Solar Power The trends and future of solar power generation Essay Example for Free

Solar Power The trends and future of solar power generation Essay Solar power is being increasingly conceived as a possible alternative to traditional energy sources, given the rise in costs associated with traditional energy sources. Although it had for long, been considered as highly uneconomic; this notion has been changing with the improvement in technologies. It should be noted here that generation of solar power is currently highly dependent on government subsidies. These subsidies are very essential for projecting solar power as an alternative to electricity from traditional fuel sources. However the cost of manufacturing and installing solar power generation system has been considerably decreased during the last two decades, during which the installed capacity too rose phenomenally. This scenario is in stark contrast to electricity generation from traditional sources where the generation costs increased with the rise in natural gas prices. The need for more power plants to meet the increasing consumption needs, the need to cut emissions and adopt other pollution control measures, only keep pushing conventional electricity prices further and further. The global solar capacity is anticipated to be about 20 to 40 times its current levels, by 2020, growing by 30 to 35% each year. The solar power generated today would correspondingly rise from 10 gigawatts to 400 gigawatts by 2020. However, despite the prospects for solar power, the solar power generation field is in its early stages; such that even if the estimated capacity level reaches the said 20 to 40 times its current level, it would only account for 3 to 6% of the electricity generation capability or 1.5 to 3% of the total output in 2020. It is now anticipated that in three to seven years from now, unsubsidized solar power should be available to the end customer at costs compatible to electricity produced by fossil fuels or other alternatives to solar. Parts of US and Italy, Japan and Spain are expected to see the equalization of solar and traditional power costs due to favorable trends and encouraging factors prevailing in these regions. Currently unsubsidized solar power costs about 36 cents per kilowatt-hour. This is expected to be around 12 cents per kilowatt-hour by 2020. The current solar technologies used are silicon-wafer photovoltaics, thin-film photovoltaics and concentrated solar thermal power. Each of these technologies have certain advantages with regard to particular usages. Through innovations and cost cuttings, the technologies strive to be more efficient, with enhanced applicability. The power conversion efficiency is the amount of electricity generated by the solar radiation corresponding to the surface of the photovoltaic cell, for a particular time period. Efficient systems are directed towards weighing less, with a smaller radiation collection surface, low cost transportation and installation. Photovoltaic refers to the solar panels which convert solar energy to electricity. The photovoltaic material is mainly formed of pure silicon, which emit electrons when subjected to solar radiation, thereby producing an electric current. While basic photovoltaic cells are used in calculators and wrist watches, more higher versions are used for powering water pumps, communications equipments and several other off-grid requirements. Photovoltaics are increasingly used as an additional or alternative for utility purposes already serviced by electric grid. More and more people increasingly opt for photovoltaics for several reasons like environmental, economic, emergency requirement, rising electricity costs etc. The silicon-wafer photovoltaics account for about 90% of installed solar capacity. It is particularly used in rooftop applications associated with space restrictions. Although these are doubly efficient compared to thin-film photovoltaics, their installation is costly. The solar panels themselves are costly too, requiring larger quantities of silicon photovoltaic material compared to thin film photovoltaic solar cells. Another disadvantage is that the theoretical efficiency limit of the photovoltaic single-junction silicon wafer cell, set at 31%, has been neared by several companies already. Although the limit of 31% can be extended by advanced techniques, these could lead to increased production costs. The commercially produced thin-film photovoltaics have only been recently proved to reach efficiency levels of about 10%. The lower efficiency levels with respect to silicon-wafer photovoltaics is achieved by very low usage of materials, requiring only about 5% or lesser than that needed for silicon wafer photovoltaics. The manufacturing costs associated with thin-film photovoltaics is almost half that for silicon-wafer, with tremendous prospects of increasing the costing gap in the long run. Thin-film photovoltaics are more used in large area installations, flat rooftops etc. While silicon-wafer based photovoltaics are capable of providing high output even for a quarter of a decade, the longevity of thin film are uncertain. Cadmium telluride is perhaps the most prospective thin film technology that have