Technological, Economic, Social, and Political Barriers and Inducements to the Development of Solar Photovoltaic Energy Sources
Jason Gibbons, Mark Koziel,
Matheus Santiago, & Kwehnui Tawah
12/08/2014
Energy and Energy Policy
George Tolley & R. Stephen Berry
Introduction
The following paper is an assessment of the solar photovoltaic industry with respect to inducements and incentives from a technological, economic, social, and political perspective. The paper will explore major trends, systematic problems, and offer suggestions aimed at further developing the role of solar PV as a prominent source of renewable energy. What each section will discuss specifically is described in the following paragraphs.
In the technology section, we will explore as to why research is being done in PV technology and the advantages that it brings as compared to other sources of energy production. We will then explore the different types of PV technologies that have been developed along with the advantages and disadvantages of each of them along with why some of them are not being used at all. We will finally briefly discuss emerging PV technologies that may become the successor to PV technologies being used today.
In the economics section, we will be exploring the bottlenecks that have been inhibiting growth in the PV solar market due to insufficient capital allocations. We will discuss the current financial model utilized for both small and large scale PV solar assets. We will then seek to discuss the potential hurdles and benefits associated with more innovative financing models, and lay out any recent examples that have proved effective. Lastly, we seek to identify which new innovations we believe will be viable financing methods in the short-term, medium-term, and the long-term.
In the social section, we will qualitatively observe and analyze key influential factors to solar PV in society. Consideration will be first given to cost-efficiency in order to gage the potential development of the market in society as well as the potential presence and influence it will have on modern society as a paradigm shift will likely occur from current conventional energy resources. We will then move to observe barriers, inducements, and possible social effects of the installation of solar photovoltaic technology in America with respect to the environment, health, the labor force, infrastructure, and the current political standard.
In the policy section, we will look at the various forms of solar PV incentives and inducements offered by state and local governments across the US. We will then use these, along with net generation data, to determine the value of investment into solar PV policy. To do this, we will explore the results of a regression analysis that approximates the marginal effect of policy on solar PV output in the US for 2013.
Technology
Introduction
This section will begin by highlighting the problems and concerns with the current means of energy production conducted in the United States. The section will then proceed to discussion potential solutions to the current problematic state of energy production by focusing on the usage of a variety of alternative sources of energy, with specific detail on solar energy. Finally, this section will discuss previous efforts made in harnessing solar energy for the creation of new technologies through a brief historical timeline of the various types of technologies that have been developed while also providing a speculation for the future of solar technologies. . Our primary goal within this section is to explain the benefits of researching solar power as it solves major concerns that the current forms of energy production may bring and to describe how the technology works. The limiting factor for solar power right now to becoming the predominant form of energy production is that the required technology has not yet been fully developed. In the future however, with new progresses made within the development of technology, solar energy may prove to be highly efficient and cost effective.
Why Solar Power?
In the past few decades, as society’s demands for energy has increased, the production of energy has been forced to rapidly increase in order to meet the rising demand. As the standard of life continues to improve more energy is needed per person to maintain this changing life style. Additionally, the improvement of standard of life translates into longer lifespans thereby contributing to the rapid growth of the human population. Most of the energy that is produced today comes from oil, coal, and natural gas. Those sources of energy, however, depend on nonrenewable resources on Earth which in the future would become depleted. Additionally, those sources of energy production contribute to high emissions of carbon dioxide. Two types of energies that provide potential solutions to the previously mentioned problems are nuclear and wind energy. Nuclear energy addresses the pollution issue, as this it releases smaller amounts of carbon dioxide into the atmosphere. The remaining problem however is that uranium and other sources of nuclear energy like current energy sources are nonrenewable resources. Unlike either nuclear energy or the current sources of energy, wind energy is a renewable source of energy that occur without human labor. Additionally, wind energy does not contribute to high emissions of pollutants such as carbon dioxide. Solar energy is an alternative form of renewable energy that also does not contribute to the emission of dangerous pollutants.
