Contents
Introduction
Environmental Impact
Affordability
Scalability
Concluding Remarks
Bitesize Edition
We continue the solar masterclass with an exploration of the environmental impact, affordability, and scalability of solar-powered systems.
Solar is known as a renewable energy resource and hence is accepted as a clean production method that will save the entire planet singlehandedly. (sarcasm detected). Of course, it’s a part of the solution, but not the entire solution. There are still aspects of solar panel production and manufacture in which our impact on the environment needs to be considered, such as extraction of materials and waste at end-of-life. But, solar is much cleaner than fossil fuel alternatives.
When it comes to analysing costs, there are many methods. LCOE has been artificially reduced by the period of low interest rates since 2008 when considering energy projects, but solar has also reduced in cost per watt and possesses one of the lowest ratios of energy returned on energy invested (EROEI) of any production method.
Finally, solar panels can be used in a variety of situations, from individual homes to large solar farms. However, we’re not fulfilling our potential, with the power of the sun limited here on Earth. Heading space-bound would improve this greatly. We’re also limited by land space on Earth. A field containing a solar farm could be used for alternative endeavours, and even if we build a great, big solar farm, are we producing too much power that we don’t have the capacity to store for later use? Storage devices still need improvements as we’ve discussed previously.
After that short nibble, let's dive into the full piece.
Introduction
We continue the solar masterclass today, diving into the environmental impacts, affordability, and scalability of solar systems.
Environmental Impact – We already know solar cells are clean and renewable when operating. How much environmental impact occurs in the manufacturing process? In any manufacturing process, the environmental impact depends on the methods used to produce the energy required to construct the item, in this case, a solar panel. A circular solar economy could theoretically lead to solar power being used to produce the electricity needed to construct solar panels, as well as other renewable sources. However, this would also require recycling and waste reduction.
Solar panels also require the extraction of the materials used within. As we discussed last week with innovative solar panels such as gallium arsenide (GaAs), some materials are more difficult to mine than others. We’ve also previously experienced a silicon shortage between 2005 and 2008. As a key component of many solar panels, as well as semiconductors, securing supplies of silicon will be vital for those wishing to continue to innovate.
Finally, waste produced during manufacturing and at the end-of-life of solar panels also needs suitable handling, especially as the industry grows in size.
When considering solar panels, we achieve better efficiencies in space, as detailed in part 1 of my solar masterclass. What impacts could this have on the environment? We’ve seen satellites destroyed creating debris fields in space. Could the same be done for solar panels?
Finally, solar panels can take up land space. For individual households, they’re placed on the roof, but there exist many larger operations that take up valuable space in fields. For anybody who has ever taken the train from the north of England that heads through Grantham and Newark towards London, you’ll have seen the huge solar farm, and that’s just one such example. There will exist many more.
This land could be used for alternative purposes, such as farming. In a world where our necessities can be weaponised, a country’s ability to self-sufficiency grow its own food could be tested in upcoming decades. This requires the need for governments to support their farmers, which is something that isn’t occurring.
Affordability – When considering the affordability of any electricity or energy production method, we have different stages to consider. Planning, production, installation, operational, maintenance, and insurance costs to name a few.
Luckily for solar, it is considered the saviour of planet Earth by policymakers, and so funding for all stages of a solar panel’s life cycle is often easier to access versus alternative methods. Take the Loans Program at the Department of Energy, for example.
It also depends on the method of cost analysis used. For decades during low interest rate environments, the levelized cost of energy was naturally dragged downwards since debt came easily and interest costs were reduced. Hence, when using LCOE, we can’t look at the cost reduction on an individual basis. We have to compare to others.
A steeper line demonstrates a sharper decrease in costs as deployment advances. Renewables as they are built are indeed achieving economic feasibility and economies of scale, and so costs will reduce. The largest cost reductions have been seen in electricity from solar photovoltaic and onshore wind.
In recent years, we have seen a tick-up in many energy sources when using LCOE. Still, using LCOE can allow us to assess grid parity for solar systems. This refers to the point when an energy source generates power at an LCOE that is less than or equal to the price of power from the electricity grid. Once this occurs in a country, it signals that economies of scale are ready to be achieved with less government or subsidy support. By January 2014, this had been achieved in 19 countries for solar photovoltaics.
