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Solar Power: Prospects andIssuesPrepared by Roman Zytek, Senior Economist, International Monetary Fund1/National Capital A...
Contents• Why talk about solar? (starts with slide 4)• Energy transition: theory and history (19)• Energy cost/risk manage...
Thing to Remember …Transition Takes TimeIt takes time for innovations andnew products to becomecompetitive and mass market...
Why Talk About Solar?
Why Even Bother with Solar Energy?U.S. Electricity Generation Mix(In percent of total)Source: http://www.eia.doe.gov/emeu/...
Solar Power …• Solar energy contributed less than two of onehundredth of one percent (<0.02 percent) to U.S.electricity ge...
Share of PV Electricity at SuperOptimistic Growth AssumptionsShare of Solar Electricity(In percent of total electricity ge...
Share of PV Electricity at JustOptimistic Growth AssumptionsThe Share of Solar Electricity(In percent of total electricity...
Installation Trends-New GenerationNew Solar Power Installed in International EnergyAgency Photovoltaic Power Systems Progr...
Installation Trends-Total CapacitySolar Power Capacity in International Energy AgencyPhotovoltaic Power Systems Program (I...
PV Installations by CountryHigh tax incentives made the differencePV Installations in 1992(In percent of global total)Germ...
Research TrendsSource: ScienceDirect.com search on November 12, 2008Reference to Photovoltaic in All Journals,2000-Novembe...
Research TrendsSource: ScienceDirect.com search on November 12, 2008Reference to Photovoltaic in Energy Sector Journals195...
Solar Power May BecomeIndispensable by 2050• 10 billion people around the world• Each using a couple of kilowatt-hours ofe...
Future Energy Balance—How toMeet Demand for RenewableEnergy• Projected 28 TW in 2050 in global energy demand• To stabilize...
Solar Potential• The only renewable resource with terrestrial energypotential to satisfy a 10-20 TW carbon-free supplycons...
An Interesting MapTheoretical space needed for solar power plants to generate sufficient electric power inorder to meet th...
RisksThe solar energy sector will remain volatile• Sharp fall in hydrocarbon fuel prices– Concerns for global warming may ...
Energy Transition:Theory and History
• Fundamental changes in global energy systemsare slow– Substitution of wood by coal took most of the 19thcentury– Replace...
Three Laws of Energy Transition• The law of stable long-term energy costs-to-income ratio• Growth in economic productivity...
Three Laws of Energy TransitionI. The law of stable long-term energy costs-to-income ratio– Final energy costs-to-GDP (8-1...
U.S. Personal Expenditure on Household Energy Utilities(In percent of total expenditure)0.01.02.03.04.05.06.01929 1940 195...
U.S. Personal Expenditure on Transportation(In percent of total expenditure)0.03.06.09.012.015.01929 1940 1951 1962 1973 1...
Three Laws of Energy TransitionII. Growth in economic productivity requires betterquality of energy services– The share of...
Three Laws of Energy TransitionIII. The law of growing energy productivity– As energy quality improves, given relatively s...
Energy Cost and RiskManagement
Justifying Solar TodayEnergy Cost Risk Management• Cost competitiveness is a conditional criterion– Least-cost technology ...
Energy Cost Volatility and GDP• Fossil price fluctuations are not random, but are statistically highwhen GDP growth and th...
Solar Technologies
Types of Direct Solar Power• Light/Hybrid Solar– Light sent from rooftops to inside buildings (fiberoptics and solar tube)...
Hybrid Solar(Source: yahoo.com—images)
Solar Water Heaters(Source: yahoo.com—images)
CSP Technologies• Parabolic troughs: over 20 years of operatingexperience under real world conditions• Power Towers (helio...
Parabolic TroughsTaggart, Stewart, 2008, “Parabolic Troughs: CSPs Quiet Achiever,” Renewable EnergyFocus, Vol. 9, Issue 2,...
Solar TowerTaggart, Stewart, 2008, “Hot Stuff: CSP and the Power Tower” Renewable EnergyFocus, Vol. 9, Issue 3, pp. 51-54....
Solar DishesTaggart, Stewart, 2008, “CSP: Dish Projects Inch Forward,” Renewable EnergyFocus, Vol. 9, Issue 4, pp. 52-54. ...
Linear FresnelFord, Graham, 2008, “CSP: Bright Future for Linear Fresnel Technology?” RenewableEnergy Focus, Vol. 9, Issue...
Photovoltaics
Photovotaics: Theory• Photovoltaic: electricity directly from sunlight• Photons (light) are absorbed by semiconductingmate...
Photovoltaic Technology(Picture source: yahoo.com—images)
Photovoltaics: Benefits• Renewable• Minimal maintenance cost• Non-polluting (zero CO2 emissions)• No moving parts to break...
Photovoltaics: Drawbacks• High initial capital cost• Intermittent• Relatively low efficiency• Requires sunlight (stronger ...
Photovoltaics: History• Discovered in mid-XIXth century• 1883: Charles Fritz’ solar cell with efficiency of 1-2%• 1954: Be...
Key Technologies• Discrete Cell Technology– Single-crystal silicon– Multicrystalline silicon– Dendritic web• Integrated Th...
Photovoltaics: Discrete CellTechnology• Single-crystal silicon– Sliced from single-crystal boules of grownsilicon– Cut as ...
Photovoltaics: Discrete CellTechnology (cont.)• Multicrystalline silicon– Sliced from blocks of cast silicon– Less expensi...
Photovoltaics: Discrete CellTechnology (cont.)• Dendritic web– A film of single-crystal silicon pulled from a crucible ofm...
Photovoltaics: Integrated Thin FilmTechnology• Copper Indium Diselenide (CuInSe2), or CIS– A thin-film polycrystalline mat...
Photovoltaics: Integrated Thin FilmTechnology (cont.)• Cadmium Telluride (CdTe)– A thin-film polycrystalline material, dep...
Recent Technological Progress• Innovation yields efficiency gains:– December 11, 2006: A concentrator solar cell produced ...
Technological Targets• Defense Advanced Research Projects Agency (DARPA)Advanced Technology Office’s Very High EfficiencyS...
Examples of Latest Technologies• Innovation yields rapid reduction in costs:– Clean Hydrogen Producers Ltd. (CHP) patented...
Home Components of PV Systems• Cell (PV) module• PV Balance of Systems:– Inverter (direct current to alternating current)–...
Issues in Managing Solar Electricity• Managing intermittent electricity flow• Maximizing the use of PV generatedelectricit...
Optimizing PV/Wind Hybrids• Reliability of power supply– Loss of power supply probability (LPSP) set at zero• Cost of kWh ...
Economics 101 of PV
Economics101 of PV Technologies• Material cost vs. efficiency of PV ($/W capacity)– Less material lowers costs and efficie...
Prospects for PV: An Example of Optimism(PV is an industry where projections made in 2001 proved too optimistic in 2008)• ...
Experience Curves and ProgressRatio: Important Terminology• The experience curve describes how unit costs decline withcumu...
PV Life Cycle EnvironmentalPerformance (Sample Results)• Net energy ratio– 2.7 years for multi-crystalline PV 120 W module...
Cost Developments of HomeComponents• Cell (PV) module– Some evidence of 36-54 percent reduction incosts per each doubling ...
PV System Price Indices• Solar I Solar Electricity Residential Price Index– Based on a standard 2 kilowatt peak system, ro...
Price DevelopmentsDecember 2008 Survey• Solar III Installed Industrial System on Grid(500 kilowatts)– Customer Price $2,47...
PV Stock Price Index• The Photon Photovoltaics Stock Index (PPVX)– Aug. 1, 2001 at 1,000 points– June 1, 2007 -- 3,782 … D...
Stock Price Index, Cont.• A capitalization of less than €50 million has 1 WP• €50--€200 million, 2 WP• €200-€800 million, ...
Pricing Intermittent Solar Power• Pricing intermittent electricity• Fixed prices (regulated or standing contractprices)– O...
Government Policies
Pricing Distortions in EnergyMarkets/Public Policy Justification• Market failure to account for the environmental benefits...
Public Policy• Regulatory– Integration with existing supplies, grids– Product standardization– Pricing, tariff regulations...
Government Support• Continental European feed-in tariffs (FIT)– Long-term fixed prices paid to energy generators (can be v...
Recommended Reading for PolicyMakersFocus funding and support on R&Drather than on increasing deploymentsSee for example:F...
Deployment Strategies
Corporate/Market Policies• Preconfigured packages (Costco/Walmart)• Standardization (ratings and efficiency)• Interconnect...
Deployment Models• The information technology model– Diffusion based on a variety of applications (U.S.)– Customization of...
Deployment Policies• Static efficiency– “Low-hanging fruits are harvested” first– Long-term opportunities may be missed• D...
Strategies• System costs and efficiencies– Market driven decline in polysilicon prices– Use of thin-film technologies• Dep...
Solar Energy in DevelopingCountries
Solar Energy and PovertyAlleviation• Solar home systems (SHS) provide an opportunity forrural households– Radio, TV, light...
Market Structure in DevelopingCountries• Self-organized solar home systems (SHS) markets– End user gets complete ownership...
Donor Assistance for Solar Powerin Developing Countries• Donor assistance needs to refocus to support self-organized marke...
Solar Energy in China• Huge solar resources (western regions)• R&D of PV started in 1958• Entered application stage in 197...
Solar Energy in China• Annual production of PV cells and installedcapacity still small, but ...• Massive capacity expansio...
Solar Energy in China• Capital raised by Chinese PV/solar IPOs:– Trina Solar: $98+$243 million (Dec. 06 and May 07)– JA So...
Solar Energy in China• Market barriers:– High cost (still a niche market)– Low consumer density adds to installation andtr...
Conclusions• Energy transition towards higher quality energy (electricity) is real,but the time of solar has not yet arriv...
More on Solar is Available• As you can see there is a lot, and more, ofresearch about solar energy ...• I have prepared a ...
Annex 1: Country Experiences(Abstracts of Selected ResearchArticlesPrepared by Ariadna Bankowska)
Country Experiences with Energy Transitions, Solar EnergyPolicy and Sector Development—Abstracts of Selected ArticlesPrepa...
Parker, Paul, 2008, “Residential Solar Photovoltaic Market Stimulation: Japanese andAustralian Lessons for Canada,” Renewa...
Schmid, Aloísio Leoni, and Carlos Augusto Amaral Hoffmann, 2004, “Replacing Dieselby Solar in the Amazon: Short-term Econo...
Taiwan imports over 97 percent of its energy needs. Potential to utilize renewable energy inTaiwan is reviewed. At present...
from R&D and may support possibly unsustainable economic and social development in therecipient countries.East TimorBond, ...
solar and wind energy resources for certain locations hybrid systems with storage offer areliable source of power.GermanyF...
