Today, electricity from solar farms is approximately four times as expensive as the market rate. Solar costs are not predicted to reach parity until after 2020. Economics aside, what is the potential for solar energy?

The Utility Solar Assessment (USA) Study, produced by clean-tech research and publishing firm Clean Edge and green-economy nonprofit Co-op America, provides a comprehensive roadmap for utilities, solar companies, and regulators to reach 10% solar in the U.S. by 2025. They believe its achievable. I’m doubtful because of the costs.

First, some basic facts from Professor MacKay.

World electricity consumption, which is 2,000 GW. World power consumption today is 15,000 GW. So the correct statement about power from the Sahara is that today’s consumption could be provided by a 1000 km by 1000 km square in the desert, completely filled with concentrating solar power. That’s four times the area of the United Kingdom. And if we are interested in living in an equitable world, we should presumably aim to supply more than today’s consumption. To supply every person in the world with an average European’s power consumption (125 kWh/d), the area required would be two 1000 km by 1000 km squares in the desert, or eight United Kingdoms.

Concentrating solar power in deserts delivers an average power per unit area of roughly 15W/m2. One 25 kWp collector generates on average about 138 kWh per day; the American lifestyle currently uses 300 kWh per day per person. So to get America off fossil fuels using solar power, we need two of these 15m×15m collectors per person.

That’s 2420 sq. feet for the metric challenged. Times two. There are at least 250,000 square miles of land in the Southwest are suitable for solar energy. That’s 6.9 trillion square feet, or enough space to meet the full energy needs of 1.4 billion Americans.

So obviously there is enough sun power. But what does it cost? Again, to MacKay:

Various cell types exist, but the least expensive modules today are thin films made of cadmium telluride. To provide electricity at six cents per kWh by 2020, cadmium telluride modules would have to convert electricity with 14 percent efficiency, and systems would have to be installed at $1.20 per watt of capacity. Current modules have 10 percent efficiency and an installed system cost of about $4 per watt.

The Utility Solar Assessment details for us what various types of solar currently cost.

We project that the cost for crystalline silicon PV systems will drop from an average of $7 peak watt (19-32 cents kWh) today to approximately $3.00 (8-14 cents kWh) a decade from now. Thin-film PV systems and low-price, bulk-purchased crystalline PV systems are projected to drop from around $5.50 per peak watt today (15-25 cents kWh) to $3.00 peak watt in 2015 (8-14 cents kWh) and less than $1.50 peak watt (4-7 cents kWh) in 2025. In our utility-scale concentrating solar power (CSP) calculations we show an average price of $3.50 per watt (around 18 cents per kWh) in 2007 declining to around $1 peak watt (approximately 5 cents per kWh) in 2025.

So we have at least one problem. Assuming all of the cost reductions and efficiency improvements underlying the Utility Solar Assessment are true, solar won’t be truly cost competitive for approximately fifteen years. It will take less time however before some solar starts to be competitive. Both solar and wind have intermittency problems. This simply means that they are not always available since they depend on the wind and sun respectively. This intermittency causes solvable problems for the electric grid.

For solar in the Southwest however, this intermittency can also be a positive. Solar produces the most energy at peak times. I.e., when its hot in Arizona and people are using their air conditioners at full power, solar is also operating at peak efficiency. “The price point that’s going to make a real difference is getting solar installed on the order of $3 per peak watt. We need to get to that level to see the pricing work. At $3 per peak watt you’re definitely competitive with a natural-gas peaker plant.”

The Truth About the 10% Solar Solution

The Utility Solar Assessment concludes that “solar contribution could be quite considerable, realistically reaching 10 percent of total U.S. electricity generation by 2025 by deploying a combination of solar photovoltaics (PV) and concentrating solar power (CSP).”

I don’t trust this report for a variety of reasons, but mostly because its very obviously slanted language. For example, take this quote:

The sun shines everywhere. Solar PV, unlike many other renewable (and non-renewable) technologies, can be deployed just about anywhere. It’s not bound to specific regions. The best evidence of this: among nations, the world’s largest producer of solar power is cool, often-cloudy Germany.

This may be true, and its a quote that Obama has often used. It does not however tell the whole story. If in its best case scenario (i.e. sited in a desert) solar is currently 4 times as expensive as conventional sources, then how much more are the German’s paying for electricity than they need to be?

From MacKay:

When using these sunniness figures to work out solar power, I’ve assumed that when it’s ‘sunny’, solar collectors work at their peak efficiency, and when it’s ‘not sunny’, they deliver nothing. Both these assumptions are inaccurate, but I believe that they roughly cancel each other out. On a bright but cloudy day, solar photovoltaic panels and plants do continue to convert some energy, but much less: photovoltaic production falls roughly ten-fold when the sun goes behind clouds. The power delivered by photovoltaic panels is almost exactly proportional to the intensity of the sunlight (source: Sanyo 210 datasheet). There’s a myth going around that states that solar panels produce almost as much power in cloudy conditions as in sunshine. This is simply not true.

For the time being we’ll accept the Utility Solar Assessment at face-value. I certainly question the achievability of the 10% Solar solution by 2025 because of the costs. I’ll reiterate my primary point one more time: if we’re going to find a carbon-free solution, it must be done in an economically efficient manner.

Cost of the 10% Solution

The Utility Solar Assessment provides that the 10% Solar solution by 2025 would require an investment of “between $400 billion and $500 billion to install the required PV and an additional $50 billion to $60 billion to install the required CSP to reach the 10 percent target. That’s a total projected price tag of between $450 billion and $560 billion between now and 2025, an average of $26 billion to $33 billion per year.”

That’s twice the cost of a similar investment in wind and relies upon some significant cost reductions over the course of 20 years.

Conclusion

There is no doubt that solar has the potential to provide a significant amount of the United States’ future energy needs, especially in Southern California and the Southwest. The technology isn’t quite ripe however.