been developed commercially. However, the toxicity levels associated with cadmium and the availability of telluride are worrisome factors. The concentrated solar thermal power technology converts solar radiation to heat using mirror arrangements. These are then converted to electricity through heat conversion methods. The concentrated solar thermal power is appropriate for village requirements of 10 kilowatts as well as for grid applications involving several hundred megawatts (SEPA, 2008). These can be installed at the vicinity of the customers, thereby lowering transmission and distribution costs. Although these are the lowest in terms of associated costs, they require plenty of open space and very demanding solar conditions. The concentrated solar thermal technology mostly uses the usual components like reflectors and pipes, and therefore the prospects of costs reduction are less. The challenges confronting the advancement of solar power are those that are relevant to any upcoming or emerging sector. Given the intense competition, companies involved in manufacturing of solar power generation equipment must slash their costs by improving their manufacturing process of solar cells. The spurt in solar power activity has brought in funds from venture capital and private equity firms. An amount of $3.2 billion invested in the year 2007, saw new players in the solar power generation, who contributed to excess supply and falling prices. Early entrants like Dow Corning and Wacker as well as component developers like First Solar and SunPower saw high margins. At May end this year, the Abu-Dhabi based Masdar announced its entry in the manufacturing of thin film photovoltaic products. With an investment of $2 billion, the company expects to produce the state of art thin film modules, through a three phase strategy. (Ghelfi, 2008). On the previous day to this announcement, Q-Cells, the German solar cell manufacturer, announced an investment of $3.5 billion for developing a production center in Mexico, for manufacturing thin film modules. According to First Solar Inc., a company involved in manufacturing of solar modules, its average manufacturing cost for solar module in 2007 was only about $1.23 per watt. The company attributed the low cost to its thin film semiconductor technology compared to crystalline silicon modules, manufactured traditionally. The company expects to become the first solar module manufacturing company to provide non-subsidized solar electricity at retail electricity rates by 2010. A single manufactured solar module is about 2ft by 4ft, employing cadmium telluride as the absorption layer which provides high conversion efficiency with very little semiconductor material. From 2005, there had been an increasing demand for silicon from the solar module, solar cell and solar wafer manufacturers. Due to the insufficient supply of crystalline silicon, the solar modules and cells manufacturers’ utilization rates fell. The utilization rates fell to 70% in 2005 from 86% in 2004. With the demand increasing considerably, the German cell manufacturer ErSol Solar Energy reduced its 2007 expectations from 70 megawatts to 55 megawatts, due to fall in wafer supply. The supply shortfall led to a huge hike in silicon prices. The price of the silicon raw material shot to $45 a pound in 2007 from $20 in 2003. The higher prices in turn brought many companies into the business of silicon manufacturing. Silicon production rose by 14% in 2007 and is expected to rise by 43% in 2008 and by 50% in the each year 2009 and 2010. By 2010, the supply shortage and the resulting high prices would be taken care of. According to investment columnist Jim Jubak, rising prices of natural gases, slow developments and cancellations associated with nuclear and coal plants respectively, are pushing the price of solar stocks. Solar cell companies too are highly dependent on technology just as any other computer chip makers or cell phone one or television manufacturers. A bill seeking to extend the existing tax break for another six years have been passed by the House Ways and Means Committee. Jubak estimates that with everything looking in favor of solar power, the revenues in the solar industry are very likely to increase phenomenally (Jubak, 2008). Lux Research projects revenues to climb 27% annually, on a compounded basis through 2012. Another estimate from Clayton Securities suggests 17% annual compounded revenue growth through 2016. Â  REFERENCES Solar Electric Power Association (2008) Solar Electricity Basics [Electronic Version] Downloaded on 29th June 2008 from http://www.solarelectricpower.org/index.php?page=basics Jubak J., (2008) 3 high powered solar stocks [Electronic Version] Downloaded on 28th June 2008 from http://articles.moneycentral.msn.com/Investing/JubaksJournal/HighPoweredSolarStocks.aspx Ghelfi C. (2008) Masdar getting into thin film solar business Electronic Version] Downloaded on 27th June 2008 from http://media.cleantech.com/2904/masdar-getting-into-thin-film-solar-business-abu-dhabi Lorenz P., Pinner D. Seitz T., The economics of solar power. The McKinsey Quarterly [Electronic Version] Downloaded on 27th June 2008 from http://www.mckinseyquarterly.com/my_profile.aspx