Solar home systems (SHS) are compared to petrol/diesel generators, kerosene lighting andbattery charging in areas with no ...
no solar cooling system was an economical substitute for the conventional systems. Theabsorption system was the most promi...
ThailandGreen, Donna, 2004, “Thailand’s Solar White Elephants: An Analysis of 15 Years ofSolar Battery Charging Programmes...
Paul Denholm, and Robert M. Margolis, 2008, “Land-use Requirements and the Per-capita Solar Footprint for Photovoltaic Gen...
Annex 2: Further Readings
Developments and Issues in Solar EnergyPresented by Roman Zytek (rzytek@imf.org; tel.: 202-623-8856)National Capital Area ...
- 2 -Photovoltaic Technologies (PV)Bagnall, Darren M., Matt Boreland, 2008, “Photovoltaic Technologies,” Energy Policy, Vo...
- 3 -Denholm P. and R.M. Margolis, 2007, “Evaluating the Limits of Solar Photovoltaics (PV) in ElectricPower Systems Utili...
- 4 -Pricing Intermittent Electricity, Policies, Pricing DistortionsDuke, R., Williams, R., and A. Payne, 2005, “Accelerat...
- 5 -“Solar Photovoltaic Supply and Demand Update,” November 12, 2008, FBR Capital MarketsData SourcesJager-Waldau, A., 20...
Interesting Web Links• Solar Energy Industries Association http://www.seia.org/• European Photovoltaic Industry Associatio...
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  1. 1. Solar Power: Prospects andIssuesPrepared by Roman Zytek, Senior Economist, International Monetary Fund1/National Capital Area Chapter of the U.S. Association for Energy Economics(http://www.ncac-usaee.org/)This self-guided tour/research reference guide to solar power has benefited fromcomments and suggestions received during the author’s presentation to NCAC-USAEE members made on December 19th, 2008Acknowledgment:The author would like to thank the participants of the December 19th seminar for valuable input andcomments that helped design this self-guided tour1/ Disclaimer:The views expressed herein are those of the author and should not be attributed to the InternationalMonetary Fund (IMF), its Executive Board, or its management
  2. 2. Contents• Why talk about solar? (starts with slide 4)• Energy transition: theory and history (19)• Energy cost/risk management (27)• Solar technologies (30)• Photovoltaics (PV) (39)• Economics 101 of PV (57)• Government policies (68)• Deployment strategies (73)• Solar energy in developing countries (78)• Conclusions (86)• Annex 1: Country experiences (abstracts of selectedarticles prepared by Ariadna Bankowska) (88)• Annex 2: Further readings (99)• Interesting web links (105)
  3. 3. Thing to Remember …Transition Takes TimeIt takes time for innovations andnew products to becomecompetitive and mass marketed.This applies to energy as well,whether we like it or not ...
  4. 4. Why Talk About Solar?
  5. 5. Why Even Bother with Solar Energy?U.S. Electricity Generation Mix(In percent of total)Source: http://www.eia.doe.gov/emeu/aer/txt/ptb0802a.htmlF ossil, 7 2 .0N u clear, 19 .4W in d , 0.8H y dro, 6 .0B iom ass, 1 .3S olar, 0 .01 5G eoth erm al, 0 .4
  6. 6. Solar Power …• Solar energy contributed less than two of onehundredth of one percent (<0.02 percent) to U.S.electricity generation in 2007• Even at super optimistic (unrealistic?) growth ratessolar power will remain only a marginal contributorto electricity generation in 2025; maybe a player by2050• But …– The industry is growing rapidly (even if only because ofgenerous taxpayer support)– Policymakers explore options for promoting the sector.Bad support can be costly and undermine the sector– Solar power can be competitive in niche markets– Solar power can become indispensable in the long term
  7. 7. Share of PV Electricity at SuperOptimistic Growth AssumptionsShare of Solar Electricity(In percent of total electricity generation)54.60.01500204060801002007 2015 2023 2031 2039 2047Assuming annual growth rates of:2008-17=40%,2018-27=30%,2028-37=20%,2038-50=10%;2% annual growth for electricity demand
  8. 8. Share of PV Electricity at JustOptimistic Growth AssumptionsThe Share of Solar Electricity(In percent of total electricity generation)2.70.0150204060801002007 2015 2023 2031 2039 2047Assuming annual growth rates of: 2008-17=30% ,2018-27=20% ,2028-37=10% ,2038-50=5% ;2% annual growth for electricity demand
  9. 9. Installation Trends-New GenerationNew Solar Power Installed in International EnergyAgency Photovoltaic Power Systems Program (IEAPVPS) Reporting Countries, 1993-2007 (in MW) 2,25704008001,2001,6002,0002,400199319941995199619971998199920002001200220032004200520062007
  10. 10. Installation Trends-Total CapacitySolar Power Capacity in International Energy AgencyPhotovoltaic Power Systems Program (IEA PVPS)Reporting Countries, 1993-2007 (in M W ) 7,73601,0002,0003,0004,0005,0006,0007,0008,000199319941995199619971998199920002001200220032004200520062007
  11. 11. PV Installations by CountryHigh tax incentives made the differencePV Installations in 1992(In percent of global total)Germany, 5Italy, 8Japan, 18USA, 41Other, 27PV Installations in 2007(In percent of global total)Germany, 49Italy, 2Japan, 24USA, 11Other, 14
  12. 12. Research TrendsSource: ScienceDirect.com search on November 12, 2008Reference to Photovoltaic in All Journals,2000-November 20082282852623443193664774355772003004005006002000 2001 2002 2003 2004 2005 2006 2007 2008
  13. 13. Research TrendsSource: ScienceDirect.com search on November 12, 2008Reference to Photovoltaic in Energy Sector Journals1950-November 200811 34 735321049172904008001,2001,6002,0001950-59 1960-69 1970-79 1980-89 1990-99 2000-081/
  14. 14. Solar Power May BecomeIndispensable by 2050• 10 billion people around the world• Each using a couple of kilowatt-hours ofenergy per day ...• Will need 60 terawatts of energy …• The equivalent of 900 million barrels of oilper day (up from about 225 million today)Smalley, Richard E., 2005, “Future Global Energy Prosperity: The Terawatt Challenge,” MaterialsResearch Society (MRS) Bulletin, Vol. 30, pp. 412-417, www.mrs.org/publications/bulletin orhttp://smalley.rice.edu/
  15. 15. Future Energy Balance—How toMeet Demand for RenewableEnergy• Projected 28 TW in 2050 in global energy demand• To stabilize CO2 requires !20 TW of carbon-free power …Twice as much carbon free power by 2050 than all powerproduced today• Nuclear? 10 TW require construction of 10,000 new plantsover the next 50 years, i.e., one every other day• Feasible hydropower? 1.5 TW• Wind? 2 TW on land; offshore large but costly …• Biomass? 20 TW require 31% of the total land on earthLewis, N.S., 2004, “Chemical Challenges in Renewable Energy,” www.nsl.caltech.edu/files/Energy_Notes.pdf
  16. 16. Solar Potential• The only renewable resource with terrestrial energypotential to satisfy a 10-20 TW carbon-free supplyconstraint in 2050• A practical solar power potential of ~600 TW– Estimates from 50 TW to 1500 TW• For a 10% efficient solar farm, at least 60 TW ofpower could be supplied from terrestrial solarenergy resources• U.S.: 3 TW at 10% efficiency require 1.7% of landLewis, N.S., 2004, “Chemical Challenges in Renewable Energy,” www.nsl.caltech.edu/files/Energy_Notes.pdf
  17. 17. An Interesting MapTheoretical space needed for solar power plants to generate sufficient electric power inorder to meet the electricity demand of the World, Europe (EU-25) and Germanyrespectively. (Data by the German Center of Aerospace (DLR), 2005)Also see: Meisen, Peter and Oliver Pochert, 2006, “A Study of Very Large Solar Desert Systemswith the Requirements and Benefits to those Nations Having High Solar Irradiation Potential”at: http://geni.org/globalenergy/library/energytrends/currentusage/renewable/solar/solar-systems-in-the-desert/Solar-Systems-in-the-Desert.pdf
  18. 18. RisksThe solar energy sector will remain volatile• Sharp fall in hydrocarbon fuel prices– Concerns for global warming may soften the blow to solar from lowerhydrocarbon prices– Expanding niche applications will give some support• Sharp rise in input costs– Neck-breaking additions to PV capacity my push input silicon priceseven higher and further slow cost reductions of solar energy• Drop in demand for solar energy when tax incentivesbecome too costly as the sector grows, while productioncosts are still too high to ensure market competitiveness• Too rapid technological depreciation makes mainstreaminvestors adopt a wait-and-see attitude– It is not clear which technology will win
  19. 19. Energy Transition:Theory and History
  20. 20. • Fundamental changes in global energy systemsare slow– Substitution of wood by coal took most of the 19thcentury– Replacement of coal by oil and gas took most of 20thcentury– Replacement of oil and gas likely to take time– Long-term forecasts proved repeatedly wrongGritsevskyi, A., and N. Nakicenovic, 2000 “Modeling Uncertainty of InducedTechnological Change,” Energy Policy, Vol. 28, pp. 907-921Sohn, I., C. Binaghi and P. Gungor, 2007, “Long-term Energy Projections: What Lessonshave We Learned?” Energy Policy, Vol. 35, pp. 4574-4584Long Term Energy Transitions andProjections: Theory and Experience
  21. 21. Three Laws of Energy Transition• The law of stable long-term energy costs-to-income ratio• Growth in economic productivity requires betterquality of energy services• The law of growing energy productivityBashmakov, I., 2007, Three Laws of Energy Transitions, Energy Policy, Vol.35, pp. 3583-3594
  22. 22. Three Laws of Energy TransitionI. The law of stable long-term energy costs-to-income ratio– Final energy costs-to-GDP (8-10 percent for U.S.; 9-11 percentfor OECD)– Final consumer energy-to-GDP (4-5 percent for U.S.; 4.4-5.5percent for OECD)– Housing energy costs-to-personal income (2.6 for U.S.; 3.2percent for EU-15)– Energy for transportation-to-personal income ratio stableBashmakov, I., 2007, “Three Laws of Energy Transitions,” Energy Policy, Vol. 35, pp.3583-3594
  23. 23. U.S. Personal Expenditure on Household Energy Utilities(In percent of total expenditure)0.01.02.03.04.05.06.01929 1940 1951 1962 1973 1984 1995 2006Expenditure on electricity, gas, and fuel oil and coalElectricityGasFuel oil and coalExpon. (Expenditure on electricity, gas, and fuel oil and coal)Source: Bureau of Economic Analysis, U.S. Department of Commerce
  24. 24. U.S. Personal Expenditure on Transportation(In percent of total expenditure)0.03.06.09.012.015.01929 1940 1951 1962 1973 1984 1995 2006Transportation Gsoline and oilSource: Bureau of Economic Analysis, U.S. Department of Commerce
