Despite the fact that solar energy is now a global business, and despite the fact that building owners are increasing their adoption of solar PV generation systems, there is still a lot of confusion about solar PV in the market.
It’s difficult for business owners to discriminate between competing claims about solar energy.
Compare the situation between the automobile and solar energy markets. If a slick talking sales guy in an automobile showroom were to make any kind of outsized claim about the performance of a car, it would be difficult to get away with such a claim.
Consumers are familiar with automobiles and their performance, and have more than a century of experience with cars. There is a vast array of data and consumer discussion about automobiles.
In short, consumers have a ‘schema’ by which to judge any claims made about cars and their performance. They can spot a fib a mile away.
This is not so for solar PV systems. They are new to consumers. Most people lack the base of general knowledge which would allow them to identify a false or misleading claim made about a solar PV system.
This situation opens up a space where unscrupulous sales people can create little nest eggs for themselves, funded by the naivete of their customers.
Further, the recent development of computer technology, cell phones and social media has primed consumers to think about solar power as if it operated by the same laws of development as the computer chip.
Computing power has increased exponentially, and prices have fallen exponentially since the 1980s. Consumers project their experience with computers – which they know just as well as they do automobiles – onto solar PV. This unfortunately sets them up to misunderstand the market.
The reality of solar PV is different from what consumers expect, and it’s somewhat counter-intuitive. Here are some facts:
- It’s not economically viable to ‘run my house’ using solar power, and it’s very expensive, not cheap. Cheap solar power for homes is not viable. At a small scale, the scale of a residential house, solar PV is very expensive.
- Solar PV becomes cost effective at scale – a medium-sized commercial building of X thousand square feet can fit 500 KW of solar generation (Fifty 10 KW residential sized systems) starts to make good economic sense.
- The most cost-effective solar PV applications are for large industrial and commercial buildings, and utility-scale solar power plants on the ground, which feed the grid which already exists and which consumers pay for via their taxes and via the fees on their utility bills. Being ‘off grid’ doesn’t make sense, unless one is located so far from the grid that off-grid is cheaper than the cost of bringing in grid power.
- Solar cell efficiencies have NOT risen exponentially, like computer chips, but only incrementally, in fractions of a percent per year. They continue to do so, but increased cell efficiency comes up against some very challenging, and very technical, limits in the physical properties of materials, which take billions of dollars in R&D to overcome – slowly. Today’s most advanced ‘TopCon’ (Top Conversion) solar technology can convert 23.5% of the light falling on the surface of the solar panel into DC current. In comparison, solar modules made in 2010 were about 15% efficient. An 8% increase in cell efficiency has taken ten years!
- That said, the cost of PV modules has collapsed. In 2005, solar PV modules cost about $6 per watt. Today, they cost about 25 cents per watt. That’s a 2400% price drop. Clearly the cost of solar panels does not have much to do with solar cell efficiency. Cell efficiency does not drive prices down.
- What HAS reduced the price of solar PV modules is manufacturing economies of scale, and automated production. Today, solar panels are produced in near-totally automated factories, at a massive scale. The physical size of modules has also increased. This is also misunderstood by consumers. Ten years ago, the industry was using 350 watt modules. Today, we use 600+ watt modules. Consumers perceive this increase in wattage as an increase in efficiency – a near doubling! But this is incorrect. What has simply occurred is that today’s modules are physically larger, with more, slightly more efficient solar cells than before. In fact, this process of size increase has probably reached its end, because today’s rooftop PV modules are nearly the size of a piece of sheet plywood, which is about as big as the installers can and want to handle. The physical limits of the human body also set a limit on what can and can’t be done with solar panels!
In short, solar PV systems have never been a better choice – for SOME consumers, for all kinds of reasons.
Solar PV modules are cost-effective, and they can produce the lowest-cost, and cleanest electricity in the market today. But just not for the reasons you may think!
