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How far can solar go? A less-optimistic take.

at 03:55 PM ET, 11/12/2011

Earlier this week, I wrote about how solar power is steadily getting cheaper, but there are still plenty of questions about just how cheap it can get — and whether it can ever get cheap enough to become a major energy source in the future. The International Energy Agency, for one, projects that solar could provide more than half of the world’s energy needs by 2060, but that assumes a huge drop in costs, to around 50 cents per watt installed. So is solar on that path? Here are a few reasons to be skeptical.


(JIANAN YU/REUTERS)
First, over at Forbes, Michael Kanellos argues that “Moore’s Law” — the tendency for computer chips to halve in price every 18 months or so — doesn’t really apply to solar. “Moore’s Law is all about getting small,” he notes. “Transistors exist to ferry electrons from point A to point B. Thus, smaller transistors mean better performance.” As engineers figure out how to place more and more transistors on a chip, performance improves. But there’s no way to shrink solar panels in the same fashion. So, Kanellos notes, we can’t reasonable expect solar prices to tumble at the same furious rate that processor technology has done.

Tyler Cowen, meanwhile, links to a Bloomberg story that suggests that solar’s been getting cheaper lately because there’s been a glut of polysilicon, the key semiconductor material in photovoltaic panels. A few years ago, polysilicon producers expected a far bigger boom in solar power than actually materialized, and produced way too much of the stuff. That’s made solar ridiculously cheap, but the good times may not last. As Bloomberg reports, “About 90 percent of China’s polysilicon plants comprising half the country’s production may suspend production because of the price slump.”

Jesse Jenkins is likewise skeptical that solar will automatically keep getting cheaper. “In recent years,” he writes, “China’s emergence into the market has driven intense competition, and forced firms to invest in innovation, scale, and other methods to drive down costs. But what China did to get lower costs—take yesterday’s conventional crystaline silicon panel designs, take advantage of falling silicon prices, achieve gigawatt-scale manufacturing supply chains and economies of scale, and tap free land, subsidized loans, and an artificially depreciated currency—are not really repeatable into the future.”

So how can solar power keep getting cheaper? Will it take some big, dramatic lab breakthrough? Perhaps. Though I was struck by a comment that energy consultant Alan Nogee left here. Nogee recounts how, in the late 1970s, the Energy Department was frantically researching ways to develop big (as in, one- to five-megawatt) wind turbine designs. Those lab efforts failed.

But then the wind industry started deploying smaller-sized turbines and, over time, it got steadily more skilled at building the things, and the design improved. Nowadays, wind companies regularly build two-megawatt turbines, with still-bigger ones on the way. That’s hardly a case against R&D. But sometimes this sort of “learning through doing” can produce big breakthroughs, as well.

 
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