  25. 25. Three Laws of Energy TransitionII. Growth in economic productivity requires betterquality of energy services– The share of electricity in final energy consumptionrose from 10.6 percent in 1971 to 18.1 percent in2002 globally; projected at 50 percent in 2100– The share of natural gas in the power sector fuel mixrose from 13.3 percent to 19.1 percent– Carbon intensity of primary energy use declined 1.8percent per annum in 1990-2003Bashmakov, I., 2007, “Three Laws of Energy Transitions,” Energy Policy, Vol.35, pp. 3583-3594
  26. 26. Three Laws of Energy TransitionIII. The law of growing energy productivity– As energy quality improves, given relatively stable energy costs-to-income ratios, energy intensity declines– Energy intensity halved in the U.S. in 50 years– China reduced energy intensity by a factor of 4 since 1971– Germany to reduce energy intensity by a factor of 3 by 2050(Note: Long-term data often exclude human & animal power)Bashmakov, I. ,2007, “Three Laws of Energy Transitions,” Energy Policy, Vol. 35, pp. 3583-3594
  27. 27. Energy Cost and RiskManagement
  28. 28. Justifying Solar TodayEnergy Cost Risk Management• Cost competitiveness is a conditional criterion– Least-cost technology in electricity generation (coal)– Least-risk technology (solar)• Hydrocarbon energy is risky– Coal, gas, oil prices are volatile and difficult to predict– Global warming/environmental policy risks• Solar energy technologies are low-to-no-risk technologies– No price volatility for inputs– Low risk of government environmental regulations• Adding solar to energy portfolio reduces portfolio risk– People invest in government bonds and stocks even though the latter seem tooffer much higher rates of return; many prefer to use 30-year fixed mortgageat 6 percent than adjustable rate mortgage at 3 percentAlbrecht, J., 2007, “The Future Role of Photovoltaics: A Learning Curve versus PortfolioPerspective” Energy Policy, Vol. 35, pp. 2296-2304Awerbuch, S., 2004, “Portfolio-Based Electricity Generation Planning: Policy Implications forRenewables and Energy Security,” SPRU, University of Sussex, Working Paper
  29. 29. Energy Cost Volatility and GDP• Fossil price fluctuations are not random, but are statistically highwhen GDP growth and the value of other assets are low. Thisimplies that:– Cost estimates understate the true economic cost of fossil-basedgeneration– Risk-adjusted estimates suggest 50% higher cost of gas-firedgeneration– The negative betas imply that fossil fuel price spikes• Drive up cost of living,• Lower consumer wealth, value of homes and other assets• The negative oil-GDP relationship implies the need for optimalgenerating portfolios to avoid exposure to fossil price riskAwerbuch, S. and R. Sauter, 2005, “Exploiting the Oil-GDP Effect to SupportRenewables Deployment” The Freeman Centre, University of Sussex,Paper No. 129
  30. 30. Solar Technologies
  31. 31. Types of Direct Solar Power• Light/Hybrid Solar– Light sent from rooftops to inside buildings (fiberoptics and solar tube)• Thermal Solar (among them):– Solar Hot Water– Concentrating Solar: power a turbine; for thermaldissociation (break water into hydrogen and oxygen)• Photovoltaic (PV) devices generate electricity viaan electronic process– “Electricity from your roof,” windows, dress, backpack
  32. 32. Hybrid Solar(Source: yahoo.com—images)
  33. 33. Solar Water Heaters(Source: yahoo.com—images)
  34. 34. CSP Technologies• Parabolic troughs: over 20 years of operatingexperience under real world conditions• Power Towers (heliostats, receptors, and tower)• Solar Dishes• Linear Fresnel CSP (cheap mirrors are a big plus,no need for expensive bent glass reflectors)Wolff, Gerry, Belén Gallego, Reese Tisdale, David Hopwood,2008, “CSP Concentrates the Mind,” Renewable EnergyFocus, Vol. 9, pp. 42-47
  35. 35. Parabolic TroughsTaggart, Stewart, 2008, “Parabolic Troughs: CSPs Quiet Achiever,” Renewable EnergyFocus, Vol. 9, Issue 2, pp 46-50. (Picture source: yahoo.com—images)
  36. 36. Solar TowerTaggart, Stewart, 2008, “Hot Stuff: CSP and the Power Tower” Renewable EnergyFocus, Vol. 9, Issue 3, pp. 51-54. (Picture source: yahoo.com—images)
  37. 37. Solar DishesTaggart, Stewart, 2008, “CSP: Dish Projects Inch Forward,” Renewable EnergyFocus, Vol. 9, Issue 4, pp. 52-54. (Picture source: yahoo.com—images)
  38. 38. Linear FresnelFord, Graham, 2008, “CSP: Bright Future for Linear Fresnel Technology?” RenewableEnergy Focus, Vol. 9, Issue 5, pp. 48-51. (Picture source: yahoo.com—images)
  39. 39. Photovoltaics
  40. 40. Photovotaics: Theory• Photovoltaic: electricity directly from sunlight• Photons (light) are absorbed by semiconductingmaterials (e.g. silicon) in a solar cell• Electrons (negatively charged) are knocked loose fromtheir atoms, flow through the material, produceelectricity. The complementary positive charges, holes,flow in the opposite direction (photovoltaic effect)• An array of solar panels converts solar energy intodirect current (DC) electricity• The DC current enters an inverter• The inverter turns DC electricity into 120/240-voltalternating current (AC) electricity• Surplus electricity to batteries/grid (other users)
  41. 41. Photovoltaic Technology(Picture source: yahoo.com—images)
  42. 42. Photovoltaics: Benefits• Renewable• Minimal maintenance cost• Non-polluting (zero CO2 emissions)• No moving parts to break down• Life expectancy 25-45 years• Small scale installations can be efficient• Decentralizes power generation (security)• Power added as needed, where needed
  43. 43. Photovoltaics: Drawbacks• High initial capital cost• Intermittent• Relatively low efficiency• Requires sunlight (stronger the better)• Tools to manage sun/cloud volatility• Limits on electricity storage (batteries)• Aesthetic issues
  44. 44. Photovoltaics: History• Discovered in mid-XIXth century• 1883: Charles Fritz’ solar cell with efficiency of 1-2%• 1954: Bell Labs photovoltaic device with efficiency of 6%• 1955: a commercial PV cell cost $1,785/Watt• 1958: small-scale scientific applications– Space program– Sensing and measuring light (cameras)• 1970s: high costs made large applications unfeasible• Semiconductor technology allows large efficiency gains
  45. 45. Key Technologies• Discrete Cell Technology– Single-crystal silicon– Multicrystalline silicon– Dendritic web• Integrated Thin Film Technology– Copper Indium Diselenide (CuInSe2) or CIS– Cadmium Telluride (CdTe)Bagnall, Darren M., Matt Boreland, 2008, “Photovoltaic Technologies,” EnergyPolicy, Vol. 36, pp. 4390-4396O’Rourke, Stephen, 2008, “Solar Photovoltaic Industry,” Deutsche Bank SecuritiesQuaschning Volker, 2004, “Technical and Economical System Comparison ofPhotovoltaic and Concentrating Solar Thermal Power Systems Depending on AnnualGlobal Irradiation,” Solar Energy, Vol. 77, Issue 2, pp. 171-178
  46. 46. Photovoltaics: Discrete CellTechnology• Single-crystal silicon– Sliced from single-crystal boules of grownsilicon– Cut as thin as 200 microns– Research cells: 24-percent efficient– Commercial modules: 15-percent efficient
  47. 47. Photovoltaics: Discrete CellTechnology (cont.)• Multicrystalline silicon– Sliced from blocks of cast silicon– Less expensive to manufacture– Less efficient than single-crystal silicon cells– Research cells: 18-percent efficient (May ’07)– Commercial modules: 14-percent efficient
  48. 48. Photovoltaics: Discrete CellTechnology (cont.)• Dendritic web– A film of single-crystal silicon pulled from a crucible ofmolten silicon, like a soap bubble, between twocrystal dendrites.– Gallium Arsenide (GaAs) A III-V semiconductormaterial for high-efficiency photovoltaic cells, used inconcentrator systems and space power systems– Research cell 25+ percent efficient under 1-sunconditions, 28 percent under concentrated sunlight– Multijunction cells based on GaAs and related III-Valloys exceed 30-percent efficiency
  49. 49. Photovoltaics: Integrated Thin FilmTechnology• Copper Indium Diselenide (CuInSe2), or CIS– A thin-film polycrystalline material– Research efficiency: 17.7 percent– Highest completed module efficiency for full sizedpower modules, reaching over 11 percent• Amorphous Silicon (a-Si) used in:– Consumer products: solar watches and calculators– Building-integrated systems: replacing tinted glasswith semi-transparent modules– Efficiency is low: greater requirement for space, higharray installed cost and weight
  50. 50. Photovoltaics: Integrated Thin FilmTechnology (cont.)• Cadmium Telluride (CdTe)– A thin-film polycrystalline material, depositedby electrodeposition, spraying, and high-rateevaporation– Small laboratory devices: 16 percent efficient– Commercial-sized modules: 8 percentefficient
  51. 51. Recent Technological Progress• Innovation yields efficiency gains:– December 11, 2006: A concentrator solar cell produced byBoeing-Spectrolab achieved a world-record conversion efficiencyof 40.7%, …– July 28, 2007: A consortium led by the University of Delawareachieved a combined solar cell efficiency of 42.8% from sunlightat standard terrestrial conditions. The advance of 2 percentagepoints is noteworthy in a field where gains of 0.2 percent are thenorm and gains of 1 percent are significant breakthroughs– August 13, 2008: Scientists at the US Department of Energy’sNational Renewable Energy Laboratory (NREL) have set a worldrecord in solar cell efficiency with a photovoltaic device thatconverts 40.8% of the light that hits it into electricity, …• But … costs of these laboratory efficiencies are highhttp://www.greencarcongress.com/solar/index.html
  52. 52. Technological Targets• Defense Advanced Research Projects Agency (DARPA)Advanced Technology Office’s Very High EfficiencySolar Cell (VHESC) program (started in 2005):– The VHESC program is aimed at developing photovoltaic (PV)devices with efficiencies exceeding 50 percent– A novel design architecture that allows integrating previouslyincompatible materials technologies to maximize performanceacross the solar spectrum– Evaluating the potential of engineered bio-molecules to guide theassembly of inorganic materials in a manner not achievable withcurrent technology, which offers the prospect for dramatic costreductions in key materialshttp://www.darpa.mil/sto/solicitations/vhesc/index.htm
  53. 53. Examples of Latest Technologies• Innovation yields rapid reduction in costs:– Clean Hydrogen Producers Ltd. (CHP) patented the use ofConcentrating Solar to crack the molecule of water(thermal dissociation) and produce hydrogen– Colorado State University developed a manufacturingprocess for thin-film solar panels that lower costs to $2 perwatt, about half the current cost of solar panels (firstproduction expected in 2008)– HelioVolts FASST™ technology—ultra thin, low cost,seamlessly integrated solarized building materials, PV“power buildings”
