Thread by @solar_chase

Time to make 2024 updates to my annual “opinions about solar” thread. If you like these, the second edition of my book, Solar Power Finance Without The Jargon, is new this year. A 30% discount code WSQ0437 is valid on publisher website until end of Oct.

worldscientific.com/worldscibooks/…

It's the book I should have read before trying to get a job in renewable energy. Reviewers describe as “to the point, important, and taught me a lot” and “surprisingly entertaining, don’t be put off by the title”.

I have put out this thread once a year on social media since 2017. You can view the 2023 thread below, and from there it links to previous threads. So you can see what I got wrong, or at least changed.

https://x.com/solar_chase/status/1718295988421456087

1. To opinions! Solar is the cheapest source of bulk electricity in many countries, and the quickest to deploy, and now you couldn't stop it being built if you wanted to. The limits to PV build in most places are grid access, permitting, and sometimes installation labour.

2. Nearly 20 years ago when I got this job, I thought maybe solar would one day be 1% of global electricity supply. Last year it was 6% worldwide, and rising fast.

3. We don’t need a solar technology breakthrough. Today, solar developers just need a grid connection and permission to sell electricity, and then they’ll be off building solar plants whether it’s a good idea or not.

4. Solar will not solve every problem. But the biggest problem is that our civilisation relies on digging up fossil carbon and burning it, which is destabilising the climate, which multiplies a lot of very unpleasant threats. Solar is part of stopping us needing to do that.

5. Solar modules now cost 9.5 US cents per Watt (higher in US, India due to trade barriers). Solar panels are cheaper than ordinary fencing materials. For rooftop installs, non-module cost is still $0.50-3.00 per Watt, so further module price declines make little difference.

6. These prices mean that few makers of solar modules are profitable right now. If manufacturers stop selling at these prices, they will permanently lose customers. They are locked into a game of chicken. There will be bankruptcies and eventual price stabilisation.

7. Solar manufacturing has always been a horrible business, and that’s unlikely to change. It’s very commoditised, and incremental improvements in cell and module tech make factories obsolete in less than four years.

8. India and the US have solar import tariffs, so modules are pricier there (~17 and ~28 cents/W respectively). Both countries are subsidizing local manufacturing capacity. This is a perfectly good strategy as long as it doesn’t slow down their energy transition, but...

9. Thank goodness we’ve collectively stopped the nonsense of boasting about "lowest ever solar auction prices", most of which were Middle East opaque transfer prices or had other features. PV power prices below $25/MWh unsubsidized are still too low. Solar still does cost money.

10. After grid and permitting issues, the next big challenge for PV is power price cannibalization. Basically, solar plants in one area all generate at the same time. This means that they reduce the price of power at that time, “cannibalizing” their own revenues.

11. High solar penetration resulting in power price cannibalization also affects other power plants, but not as much as it affects solar, because solar plants generate most at times when solar is pushing the price down most. This will inhibit further solar build.

12. This is already obvious in Spain, California, Australia and even Germany. Now that the global liquefied natural gas price hike related to Russia invading Ukraine in 2022 has eased, lower power prices drive solar developers to seek long term contracts again.

13. By 2030 most countries will have spot power prices of zero in sunny hours. This will be passed on to end consumers, to encourage them to shift power demand to sunny periods by electric vehicle and battery charging, preheating, precooling, etc.

14. Low power prices may be great for consumers but they are very bad if you're trying to build more clean power plants. Without demand-side flexibility measures, the energy transition will fail before fully pushing fossil fuel out of the mix. Which is what we must do.

15. One big difference between edition 1 and edition 2 of my book is that batteries are now a thing. For example, California has 11GW of batteries in a grid with about 50GW peak power demand, and the reliability of the grid has steadily improved as its carbon emissions go down.

16. Small-scale batteries are a thing too, even though the economics don’t always make much sense. 2023 battery attachment rates – proportion of residential PV buyers who get a battery too – are >70% in Germany and Italy, >50% in Switzerland, >30% in the UK.

17. It may be that "negative power prices for a few hours every sunny day, followed by high evening power prices when the sun goes down" is a problem solved by capitalism and batteries.