Energy provided by the sun is due to proton-proton chain and other nuclear reactions that occur in the Sun’s core and it delivers 3.9*1026 J s-1 of nuclear energy which translates to about one million times our current global energy consumption per year. The amount of solar power that reaches the Earth’s surface is not nearly as high due to the fact that not all of this energy hits the Earth. Looking at the first diagram, one can see in greater detail, that this energy gets reflected by the atmosphere and the clouds amongst other things. This still leaves 51% of solar energy being absorbed by the Earth’s surface and is 6000 times more energy than current consumption which is far from the total energy that the sun produces but that’s good news for life on Earth. The carbon emissions caused by the production of oil, coal, and natural gas has increased the amount of energy that gets trapped within the atmosphere which may cause problems in the future if those emissions are left unregulated. Only 1% of this energy is actually utilized and this is done by land and ocean vegetation which does so through photosynthesis. This is more than enough energy left over that can be used for human consumption. [1]
Current Technologies
Work done on the harnessing of the sun’s energy has been ongoing since the 1970s, however the viability of solar technology has not occurred until fairly recently. And it still is not completely viable without significant subsidies from the government. All solar technologies operate under the same basic principle which is the photoelectric effect in order to convert the sun’s energy into electricity. The photoelectric effect is the ability of matter to emit electrons when a light is shone onto it. Sunlight is composed of tiny particles called photons which radiate from the sun and when these particles hit a solar cell, this energy gets transferred into loose electrons which get freed. These freed electrons then get herded into an electric current which can then be used to power any sort of device.[2] The first material to receive a lot of attention and some success in solar panels was silicon. This is because there is a lot of information known about silicon from the electronics industry which uses silicon for semiconductors. Silicon is also the second most abundant element on earth and is used in many manufacturing processes which means that the process for obtaining it has become efficient. In a silicon solar cell, an electric current flows across a p-n junction. P-type silicon is made by replacing a few silicon atoms in the crystal with boron atoms, while n-type silicon is made by replacing some silicon atoms with phosphorus.[3] One can look at the second diagram for a pictorial representation of a silicon solar cell working.
Despite the improvements in efficiency for silicon solar cells, there were still problems for solar cells to be used in energy production. The material could degrade outside of the laboratory and connectors between each cell could break upon expansion in heat. There is a company called SunPower that produces a simple silicon cell called the SunPower Maxeon cells which solves these problems and it is also the most efficient simple silicon cell at 24.2%. It solves these problems by having a copper backing to prevent corrosion and also thicker connectors between cells to allow more room for expansion. Simple silicon solar cells do still have room to grow in efficiency. The theoretical limit is 34%, but that theoretical limit has almost been reached so researchers have looked into other ways to achieve higher efficiencies.[4] One of those solutions is to use multiple layers of different semiconductor materials. Silicon solar cells can only achieve an efficiency of 34% because solar cells cannot utilize all of the sunlight to create electricity. Using multiple materials fixes this issue because different materials absorbs different wavelengths of light. The highest theoretical efficiency possible with multi-junction cells is 84% which is considerably higher than silicon cells. Lab examples have been shown to reach efficiencies of over 43%. The main problem with this these types of cells is that even though they are more efficient, their design is more complex and so manufacturing costs are significantly higher. The material costs are also a great deal higher since layers are stacked up on each other. These types of solar cells cannot be used for major energy production and are only useful in situations in which cost is not an issue such as usage in space.[5]
Another type of cell that utilizes silicon is amorphous silicon which means that the structure of the silicon is non-crystalline. Amorphous silicon is the type of material that has been used to power pocket calculators. This works because the cells found in calculators does not require high performance. Researchers were able to improve on amorphous silicon techniques by stacking several thin-film cells on top of each other. The cells constructed like this aren’t quite as efficient as crystalline silicon cells, but the amount of silicon required in amorphous silicon cell is only 1% of that for crystalline solar cells. Similar to multi-junction cells there is a high cost to manufacture the multiple layers which means that even though the materials are cheaper, it ends up costing a lot more.[6]
There are two other types of thin film cells that are similar to amorphous silicon in the fact that they are all extremely thin. These would be cells based off of copper indium gallium selenide (CIGS) and cadmium telluride (CdTe). The efficiencies of these two materials for the purpose of solar cells has increased as more research has been done on it. CIGS cells are made up of a chalcopyrite crystal structure, while CdTe cells have a much simpler structure. The advantage to these cells is that they are highly flexible and can be used to make lightweight solar panels. The materials used for these cells are also not silicon so it has the advantage of not relying on the supply of silicon. CIGS cells haven’t found as much success as CdTe cells as they cost more than CdTe cells and aren’t quite as efficient. CdTe cells have been able to compete with silicon cells.[7] A company called First Solar produces the most efficient CdTe solar cell at 19.1% and according to their research has a theoretical limit near 30%. It has also acquired GE’s solar panel technology which it says will help the company to further increase efficiency. First Solar has also made notable large scale systems using solar panels with their cells. The most notable one is the Topaz Solar Farm which is pictured in the third diagram and is located in California. Its construction was recently completed in November of 2014 and had an energy size of 550-MW. First Solar also has a smaller PV plant in Arizona as well.[8]