  54. 54. Home Components of PV Systems• Cell (PV) module• PV Balance of Systems:– Inverter (direct current to alternating current)– Service panel (to household)– Battery (for off the grid systems)– Charge controller (regulator; for off-grid)– Net meter (to utility sub-station; for on-grid)
  55. 55. Issues in Managing Solar Electricity• Managing intermittent electricity flow• Maximizing the use of PV generatedelectricity– Expanding pick time demand– Development of storage technologiesDenholm P. and R.M. Margolis, 2007, “Evaluating the Limits of Solar Photovoltaics (PV) in TraditionalElectric Power Systems,” Energy Policy, Vol. 35, pp. 2852-2861Denholm P. and R.M. Margolis, 2007, “Evaluating the Limits of Solar Photovoltaics (PV) in ElectricPower Systems Utilizing Energy Storage and Other Enabling Technologies,” Energy Policy, Vol.35, pp. 4424-4433Lamont, Alan, 2008, “Assessing the Long-term System Value of Intermittent Electric GenerationTechnologies,” Energy Economics, Vol. 30, pp. 1208-1231
  56. 56. Optimizing PV/Wind Hybrids• Reliability of power supply– Loss of power supply probability (LPSP) set at zero• Cost of kWh of energy– Levelized cost of energy (LCE)• Optimization techniques:– Linear programming– Probabilistic approach– Iterative technique– Dynamic programming– Multi-objective• The exercise involves modeling of a PV and wind generators, and ofbattery storage separately, then modeling system reliability, andfinally building an economical model to minimize levelized costDiaf S., D.Diaf, M. Belhamel, M. Haddadi, A. Louche, 2007, “A Methodology for Optimal Sizing ofAutonomous Hybrid PV/Wind System,” Energy Policy, Vol. 35, pp. 5708-5718
  57. 57. Economics 101 of PV
  58. 58. Economics101 of PV Technologies• Material cost vs. efficiency of PV ($/W capacity)– Less material lowers costs and efficiency– Better material yields higher efficiency at a higher cost– Combining materials yields higher efficiency at a highercost– Concentrating sun on a PV panel yields higher efficiencyat a higher cost• Government incentives drive the sector ...• Scaling up production lowers unit costs, but ...• Increase in demand for inputs pushed input priceshigher, at least temporarily;• Expect lots of volatility from the interactionsbetween markets and government policy
  59. 59. Prospects for PV: An Example of Optimism(PV is an industry where projections made in 2001 proved too optimistic in 2008)• Thin-film modules scaled up for mass production in100MW/year factories could be competitive at$2.2/Wp wholesale in 2007 with price declining 5.5percent annually for 10 years• At the above price trend PV modules may be costeffective in 125,000 new home installations of 4kWp per year (0.5GWp/year)Duke, R., Williams, R., and Payne A., 2005, “Accelerating Residential PV Expansion:Demand Analysis for Competitive Electricity Markets,” Energy Policy, Vol. 33, pp.1912-1929Payne, A. Duke, R., Williams, 2001, “Accelerating Residential PV Expansion: SupplyAnalysis for Competitive Energy Markets,” Energy Policy, Vol. 29, pp. 787-800
  60. 60. Experience Curves and ProgressRatio: Important Terminology• The experience curve describes how unit costs decline withcumulative production• Cost declines by a constant percentage with each doublingof the total number of units produced• A progress ratio (PR) is used to express the progress ofcost reductions for different technologies– A PR of 0.8 (80%) means that costs are reduced by 20% each timethe cumulative production doublesNeij, Lena, 1997, “Use of Experience Curves to Analyze the Prospects for Diffusionand Adoption of Renewable Energy Technology,” Energy Policy, Vol. 23 No. 13,pp. 1099-1107Nemet, Gregory F. 2006, “Beyond the Learning Curve: Factors Influencing CostReductions in Photovoltaics,” Energy Policy, Vol. 34, pp. 3218-3232
  61. 61. PV Life Cycle EnvironmentalPerformance (Sample Results)• Net energy ratio– 2.7 years for multi-crystalline PV 120 W module– 5.14 years for PV laminate 136 W• Energy pay-back time– 7.4 years for multi-crystalline PV 120 W module– 3.15 years for PV laminate 136 W• CO2 emissions– Depend on the energy mix of PV producers– 54.6 gCO2/kWh (E.U.) to 72.4 gCO2/kWh (U.S.) energy mix– 34.3 gCO2/kWh for PV laminate 136 W using U.S. energy mixPacca S. D. Sivaraman, and G.A. Keoleian, 2007, “Parameters Affecting the LifeCycle Performance of PV Technologies and Systems,” Energy Policy, Vol. 35, pp.3316-3326
  62. 62. Cost Developments of HomeComponents• Cell (PV) module– Some evidence of 36-54 percent reduction incosts per each doubling of cumulative production– Unit prices are competitive internationally• PV Balance of Systems (BOS)– BOS experience curve sustained a progress ratioof 0.78 in 1992-2000– BOS prices depend on local standards and labormarket trendsVan der Zwaan, B & Rabl, A., 2004, “The Learning Potential of Photovoltaics:Implications for Energy Policy,” Energy Policy, Vol. 32 pp. 1545-1554
  63. 63. PV System Price Indices• Solar I Solar Electricity Residential Price Index– Based on a standard 2 kilowatt peak system, roof retrofitmounted• Solar II Solar Electricity Commercial Price Index– Based on a 50 kilowatt ground mounted Solar System,connected to the electricity grid• Solar III Solar Electricity Industrial Price Index– Based on a 500 kilowatt flat roof mounted Solar System, suitableon large buildings, connected to the electricity grid• All Price Indices include full system integration andinstallation costs; compiled monthly by Solarbuzz.comSource: http://www.solarbuzz.com/SolarIndices.htm
  64. 64. Price DevelopmentsDecember 2008 Survey• Solar III Installed Industrial System on Grid(500 kilowatts)– Customer Price $2,474,245– Sunny climate 21.32 cents kWh– Cloudy climate 46.90 cents kWhSource: http://www.solarbuzz.com/SolarIndices.htm
  65. 65. PV Stock Price Index• The Photon Photovoltaics Stock Index (PPVX)– Aug. 1, 2001 at 1,000 points– June 1, 2007 -- 3,782 … December 12, 2008—1,879– Calculated weekly on a euro base– Currently, 30 stocks listed in different countries– More than 50 percent sales in PV prod. or services– Weighted: six classes, with different weighing pointsbased on the companies market capitalizationsSource: http://www.photon-magazine.com
  66. 66. Stock Price Index, Cont.• A capitalization of less than €50 million has 1 WP• €50--€200 million, 2 WP• €200-€800 million, 3 WP (Canadian Solar, Conenergy,ErSol, E-Ton, Evergreen, Gintech, Manz, Meyer BurgerTechnology, Motech, PV Crystalox, ReneSola, Roth &Rau, Solarfun Power, Solargiga, Solon, Trina),• €800--€3.2 billion, 4 WP (Centrotherm, ECD, GT Solar, JASolar, LDK Solar, SMA Technology AG, Solaria, Yingli)• €3.2- €12.8 billion, 5 WP (Q-Cells, Renewable EnergyCorp., SolarWorld, SunPower, Suntech Power)• < €12.8 billion, 6 WP (First Solar)Source: http://www.photon-magazine.com
  67. 67. Pricing Intermittent Solar Power• Pricing intermittent electricity• Fixed prices (regulated or standing contractprices)– Offer stability, in practice maximize revenues• Cost-reflective pricing (pool, spot prices)– Currently, only temporarily very high– Not enough day-periods of high pricesMaine, T and P. Chapman, 2007, “The Value of Solar: Prices and Output from DistributedPhotovoltaic Generation in South Australia,” Energy Policy, Vol. 35, pp. 461-466Lively, Mark, 2008, “The WOLF in Pricing: How the Concept of Plug, Play, and Pay WouldWork for Microgrids”, IEEE Power & Energy Magazine, January/February 2009
  68. 68. Government Policies
  69. 69. Pricing Distortions in EnergyMarkets/Public Policy Justification• Market failure to account for the environmental benefitsof PV (air pollution, health impact, CO2)• Market failure to account for non-environmental benefits– Stable pricing– Availability when and where needed– Reduced resistive power losses– Reduced electric system reserve needs– Improved transmission and distribution (T&D) reliability– Avoidance or deferral of T&D system investmentsDuke, R., Williams, R., and Payne A., 2005, “Accelerating Residential PV Expansion:Demand Analysis for Competitive Electricity Markets,” Energy Policy, Vol. 33, pp.1912-1929
  70. 70. Public Policy• Regulatory– Integration with existing supplies, grids– Product standardization– Pricing, tariff regulations• Deployment in developing countries– Focus on support of local distributors– Financing
  71. 71. Government Support• Continental European feed-in tariffs (FIT)– Long-term fixed prices paid to energy generators (can be very costly)• U.S./U.K Renewables Portfolio Standard (RPS)– Minimum output target for renewables– Typically limit cost by setting a price cap– Seek price competition to meet the target (pick-no-winners)– Distinction between consumption and production targets (for EU)Lipp, Judith, 2007, “Lessons from Effective Renewable Electricity Policy from Denmark, Germany and theUnited Kingdom,” Energy Policy, Vol. 35, pp. 5481-5495Rickerson W., Grace R.C., 2007, “The Debate over Fixed Price Incentives for Renewable Electricity inEurope and the United States: Fallout and Future Directions,” A White Paper prepared by The HeinrichBoll FoundationVerhaegen, K. et. al., 2007, “Electricity Produced from Renewable Energy Sources—What Targets are weAiming for?,” Energy Policy, Vol. 35, pp. 5576-5584
  72. 72. Recommended Reading for PolicyMakersFocus funding and support on R&Drather than on increasing deploymentsSee for example:Frondel, Manuel, Nolan Ritter, and Christoph M. Schmidt, 2008,“Germanys Solar Cell Promotion: Dark Clouds on the Horizon,”Energy Policy, Vol. 36, pp. 4198-4204Erickson, Jon D. and Duane Chapman, 1995, “PhotovoltaicTechnology: Markets, Economics, and Rural Development,” WorldDevelopment, Vol. 23, No. 7, pp. 1129-1141
  73. 73. Deployment Strategies
  74. 74. Corporate/Market Policies• Preconfigured packages (Costco/Walmart)• Standardization (ratings and efficiency)• Interconnections and permits process• Mounting, minimally invasive technologies• Solar power loans (account for cash flow)• Manufacturing financing• Support secondary market for equipmentThe Topline Strategy Group and Sunlight Electric (2006)
  75. 75. Deployment Models• The information technology model– Diffusion based on a variety of applications (U.S.)– Customization of each application• The manufactured technology developmentmodel– A dominant category of application is developedaround the existing utility grid (Japan)– Mass production of standardized productsShum K.L. and Chiro Watanabe, 2007, “Photovoltaic DevelopmentStrategy in Japan and the USA—An Institutional Appraisal,” EnergyPolicy, Vol. 35, pp. 1186-1195
  76. 76. Deployment Policies• Static efficiency– “Low-hanging fruits are harvested” first– Long-term opportunities may be missed• Dynamic efficiency– Lowering costs through technological innovation isencouraged by subsidies to ensure production scaleMenanteau, P., Finon, D., M-L, 2003, “Prices versus Quantities:Choosing Policies for Promoting the Development of RenewableEnergy,” Energy Policy, Vol. 31, pp. 799-812
