Solar and Moore’s Law

pv moores law 800x596 Solar and Moores Law

Late last summer, I was walking the neighbourhood near where a rooftop residential solar PV system was about to be installed. People tend to be more interested and less sceptical about solar when their neighbors are getting into it, so it’s good policy to pound the pavement in the hopes of drumming up some business. I had already had several great conversations, and had some promising leads jotted down on my smartphone.

I saw a gentleman sitting on his porch, engrossed in the notebook computer on his lap. His roof was a good candidate, so I introduced myself. He obviously wanted to escape the conversation as soon as possible and get back to his surfing, so I did my best to keep it brief. I explained that his home had a good roof for solar, that some folks down the street were about to get a system, and there was good money to be made in generating electricity from sunshine.

The man clearly believed he knew all he needed to know about solar, and even more clearly demonstrated that he knew next to nothing about it. He explained that he worked in the information technology field, and IT equipment is typically amortized over three years. He had no intention of making a 20-year technology commitment when whatever he installed would doubtless be obsolete before, say, a politician could complete one term in office.

I won awards on my high school debating team, so I can make a persuasive argument. I’ve trained people in the corporate world on things like email encryption tools and document management systems, so I can explain things. I’ve also had to make sales pitches to C-suite executives, so I can convince people that what they’ve just learned from me is, in fact, simply something they knew all along.

However, I’m also a reasonably good judge of character. I could tell that with this guy, I’d be wasting my time. That he knew IT cold, I have no doubt. But he greatly overestimated the similarities between his field and others. Microchips and solar cells both depend on silicon, but concrete does too, and the three have about as much common ground. I wasn’t going to convince him that he was missing out on a great opportunity. Better to mosey on over to the next likely house and hope for someone with an open mind.

Nonetheless, the fellow was wrong. Dead wrong. Moore’s Law does not apply in the world of solar photovoltaics. If you look at cell efficiencies, nothing terribly exciting is going on. Certainly nothing like a doubling every 18 months, which is something that has become an article of faith in IT circles.

Oh yes, every time you turn around there’s another breathless announcement by some university research team that has made an astounding breakthrough in efficiency. However, these innovations seem to disappear on the road from the lab to the marketplace.

There are plenty of reasons. The devil is in the details, so maybe the process to manufacture the new-fangled device is too complicated, and cannot scale to mass production. Solar panels have to be able to take a lot of abuse, so maybe the end product isn’t robust enough to withstand shipping, installation, and two decades of weathering in every earthly climatic zone. Efficiency is useless if it comes at too high a price, so maybe, as in the case of solar cells known by the acronym CIGS (Copper Indium Gallium Selenide), three of the four key components are so rare that manufacturing large volumes with that stuff would use up the entire global supply and send the price into the stratosphere.

If you look at mainstream solar PV installations, most are the breed known as C-Si (crystalline silicon). The processes for transforming silicon into ingots, ingots into cells, and cells into modules are well established, simple, and efficient. The finished product is solid and easily able to put up with 20 years of whatever Mother Nature can throw at it (while still remaining fully functional, and retaining 80-90% of its capacity at the end of that time). The materials aren’t terribly exotic. The principal element happens to be the second most common in the earth’s crust after oxygen. On every Caribbean beach, you see tons of it – sand. We won’t be running out of that any time soon.

This time last year, most of the panels being sold were 245 watts. This year, most are 250 watts, with some 255-watt units thrown in. A 4% increase in efficiency over an entire year is not going to impress anyone, especially my IT-schooled front porch friend. You can rest easy knowing that if you install a solar array on your roof this year, the ones being installed the following year won’t be dramatically different.

That doesn’t mean that the industry is static – far from it. However, the big news is not gains in efficiency; it is reductions in price. These come from scale economies, meaning that the more units you produce, the cheaper each unit becomes. It’s not as sexy as press releases touting scientific breakthroughs, but it’s here and now rather than pie in the sky.

Let’s take Chinese C-Si modules as an example. If you look at Solarserver data from September 2011 to January 2013, the price per watt in any given month is between 50% and 65% of what it was a year earlier. At no time during that time period did prices rise. Cell efficiency did not play a significant role in that downward pricing trend. It’s all about economies of scale.

In personal computers, it’s easy to make the argument that you should wait until next year’s model, because it will be cheaper and more powerful. You could make the same argument in solar PV. Why buy this year, when next year the cost of panels (and, as it turns out, the entire system) will be lower? The problem with that rationale is that you never end up buying a computer, or a solar PV system.

The real question you need to ask is whether it makes economic sense to buy today, based on prices today, and based on benefits today. The fact that a newer, shinier, more powerful product comes out next year has no impact on the validity of that decision.

Even for Mr. Porch Surfer, tomorrow never comes.

Original Article on Brighter Tomorrow