Introduction to the MIT study
Solar power has become significantly cheaper in the last few years, and installed capacity has grown substantially in the same period. The MIT Energy Initiative (MITEI) considers that it is one of the very few low-carbon energy technologies with the potential to grow to very large scale.
What are the advances that are needed to reduce the cost further so that the technology can be deployed on a scale large enough to meet the climate change challenge?
The report focuses on three specific challenges for solar generation:
- developing new solar technologies ;
- integrating solar generation at large scale into existing electric systems ;
- designing efficient policies to support solar technology deployment.
It considers in particular: reducing the cost of installed solar capacity, ensuring the availability of technologies that can support expansion to very large scale at low cost, and easing the integration of solar generation into existing electric systems.
What is the present and future of photovoltaic cells systems ?
Photovoltaic (PV) waferbased crystalline silicon (c-Si) solar panels account for about 90% of installed PV capacity in the U.S : more than 18,000 MW installed.
With a 50%–70% drop in reported PV prices, this technology is now mature and is supported by a fast-growing, global industry with the capability and incentive to seek further improvements in both cost and performance
However, current crystalline silicon based technologies have inherent technical limitations and the other components of a photovoltaic system, apart from the panels themselves, account for some 65% of the price of utility-scale PV installations. Research should thus focus on novel technologies to reduce these costs rather than on near-term reductions in the cost of crystalline silicon.
Thin-film technologies are promising, but face limitations in terms of efficiency, stability and manufacturability. They also use elements that are relatively rare in the earth’s crust such as tellurides, gallium or indium that limit the large-scale deployement of such systems.
What about the solar thermal generation?
The other major solar generation technology is Concentrated Solar Power (CSP) or solar thermal generation used to produce hot water. It can only use direct light from the sun therefore it is more sensitive to clouds, haze and dust than photovoltaic systems consequently, it is only suitable for certain regions. Utility-scale CSP generation is around 25% more expensive than photovoltaic energy generation, even in a region like southern California that has strong direct insolation and is definitely not yet competitive with classical energy production from gas.
Research should thus focus on new materials and system designs and should establish a program to test in pilot-scale facilities.
What about the economics of PV systems ?
The estimated installed cost per peak watt for a residential photovoltaic system remains approximately 80% greater than that for a utility-scale plant. Without a price on CO2 emissions and without federal subsidies, current utility-scale photovoltaic electricity has a highter cost than natural gas combined cycle plants in most U.S. regions.
Net load peaks can be reduced by coordinating solar generation with hydroelectric output, pumped storage, other available forms of energy storage and techniques of demand management which are an attractive focus for federal R&D spending.
Photovoltaic costs have to keep declining for new investments to be economic and research aimed at developing low-cost, scalable energy storage technologies is a crucial part of a strategy to achieve economic PV deployment at large scale envisioned in many low-CO2 scenarios.
There is a need for a pricing system that takes into account the distribution network costs, attributes it to those that cause them, and that are widely viewed as fair. Indeed, this cost shifting has already produced political conflicts in some cities and states.
How far should the solar energy initiatives be subsidied?
Federal, state, and local subsidies for solar technologies would be much more effective per taxpayer dollar spent if rewarding generation, not investment.
Reforming some subsidies adopted by state and local governments could also yield greater results for the resources devoted to promoting solar energy.
This change would correct the inefficiency in the current US federal program, under which a kWh generated by a residential PV system gets a much higher subsidy than a kWh generated by a nearby utility-scale plant. If Congress restores an investment subsidy, it should replace tax credits with direct grants, which are both more transparent and more effective.
An issue is that federal subsidies are slated to fall sharply after 2016 but drastic cuts in federal support for solar technology deployment would be unwise.