  77. 77. Strategies• System costs and efficiencies– Market driven decline in polysilicon prices– Use of thin-film technologies• Deployment models/strategies– A shift from small scale (home) systems tolarge-scale deployments to lower costs(following Japan’s model)
  78. 78. Solar Energy in DevelopingCountries
  79. 79. Solar Energy and PovertyAlleviation• Solar home systems (SHS) provide an opportunity forrural households– Radio, TV, light, basic refrigeration, charging batteries• The majority of users purchase small units (10-25 W)• Unit cost equivalent to the cost of a bicycle ($40-$100)– Rural middle class main purchaser, not the poorest– Electricity from PV is expensive but no other choice• Market penetration varies– 5 percent average of the rural population– In some areas, up to 25 percent• PV systems replace kerosene, candles, batteries– limited impact on marginal CO2 emissions
  80. 80. Market Structure in DevelopingCountries• Self-organized solar home systems (SHS) markets– End user gets complete ownership and responsibility for SHS– Offer variety of choices in terms of PV equipment size– Offer individual system components– Provide flexibility to customers– Sold at full price plus taxes• Donor-funded project organized SHS– End users feel the ownership and responsibility lies with external party– Only few, high-quality models distributed in complete kits, often incl. end-useappliances (refrigerators)– Distributed through few big-dealer networks in cities– Sold at subsidized prices, exempt from VAT and import duties• The two markets are weakly coordinated“Solar Photovoltaics in Africa—Experiences with Financing and DeliveryModels,” 2004, Global Environment Facility, United Nations DevelopmentProgramme, Monitoring and Evaluation Report Series, Issue 2, May 200Literature review on country experiences in Annex 1
  81. 81. Donor Assistance for Solar Powerin Developing Countries• Donor assistance needs to refocus to support self-organized markets– Financing to local banks and dealers– Support proportional to the number of systems sold, not size ofequipmentWamukonya, N., 2007, “Solar Home System Electrification as a ViableTechnology Option for Africa’s Development,” Energy Policy, Vol. 35, pp. 6-14Vleuten, van der, F, and N. Stam, R. van der Plas, 2007, “Putting Solar HomeSystem Programmes into Perspective: What Lessons are Relevant,” EnergyPolicy, Vol. 35, pp. 1439-1451Damian Miller, Chris Hope, 2000, “Learning to Lend for Off-grid Solar Power:Policy Lessons from World Bank Loans to India, Indonesia, and Sri Lanka,”Energy Policy, Vol. 28, pp. 87-105
  82. 82. Solar Energy in China• Huge solar resources (western regions)• R&D of PV started in 1958• Entered application stage in 1970s• Industrialized in mid1980s• Since 1993, 20-30 percent annual outputgrowth, most for exports• Since 2000 China produces its own cellmaking equipment
  83. 83. Solar Energy in China• Annual production of PV cells and installedcapacity still small, but ...• Massive capacity expansion under way in 2007-08• China plans to spend $200 billion on renewableenergy over the next 15 yearsYang, Hong, He Wang, Huacong Yu, Jianping Xi, Rongqiang Vui, and Guangde Chen,2003, “Status of Photovoltaic Industry in China” Energy Policy, Vol. 31, pp. 703-707Qu Hang, Zhao Jun, Yu Xiao, Cui Junkui, 2008, “Prospect of Concentrating Solar Powerin China—the Sustainable Future, Renewable and Sustainable Energy Reviews, Vol.12, pp. 2505-2514Chen, Falin. Shyi-Min Lu, and Yi-Lin Chang, 2007, “Renewable Energy in Taiwan: ItsDeveloping Status and Strategy,” Energy, Vol. 32, pp. 1634-1646
  84. 84. Solar Energy in China• Capital raised by Chinese PV/solar IPOs:– Trina Solar: $98+$243 million (Dec. 06 and May 07)– JA Solar Holdings: $238 million (Feb. 07)– China Sunergy: $108 million (May 07)– Motech Industries (Taiwan): $211 million (May 07)– LDK Solar: 469 million (June 07)– Yingli Green Energy Holding: $319 million (June 07)China’s Solar-IPO’s Getting Bigger,” Global Finance, July/August 2007
  85. 85. Solar Energy in China• Market barriers:– High cost (still a niche market)– Low consumer density adds to installation andtransaction costs– National policy and inter-agency coordination insupport of PV is in its infancy ...Yang, H. et. al., 2003, “Status of Photovoltaic Industry in China,” EnergyPolicy, Vol. 31, pp. 703-707China’s Solar-IPO’s Getting Bigger, Global Finance July/August 2007
  86. 86. Conclusions• Energy transition towards higher quality energy (electricity) is real,but the time of solar has not yet arrived ...– Solar energy (thermal CSP and PV) are not yet competitive in the massmarket– Though, the persistence of high & volatile oil and gas prices boostsincentives for CSP and PV technologies even in the absence of outrightgovernment financial support of the industry• Major innovations are needed to make solar fully viable• The process will take time, will be volatile• Public assistance needs to be effective and efficient, for nowfocused on R&D, less on mass deployments• Impact on other markets to grow• CO2 concerns and security considerations will support long-termfunding for solar R&D
  87. 87. More on Solar is Available• As you can see there is a lot, and more, ofresearch about solar energy ...• I have prepared a pre-selected list of someexcellent references for further reading ...• Also, if you know of any company orassociation that could benefit from apresentation on one of the topics related tosolar ...• Please contact me at rzytek@imf.org
  88. 88. Annex 1: Country Experiences(Abstracts of Selected ResearchArticlesPrepared by Ariadna Bankowska)
  89. 89. Country Experiences with Energy Transitions, Solar EnergyPolicy and Sector Development—Abstracts of Selected ArticlesPrepared by Ariadna Bankowska (asmbz@yahoo.com)Africa, Australia, Brazil, Canada, China and Taiwan, Costa Rica, Cyprus, DominicanRepublic, East Timor, Egypt, France, Germany, Haiti, India, Indonesia, Israel, Japan,Kenya, New Zealand, The Netherlands, Saudi Arabia, Serbia, Sri Lanka, Thailand,Turkey, US, ZimbabweAfrica“Solar Photovoltaics in Africa—Experiences with Financing and Delivery Models,”2004, Global Environment Facility, United Nations Development Programme,Monitoring and Evaluation Report Series, Issue 2, May 2004PV systems provide very limited amount of electricity in developing countries. PV electricityis used primarily for operating light bulbs, radios, and TVs, but is insufficient to operatestoves, ovens, refrigerators and tools. As such PV cannot substitute for grid electricity, but itfills an important niche.To facilitate growth in PV deployment a detailed analysis of PV financing and deliveryoptions is provided, which includes both market and donor options.Wamukonya, N., 2007, “Solar Home System Electrification as a Viable TechnologyOption for Africa’s Development,” Energy Policy, Vol. 35, pp. 6-14Solar home systems (SHS) in Africa were promoted as cost-efficient and time-saving, able tomeet end-user demand, alleviate poverty, and reduce emissions. However, the review of costsand benefits of SHS in Africa indicates that the promises were not fulfilled. The questionarises if the public funds spent to support SHS would be better used to promote moreappropriate technologies.Vleuten, van der F, and N. Stam, R. van der Plas, 2007, “Putting Solar Home SystemPrograms into Perspective: What Lessons are Relevant,” Energy Policy, Vol. 35, pp.1439-1451Solar home systems (SHS) in Africa are delivered in two different ways: as a self-organizedinitiative by end-users, or organized externally by donor organizations and governments.Advantages and drawbacks of both systems are reviewed, based on the experience ofMorocco, Kenya, and Zimbabwe. The most important conclusion is that donors should utilizealready existing local solar infrastructure and companies to a much greater extent.Australia, Canada, and Japan
  90. 90. Parker, Paul, 2008, “Residential Solar Photovoltaic Market Stimulation: Japanese andAustralian Lessons for Canada,” Renewable and Sustainable Energy Reviews Vol. 12, pp.1944-1958Canada lags behind other industrial countries in photovoltaic (PV) deployment (14thout of 20reporting International Energy Agency (IEA) countries in the installation of PV systems).Japanese and Australian experience is compared based on capital incentives to stimulate theresidential PV market. Drawing from those countries’ experience a balanced solar energymarket stimulation program is proposed for Canada that combines a feed-in tariff with adeclining capital incentive.Spooner, E. D., D. Morphett, M. E. Watt, G. Grunwald, P. Zacharias, 2000, “SolarOlympic Village Case Study,” Energy Policy, Vol. 28, pp. 1059-1068Australian solar powered suburb is analyzed, which incorporates solar PV systems, solarthermal hot water and energy efficient design. The suburb has 629 residential homes, eachwith 1 kW peak PV system on the roof, connected to the local grid via inverter.Technical requirements of grid connection are addressed based on “Australian guidelines forgrid connection of energy systems via inverters.” Benefits of net metering are discussed,along with market barriers to PV expansion, namely market access, price, acceptance andregulation.Shum K.L. and Chiro Watanabe, 2007, “Photovoltaic Development Strategy in Japanand the USA—An Institutional Appraisal,” Energy Policy, Vol. 35, pp.1186-1195PV deployment strategies in Japan and the US are compared. Both governments promotesolar applications to address environmental and energy security issues. However, Japan hadPV installation capacity three times that of the US (as of December 2003). Japan favors grid-connected standardized small residential systems, while the US installations are split amongdifferent types of applications, on and off the grid.BrazilMartins, F.R., R. Ruther, E.B. Pereira, and S.L. Abreu, 2008, “Solar Energy Scenariosin Brazil. Part Two: Photovoltaic Applications,” Energy Policy, Vol. 36, pp. 2865-2877Despite the large solar energy resource availability Latin America represents only 1 percent ofthe world photovoltaic (PV) market.Two scenarios are proposed for Brazil. (1) Hybrid diesel/PV system would be appropriate forBrazilian Amazon region where electricity is produced at present by diesel-based mini-grids,characterized by high costs and low reliability. (2)Grid-connected PV systems would be wellsuited for urban centers, which have considerable solar irradiation rates and where thedemand for electricity peaks at daytime and in summer.