Emerging Technologies
All of the technologies that have been described above can still be developed further and manufacturing costs can still continue to decrease so that they can compete with other forms of energy production, but there is research being done into different solar technologies which are theoretically more efficient than current ones. These solar cells have efficiencies that are lower than the ones previously described, but have not been worked on for as long as the other ones. One of these types of solar cells are called quantum dot cells. These cells utilize quantum dots as the absorbing material. Quantum dots are nanocrystals made up of semiconductor materials which are small enough to exhibit quantum mechanical properties. These dots vary in size which allows them to express a variety of band gaps. This is important because it could essentially simulate the different band gaps of many materials. There is still a lot of work that needs to be done as the highest efficiency is only 8.7%. These cells would have to be part of multi-junction solar cells which as explained earlier costs more to manufacture, but theoretically quantum dot cells would be more efficient and which might make up for the increased manufacturing costs. Another problem is that these cells currently have very short lifespans.[9]
The most promising emerging type of solar cell is the perovskite solar cell. Research in these kinds of cells did not start until seven years ago. In that time span the efficiency has gone from 2.2% to 19.3%. The term perovskite comes from the natural-occurring mineral discovered in the 19th century in the Ural Mountains. Perovskite solar cells have the same structure as that mineral and that structure is picture in the fourth diagram. The structure is based on three atoms and scientists have been changing those three atoms to make a better solar cell. These cells inherently absorb more light than standard solar cells and have higher theoretical limits. The major problem is that they degrade very quickly when exposed to moisture and UV radiation. Large scales of the cells have also not been currently developed which can change things as well.[10]
Conclusion
Photovoltaic technology as compared to the technology associated with oil, coal, and natural gas is more recent and in this short amount of time the technology has dramatically improved. There are two technologies that have started to be able to compete with the other major forms of energy production with those two technologies still having room to become even more efficient than they are currently. There are also many sources of emerging photovoltaic technologies only two of which were described. In the fifth diagram is a graph that displays all the types of photovoltaic technologies that have been developed along with their increasing efficiencies over the years. The ones in orange are the emerging technologies and although their efficiencies are currently low, they may overtake even the best photovoltaic technologies today in the future.
Economics
Introduction
In this section, we are seeking to uncover the economic constraints that have been limiting the potential for explosive growth within the solar industry, as well as allowing solar to become one of the key sources of energy production within the United States. Within the section, we seek to provide a brief background into the economic factors that underpin the value chain of the solar industry, discuss the various historical landmarks that have caused the drastic shift in pricing throughout the 21st Century, and discuss the investment climate and investment base surrounding the industry. Our primary goal with the section is to outline the key bottlenecks facing the investment climate and investor base in regards to the solar market across the value chain. Upon identifying these bottlenecks, we seek to outline proposed solutions in conjunction with potential policies (which would be further discussed in the policy section of the paper), and introduce a fresh perspective and approach to implementing these solutions.
Value Chain
Manufacturing Costs
The first link in the value chain is the production of silicon and its use in the semiconductor industry. As discussed within the technology section of the paper, there are three generations of technology within the PV market, the first is the thick film which uses poly silicon as feedstock; the second is the thin film which uses either amorphous silicon, cadmium telluride, or copper indium diselenide; and the third is multi-layer/tandem cells made of amorphous silicon.[11] Currently, the second generation with its improved theoretical efficiency to roughly 31-41% and less required material is the most cost-effective technology in the market place.[12] Module prices have fallen 10-17% per doubling of market size, and coupled with manufacturing improvements (decreasing the learning curve) has cause price decreases of about 15-20% per doubling in market size- in accordance with Swanson’s Law (the law states that the price of PV modules drops 20% for every doubling of cumulative shipping volume).[13] Thus far the market has been doubling in two and half years and we expect the trend to continue.3 Module prices were also affected by the significant drop in silicon prices from $400/kg in 2007 to about $25/kg as the result of increased production capacity from 402 MW in 2007 to 10 GW by 2010 (See Appendix 1).[14]