Case 53: Solar without subsidies

The market

The photovoltaic industry (PV) generated income of $ 82 billion in 2010, more than double monetary value over a period of only one year. The new photovoltaic installations reached a record level of 18.2 gigawatts (GW) in 2010, which represents growth of almost 140 % in the last twelve months. The European market represented 14.7 GW, 81 % of global PV demand. Germany, Italy and the Czech Republic are the three European leaders, followed by Japan and the United States. Such rapid growth requires capital. Companies part of the photovoltaic energy supply chain have managed to raise $ 10 billion in equity and debts. Consequently, the production capacity increased from 9.9 GW in 2009 to 20.5 GW in 2010, the production of thin layers already representing 13.5 % of total production. China and Taiwan represent just under 60 % of world production. Sutech Power, whose headquarters are in Wuxi (China), is the largest producer in the world.

The German government, the first photovoltaic market, added 7 GW in a year 2010 Record to 17 GW, the equivalent of 17 large power plants generating a total of 130,000 jobs at a total cost of subsidy of $ 9 billion, near $ 1.3 billion for each gigaby and 70,000 euros for each job. The incentives decided in 2000 by the German law on renewable energies guarantee higher purchase rates for the market rates for solar installations for 20 years from the date of installation. This generous support has helped reduce the cost of photovoltaic systems. The price of silicon modules dropped by 38 % in 2009 and 14 % in 2010 compared to the previous year. With the expansion of demand in Asia and North America, factor prices are expected to drop 50 % over the next five years compared to 2010.

According to Greenpeace, the fossil fuels industry last year received around $ 100 billion in government grants in the G-20 member states. Fossil fuels and nuclear have benefited from generous government support for decades. Coal has been subsidized in Germany since 1965, and solar energy has started to benefit from significant tax support that ten years ago. However, the annual coal subsidy in Germany was limited in 2010 to 2 billion euros in 2010 ($ 2.8 billion) and the government has adopted a law gradually eliminating all subsidies by 2018. German subsidies for Renewable energies (wind, solar, biogas, etc.) amounted to $ 17.9 billion, which means that renewable energies receive a significant part of government support.

Innovation

The complex wiring system makes the price of non -competitive photovoltaic panels, while the cost and the silicon supply are not a problem. While Leonardo da Vinci had already predicted the use of solar energy in 1447, its penetration on the market was based on tax measures which are ultimately paid by the consumer, or by an increase in taxes to cover public debt, Either by higher rates for green energy. The fact that solar energy only generates direct current (CC) while the electrical network works with alternating current (CA) implies that all the electricity produced by PV requires inverters. As the sun only shines 5 hours a day all year round, the PV needs rescue batteries. The combination of batteries, inverters and discontinuous sunshine implies that current solar energy technologies will depend on government assistance equivalent to that of non -renewable energies. Stefan Larsson carried out research projects on maximum reflection concentrators. One of its objectives was to make solar energy viable in the Arctic and Antarctica. He and his team concentrated sunlight 3.5 times using reflectors who also follow the movement of the sun throughout the year without the need for expensive heliostats. The geometry of the reflector is designed so that the whole light strikes the tube absorbing heat. Its conceptions make it possible to produce heat and electricity in the coldest corners of the world. He then adjusted the reflector to give the best performance when the sun is the lowest in the sky. This innovative approach makes it possible to obtain a constant energy efficiency on a wide range of temperatures, which, with its modular approach, makes it adapted to the production of hot water, to urban heating, to solar cooling, to sanitation of Water, desalination and ... to the production of electricity, all at the same time. Mr. Larsson then created Solarus AB and, while perfecting with his team the technology which consists in combining several functions in a single panel, he also spent a lot of time to secure a chain of supply of basic materials, to recycle Carbon fiber from the aerospace industry and to access the technologies for manufacturing silicon. It is the combination of multifunctional solar cells and the use of recycled carbon fibers which allows Solarus to offer less expensive solar energy on the solar energy market than fossil fuel energy without requiring Subsidies. In addition, Solarus has developed a business model that provides dozens - and over time - hundreds of local manufacturing plants generating local jobs. The combination of ingenious geometric conceptions, recycling of high -tech materials rebuilt, a decentralized production model, which competes on the market without needing subsidies (while welcoming any help) in fact a prototype of the blue economy .

The first cash flow

Sweden is a world leader in urban heating, where water is heated centrally and distributed by pipes of pipes. This system is less demanding in capital and more efficient on the energy level than individual water heaters which today consume 30 percent of all the electricity used at home. Solarus has committed to feeding an urban heating system with 2,400 square meters of solar and thermal collectors reaching a cost price of only $ 0.025/kWh, on a 10 -year basis with government subsidies. Without subsidies, urban heating would still only cost $ 0.07/kWh, and if we take into account the full lifespan of solar and thermal sensors, the price of energy without subsidies is as low as 0 , $ 02/kWh, or a price equal or even lower than that of nuclear fuels, coal or subsidized diesel.

The opportunity

The market potential for Stefan Larsson and his team at Solarus AB is enormous. Each panel produces 300W of electricity and 880W of heat which convert to a country low in sun like Sweden in 264 kWh of electricity and 660kWhr of heat for each panel. This multifunctional system provides electricity, hot water, heating and cooling thanks to a heat exchange system, based on a uniform installation on the roofs of buildings of a minimum area of ​​200 meters squares. This makes the buildings neutral on the energy level. A house would become independent on the energy plan (in Sweden) with 8 to 12 panels covering hot water, electricity and heating of the parts. Low weight, ease of installation, weather resistance and capacity to operate under diffuse sun light combined with the use of recycled composite materials have reduced the traditional recovery period from 3 to 5 years to 6 months only . The low cost of the Solarus system, its high efficiency and low heat loss make it possible to use the solar humidification processing process (HDH). While it was the standard desalination and water purification system for decades, it was very energy -consuming and was replaced by the reverse osmosis. Now it seems that HDH based on described solar technologies can provide constant heat greater than 100 ° C necessary to accelerate evaporation and condensation. While the cost of construction would be equal to that of any existing installation, operating and maintenance costs are divided by ten, which proves that innovations in solar energy will make it possible to surpass competition from energies fossils and nuclear even in the absence of subsidies. Fortunately, subsidies will always be the rule of the game, changing the advantages even faster in favor of solutions similar to Solarus. However, knowing that it can be made locally from recycled materials should allow entrepreneurs from around the world to sit on the edge of their chair, while governments on the verge of bankruptcy could still provide certain support without having To do everything that the German authorities had to do.