18. However, there is no way we can build a big enough battery to shift energy from summer to winter. The economics of battery storage are impossible at one cycle a year.

19. We oughtta be building more wind. Seriously, solar will get built anyway, but wind needs some help, and wind blows in the dark and in the winter. It doesn’t help that solar pushes down power prices and generates renewable energy credits, which hurts wind farm economics.

20. To put it another way: when you tell an energy future model to optimise a power portfolio for clean power adequacy, it will give you more wind and less solar than when you tell it to optimise a least-cost electricity sector development.

21. BNEF’s New Energy Outlook modelling doesn’t want to just solve the intermittency problem with loads of batteries. This is because the batteries get lower utilization rates the more you build. Batteries cannibalize batteries long before you get 100% clean power.

22. Hydrogen made with renewable electricity will be used for steel and fertiliser manufacture. Some may be used to make shipping and aviation fuel. Some may even be burned for power in weeks of low renewables, which is one way to shift energy from summer to winter.

23. ...but sometimes net-zero electricity models want to put in hydrogen to cover weeks of low renewables just because the model isn’t given any other option. Deep decarbonization models do weird things. It may turn out there are easier pathways in practice.

24. BNEF's mid cumulative solar forecast is 6.7TW by 2030, close to the 7.2TW BNEF models that we need to be on a global net-zero-by-2050 high-renewables path. Wind is 2.1TW forecast and 2.7TW net-zero pathway, a bigger miss.

25. Electrification of transport is far better than biofuels; for example, as @Dlashof says on this podcast w/ @drvolts, it takes about 300 acres of farmland to run a petrol car on corn ethanol, vs an electric car running on about one acre of PV.

volts.wtf/p/whats-going-…

@Dlashof @drvolts 26. Decarbonizing aviation is hard. The CEO of Lufthansa said in 2023 that running its fleet on sustainable aviation fuel made from electricity would take half Germany’s current electricity demand. BNEF thinks this an underestimate.

@Dlashof @drvolts 27. Direct electrification of aviation would be better. BNEF research did track orders for 989 electric aircraft (mostly small ones) as of early 2022. Fingers crossed.

(Paywall, ).bnef.com/insights/30267

@Dlashof @drvolts 28. Heatpumps are better for heating homes than hydrogen, but in seasonal climates like northern Europe will exacerbate the seasonal demand and supply mismatch for solar. We need to build wind and probably nuclear as well.

@Dlashof @drvolts 29. Nuclear is safer than coal and climate change, and better than gas unless the gas plants are running very rarely. Batteries should help with the unfavourable ramping economics of nuclear (you *can* turn nuclear plants up and down, but you really don’t want to).

@Dlashof @drvolts 30. We’re finally getting serious about net zero carbon. Getting that last 5-20% of carbon out of power will be hard, and require some expensive solutions. The first 80-95% is easy-ish but we're getting on with it.

@Dlashof @drvolts 31. You can be cynical about government and corporate net zero emissions targets if you like, but they're a lot better than no net zero emissions targets.

@Dlashof @drvolts 32. Ordinary people have no idea how much progress we’ve made. Tell people at parties that UK carbon emissions in 2023 were at their lowest level since 1879, for example. Most developed economies are now reducing carbon emissions without lowering quality of life.

@Dlashof @drvolts 33. …It would still really help if rich people would stop pissing carbon into the atmosphere for no reason.

@Dlashof @drvolts 34. Annual build volumes of solar are rising, but they are not guaranteed to rise forever. Lower power prices in Europe take the urgency out of the market. Parts of China already have solar grid congestion which is slowing build.

@Dlashof @drvolts 35. Solar is not just for the rich any more, nor is it being built with subsidies. Many of Pakistan’s factories now have solar on their roofs, of which regulator NEPRA does not seem to have any record.

@Dlashof @drvolts 36. Pakistan power demand fell 9.1% in 2023, and one reason is the rise of solar panels. The country imported 13GW of solar panels in 1H 2024, and the current on-grid power capacity is about 50GW, so this is a story to watch.

