Why It's Time to Take Solar Seriously

Why It's Time to Take Solar Seriously

The ongoing debate today is whether solar photovoltaics (PV) will emerge from its niche position within the energy sector to become a larger part of our power generation portfolio.

Because solar PV has been in development for 60 years, you could easily assume that it might be another 60 years before it becomes a major energy source. But speaking from within a company that has supplied 25 percent of the world's power generation technology, that future could arrive sooner than many realize.

Right now, PV costs are higher than other solutions today -- including other renewables. But the overall trends and recent progress within the PV industry reveal that solar is poised for major growth.

More competition across the entire solar industry is accelerating the pace of technology development, overcoming bottlenecks and reducing costs. And as installed capacity increases, the solar industry is learning faster.

To put this progress in perspective, PV module costs are 10 times cheaper than what they were 30 years ago. Even more impressive is the greater than 30 percent  reduction in installed PV systems costs in the U.S. and even deeper reductions in Germany where competition has become more fierce over the past decade.

Despite the financial crisis, investor interest in solar technology continues to be strong. Solar PV held the distinction of having more venture capital and private equity funding funneled into it than any other technology on the planet from 2006 to 2008.

These investments and others have borne advances such as cheaper, more efficient thin film PV modules, and micro inverters that enable safer, modular, scalable rooftop systems complete with built-in communications. Companies like GE and others are working to address the integration challenges of putting large amounts of variable resource onto the electrical grid through advanced controls and communications, as well as looking at important storage issues.

Future technology improvement and standardization will create new efficiencies in solar module design and system installation, making this clean energy source even more economically viable.

With growing public support in the U.S. for cleaner, greener energy solutions, states are responding with ambitious programs to promote renewable resources and more incentives are emerging to make solar a more attractive option for customers. Renewable Portfolio Standards (RPS) are now in effect in over 30 states, and new financial programs and incentives like net metering and Property Assessed Clean Energy (PACE) financing programs for homeowners are emerging to make solar more economically attractive and accessible.

Although electricity demand is down in North America, Europe and Japan, we also should not underestimate the need for future replacement generation. Coal retirements by 2015 alone could account for a sizable chunk -- around 30 GW each in the U.S. and in Europe even with modest (10 percent) retirement rates.

{related_content}Another trend that could disrupt our expectations for power generation requirements is the electrification of vehicles. A gradual shift to electric cars in the U.S. (10 percent by 2020) would create a new source of distributed demand. Even the rise of gas-based power generation will enable higher renewable penetration, as it is more flexible than today's coal supplied base load.

Of course, there are potential downsides as policy changes could delay or inhibit growth, and integration challenges to grid infrastructure could delay high penetration of PV generation on the grid. But even still, the trend is unmistakable.

PV systems offer a distinct alternative to fossil fuels and renewable power technologies. They convert energy from the sun directly into electricity with no moving parts, using low cost materials that are robust and produce no emissions. It is ubiquitous, accessible and offers solutions in both rural and urban settings. These facts will continue to fuel solar PV's growth within the energy sector. Solar's future should not be underestimated.

Danielle Merfeld is the director of Solar Technologies at
GE's Global Research Center.

Images courtesy of GE.