Considering alternative methods of cost analysis, we’ll consider energy return on energy invested. EROI is the ratio of usable energy created from an energy resource versus the amount of energy put in to obtain said energy. It is measured in years that it would take an energy production method to essentially pay itself back in energy produced versus energy put into building it. As seen below, solar panels possess the lowest EROI versus wind, hydroelectric, gas power plants, coal, and nuclear power plants. There are other aspects to consider. Later in this series, we’ll discuss baseload power. Nuclear may possess a high EROI, but it can constantly produce power, whereas wind and solar cannot. Another reason we need diversified production methods.
Centrifuge Enrichment = Concentration of Fissile Isotopes Used
Full Load Hours = Hours during which a plant operates at maximum capacity in a year.
VLh = Virtual Load Hours. Used for renewable sources production relative to their theoretical maximum capacity.
When considering the price per watt of solar panels, Swanson’s Law is an observation from the founder of SunPower Corporation Richard Swanson. It details that the price of solar modules drops 20% for every doubling of cumulative shipped volume. This is over the period from 1975 to 2021.
There are many other cost analysis metrics that we can explore, but I’ll save that for a future piece in which I’ll deep dive into as many metrics as possible.
Scalability – Solar panels are scalable since they can be used to power individual homes or large-scale solar farms. However, with scalability comes increased reliance on the intermittent sun.
Do more solar panels mean more wasted electrical energy, until storage improves?
There’s no doubt about solar’s place in the electricity production portfolio, but relying upon it too heavily as an individual electricity production method will see us sat in the dark.
From a physics point of view, what factors limit the amount of usable electricity produced from solar panels?
Firstly, the power of the sunlight. It has to battle its way through the atmosphere, which reduces its strength. Hence the allure of solar panels in space.
Other factors include the size and efficiency of the panel, as discussed last week, and location. The equator receives the most sunlight since it travels the shortest distance. As the Earth curves away from the equator, the distance travelled by the sun increases. It’s this that I continue to imply in these pieces – location is of vital importance in the energy transition. Solar panels in Scandinavia in winter will be less effective than on the equator in summer, for example.
A final limit to consider is land space in larger-scale projects.
We aren’t limited as such by the number of solar panels we can build, as seen in the growth of photovoltaics above. Of course, at a point, we’d run out of materials, but the pace of new installations is showing no likelihood of slowing down.
We are limited by power generation (of a single panel) when it’s needed and power storage capacity. During peak periods, we require more electricity. If the sun has gone to bed for the night when this occurs, you’ll need alternative methods to generate power. We’d like these to be power generation methods we can control, not those that are at the whims of the chaotic weather.
Similar to EROEI, we can measure energy storage on energy invested (ESOEI) of the innovative batteries we’re discussing over time in my Geopolitics Database. This is a ratio of electrical energy stored over a device's lifetime vs the energy required to build the device. I won’t deep dive into this today, but it’s a useful metric to be aware of.
The problem with storage is in periods we produce too much power, once we reach maximum capacity, excess electricity would be wasted. The grid may also not possess the capacity to absorb excess solar energy. Hence the push to improve storage capacity, smart grids, and demand-side management.
Concluding Remarks
Still a lot to cover, with reliability, flexibility, durability, safety, social acceptance, and regulation to discuss, among others. Over the coming weeks, we’ll continue this deep dive into solar power. I hope you’re enjoying this thus far!
Thanks for reading! If you want more then subscribe on Substack for these posts directly to your email inbox. I research history, geopolitics, and financial markets to understand the world and the people around us. If any of my work helps you be more prepared and ease your mind, that’s great. If you like what you read please share with others.
Key Links
The Geopolitics Explained Podcast
If you want to see daily updates and discover other newsletters that suit you, download the Substack App.
You can become a paid subscriber to support my work. There are long-form monthly articles in my global questions series exclusively for paid subscribers. Read Geopolitics Explained for 20p per day or start a free trial below to find out if my work is for you! I appreciate your support!
Sources: