July 01, 2008

 Peak solar and the Maharishi

A year ago I posted on the paradox that the price of photovoltaic solar panels had been going up. Well, it's been falling now for six months; not a lot in dollars - from $4.85 a watt last June to $4.82 now, a bit more in euros - from €4.78 to €4.70. There was an 1c uptick in the dollar price in June, but not the euro one. These are the wholesale prices for the modules that account for 60% of the value of a complete panel. Source: the helpful industry trade website Solarbuzz.


The price trend in euros is actually much more significant than that in dollars. The US is a small part of the world market. Because this infant industry still relies on consumer subsidies, most of the world's installed PV lies inefficiently under the grey, high-latitude skies of virtuous Germany and Japan. Spain has recently jumped into second place - and it actually has sun!


On the basis of this micro-trend, I'm calling Peak Solar: the price has peaked and will fall from now on. Why?

The solar PV industry is growing at breakneck speed: 30+% per annum. Even a tiny fall in price proves that the supply constraint of refined silicon feedstock is easing, and more capacity is coming on stream. The supply chain doesn't yet reflect any breakthrough to a low-cost technology for refining silicon to intermediate purity - which is what we need for WalMart to lease its carparks to Iberdrola for a half-gigawatt of PV roofing (back-of-the-envelope calculation in footnote).

Incremental progress is still very welcome, and a lot of players are working on the problem from Dow Corning to the EU. One intriguing participant is Maharishi Solar Technology: yes, the Beatles' Maharishi. One of them will surely hit the jackpot. Vedic Consciousness would not be my bet; but what Christian or Muslim fundamentalists are putting their money into a problem that's both really important to humanity and comparatively tractable? As in the great Goldstein joke (search for Sid, but the hero should surely be Goldstein, and an Orthodox not a secular Jew), to win the lottery you have to buy a ticket.

Meanwhile on oil:
Remember the crazy Germans who claimed a year ago that oil production peaked in 2006? The declines in Russian and Saudi oil production are making the Germans look better all the time. Their take is almost the CW.

Meanwhile on wind:
There's a bit of a tizzy in Britain that rising wind turbine prices are putting the Brown government's ambitious plans for offshore wind into doubt.The bet on offshore was driven by both real factors - the UK is surrounded by conveniently shallow sea, where the wind is stronger than on land - and political cowardice in the face of NIMBY countryside lobbies.

Offshore gear is inherently more complex and there are comparatively few suppliers. I could only find four: GE, Gamesa, Siemens, and Vesta, who are presumably raking in temporary scarcity profits. Several large wind turbine manufacturers seem to have skipped the offshore market: Mitsubishi, Enercon, and the Indian Suzlon - a sizeable and capable company even if its marketing department appears to have been engagingly hacked by Alfred E Neuman.

The 11MW dedicated Serpa PV solar power plant in Portugal takes up 150 acres = 60.7 hectares, which makes a density of 73kw per acre = 181kw per hectare.

A WalMart store with car park averages 11 acres = 4.45 hectares. WalMart had 2447 "supercenters" in the USA in January, giving a rough estimate of its land take at 27,000 acres = 10,900 hectares.

Supposing a PV roof over a store and its car park can achieve half the density of Serpa, you have a potential PV installation of 0.98 Gw. Cut out the low-sun stores north of the Mason-Dixon Line, that brings it back to a round half-Gw (wih a huge margin of error).

No, WalMart or Iberdrola will not do this at $4.80 a PV watt - but there is some price at which they will.

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