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Making Sense of the Solar Hype


For thousands of years mankind has viewed the Sun as an evident source of energy, primarily as a source of heat. The most intuitive idea of past civilisations was to use the sun’s wares towards applications that involved heat and light. The Ancient Chinese pioneered the concept of “yangsui”, or “burning mirrors” that used focused sunlight to make a fire. In the 5th century, the Greeks improved upon “Solar Architecture” by building houses designed to face South to capture heat during the winter months. The Romans took it a notch further by covering south-facing windows with mica and glass to prevent the escape of heat during the day. The Romans continued improvising by using the greenhouse effect to warm public baths. History has a long track record of trying, but unsuccessfully positioning solar energy as a mainstream source of power. Other notable and inspirational cameos include those of Leonardo da Vinci’s 4-mile long mirror experiment to heat an industrial boiler, and Augustin Mouchot’s invention that converts sunlight into mechanical work using heat generated by solar boilers to drive a 1/2 horsepower engine. Mouchot also audaciously converted sunlight into a portable hydrogen based fuel, but none of these experiments made it past the lab bench, thus continuing to deprive the market of a cost-effective solution. The technology experienced a true renaissance in the decades that followed World War 2 with the invention of the Photovoltaic Cell.

Fast forward to 2020, solar is touted as the technology that has the potential to change the face of energy as we know it. The solution in the spotlight is Photovoltaic Solar Modules. It might be worth mentioning that the other mainstream solar-based solution is Concentrated Solar Power (CSP) (A system of mirrors that generate heat to drive a turbine) which has seen some success, but not at the scale to have mass-market impact. 

So what has promoted PV to a seat at the energy table with fossil-fuel based technologies? More importantly, how has the technology taken a lead in the renewables race despite the sun’s apparent quirks? In my view, there are three major drivers that have been instrumental to the technology’s meteoric rise over the last 60 years:

1. Exponential reductions in cost

2. Steady Improvements in efficiency

3. Decentralisation at scale

Let’s take these one at a time. 

1. Cost:

In an economy where inflation has been on steady march and the cost of the average commodity has all but decreased year-on year, we have seen an encouraging and dramatic fall in the cost of solar panels. The only comparable, yet in all fairness – exceptional precedent – has been that of the semiconductor industry, which has consistently churned out double the number of transistors on an integrated circuit every year in line with Moore’s Law with correspondingly dramatic reductions in cost to resulting computer technology. Solar panels, which also happen to be built on silicon substrate have elegantly resembled Moore’s phenomenon, with a 99.3% drop in cost since 1960. This industrial trend is usually attributed to the experience curve or learning curve that manufacturers have benefited from through economies of scale. The simple principle behind which implies that as an emerging industry improves, prices fall.

Falling Costs of Solar

The cost advantages reveal itself nicely at a project level. Even narrowing the assessment period to the last 10 years – for instance, in 2009, back when I was a fresher in college, a 10kW solar system would have set you back $85,000 if you lived in New York City. That very same project in March 2020, costs $29,600 on average, about 65% lower. It might be worth noting that over 75% of this cost is weighted towards labour overheads. If you were to consider an emerging economy like India, that cost is even lower, by almost 87%, factoring in our ability to hire skilled labour at competitive rates.  Even at the higher figure, with payback horizons of 10 years and upwards, early adopters were thrilled about the prospects. Today, the investment breaks even at the 4-5 year mark taking the most conservative assumptions and can go down to 2-3 years when conditions favour the setup. One reason for this is that the Indian sun relatively outperforms irradiance in other parts of the world, making for higher energy yields from every solar array on your rooftop. All said and done, in 2020 India, solar is proving to be a more than just a respectable investment with lower upfront costs and aggressive returns. However, we are also seeing a reversal in the trend, with non-panel costs (structures, inverters, cables and labour) climbing towards figures in developed markets. The honeymoon period may well come to an end soon, but as the old saying goes, let’s make hay while the sun shines. 

2. Efficiency:

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PV Material efficiency

Solar panel efficiency is a measure of the quantum of the sun’s energy a certain panel can convert into usable electricity. It is typically calibrated by capturing the electrical current generated when sunshine interacts with silicon or thin film cells inside a solar panel. As you may well imagine, early PV cells did not have impressive efficiency. In 1955, Hoffman Electronics – Semiconductor division introduced photovoltaic panels with 2% efficiency. Within 2 years, that figure quadrupled to 8% and later skyrocketed to 14% by the end of 1960. 

Lab Efficiency Timeline

Today the record lab cell efficiency is 26.7% for mono-crystalline silicon cells and 22.3% for multi-crystalline wafer-based cells. The new kid on the block is high-concentration multi-junction solar technology which can achieve an efficiency of up to 47.1% in the lab, with module efficiencies at 38.9%. But these technologies have not made it very far from the laboratory, given the steep cost. All in all, good progress in research has elevated solar’s competitiveness, resulting in high yields and attractive payback models.

3. Decentralisation:

Over the years, there have been several energy technologies that have powered economic life on earth – think coal, nuclear, hydroelectric. If you were to find a common thread tying each of these power generating sources, what would it be? They are all collected at central points and distributed further downstream creating single points of failure in the process. This top-down design is being upended by solar which is able to scale by turning every building, home or business into a mini-power plant.

Unlike coal and uranium, which are elite fuels restricted to specific regions, and monopolized by a handful of corporations and governments, the sun shines almost everywhere, and does not send humanity a monthly bill. This is the radical ideology on which the solar revolution is taking place. Quite literally, “power” to the people, by the people. 

PV module over hut – Nimule, south sudan

The technology is easy to deploy, a commercially attractive investment and requires little to no maintenance for 20 years and provides the property owner free energy and a degree of independence from the grid. Governments and utilities all over the world have sent their blessings in the form of tax breaks and net metering policies to promote their renewable energy and energy security targets. This also demands more local businesses to step up to the plate and meet the multitude of needs that arise with a consumer-driven energy market, furthering the economy in the process. These are just a few of the collateral benefits that come with this decentralised energy ecosystem. 

In closing, the world needs solar now more than ever given our dire environmental challenges. But if there is one thing we understand about humanity, it is that he/she is not driven by virtue alone, but by a healthy proportion of self-interest. The solar saga is unfolding in a way where ulterior motives of every stakeholder are conspiring and converging on the opportunities that lie ahead for each of them. Whether you are a climate change advocate, a government, a citizen, a utility, a manufacturer or a business owner. There’s something in it for you. If all goes according to plan, the world will win at the end of it. 

AT SWAN ENERGY, WE ARE IN THE BUSINESS OF HELPING CUSTOMERS REALISE THEIR SOLAR GOALS. WE DESIGN – ENGINEER – DEPLOY – OPTIMISE SOLAR SYSTEMS TO SAVE YOU MONEY. IF YOU WOULD LIKE A FREE CONSULTATION TO FIND OUT IF YOU ARE A GOOD CANDIDATE FOR SOLAR (OR NOT) AND FOR A MORE TAILORED, REALISTIC ROI ANALYSIS, GIVE US A CALL ON 98840 25 888 OR SEND US AN EMAIL AT INFO@SWANENERGY.IN. YOU CAN ALSO BOOK AN APPOINTMENT WITH US HERE


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