Has Solar's Day in the Sun Finally Come?

AgMRC Renewable Fuels Monthly Report
March 2015

Don Hofstrand

Don Hofstrand
retired Iowa State University Extension agricultural economist

Shale oil and natural gas are transforming the world’s energy industry.  The vision of a crude oil industry where supply outstrips demand leading to a crash in oil prices would have been viewed as a fairy tale last year at this time. Conventional wisdom was that $100 crude oil is the new normal.  However, here we are at half that price.

Are we approaching another transforming moment? Namely, the emergence of a solar industry that will make fossil fuels obsolete.  Although there have been several “false starts,” many experts believe solar’s day has come.  Its impact would evolve at a slower pace than shale oil, but overall it would be more transformative. 

There are two ways of generating solar energy.  Solar photovoltaic energy is generated through the direct conversion of light into electricity with the use of photovoltaic solar cells (PV). Solar thermal energy is the use of solar to produce heat, which is in-turn converted into electricity. PV is the major method for creating solar energy.

We traditionally think of solar as solar panels located on the top of a house.  However, solar can consist of large solar farms that provide electricity to utilities.  It can also mean “community solar” where individual households may be involved in a local solar facility.

Solar capacity in the world has expanded rapidly and the expansion is expected to continue into the future.  As shown below, natural gas power capacity was the clear winner in 2013.  But solar also made substantial gains.  In 2014 about a third of new power plant capacity was solar.  However, this only includes solar facilities built to feed utilities. Residential and non-residential solar are not included.

U.S. Power plant capacity additions in 2013

When these are included, solar capacity increases to 4,776 in 2013, as shown below.  Total solar installations increased to 6,201 in 2014.  This is a 1,500 percent increase in five years. 

U.S. Annual PV Installations (2000 – 2014)

U.S. Annual PV Installations
Source: GTM Research, U.S. Solar Market Insight Report

The U.S. is not the only country to expand solar energy capacity.  India has announced a goal of 25 percent of its power capacity to come from solar by 2022. This will result in a capacity from solar of 200 GW, up from about 3 GW currently. The potential solar power of India is 749 GW, about three times it current total capacity from all sources. (1)

China has set a solar installation target of 17.8 GW for 2015. Last year’s target was 14 GW of which only 11 GW of capacity was achieved.  Last year’s shortfall occurred in small, rooftop systems, which is not expected to happen again this year. (2)

Japan has turned towards solar as an alternative to nuclear energy.  In 2014 Japan installed more than eight GW of solar with a goal of having renewables provide 20 percent of its power by 2030. (3)

Middle-east countries are looking to exploit their solar potential. Instead of using their oil resources for domestic power production, they are moving toward domestic power from solar which will allow them to export all of their higher value crude oil.

Four Drivers of Solar

Four drivers have moved solar from being a novelty to a serious energy provider. The future direction of these drivers will determine the speed at which solar becomes a major player in the energy industry. (4)

Regulatory Support – Governments around the world are providing policies to support solar development.  These include feed-in tariffs (price guarantee), requirements for power generation from renewable energy, and subsidies to solar manufacturers and consumer (30% Federal Tax Credit in the U.S.)

Cost/Efficiency – Much of the solar capacity expansion has been due to the rapid decline in the cost of solar as shown below.  Many analysts expect this decline to continue into the future (outlined in last month’s newsletter).  Industry analysts in Germany predict that PV solar will be the cheapest form of power within a decade and cost less that 2 cents per kilowatt hour by 2050.  The International Energy Agency predicts that solar will drop to 4 cents per kWh and be the largest single source of energy by 2050.  If true, large increases in solar power capacity will continue into the future. (5)

 U.S. Installed Cost of Solar Power

A major factor in reducing the cost of solar is increasing the efficiency of the solar panels.  With current technology, about 20 percent of the light hitting a solar panel is converted into electricity.  Increasing efficiency by just a couple of percent can mean a significant reduction in cost of the panel per unit of power.

Industrialization – For example, China entered the solar panel market and now manufacturers almost two-thirds of the world’s solar panels. China’s entry has generated competition in the market which has forced innovation and driven down costs. 

Financing – Solar requires upfront investment to install the system.  After installation the costs are minimal.  The upfront cost is often an impediment for many households.  However, creative financing packages are emerging. For example, third party companies are providing programs where the company owns the panels after installation and leases them to the household for a monthly fee. 