  91. 91. Schmid, Aloísio Leoni, and Carlos Augusto Amaral Hoffmann, 2004, “Replacing Dieselby Solar in the Amazon: Short-term Economic Feasibility of PV-diesel Hybrid Systems,”Energy Policy, Vol. 32, pp. 881-898The main source of electricity in Brazilian Amazon is diesel generator, with dieseltransportation cost constituting a sizeable portion of total electricity costs. The alternativestand alone solar home systems are found to be inadequate and unreliable. The alternative PV-diesel hybrid system is analyzed. The hybrid system becomes economical up to 50 kW peekpower with 15 percent higher transportation costs over wholesale, and up to 100 kW with 45percent higher diesel transportation costs.ChinaByrne, John, Aiming Zhou, Bo Shen, Kristen Hughes, 2007, “Evaluating the Potential ofSmall-scale Renewable Energy Options to Meet Rural Livelihoods Needs: A GIS- andLifecycle Cost-based Assessment of Western Chinas Options,” Energy Policy, Vol. 35, pp.4391-4401Chen, B. and G.Q. Chen, 2007, “Resource Analysis of the Chinese Society 1980–2002 Basedon Energy—Part 2: Renewable Energy Sources and Forest,” Energy Policy, Vol. 35, pp.2051-2064Qu Hang, Zhao Jun, Yu Xiao, Cui Junkui, 2008, “Prospect of Concentrating SolarPower in China—the Sustainable Future, Renewable and Sustainable EnergyReviews, Vol. 12, pp. 2505-2514China accounted for 44 percent of the growth in global CO2 emissions in 1990-2004. It cansurpass the United States to become the world’s largest source of CO2 emissions by 2009.Except for hydro-power, which contributed 24½ percent of China’s power generation in 2004,almost no renewable sources of energy are utilized in China.Concentrating solar power is potentially the most attractive source of renewable energy inChina as it belongs to sun belt countries and has a substantial (2.6 million square km)unutilized land mass. Technology and cost are two major barriers for large-scale use of CSPtechnologies.Yang, Hong, He Wang, Huacong Yu, Jianping Xi, Rongqiang Vui, and Guangde Chen,2003, “Status of Photovoltaic Industry in China,” Energy Policy, Vol. 31, pp. 703-707In 2000 the first production line of crystalline silicon solar cells was installed in China. Sincethen photovoltaic industry has been developing rapidly in China.China-TaiwanChen, Falin. Shyi-Min Lu, and Yi-Lin Chang, 2007, “Renewable Energy in Taiwan: ItsDeveloping Status and Strategy,” Energy, Vol. 32, pp. 1634-1646
  92. 92. Taiwan imports over 97 percent of its energy needs. Potential to utilize renewable energy inTaiwan is reviewed. At present renewable energy is not competitive with very cheap fossil-based electricity. Promotional and subsidy programs introduced by Taiwanese government arediscussed.Chang, Keh-Chin, Tsong-Sheng Lee, Wei-Min Lin, and Kung-Ming Chung, 2008,“Outlook for Solar Water Heaters in Taiwan,” Energy Policy, Vol. 36, pp. 66-72At present only 3½ percent of households have solar water heaters, despite the governmentincentive programs. The initial costs and long typhoon season are considered to be majorbarriers for large-scale deployment of solar water heaters. The authors propose a governmentincentive program to promote large scale solar water heater installations for dormitories andmanufacturing.Costa RicaNandwani, Shyam S., 1996, “Solar Cookers—Cheap Technology with High EcologicalBenefits,” Ecological Economics, Vol. 17, 73-81Solar ovens are analyzed and compared with firewood and electric ovens. The payback periodof the typical solar cooker, even if used only 6-8 months a year, is around 12-14 months. For2005, if 5 percent of people facing fuel shortages used solar ovens, almost 17 million tons offirewood would have been saved, with carbon dioxide emissions lowered by 38 million tons.CyprusMaxoulis, C., H.P. Charalampous, and S.A. Kalogirou, 2007, “Cyprus Solar WaterHeating Cluster: A Missed Opportunity,” Energy Policy, Vol. 35, pp. 3302-3315Solar thermal market in Cyprus has been very successful domestically. Cyprus has the highestsolar collector area installed per inhabitant in the world. However, local firms failed to expandand export their equipment and expertise to other European and Mediterranean countries.Authors suggest that the whole business culture on Cyprus has to be changed, with moreeffort going to R&D, improvement of professional management among local players, andhigher level of collaboration between individual firmsDominican RepublicErickson, Jon D. and Duane Chapman, 1995, “Photovoltaic Technology: Markets,Economics, and Rural Development,” World Development, Vol. 23, No. 7, pp. 1129-1141The key for renewables in general and PV in particular, is to direct public assistance towardR&D activities rather than towards expanding demand for the available technology.Universities had been the most under-utilized resource of potential R&D in U.S. funding forrenewables. Current international aid for PV purchases in developing countries diverts funds
  93. 93. from R&D and may support possibly unsustainable economic and social development in therecipient countries.East TimorBond, M., R.J. Fuller, and Lu Aye, 2007, “A Policy Proposal for the Introduction ofSolar Home Systems in East Timor,” Energy Policy, Vol. 35, pp. 6535-6545The Government of East Timor aims to increase the rate of household electricity service from20 percent today to 80 percent over the next 20 years. Largely rural population, living insparsely populated remote locations, could be best served by solar home systems (SHS).There is a very limited local commercial capacity to supply and service solar PV equipment inEast Timor. The government is experimenting with the introduction of small-scale solarsystems (10W solar lanterns) in rural areas. A market-driven approach for SHS is unlikely tobe successful. A model with subsidized capital costs, which seeks full recovery of operatingcosts, is recommended. The essential elements needed: commercial availability of high-quality components and spare parts; creation of a pool of skilled technicians for installationand maintenance; and development of a robust fee collection and maintenance infrastructure.EgyptLamei, A., P. van der Zaag, and E. von Munch, 2008, “Impact of Solar Energy Cost onWater Production Cost of Seawater Desalination Plants in Egypt,” Energy Policy, Vol.36, pp. 1748-1756Egypt is using desalination technologies to overcome water shortage. The preferred method isthe reverse osmosis, versus thermal desalination. Both PVs and solar thermal energy are usedon the experimental basis.Solar energy is not cost competitive because of its high capital cost and low prices of naturalgas in Egypt. Solar thermal systems are more promising, but they would be more suitable forother Arab Gulf countries, which depend more on thermal desalination.Solar energy for desalination will become more competitive with the increased scale ofdesalination plants, which are small at present in Egypt.France (Corsica Island)Diaf, S., M. Belhamel, M. Haddadi, and L. Louche, 2008, “Technical and EconomicAssessment of Hybrid Photovoltaic/Wind System with Battery Storage in CorsicaIsland,” Energy Policy, Vol. 36, pp. 743-754Optimum size of a stand-alone hybrid photovoltaic/wind system with battery storage used atthree sites on Corsica island is discussed. Given the complementary characteristics between
  94. 94. solar and wind energy resources for certain locations hybrid systems with storage offer areliable source of power.GermanyFrondel, Manuel, Nolan Ritter, and Christoph M. Schmidt, 2008, “Germany’s Solar Cellpromotion: Dark Clouds on the Horizon,” Energy Policy, Vol. 36, pp. 4198-4204The large feed-in tariffs currently guaranteed for solar electricity in Germany are an exampleof misguided political intervention. Producing electricity on this basis is among the mostexpensive greenhouse gas abatement options. Immediate and drastic reduction in the feed-intariffs is urged. In the early stages of development of technologies it appears to be more cost-effective to invest in R&D to improve the competitiveness of new technologies than trying toachieve cost reductions by promoting large-scale production and deployment of stillexpensive and often untested technologies.HaitiTucker, Michael, 1999, “Can Solar Cooking Save the Forest,” Ecological Economics,Vol. 31, pp 77-89Approximately two billion people use wood for cooking. Solar cooking is one possiblesolution to fuel wood scarcity. Solar cookers have been marketed in developing countriesbased on their many benefits, such as freeing time used to collect wood, elimination of healthproblems associated with smoke, saving on fuel cost. However, promoting solar cookers onthat basis did not lead to their widespread use. Strong cultural and gender barriers have to beaddressed by larger local community involvement.India, Indonesia, and Sri LankaKolhe, Mohanlal, Sunita Kolhe, and J.C. Joshi, 2002, “Economic Viability of Stand-Alone Solar Photovoltaic System in Comparison with Diesel-powered System for India,”Energy Economics, Vol. 24, pp. 155-165Stand alone PV systems in remote areas of India are compared with the alternative diesel-powered systems through sensitivity analysis. PV systems are found to be the lowest costoption for the daily energy demand of up to 15 kW h under unfavorable economic conditionsand up to 68 kW h/day under favorable economic parameters.Miller, Damian and Chris Hope, 2000, “Learning to lend for Off-Grid Solar Power:Policy Lessons from World Bank Loans to India, Indonesia, and Sri Lanka,” EnergyPolicy, Vol. 28, pp. 87-105The study assesses the World Bank experience with loans for off-grid PV systems in India,Indonesia and Sri Lanka. PV technology is particularly applicable in remote, rural areas ofthose countries where grid expansion will not be feasible in the near future.
