What Is Holding Solar Back?

For years, solar energy has been widely viewed as a promise of clean, abundant energy that simply can’t be kept because of its inefficiency expense. But research into solar panels has advanced to where their cost can be subdued and their efficiency improved.

Yet even if solar energy eventually becomes a major substitute for fossil fuels worldwide – and there is yet no guarantee of that – it still faces major hurdles.

First, the good news: Germany’s Fraunhofer Institute for Solar Energy Systems has come out with a new study concluding that solar power will become the most affordable source of power in many areas of the world in the next decade.

For example, the Fraunhofer said, the cost of generating electricity in central and southern Europe will decline to between 4 and 6 cents per kilowatt hour by 2025, and as low as 2 to 4 cents by 2050. This is far less expensive than electricity generated by the newest, most efficient coal- and gas-fired plants, which cost between 5 and 10 cents per kilowatt hour and nuclear plants which cost up to 11 cents.

“The study shows that solar energy has become cheaper much more quickly than most experts had predicted and will continue to do so,” says Dr. Patrick Graichen, Director of the Agora Energiewende, another German research institute that commissioned the Fraunhofer report.

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Yet hurdles remain. The shift of energy generation from fossil and nuclear fuels can’t be accomplished overnight and therefore requires a kind of energy place-holder. Germany, for example, has greatly increased its use of renewable fuels in the past 10 years to the point where on June 9, 2014, it generated over 50 percent of its energy from solar sources for the first time.

But in response to Japan’s Fukushima nuclear accident in 2011, Germany has decided to close all its own nuclear plants by 2022. It doesn’t have the infrastructure to replace these power plants immediately with renewable generators, so it has turned to coal as a stopgap.

And Germany isn’t alone. Globally, the use of fossil fuels, especially coal, has risen steadily since 1965, as this chart shows:

Germany’s move to do away with nuclear power was merely a reaction to a disaster half-way around the world. Yet the problem is just as bad in Japan itself, which has been active in promoting and building solar cells that seem to clutter every available square foot of open space.

Using solar cells to generate electricity has grown exponentially in Japan over the past two years as the government of Prime Minister Shinzo Abe leads a nationwide effort to promote clean, safe energy in response to the Fukushima accident. But the future of solar is cloudy, as utilities struggle to cope with the waves of solar sales forces.

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Besides, do these utilities dare to invest in such a change in their infrastructure if their government’s commitment falters?

For example, Junji Akagi, a real estate developer on Ukujima, an island near Nagasaki, told The New York Times that he had hoped to turn a quarter of the island’s 10-square-mile area into a “mega-solar” generating station, and already had lined up investors and secured the necessary land.

But the local utility, Kyushu Electric Power Co., abruptly decided in September that it would abort its contract with Akagi, and other Japanese utilities followed suit reneging on similar deals, turning instead to such fossil fuels as coal and natural gas until they are eventually ready to shift their power infrastructure to renewables.

The problem, therefore, doesn’t seem to be with solar power generation itself, but how soon solar can play a meaningful role in generating electricity on a wide scale. Until then, utilities will have to do what they do best: burn fossil fuels.

By Andy Tully of Oilprice.com

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