Opinions about solar --- Jenny Chase

From a toot thread by Jenny Chase (who works for BNEF)  My comments are inside square brackets, like this: [...].

Time to make 2023 updates to my annual “opinions about solar” thread.

If you like these, the second edition of my book, Solar Power Finance Without The Jargon, comes out very soon (just sent final proofs to publisher!)

https://www.worldscientific.com/worldscibooks/10.1142/q0437#t=aboutBook

https://www.amazon.co.uk/Solar-Power-Finan

It's the book I should have read before trying to get a job in renewable energy. Edition 1 was “too valuable, and entertaining, to be ignored” according to PV Magazine. I rewrote Edition 2 quite a bit after the 2022 energy crisis, and included a lot more batteries and hydrogen.

I did this thread once a year on X, now branching out. You can view the 2022 thread below, and from there it links to 2021, 2019, 2018 and 2017.

https://twitter.com/solar_chase/status

1. To opinions! Solar is the cheapest source of bulk electricity in many countries, and the quickest to deploy, and now you couldn't stop it being built if you wanted to.

The limits to PV build in most places are grid access, permitting, and sometimes installation labour.

2. We don’t need a solar technology breakthrough. Today, solar developers just need a grid connection and permission to sell electricity, and then they’ll be off building solar plants whether it’s a good idea or not.

3. Right now the price of solar modules hits a new record low every week (currently $0.136/W) due to oversupply. Some manufacturers will exit in the next two years.

This is quite normal in this industry, and nobody will learn any lessons from it. Good for buyers, though.

4. Incremental improvements in solar modules continue. 2023 was the move from PERC cell tech (module efficiency ~21.3%) being the standard design, to TOPCon (~22.3%). The average solar module in 2023 was about 21.6% efficient, up from 15.4% (a now-obsolete multicrystalline design) in 2012.

5. In October 2021, when the standard mono module price was 27.3 US cents per W, I said it would "come back down over 1-2 years" (referring to all-time low of 19 cents in summer 2020). Since it’s now 13.6 US cents in normal markets (ie not the US or India), I’m going to say that wasn’t too bad a prediction.

6. India and the US have solar import tariffs, so modules are pricier there (~23 and ~33 cents/W respectively). Both countries are subsidizing local manufacturing capacity. This is a perfectly good strategy as long as it doesn’t slow down their energy transition.

7. Thank goodness we’ve collectively stopped the nonsense of boasting about "lowest ever solar auction prices", most of which were Middle East opaque transfer prices or had other features. PV power prices below $25/MWh unsubsidised are still too low. Solar still does cost money.

8. After grid and land, the next big challenge for PV will be power price cannibalization. Basically, PV plants in one area all generate at the same time. This means that they reduce the price of power at that time, “cannibalizing” their own revenues.

9. High PV build resulting in power price cannibalization also affects other power plants, but not as much as it affects solar, because solar plants generate most at times when solar is pushing the price down most. This will hold back more solar.

10. By 2030 most countries will have spot power prices of zero for a few hours every sunny day. This will be passed on to end consumers, to encourage them to shift power demand to sunny periods by electric vehicle and battery charging, preheating, precooling, etc.

11. It may well be that "negative power prices for a few hours every sunny day, followed by high evening power prices when the sun goes down" is a problem solved by capitalism and batteries.  [In other words, utilities/generators will make money by topping up the batteries at midday and discharging at the evening peak.  This may apply to EV owners too]

12. Utility-scale batteries became a thing much faster than I expected. BNEF's Energy Storage team recorded 16.8GW/32.9GWh of gross energy storage capacity additions worldwide in 2022, and expect 41.9GW/98.6GWh in 2023.

13. Small-scale batteries are a thing too, even though the economics don’t always make much sense. 2023 battery attachment rates – proportion of residential PV buyers who get a battery too – are >70% in Germany and Italy, >50% in Switzerland, >30% in the UK. [Depends of the difference between retail and wholesale electricity prices. For example, I'm paying 50 cents/kWh for electricity from 3 pm to 10 pm, while my feed-in tariff is just 11 cents/kWh]

14. I'm more worried about seasonal intermittency than daily, because there is no way we can build a big enough battery to shift energy from summer to winter. The economics of battery storage are impossible at one cycle a year.  [See my pieces on seasonal storage]

15. We oughtta be building more wind. Seriously, PV will get built anyway, but wind needs help, and wind blows in the dark and in the winter. It doesn’t help that solar pushes down power prices and generates renewable energy credits, which hurts wind farm economics.

16. To put it another way: when you tell an energy future model to optimise a power portfolio for clean power adequacy, it will give you more wind and less solar than when you tell it to optimise a least-cost electricity sector development.