Possible Impediments to Growth

A major impediment to the growth of solar may come from utilities.  They are concerned that customers with solar are not paying their share of the utilities fixed cost.  For example, demand for electricity is usually low during the day but peaks at the end of the day when people come home from work and turn on the TV and turn up the air-conditioner.  Solar energy production during the day when the sun shines is high resulting in low power purchases from the utility.  However, when the sun goes down and demand for electricity goes up, solar customers may demand just as much power as non-solar customers during this peak period.  So, utilities are concerned that they must have the capacity to provide peak power for both solar and non-solar customers but the total amount of power purchased by solar customers is lower than non-solar customers.  To rectify this, some utilities are proposing that solar customers pay an additional monthly fee to cover the fixed cost of providing peak power.

Solar Power for the Needy

Many people living in the developing world are “off the grid” and live without electricity.  Solar power has the potential to significantly improve the lives of these people.  This also includes refugees from conflicts and other disasters.  Most of these people live in Southern Asia and Africa. 

Life without electricity means that light at night is only available with the use of kerosene lamps or fires.  Work on the farm or around the home is done with either domestic livestock or by hand.  The development of low-cost solar and mobile charging has the potential to greatly improve people’s lives.  Small scale solar power can provide light and heat during the night, cooling during the day, power for running a water pump to access drinking water or irrigate a garden, or power for charging a cell phone. (6)

Organizations exist that provide access to solar power for these people.  Lighting Global (https://www.lightingglobal.org/) is the World Bank Group’s platform supporting sustainable growth of the international off-grid lighting market as a means of increasing energy access to people not connected to grid electricity. 

Barefoot College (http://www.barefootcollege.org/), founded by a local farmer and a young social worker, started a solar program to provide access to electricity in the remote and isolated parts of India. It teaches solar engineering skills to illiterate older women from rural communities with no access to lighting and electricity. The program has been replicated in countries from Africa and the Middle East.

New Solar Innovations

Many innovations are occurring that provide unique ways in which solar energy can be created and used.  The discussion below provides a taste of research and development currently being pursued.

Solar Tracker Solar Panels – These are oversized solar panels that rest on rotating poles. The panels are programmed to move with the sun so they capture the maximum solar rays throughout the day.  Because of their ability to follow the sun throughout the day like a sunflower, these panels capture 20 to 30 percent more solar energy than traditional rigid panels. (7)

Power Sticker to Boost Solar Power Generation – A large transparent sticker is applied to the front of the solar panel which increases power output by about 10%.  The stickers prevent light from reflecting off the solar panel, trapping light to stay inside the panel material.  The stickers also redirect the light so the panels are more efficiently utilized.  In addition to being used on newly installed panels, the stickers can be applied to previously installed panels to boost efficiency. (8)

Two-Energy Sources – Research is being conducted in Japan to combine two forms of external energy sources – light and heat.  They are creating a hybrid energy system to generate power.  The new technology overcomes one of the traditional problems with combined energy sources, namely high cost, because these technologies don’t required two separate systems but both sources are delivered by just one low cost device. (9)

Graphene: Solar Cells of the Future – Research is being conducted on organic photovoltaic cells (OPV) that hold promise as the new solar cell prototypes that are light weight, flexible substrates, low cost and easy manufacturability. Graphene/polymer sheets are used to create thick arrays of flexible OPV cells to convert solar radiation into electricity. Although traditional silicon solar cells are more efficient at converting light to electricity than graphene, graphene can compensate from increased flexibility and low cost.  For example, these cells could be hung as curtains in your home or incorporated into your clothing to power your cell phone. (10)

Solar Thermal Energy with Biomass Gasification – Researchers are studying the economic feasibility of solar-heated biomass gasification as a substitute for natural gas.  Traditionally, 20 to 30 percent of the biomass is burned to produce the heat needed for the gasification process.  This technology uses solar thermal energy in place of burning biomass so all of the biomass can be converted into synthesis gas as a substitute for natural gas. (11)

Thin-Film Solar Cells – Scientists are trying to increase the efficiency of solar cells. They are using computer simulations to probe deep into the indium/gallium combination to increase the efficiency of Copper indium gallium (di)selenide (CIGS) thin-film solar cells. Till now CIGS has shown only about 20 percent efficiency though theoretically they can attain 30 percent efficiency levels. (12)