  95. 95. Solar home systems (SHS) are compared to petrol/diesel generators, kerosene lighting andbattery charging in areas with no grid access. On a per kilowatt hour basis diesel generatorsare the most cost effective. However, for households with a limited budget and the demandfor less electricity than from a typical generator, SHS is more cost effective and moreconvenient than diesel generators, kerosene lanterns and battery charging.To increase the demand for SHS World Bank is recommending the enhancement of the followof rural credit and transparency in grid extensions. To stimulate the supply of SHS long-termloans are recommended, along with business advisory services, elimination of taxation of PVmodules and complete systems, and supply-side grants.IsraelMor, Amit, Shimon Seroussi, and Malcolm Ainspan, 2005, “Economic and SocialImpacts from Large Scale Utilization of Solar Energy in Israel,” The Greenpeace Reportfor Solar Energy in Israel, Greenpeace Mediterranean, July 2005Israel has not yet developed its domestic solar energy sector, with an exception of a high rateof rooftop solar water heating use. Benefits of rapid development of solar energy in Israelover next 20 years are estimated at $1.8 to $2.7 billion. The main emphasis is put on solarthermal generation, rather than on PV, as southern Israel has a high and consistent sunlightand Israeli companies, Luz and Solel, have demonstrated the ability to develop and operatelarge-scale projects overseas.KenyaJacobson, Arne, 2007, “Connective Power: Solar Electrification and Social Change inKenya,” World Development, Vol. 35, pp. 144-162Several developing countries started experimenting with rural electrification based on solarenergy. The market-based rural solar electrification program in Kenya is found to (1) benefitmainly the rural middle class; (2) disproportionately favor connective applications liketelevision, radio and cellular telephone charging, while demand from economically productiveand education-related activities is very modest; (3) increase television viewing, but has almostno impact on poverty alleviation and sustainable development.KuwaitHammoudeh, Sh., S. Ayyash, and R.K. Suri, 1984, Conventional and Solar CoolingSystems for Kuwait: An Economic Analysis, Energy Economics, October 1984, pp. 259-266Five cooling systems in Kuwait available in early 1980s were compared based on their life-cycle costs and occupancy rates. Two conventional vapor compression systems and threesolar, absorption and photovoltaic, cooling systems are analyses. At the time of the analysis
  96. 96. no solar cooling system was an economical substitute for the conventional systems. Theabsorption system was the most promising.The NetherlandsVerbong, Geert and Frank Geels, 2007, “The Ongoing Energy Transition: Lessons Froma Socio-technical, Multi-level Analysis of the Dutch Electricity system (1960-2004),”Energy Policy, Vol. 35 pp. 1025-1037Implementation of renewable energy in the Netherlands is low compared to other Europeancountries. Energy savings receive more attention than renewable energy. Renewable optionswere evaluated by the government based on greenhouse gas reduction and cost-efficiency. PVscored poorly on both criteria, compared to wind and biomass.New ZealandRoulleau T. and C.R. Lloyd, 2008, “International Policy Issues Regarding Solar WaterHeating, With a Focus on New Zealand,” Energy Policy, Vol. 36, pp. 1843-1857A good overview of international solar water heating policies is provided, including collector-area-based and performance-based subsidies, tax credits and deductions, and mandatorypolicies.New Zealand has introduced a solar hot water heating subsidy program. The system is basedboth on performance and cost incentives, drawing from the experiences of other countriespromoting solar water heaters.Saudi ArabiaAlnatheer, Othman, 2005, “The Potential Contribution of Renewable Energy toElectricity Supply in Saudi Arabia,” Energy Policy, Vol. 33, pp. 2298-2312Saudi Arabia has both vast oil reserves and high solar radiation. When non-market benefits ofrenewable energy are included in the analysis solar and wind resources can provide lowersocietal costs than fossil fuel generated energy.SerbiaBojic, M. and M. Blagojevic, 2006, “Photovoltaic Electricity Production of a Grid-connected Urban House in Serbia, Energy Policy, 34, 2941-2948Serbia is considering the introduction of renewable energy sources to its energy mix. To helpwith the policy discussion authors calculated the electricity revenue during the life of a housein Belgrade, Serbia, and compared it with the needed PV investment. The project waseconomically viable only if the feed-in tariffs were set at 157 percent above the prevailingmarket rate and 49 percent of the PV panel cost was covered from subsidies.
  97. 97. ThailandGreen, Donna, 2004, “Thailand’s Solar White Elephants: An Analysis of 15 Years ofSolar Battery Charging Programmes in Northern Thailand,” Energy Policy, Vol. 32, pp.747-760State funded solar battery charging program in over 50 villages in Northern Thailand isreviewed. Solar battery charging stations (SBCS) are used to supply power to many users forbattery charging.Field study results are discouraging. About 60 percent of the systems are no longeroperational. They have been plagued by technical problems from the start, including incorrectcharging techniques, rapid deterioration of PV panels, low quality or incorrect batteries, lessthan maximum solar exposure, not enough sun during rainy season. The technical help fromgovernment staff was inadequate or non-existent. The resulting electricity generation hadminimal effect on income generation, standard of living and fossil fuel savings. The onlyprogress was noted in improved households’ safety from fires, achieved by substitutingkerosene lanterns with solar ones.TurkeyOzsabuncuoglu, I.H., 1995, “Economic Analysis of Flat Plate Collectors of SolarEnergy,” Energy Policy, Vol. 23, pp. 755-763In 1995 solar heating in Turkey was used primarily for water heating. A significant amount ofresearch went to flat plate collectors used in solar water heating. However, more investmentin R&D is necessary to reduce total cost of the heating system by improving efficiency andproduction technology.United StatesByrne, John, Lado Kurdgelashvili, Daniele Poponi, and Allen Barnett, 2004, “ThePotential of Solar Electric Power for Meeting Future US Energy Needs: A Comparisonof Projections of Solar Electric Energy Generation and Arctic National Wildlife RefugeOil Production,” Energy Policy, Vol. 32, pp. 289-297The potential contribution of PV generation in the US is compared with the projected volumeof oil available in the Arctic National Wildlife Refuge. Authors calculate that for the period of2010-2070 the oil production from ANWR would range from 51 to 55 billion barrels,compared to 44 to 59 billion barrels of oil equivalent for PV energy supply.PV electricity production should be viewed as one of the sources of new energy services, andnot only as a substitute for fossil fuels. New energy services include energy management(shaving peak loads of users), back-up or emergency power, environmental improvements,and fuel diversity.
  98. 98. Paul Denholm, and Robert M. Margolis, 2008, “Land-use Requirements and the Per-capita Solar Footprint for Photovoltaic Generation in the United States,” EnergyPolicy, Vol. 36, pp. 3531-3543To supply all electricity from photovoltaics in the US the average footprint per person is about181 m2. This value assumes the availability of long-term storage and a mix of tracking andflat-plate PV systems.Besides module efficiency and local insolation, the area required is strongly dependent on thePV array configuration. Land-based tracking arrays require much more area than flat arrays.The area required for PV to meet the total US electricity demand in 2005 is about 0.6 percentof the total area of the country. It is less than 2 percent of land used for crops and grazing, andless than the amount of land currently devoted to manufacturing ethanol from corn.Manning, Neil and Ray Rees, 1982, “Synthetic Demand Functions for Solar Energy,”Energy Economics, October 1982, pp. 225-231A general model of consumer choice of energy-using durable goods under uncertainty andenergy rationing is developed and used to derive demand functions for solar water heatingequipment. The results indicate that the price of solar installations would have to fall by atleast 75 percent compared to early 1980’s levels to be attractive to consumers.Taylor, Margaret, 2008, “Beyond Technology-push and Demand-pull: Lessons fromCalifornia’s Solar Policy,” Energy Economics, Vol. 30, pp. 2829-2854A very detailed history review of California’s solar policies is provided. State’s policies aredivided into three categories. (1) Technology push incorporates investing in R&D and directlysupporting smaller companies. (2) Demand pull includes government as customer, creatingcustomers by using “carrots” and “sticks”, installation rebates. (3) Interface improvementrepresents government actions which are aimed at enhancing the relationships betweeninnovators and technology consumers, focusing mainly on installers.ZimbabweMulugetta Yacob, Tinashe Nhete, and Tim Jackson, 2000, “Photovoltaics in Zimbabwe:Lessons from the GEF Solar Project,” Energy Policy, Vol. 28, pp. 1069-1080Donor-driven solar energy projects can bring direct benefits to the users but tend to distortmarkets for energy equipment and prices, and undermine local-driven efforts.