17. BNEF's mid cumulative solar forecast is 5.8TW by 2030, above the 5.3TW that BNEF models that we need to be on a global net-zero-by-2050 high-renewables path. Wind is 1.9TW forecast and 3.6TW net-zero pathway, so a big miss.

18. Hydrogen made with renewable electricity will be used for steel and fertiliser manufacture. Some may be made into ammonia for shipping and aviation fuel. Some may even be burned for power in weeks of low renewables, which is one way to shift energy from summer to winter. [Hydrogen is hard to store and transport---converting H2 to methane via the Sabatier process is prolly a better way to go]

19. ...but sometimes net-zero electricity models want to put in hydrogen to cover weeks of low renewables just because the model isn’t given any other option. Deep decarbonisation models do weird things. It may turn out there are easier pathways in practice.

20. Electrification of transport is far better than biofuels; for example, as Dan Lashof says on this podcast with @drvolts , it would take about 300 acres of farmland to run a petrol car on corn ethanol, vs an electric car running on about one acre of photovoltaics.

https://www.volts.wtf/p/whats-going-on-wit


21. Decarbonizing aviation is hard. The CEO of Lufthansa said in September that running its fleet on sustainable aviation fuel made from electricity would take half Germany’s current electricity demand. BNEF thinks this an underestimate.

22. However, BNEF research did track orders for 989 electric aircraft (mostly small ones) as of early 2022. Fingers crossed.

(Paywall source for the 989: https://www.bnef.com/insights/30267 )

 

23. Heatpumps are better for heating homes than hydrogen, but in seasonal climates like northern Europe will exacerbate the seasonal demand and supply mismatch for solar. [Use green methane]

We need to build wind and probably nuclear as well.  [Yes, nuclear in high latitudes may be necessary]

24. Nuclear is safer than coal and climate change, and better than gas unless the gas plants are running very rarely. Batteries should help with the unfavourable ramping economics of nuclear (you *can* turn nuclear plants up and down, but you really don’t want to).  [Nuscale maintains that their SMRs can be easily ramped up and down] 

25. We’re finally getting serious about net zero carbon. Getting that last 10-30% of carbon out will be hard, and require some expensive solutions. The first 70-90% is easy-ish but we're getting on with it.

26. You can be cynical about government and corporate net zero emissions targets if you like, but they're a lot better than no net zero emissions targets.

27. Ordinary people have no idea how much progress we’ve made. Tell people at parties that in 2022 renewables produced 47% of Germany’s electricity. [South Australia 68% in 2022; should reach ~90% by 2026]

28. The 2022 energy crisis should put most concerns about cost of renewables subsidies to rest; renewable energy saved Europe billions of euros in imported gas, and reduced purchases from Russia. Turns out fossil fuels also cost money, and sometimes, unexpectedly, a lot.

29. Sorry for the German, but this chart is “the development of renewable energies in primary energy consumption in Germany” and it shows a. overall primary energy consumption (not just electricity) falling and b. renewables rising. This pattern is seen in many developed economies.

https://www.bdew.de/service/daten-und-graf

30. …It would still really help if rich people would stop pissing away carbon for no reason. [Yes]

31. The US Inflation Reduction Act includes a licence to print money for solar manufacturers and hydrogen firms.
It’s good for clean energy, but it's also like hitting the accelerator on a car with the handbrake on. The handbrake is trade barriers, grid and permitting issues.

32. US trade barriers on Chinese solar are great for First Solar, which also receives 17 cents/W for its US manufacturing, and also for southeast Asian firms like Boviet and VSUN, and Indian firms like Waaree and Adani.

33. The supply chain for solar manufacturing should probably be more transparent.

This sentence is also true without the word “solar”.

34. While moving to a circular economy with 100% recycling rates is essential in the long run, it’s not a challenge for PV in particular; few PV panels have been recycled to date only because the vast majority are still in use. It can be done.

35. For 5 years I have been refusing to get excited about perovskites until a perovskite company can disclose a commercial partnership with a named major module manufacturer. They have now. Still not excited. Just big manufacturers trying to look like they have an edge, I reckon.

36. Europe will support its solar manufacturing industry with grants, but not with trade barriers. This makes sense. The grant-backed factories are small, but are insurance against a huge disruption to the international supply chain.

37. Solar manufacturing is a horrible business to be in. Competition is vicious, the newest factories have the best tech. Older manufacturers carry heavy debt for factories rapidly becoming obsolete.

38. Floating solar is a thing, but it’s not a new tech. It’s solar onna boat.

It’s mostly about having a place to put the modules and, when it’s on a hydro dam reservoir, a grid connection right there. Grid connections are like gold dust.