3D Printed Solar Energy Trees – Due to advancing solar and 3D printing technologies, researchers are   developing what they are calling “energy harvesting trees”. The tiny leaves generate and store solar energy and can be used to power small appliances and mobile devices. They can be used both indoors and outdoors.  They can harvest kinetic energy from wind and temperature changes. (13)

Floating Solar Plant – Construction will soon begin on a floating solar power plant on top of a wastewater treatment facility.  Solar panels will be floated on the facility to generate energy to power the wastewater treatment.  The wastewater keeps the panels cool making them more efficient than land-based one.  The panels reduce evaporation from the wastewater and negate the growth of algae.  Excess electricity is sold to the grid. (14)

Concentrated Solar Power Plants – The need to produce round-the-clock electricity from solar thermal may have been overcome by a facility being built in Spain. Over 2,000 mirrors covering almost 500 acres focus the sun’s rays on a central tower containing molten salt.  The salt is heated to more than double the boiling point of water.  The heat is used to generate electricity during the day.  Excess heat is stored in molten salt tanks for use during the night and cloudy days.  Enough heat can be stored to operate for 18 to 24 hours.  The facility produces 20 megawatts of electricity, enough for 2,500 homes. This electricity generation technology is especially relevant in desert areas and then the electricity is transferred to population centers.  A prime example is generation in the Sahara Desert for consumption across the Mediterranean in Europe. (15)

Solar tower

Credit: DESERTEC Foundation via Climate News Network
Roadways that Generate Solar Power – What if roads were paved with solar cells?  A stretch of bike path in the Netherlands is paved with solar cells.  The “SolaRoad” is built with a topping of crystalline silicon solar cells that are coated in a thin layer of translucent tempered glass. Because roads are flat, they produce 30 percent less power than rooftops.  However, the potential is huge.  Consider all of the miles of highways and square miles of parking lots in the U.S.  Underground electric cables would transport the electricity.  (16)

Solar Energy from Space – The Japanese Space Agency has been working on a goal to transmit energy from orbiting solar panels by 2030. The solar unit would generate power which would be transmitted to earth by microwave/laser.  In a test, 10 kilowatts of electricity was successfully transmitted and received 500 meters away. (17)


Whether we have arrived at solar’s day-in-the-sun or just another day that will turn cloudy, it seems reasonable that, in the end, we will arrive at a solar powered world.  The only question is when it will occur.


1   Solar to provide 25% of India’s power capacity by 2022 – Deutsche, ReNewEconomy, Sophie Vorrath, March 3, 2015

2   China lifts solar installation target for 2015 by 19%, ReNewEconomy, Sophie Vorrath, March 18, 2015

3   Japan Closer to Harvesting Solar Energy from Space, ReNewEconomy

4   Foreign Affairs, Solar Power Comes of Age, How Harnessing the Sun got Cheap and Practical, Dickon Pinner and Matt Rogers, March/April 2015, pages 111 – 118.

5   Solar at 2c/kWh – the cheapest source of electricity, ReNewEconomy, Giles Parkinson, February 24, 2015

6   Foreign Affairs, Power the Poor, Provide Energy to Fight Poverty, Morgan D. Bazilian, March/April 2015, pages 133 – 138.

7   Solar Tracker Solar Panels, AENews, Alternative Energy

8   Power Sticker to Boost Solar Power Generation, AENews, Alternative Energy

9   Power from Two Energy Sources, AENews,  Alternative Energy

10   Graphene: Solar Cells of the Future, AENews, Alternative Energy

11   University of Minnesota. "Combine solar thermal energy with biomass gasification for natural gas substitute." ScienceDaily. ScienceDaily, 9 February 2015.

12   Breakthrough in Thin-Film Solar Cells, AENews, Alternative Energy

13   3D Printed Solar Energy Trees, AENews, Alternative Energy

14   Floating solar plant set to be built in Australian first, ReNewEconomy

15   New Design Delivers Round-the-Clock Solar Power, Climate News Network, Climate Central, May 4th, 2014, Paul Brown

16   Newsweek Magazine, Designers Building Roadways That Generate Solar Power, ZOË SCHLANGER, NOVEMBER 17, 2014 1:47 PM EST

17   Japanese Space Systems, Solar Space Power Systems