There is potential – also in solar

Yesterday I was at a gym with a German friend of mine. He’s studying mechanical engineering and business economics, so it was not surprising that after the gym, when we sat down to eat something, the discussion went to energy technologies and their future.

I’m not gonna go through the whole conversation, but the key point was, that even though in Germany “almost every roof” has a solar panel installed, and it is economically wise even in a relatively short time range to install even small devices, not all the people do it. They think, that Photovoltaics (PV) is something, that is still not mature enough. They think that it’s better waiting for the cells to become better and so on. Also a question arises: Why does the government support the industry so much just to get to pay every household an abnormally high price of the electricity? It also makes the overall electricity price to rise. For those confused: If you install a PV panel to your roof in Germany, you will get a fixed price for the electricity you produce to the grid. This price is more than what you pay for your electricity on average. Of course you can also use it yourself, but right now, I guess, it’s economically wise to sell it out.

Well the reason for the question above is: IF there would be no investments made in ( if no-one would buy the) PV, there would be no industry to produce them. The state is assured that PV is a good thing. That’s why they are strongly driving the economy to make it an economical investment for the households to buy a PV panel. This leads to a booming industry, which leads to more money to that industry. More money means also more money to R&D (Research and Development), because a variety of companies are trying to get a firm market position in the early growing markets. This inevitably leads to development.

In real life it means cheaper, more efficient solar panels or other technologies to harness the power of the sun. Also for the regular consumers. This is, as we know, essential for the renewable future of our economy. It helps us when we don’t want to be dependent on the last oil drops, for which you soon have to pay 150 or 200 dollars per barrel.

Member of Parliament, Oras Tynkkynen, shared this one this morning in Twitter. I’m quite certain, you’ll find it interesting! plastics-put-solar-on-the-verge-of-an-energy-revolution

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4 responses to “There is potential – also in solar

  1. Hi Tuomas!

    Nice to see that you are sharing your thoughts! I hope that people find this blog and take part in the discussion.

    I agree with you that the government can and should encourage the development of new technologies that are considered essential for the future. Companies are usually driven by their quarterly performance expectations where lengthy and costly R&D projects have to have quite desirable foreseeable profits to be executed. Those projects do exist, though. For example UPM decided to carry out the investment to their new biodiesel factory without support from the government.
    Subsidies and tariffs such as those used in Germany are one way of ensuring the survival of new technologies, but they have to be able to live on their own at some point, I think. In my opinion, ensured profit margin does not encourage genuine dedication to development in the long run. Where do you draw the line then? When has a technology had enough government support?

    I am quite sceptical about large scale utilization of photovoltaics in electricity production. They are a viable option to provide electricity to remote places, but I think that for the bulk energy production there are better options for harnessing solar energy. I would put more effort on using the sun as the source of thermal energy in a steam power plant. To really be able to replace fossil fuels we need solutions that are practical in a very large scale. How do you see the role of photovoltaics and solar energy as a larger concept in the future? What other options do we have besides solar energy to reduce our fossil fuel consumption?

  2. Hey Tomi!

    Really nice to get some feedback. Thank you for your thoughts in return!

    I’m sure that UPM project is not the only one of its sort, although it is a good example. I see the interference of the government as a catalyst, which gives the change a strong push forward. The initial innovations and projects have not been developed with subsidies or tariffs, but with some hard basic research and innovation by separate innovators as well as small and bigger scale companies.

    Where should we stop is a good question indeed. Without the boom created by supporting systems, the time for for example pv to reach the break even point (where solar electricity is equally expensive with the average electricity price in the markets) would come later, if ever. If there would be no taxation on CO2 and no feed in tariffs for the wind…. If we would not twist the markets to make the renewables worth it, there might be too much of economical pressure to keep burning the coal. Which is not good, as evaluated by several sources. I bet part of that UPM project is due to this artificial economical atmosphere, that we are in.

    I hope and think, that the competition between companies will deal with the possibility of “lay back” attitude. Several wind companies, for example, are competing in the markets as well as in every part of the energy ensemble. If there would be a monopoly in the markets, we could see the consequences of relatively high oil price for example… Luckily that will end soon.

    Lastly about the pv vs solar thermal. I think no-one is sure at the moment which is better overall. I totally agree with you, that e.g. in the Desertec-project in Sahara the use of solar thermal is much more economic than pv. In Sahara there is the best amount of direct sun radiation from a clear sky. If you would do it with solar panels, the high temperature would also decrease the efficiency of the panels.

    In Finland or in the distributed systems all over the world the thing is different, but for different reasons. In Finland the small amount of days with direct sunlight reduces the advantages in solar thermal. Pv operates also during the cloudy days. If I remember correctly, about 2 billion people still live without an access to the electricity. This is mostly in the countries, where sunlight is abundant. I see no reason, why both of these technologies would not be widely used in the future.

    And of course there are many technologies within the “pv” and “solar thermal”, but maybe this is the level we want to continue this discussion 🙂

    -Tuomas

    ps. About the Desertec: http://www.desertec.org/

  3. Fascinating!
    Actually, I wasn’t aware that Germany has this kind of arrangement. Always nice to learn new things.

    Tuomas, I totally agree with your last comment. In current situation, where no (solar) technology is remarkably different from the others I think it is good to just support the whole industry. That way, as said, more money flows to R&D and through that technologies will develop.

    At the moment solar power is one of the easiest ways for “average Jack” to support the production of renewable energy and that way help reduce the use of fossil fuels.
    But, I started to think that also other renewable energy sources should be available for normal citizens.
    This is kinda wild idea, but what about small windmills or bioenergy for every household? Well, not every, but you get the point. I feel that government should really support this kind of development.
    A good way to really boost renewable energy related R&D is to get money for it, and by expanding this German style with solar power to other renewable energy sources, things could start to develop fast.

  4. Hey Erika!

    In addition to Germany, at least in the USA a private citizen who owns Photovoltaic modules can sell it to the grid with a good price. They were also given nice amount of financial support to invest on solar electricity production. I don’t remember if this was a permanent arrangement or not, but many farmers for example had started to produce electricity because they can save a lot money in producing the electricity mainly on their own.

    I bet this change will take place also in other parts of Europe in addition to Germany within a decade or so. There seems to be so much happening in the next decade and decades. It is fascinating in deed 🙂

    To your other comments: I think in a really small scale and in remote places the small wind turbines might be economical (in islands or so). The thing just is, that when you go clearly above the tree level, to e.g. 100m like a “normal” turbine, the wind average speed rises almost exponentially –> cheaper electricity even though it costs more to build a big wind turbine.

    I’m really hoping that I could visit the factory of http://www.gasek.fi/ . They were talking also in one of the Vaasa Energy week’s presentations and it was just what you mean (I think 🙂 Out of wood you can produce electricity in a relatively small scale 20-50 kW / 60-100 kW of heat. That amount is a bit too much for a household, but for example for a group of houses it might be perfect! This is of course just one option, but it would be a home-grown one.

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