39. Agrivoltaics, likewise, is solar onna field.

PV only has synergies with some crops. Competition for light and restricted mechanical access to crops are often problems. Study is needed to avoid just subsidised bad PV and bad farming in the same place. 

40. Batteries for residential solar systems are becoming standard offers. Frankly some of the sales claims are of indifferent veracity and the current software isn’t up to economically optimising when batteries charge and discharge. Buyer, be aware you may not save a lot of money.

41. Also get your rooftop solar system built when you have scaffolding up for something else, 'cos scaffolding is expensive. Ideally build it when you’re building the roof, there will never be a better time. Rooftop solar mandates are good and should be more common.  [We don't use scaffolding in Oz]

42. Anyone buying a new internal combustion car now is pretty silly. EVs aren’t the answer to everything – especially congestion of cities – but they do use much less energy and, with flexibility, can support the grid.

43. If you get a battery and a solar system, pay attention to when it charges and discharges and what power costs at those times! Everyone needs a hobby.

(We need better control software for residential solar and storage to use consumer flexibility to support the grid. Norway has it already, houses pay a price linked to the current spot price of electricity and you can set an app to charge your electric car when it expects to be cheapest in the next x hours!)

44. Very few people who are not solar project financiers understand tax treatment for solar projects (I don’t) and it’s important enough to make most calculated LCOEs irrelevant to power purchase prices.

45. Solar thermal tower and heliostat designs, especially with molten salt storage, are still not working very well. We might even end up using molten salt for multi-day and seasonal storage... but heat it with PV.  [Vast Solar in South Australia may be different]

46. Solar plant operation and maintenance in desert environments will prove more challenging than PV project stakeholders currently expect. Climate risk from hurricanes, hailstorms, fire and floods is on the rise for solar as for everything else.

47. Traded electricity wholesale markets are the worst way of deciding how to dispatch energy resources, except for all the others that have been tried.

48. Many solar project developers complaining their problem is 'finance' are being disingenuous. Their problem is, their project is rubbish and they cannot convince anyone otherwise. This is not just a solar thing.

49. Auctions for renewable power are getting a lot more complex, and that’s good. India’s 24/7 auctions and China’s energy megabases are a fascinating way to try to solve grid issues by co-locating solar, wind, storage and even fossil plants.

50. South Africa will hopefully be a case study of a major market where solar helped to solve a crippling power crisis. About 5GW of solar will be installed this year, much of it on homes and businesses. [The Zimbabwe model is worth looking at]

51. Watch Nigeria, which recently removed subsidies on gasoline and hence made the country’s ~50GW of private generators much more expensive, for how cheap solar and batteries could play out in other African countries. Could they really leapfrog straight to clean power?

52. There is enough land for lots of solar. There are enough golf courses in the U.S. for about 370GW, ffs. There’s also loads and loads of roofs, so let’s see those who oppose ground-mounted solar support higher-cost roof-mounted solar. [Over the last 12 months, rooftop solar has provided 20% of South Australia's electricity, and utility-scale solar just 6%]

(sorry going off on a slightly tangential rant about how hard my job is)

53. Forecasting solar build is hard when people actually pay for the results and therefore want them country by country. It’s easy when you just extrapolate a global line, but that is not terribly useful for setting corporate strategy, and makes your clients yell at you.

54. You want to forecast a terawatt-per-year solar market by 2030, you go for it! (We have 707GW/year in 2030). Fair warning, you’ll have to forecast solar build in markets that currently have no plausible plans, and where country experts will tell you it will never happen.

55. In 2017, my analysis team covered 42 countries which were significant solar markets. Now we attempt to cover 146, which is a pain, and we keep finding ones we have missed.

56. Also have I mentioned how bad the data is?! Increasingly nobody knows where the bloomin’ solar panels are being installed. We have Customs data on how much is leaving China, and it’s a *lot*, but it is often unclear where it went.

57. While in theory you can see said solar panels from SPACE, in practice it is far harder to count them by machine learning than you might think. You can waste a lot of time preparing training data and get clearly inaccurate results for area covered. I am told.

58. If you record PV capacity and only have room for one figure, record MW(DC), the module capacity. It tells you more about what the project will produce, how much land it needs, and what it will cost than MW(AC), which is just the size of the wire.

I will die on this hill.

Also btw if you want to estimate a rough capacity factor for an entire country, just use an insolation map, not a really hyperspecific tool. PVGIS has some great ones. {Link here]

That's all, apologies for spamming Energy Mastodon.

If you would like a less flippant primer on solar and the future of decarbonization (though it still has jokes), do check out edition 2 of Solar Power Finance Without The Jargon. Also if you’re a journalist wanting to review an advance copy of edition 2, please let me know. Shouldn't be long now, I approved the final proof!