  99. 99. Annex 2: Further Readings
  100. 100. Developments and Issues in Solar EnergyPresented by Roman Zytek (rzytek@imf.org; tel.: 202-623-8856)National Capital Area Chapter of the United States Association for Energy EconomicsChinatown Garden Restaurant, 618 H Street, N.W., Washington, DC, December 19, 2008Selected ReadingsLong-term Energy TrendsBashmakov, I., 2007, “Three Laws of Energy Transitions,” Energy Policy, Vol. 35, pp. 3583-3594Byrne, John, Lado Kurdgelashvili, Daniele Poponi, Allen Barnett, 2004, “The Potential of Solar ElectricPower for Meeting Future US Energy Needs: A Comparison of Projections of Solar Electric EnergyGeneration and Arctic National Wildlife Refuge Oil Production,” Energy Policy, Vol. 32, pp. 289-297Fthenakis, Vasilis, James Mason and Ken Zweibel, 2008, “The Technical, Geographical, and EconomicFeasibility for Solar Energy to Supply the Energy Needs of the US,” Energy Policy,doi:10.1016/j.enpol.2008.08.011Lewis, N.S. “Chemical Challenges in Renewable Energy,” www.nsl.caltech.edu/files/Energy_Notes.pdfMeisen, Peter and Oliver Pochert, 2006, “A Study of Very Large Solar Desert Systems with theRequirements and Benefits to those Nations Having High Solar Irradiation Potential” atwww.geni.orghttp://geni.org/globalenergy/library/energytrends/currentusage/renewable/solar/solar-systems-in-the-desert/Solar-Systems-in-the-Desert.pdfSmalley, Richard E., 2005, “Future global Energy Prosperity: The Terawatt Challenge,” MaterialsResearch Society (MRS) Bulletin, 30, pp. 412-417, www.mrs.org/publications/bulletin orhttp://smalley.rice.edu/Sohn, I., C. Binaghi and P. Gungor, 2007, “Long-term Energy Projections: What Lessons have WeLearned?” Energy Policy, Vol. 35, pp. 4574-4584Concentrating Solar Power (CSP) TechnologiesFord, Graham, 2008, “CSP: Bright Future for Linear Fresnel Technology?” Renewable EnergyFocus, Vol. 9, Issue 5, pp. 48-51Taggart, Stewart, 2008, “CSP: Dish Projects Inch Forward,” Renewable Energy Focus, Vol. 9, Issue 4,pp. 52-54Taggart, Stewart, 2008, “Hot Stuff: CSP and the Power Tower” Renewable Energy Focus, Vol. 9, Issue 3,pp. 51-54Taggart, Stewart, 2008, “Parabolic Troughs: CSPs Quiet Achiever,” Renewable Energy Focus, Vol. 9,Issue 2, pp 46-50Wolff, Gerry, Belén Gallego, Reese Tisdale, David Hopwood, 2008, “CSP Concentrates the Mind,”Renewable Energy Focus, Vol. 9, Issue , pp. 42-47“Concentrating Solar Power for Seawater Desalination,” AQUA-CSP Study Report, www.dlr.de/tt/aqua-csp
  101. 101. - 2 -Photovoltaic Technologies (PV)Bagnall, Darren M., Matt Boreland, 2008, “Photovoltaic Technologies,” Energy Policy, Vol. 36, Issue12, pp. 4390-4396O’Rourke, Stephen, 2008, “Solar Photovoltaic Industry,” Deutsche Bank SecuritiesQuaschning Volker, 2004, “Technical and Economical System Comparison of Photovoltaic andConcentrating Solar Thermal Power Systems Depending on Annual Global Irradiation,” Solar Energy,Vol. 77, Issue 2, pp. 171-178Modeling Technological Progress in the Energy SectorBaker E. et al., 2008, “Advanced solar R&D: Combining Economic Analysis with Expert Elicitations toInform Climate Policy,” Energy Economics, doi:10.1016/j.eneco.2007.10.008Gritsevskyi, A.,and N. Nakicenovic, 2000, “Modeling Uncertainty of Induced Technological Change,”Energy Policy, Vol. 28, pp. 907-921Experience CurvesGerlagh, Reyer, 2007, “Measuring the Value of Induced Technological Change,” Energy Policy, Vol. 35,pp. 5287-5297Neij, Lena, 1997, “Use of Experience Curves to Analyze the Prospects for Diffusion and Adoption ofRenewable Energy Technology,” Energy Policy, Vol. 23, No. 13Papineau, Maya, 2006, “An Economic Perspective on Experience Curves and Dynamic Economies inRenewable Energy Technologies, Energy Policy, Vol. 34, Issue 4, pp. 422-432Van der Zwaan, B & A. Rabl, 2004, “The Learning Potential of Photovoltaics: Implications for EnergyPolicy,” Energy Policy, Vol. 32, pp.1545-1554Energy Pay-back, Net Energy Ratio, and CO2 Emissions for PVAlsema, E.A. and E. Nieuwlaar, 2000, “Energy Viability of Photovoltaic Systems,” Energy Policy Vol.28, pp. 999-1010Pacca S. D. Sivaraman, and G.A. Keoleian, 2007, “Parameters Affecting the Life Cycle Performance ofPV Technologies and Systems,” Energy Policy, Vol. 35, pp. 3316-3326Demand/Supply Analysis for the U.S.Duke, R., Williams, R., and A. Payne, 2005, “Accelerating Residential PV Expansion: Demand Analysisfor Competitive Electricity Markets,” Energy Policy, Vol. 33, pp. 1912-1929Payne, A. Duke, R., Williams, 2001, “Accelerating Residential PV Expansion: Supply Analysis forCompetitive Energy Markets,” Energy Policy, Vo. 29, pp. 787-800PV Grid Limits/Wind-PV hybrid optimizationsDenholm P. and R.M. Margolis, 2007, “Evaluating the Limits of Solar Photovoltaics (PV) in TraditionalElectric Power Systems,” Energy Policy, Vol. 35, pp. 2852-2861
  102. 102. - 3 -Denholm P. and R.M. Margolis, 2007, “Evaluating the Limits of Solar Photovoltaics (PV) in ElectricPower Systems Utilizing Energy Storage and Other Enabling Technologies,” Energy Policy, Vol. 35, pp.4424-4433Diaf S., D.Diaf, M. Belhamel, M. Haddadi, A. Louche, 2007, “A Methodology for Optimal Sizing ofAutonomous Hybrid PV/Wind System,” Energy Policy, Vol. 35, pp. 5708-5718Lamont, Alan, 2008, “Assessing the Long-term System Value of Intermittent Electric GenerationTechnologies,” Energy Economics, Vol. 30, pp. 1208-1231Government PoliciesDukert, Joseph M., 2004, “Coping with the Federalist Reality in North American Energy Trade,” Paperpresented at the Foreign North American Energy Security Conference, Monterrey, Mexico, April 1-2,2004Frondel, Manuel, Nolan Ritter, and Christoph M. Schmidt, 2008, “Germanys Solar Cell Promotion: DarkClouds on the Horizon,” Energy Policy, Vol. 36, pp. 4198-4204Kenichiro Nishio, Hiroshi Asano, 2006, “Supply Amount and Marginal Price of Renewable Electricityunder the Renewables Portfolio Standard in Japan,” Energy Policy, Vol. 34, pp. 2373-2387Lesser, Jonathan A. and Xuejuan Su Design of an Economically Efficient Feed-in Tariff Structure forRenewable Energy Development, Energy Policy, Vol. 36, pp. 981-990Lipp, Judith, 2007, “Lessons from Effective Renewable Electricity Policy from Denmark, Germany andthe United Kingdom,” Energy Policy, Vol. 35, pp. 5481-5495Menanteau, P., Finon, D., M-L, 2003, “Prices versus Quantities: Choosing Policies for Promoting theDevelopment of Renewable Energy,” Energy Policy, Vol. 31, pp. 799-812New Renewable Energy: A Review of the World Bank’s Assistance, 2006, Independent Evaluation Group,The World BankParker Paul, 2008, “Residential Solar Photovoltaic Market Stimulation: Japanese and Australian Lessonsfor Canada,” Renewable and Sustainable Energy Reviews, Vol. 12, pp. 1944-1958Rickerson W., R.C. Grace, 2007, “The Debate over Fixed Price Incentives for Renewable Electricity inEurope and the United States: Fallout and Future Directions,” A White Paper prepared by The HeinrichBöll FoundationRoulleau T. and C.R. Lloyd, 2008, “International Policy Issues Regarding Solar Water Heating, with aFocus on New Zealand”, Energy Policy, Vol. 36, pp.1843-1857Solomon, Barry and Thomas Georgianna, 1987, “Optimal Subsidies to New Energy Sources,” EnergyEconomics, JulyTaylor, Margaret, 2008, “Beyond Technology-push and Demand-pull: Lessons from California’s SolarPolicy,” Energy Economics, Vol. 30 pp. 2829-2854Verbong Geert and Frank Geels, 2007, “The Ongoing Energy Transition: Lessons from a Socio-technical,Multi-level Analysis of the Dutch Electricity System (1960-2004),” Energy Policy, Vol. 35, pp. 1025-1037
  103. 103. - 4 -Pricing Intermittent Electricity, Policies, Pricing DistortionsDuke, R., Williams, R., and A. Payne, 2005, “Accelerating Residential PV Expansion: Demand Analysisfor Competitive Electricity Markets,” Energy Policy, Vol. 33, pp. 1912-1929Lively, Mark, 2008, “WOLF at the Door: Valuing Intermittent Wind Power For Electricity Dispatchers?”28thUSAEE/IAEE North American Conference, New Orleans, Louisiana, 2008 December 4-6.http://www.usaee.org/usaee2008/submissions/OnlineProceedings/MarkLivelyUSAEE2008PaperRev.pdfLively, Mark, 2008, “The WOLF in Pricing: How the Concept of Plug, Play, and Pay Would Work forMicrogrids”, IEEE Power & Energy Magazine, January/February 2009.Mills, Andrew, Ryan Wiser, Galen Barbose, William Golove, 2008, “The impact of Retail Rate Structureson the Economics of Commercial Photovoltaic Systems in California,” Energy Policy, Vol. 36, pp. 3266-3277“Projected Costs of Generating Electricity (2005 Update)—World Alliance for Decentralized Energy’s(WADE’s) response to the report of the International Energy Agency and the Nuclear Energy Agency,AugustRafaj, P. and S. Kypreos, 2007, “Internalization of External Cost in the Power Generation Sector:Analysis with Global Multi-regional MARKAL Model,” Energy Policy, Vol. 35, pp. 828-843PV Deployment ModelsKlein, J., R. Erlichman, 2006, “What the Solar Power Industry Can Learn from Google andSalesforce.com,” The Topline Strategy Group, Sunlight Electric www.sunlightelectric.comShum K.L. and Chiro Watanabe, 2007, “Photovoltaic Development Strategy in Japan and the USA—AnInstitutional Appraisal,” Energy Policy, Vol. 35 pp. 1186-1195PV and Capital Asset Pricing Model (CAPM) PerspectiveAlbrecht, J. 2007 “The Future Role of Photovoltaics: A Learning Curve versus Portfolio Perspective”Energy Policy, Vol. 35, pp. 2296-2304Awerbuch, S., 2004, “Portfolio-Based Electricity Generation Planning: Policy Implications forRenewables and Energy Security,” SPRU, University of Sussex, Working PaperAwerbuch, S., 2005, “The Role of Wind in Enhancing UK Energy Diversity and Security: A Mean-Variance Portfolio Optimization of the UK Generating Mix,” available at http://www.awerbuch.comAwerbuch, S. and M. Berger, 2003, “EU Energy Diversity and Security: Applying Portfolio Theory toElectricity Planning and Policy-Making,” International Energy Agency, available athttp://www.awerbuch.comAwerbuch, S. and R. Sauter, 2005, “Exploiting the Oil-GDP Effect to Support Renewables Deployment”The Freeman Centre, University of Sussex , Science and Technology Policy Research (SPRU), Paper No.129 (January 2005), http://www.sussex.ac.uk/spru/Capital Markets ReportsO’Rourke, Stephen, 2008, “Solar Photovoltaic Industry,” Deutsche Bank Securities
  104. 104. - 5 -“Solar Photovoltaic Supply and Demand Update,” November 12, 2008, FBR Capital MarketsData SourcesJager-Waldau, A., 2006, “PV Status Report 2006: Research, Solar Cell Production and MarketImplementation of Photovoltaics,” European Commission, Directorate-General, Joint Research CenterPhoton Photovoltaics Stock Index (PPVX): http://www.photon-magazine.com/ppvx/index.htmSolar electricity PV-based prices: http://www.solarbuzz.com/SolarPrices.htm“Trends in Photovoltaic Applications—Survey Report of Selected IEA Countries Between 1992 and2007,” 2007, Photovoltaic Power Systems Programme, International Energy Agency (IEA), August 2008United States Solar Atlas, http://www.nrel.gov/gis/solar.html
  105. 105. Interesting Web Links• Solar Energy Industries Association http://www.seia.org/• European Photovoltaic Industry Association http://www.epia.org/• http://www.solarbuzz.com/ (provides monthly updates on pricedevelopments)• Photon Magazine http://www.photon-magazine.com/• Company database: http://www.enf.cn/• Renewable Energy Accesshttp://www.renewableenergyaccess.com/• National Renewable Energy laboratory http://www.nrel.gov/pv/• Solar America Initiativehttp://www1.eere.energy.gov/solar/solar_america/index.html• Database of State Initiative for Renewables and Efficiencyhttp://www.dsireusa.org/

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