storage? I expect that from other places reporting on energy, but I thought you knew better.

surrealize• 11 years ago

I had the same thought. The article does mention pumped hydro storage though. And for that, watts (the capacity of the turbines/generators) is a relevant figure of merit just as watt-hours (the capacity of the reservoir) is. The article does use watts kind of indiscriminately, though.

laotzu2• 11 years ago

Solar is not cost effective on the scale of dollars. That doesn't mean it's not cost effective though.

The dollar is a debt-based system which means when something is bought with a dollar that thing is assumed to be owned and loaned by someone. No one owns the sun, it's free and basically infinite.

Oil is the commodity which creates the most demand for and thus the most value out of the dollar. 6 of the 7 richest companies in the world in terms of revenue are oil and gas companies.

So with all things considered the cost effectiveness of solar power to the dollar is not a valid comparison because what you are basically doing is comparing the cost benefit of solar for oil production and the ability to create debt.

Even after all this time the Sun never says to the Earth, "You owe me." Look what happens with a love like that, it lights the whole sky.

-Hafez

roymurdock2• 11 years ago

It takes time and money (among other resources) to convert the energy emitted by the sun into a form that we can use.

Are you suggesting that we should not pay the companies who do the conversion, routing, and storage of this energy because nobody owns the sun?

laotzu2• 11 years ago

MilnerRoute• 11 years ago

Electric cars look better all the time - and maybe even more electric mass transit.

I mean, this article talks a lot about "overproduction" - how the grid gets taxed by massive daytime spikes in production on sunny days. But it seems like if the problem really is going to be "too much electricity", then maybe green vehicle designers can find ways to put all that "clean" energy to good use.

ta20101029• 11 years ago

Want to help solve this puzzle? Genability is building software to stay ahead of the utilities and save energy consumers money through clean energy on day 1. And we're hiring: http://genability.com/careers/work_with_us.html

benplumley• 11 years ago

a staggering 20GW of overproduction
the recent drought

Desalination is normally shot down for being very wasteful of energy, but given the energy can't otherwise be stored and California seems in constant drought, are there any reasons why isn't it a viable use of the surplus energy in this scenario?

ethbro2• 11 years ago

I think this will probably be a major energy sink going forward, as we've never really had to find a use for "surplus electricity" on this scale before.

Moreover though, I think the general class of chemical storage is likely to be another winner. Reversible reactions in liquid provide so many benefits: modest infrastructure costs (compared to anything but pumped hydro) and scalability in terms of both throughput (more reactors in parallel) and capacity (additional tank volume).

epistasis2• 11 years ago

I agree! For example, vanadium redox flow batteries are looking pretty great for grid storage lately, with estimates of storage costs below $0.20/kWh stored. As I understand it, that's more than the daily price fluctuation in some markets. Far more cycles than lithium ion and a wider range of operating temperatures.

And I think we're just skimming the surface with flow batteries (pun not intended). There's a massive amount of potential for new materials here.

aidenn02• 11 years ago

In California, it's not just the energy that's the issue, it's the coastal commission, which is very stingy about giving out de-sal permits.

pjc50• 11 years ago

For hard data, it's hard to beat http://gridwatch.templar.co.uk/ - has anyone built an equivalent for their own country?

You can see that although wind is broken out to its own meter, solar is not yet broken out. The effect of solar so far is a small dip in noonday demand. The daily high point is about 6pm at the moment, as the end of the working day overlaps it getting dark here.

From the rest of the graphs you can see gas and coal ramping up and down over the course of the day. Gas is capable of fairly rapid response. At the peak, the pumped storage (Dinorwig) is turned on.

Until rooftop solar pushes daytime net demand below the 4am current demand low, I don't think we need to panic about storage.

The government policy on subsidies is incoherent; subsidies for renewables are being cut, but the Hinkley Point C nuclear deal includes an obligation to buy the power at a price far above market or renewable levels.

Personally I have 3.8kW of panels on my roof. At some point I'll go and have a look at the data logger and see what conclusions to draw.

secabeen• 11 years ago

The California Grid Operator has a similar page for our state: https://www.caiso.com/outlook/outlook.html

mikeyouse2• 11 years ago

Cool link.. For people on Chrome, if you have the same issue as I did seeing the charts, there's a little Shield icon in the address bar that prevents the loading of 'unsafe scripts'. I'd never seen that before so it took me a minute to figure out why nothing was showing up.

For the future of solar, we’ve got the tech – it’s the economics

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