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The sun machine is coming down

Cost has always been solar power's Achilles' heel; now it's becoming its most promising trait.

Lezette Engelbrecht
By Lezette Engelbrecht, ITWeb online features editor
Johannesburg, 04 Oct 2011

For a long time, renewable energy has been synonymous with expensive energy. Critics would smile complacently as clean energy champions ticked off the benefits: vastly reduced environmental damage, sustainability, job creation... before silencing them with a smug “but it's more expensive”.

This is how the debate has unfolded for years - even the green tech enthusiasts seem to accept it as a given. But perhaps it's time to check in and see whether this is still the case.

When it comes to renewable energy, many can't see the opportunity for the obstacles.

Lezette Engelbrecht, online features editor, ITWeb

Numerous research groups have found that renewable energies - and solar photovoltaics (PV) in particular - are gaining on fossil fuels much faster than anticipated. The European Photovoltaics Industry Association (EPIA) said last month that solar PV will become genuinely competitive with conventional energy sources in Europe by 2020, with the price of PV systems set to decrease by up to 51% over the coming decade, cutting the cost of PV electricity generation in half.

Ten years isn't a long time in the energy sector, but for those who remain unconvinced, the EPIA reports that dynamic grid parity could occur in Italy's commercial segment as early as 2013, thanks to its sunny climes. (Dynamic grid parity is the point at which long-term revenues from PV electricity equal that of traditional sources.) In 2010, the cumulative installed solar power in Italy was already more than the combined installed power of 50 states in the US.

The price of PV has come down by 50% over the past five years, helped by the so-called “Moore's Law” of solar, which suggests the price of PV modules falls about 20% with each cumulative doubling of manufacturing capacity.

Also last month, the Lawrence Berkeley National Lab reported that the average cost of installing solar PV systems in the US dropped 17% in 2010 and continues to fall in 2011.The Solar Energy Industries Association says the solar power business is the fastest-growing industry in the US, delivering strong economic returns and dishing out plenty of jobs.

On the other side of the globe, in sunny Australia, solar PV is already producing electricity at the same rate as charged by the national grid. And following the Fukushima disaster, Japan is also ramping up development of renewable energy, with the country's relatively high energy prices boding well for the competitiveness of solar PV.

Bottom line, competitive PV is, in the EPIA's words, “coming soon - and sooner than many people think”.

In the dark

The irony is, of course, that in many parts of Europe where PV is making great strides, the solar radiation is significantly less than here in Africa.

The top five national markets for PV last year were Germany, Italy, the Czech Republic, Japan, and the US - together representing over 80% of global demand. Germany remains in the top spot when it comes to cumulative installed capacity, with more than 17GW currently installed.

The Sun is an immense energy source - it emits more joules in one second than is available in all the fossil fuels on earth. Our home star could easily supply all the world's energy needs for centuries to come. It's widely available, sustainable, and as a pure source - free. For much of the year, that energy falls on the African continent, yet goes largely to waste as we drill and dig and frack at great expense to extract dirty fuel from the ground.

Considering many African nations receive on average 325 days of bright sunlight per year (compared to Germany's average of 73), why isn't the continent embracing it? Yes there are lots of small-scale installations in villages, but why isn't it being considered as a serious form of energy supply, given its future growth prospects, falling costs and the threats of global warming? With all that sunshine and more than 75% of the continent's people without electricity, something doesn't add up.

Granted, even the largest PV markets remain driven by financial support in the form of feed-in tariffs and similar programmes. But this is set to change in future, as tariffs are reduced, leading to lower industry costs and prices, and competitiveness becoming less dependent on incentives (Germany reduced its feed-in tariff levels by 13% in 2011).

In fact, solar could soon compete with coal on a cent-for-cent basis, without incentives, special allowances or any of the aids critics often point to. A Climate Progress article reports that reductions in material costs could turn solar PV into a serious competitor to new coal plants before the end of the decade. And that doesn't even take into account the full cost of coal, which a Reuters report notes can be triple what industry charges, thanks to the health and environmental damage associated with this source.

Wood for the trees

An important fact coal pundits often miss is that the subsidies and investments ploughed into conventional fuels over the years far surpass those currently supporting renewables. A Harvard study reveals that the coal generation making up half the US' electricity, costs the economy about $345 billion a year in hidden expenses. This includes the medical costs of dealing with increased incidences of cancer and other illnesses in coal-mining areas; air, water and soil pollution; and the negative effects of elevated emissions.

This cost isn't borne by miners or utilities, but rather, as the study author notes, by the public. It's a subsidy borne “by asthmatic children and rain-polluted lakes and the climate”.

Accounting for all these associated costs would shift coal from one of the cheapest sources of electricity to one of the most expensive. In SA, where the electricity provided by coal is double that of the US, you can only imagine how much extra the public is paying for this “cheap' form of electricity.

The problem is, when it comes to renewable energy, many can't see the opportunity for the obstacles. The word that's been dogging solar energy is 'but'. Yes it's effective, but...; yes it's clean, but...Why is the argument not turned on coal? Why not: Yes it's cheap, but it's slowly poisoning communities and the environment; Yes we have established infrastructure, but building new energy systems could create sustainable jobs with fewer impacts; Yes it's easy to just carry on the way we have, but the welfare of future generations outweighs our apathy. It's time to get off our 'buts' and start seeing the opportunities.

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