@Dlashof @drvolts 37. Nigeria is another market to observe closely. In 2023 the government briefly removed subsidies on gasoline for the country’s fleet of private generators, which is much larger than its central power grid. Although gasoline subsidies were reinstated, PV sales continue steadily.

@Dlashof @drvolts 38. While it’s easy to get very excited about offgrid solar, most of these markets are very small. Pakistan, Nigeria and South Africa are middle-income countries with specific reasons to boom. It’s still hard to sell stuff to very poor people!

@Dlashof @drvolts 39. The US Inflation Reduction Act includes a licence to print money for solar manufacturers and hydrogen firms. It’s good for clean energy, but it's also like hitting the accelerator on a car with the handbrake on. The handbrake is trade barriers, grid and permitting issues.

@Dlashof @drvolts 40. While moving to a circular economy with 100% recycling rates is essential in the long run, it’s not a challenge for PV in particular; few PV panels have been recycled to date only because the vast majority are still in use. It can be, and is being, done.

@Dlashof @drvolts 41. For 6 years I have been refusing to get excited about perovskites until a perovskite company can disclose a commercial partnership with a named major module manufacturer. They have now. Still not excited.

@Dlashof @drvolts 42. Floating solar is a thing, but it’s not a new tech. It’s solar onna boat. It’s mostly about having a place to put the modules and, when it’s on a hydro dam reservoir, a grid connection right there. Grid connections are like gold dust.

@Dlashof @drvolts 43. Agrivoltaics is mostly just a buzzword. Whether it means better overall use of land will depend on the precise rules made for local conditions. It needs subsidy, as PV alone is more profit and less work. And there’s a reason we farm big open fields.

@Dlashof @drvolts 44. Get your rooftop solar system built when you have scaffolding up for something else, 'cos scaffolding is expensive. Ideally build it when you’re building the roof, there will never be a better time. Rooftop solar mandates are good and should be more common.

@Dlashof @drvolts 45. Anyone buying a new internal combustion car now is pretty silly. EVs aren’t the answer to everything – especially congestion of cities – but they do use much less energy and, with flexibility, can support the grid.

Here's ours, a Peugeot electric estate car:

@Dlashof @drvolts 46. Levelized Cost of Electricity, LCOE, should be defined as “what you gotta pay someone per MWh to get them to build you a power plant”. Tax treatment and future inflation assumptions can turn out to be the most important inputs.

@Dlashof @drvolts 47. Very few people who are not solar project financiers understand tax treatment for solar projects (I don’t) and it’s important enough to make most calculated LCOEs irrelevant to power purchase prices.

@Dlashof @drvolts 48. Solar thermal tower and heliostat designs, especially with molten salt storage, are still not working very well. We might even end up using molten salt for multi-day and seasonal storage... but heat it with PV.

@Dlashof @drvolts 49. Solar plant operation and maintenance in desert environments will prove more challenging than PV project stakeholders currently expect. Climate risk from hurricanes, hailstorms, fire and floods is on the rise for solar as for everything else.

@Dlashof @drvolts 50. Traded electricity wholesale markets are the worst way of deciding how to dispatch energy resources, except for all the others that have been tried.

@Dlashof @drvolts 51. Many solar project developers complaining their problem is 'finance' are being disingenuous. Their problem is, their project is rubbish and they cannot convince anyone otherwise. This is not just a solar thing.

@Dlashof @drvolts 52. Auctions for renewable power are getting a lot more complex, and that’s good. India’s 24/7 auctions and China’s energy megabases are a fascinating way to try to solve grid issues by co-locating solar, wind, storage and even fossil plants.

@Dlashof @drvolts 53. There is enough land for lots of solar (most studies suggest 1-2% of land would be required to generate all the solar most countries can use). There’s also loads and loads of roofs, so let’s see those who oppose ground-mounted solar support higher-cost roof-mounted solar.

@Dlashof @drvolts 54. If you record PV capacity and only have room for one figure, record MW(DC), the module capacity. It tells you more about what the project will produce, how much land it needs, and what it will cost than MW(AC), which is just the size of the wire.

I will die on this hill.

End of thread, do consider ordering / asking your library to get you the book if you liked this and want to understand more. Now I'm off to make fig jam with Small Child.