Photovoltaics – the energy alternative that is immediately available in large and affordable quantities10. January 2012 By: Karl-Heinz Remmers
Publisher Karl-Heinz Remmers takes aim at those who continue to label photovoltaics as the most expensive renewable energy source - particularly in context of the German renewable landscape.
With the first blog of the new year I would like to wish everyone, above all, a happy and healthy New Year! And I hope that everyone got off to a good start. I also wish the photovoltaic industry continued nerves of steel because it looks the New Year started off with another sensation:
In a furious final spurt, that I myself had not expected, in November / December the market volume (based on newly installed output) appears to have catapulted itself to the level of the previous year. This is according to initial data from the German Federal Network Agency, the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety [BMU] and the German Solar Industry Association [BSW].
A big success even if it once again gets the eternally backward opponents to photovoltaics up in arms. They will now scream even louder for restrictions to photovoltaics and offer arguments primarily involving the costs – and as an aside mention that grid development for renewable energies cannot even be achieved quickly enough and so a ceiling is required, above all for photovoltaics.
It is clear that in essence what is behind these attacks is the attempt to completely undermine the change in energy policy and to also flog wind and bio-energy to death. Just as onshore wind energy has been denigrated in every conceivable form for ten years and now the focus is on the substantially more expensive prototype technology of offshore wind energy in order to assure the survival of large suppliers in this area. What is sufficiently well-known among insiders is that the cost situation has completely changed with the 15 percent cut in remuneration that just took place, with the increase in photovoltaics in 2011 and the already decided further cuts in remuneration in 2012 and 2013 - of presumably 24 percent by January 1, 2013 (15 percent as of July 1, 2012, nine percent as of January 1, 2013). Nearly 40 percent cuts to remuneration within a space of 12 months and one day sets a record and completely changes the energy landscape.
PV solar electricity becomes the "immediately available cost cutter"
Seen in both technical and market terms, photovoltaic solar electricity is certainly capable of currently replacing one and a half to two nuclear power plants per year, and with more power even more would surely be feasible. Thus immediate availability and feasibility is not an issue. “At horrendous costs, for God’s sake are you all mad?” will now be the objection. Yet if one asks the objector what photovoltaic electricity costs, the response usually is “more than forty cents.” That is history. Today the remuneration for electricity amounts to just only between 17.9 and 24.4 cents/kWh. Thus even for small domestic roof installations this equals less than many pay for their electricity. And this will already be between 15.2 and 20.7 cents on July 1; and in 358 days it will then be only between 13.6 and 18.5 cents.
And so a small domestic roof installation will soon receive less remuneration than an offshore wind plant and many bio-energy plants. The large roof and outdoor plants have already undercut offshore wind installations and will continue to do so within a period of one year. But mind you: Without the billions that are necessary for the difficult development of the grids for offshore wind energy and with fully developed products, not with prototypes. And since (at least up to now) nobody has come up with the idea of demanding a ceiling for offshore wind, the ‘rowdies’ should just be quiet because all of their comparative and defamatory arguments are already false from the outset and get even worse still by the day.
Apart from onshore wind energy, which finally has to be provided with the possibility for substantial growth with the dismantling of official requirements, since this form of energy is cheaper than photovoltaics already even today, photovoltaics is now the "cost cutter" – or lowest cost technology – covered by the German Renewable Energy Act [EEG]. After all, remuneration rates are or will be even lower than that of offshore wind energy and many bio-energy installations.
So enough of the lie about the costs of photovoltaics! Neither consumers nor industry (which in an asocial manner, is for the most part exempt from the EEG) will continue to pay most of the money for photovoltaics as of 2012. If there is a need to be piggish here, then please at least at the right address.
And enough of the small-minded talk from the federal government! Why does there have to be a growth corridor of 3.5 GWp for photovoltaics? Full power is what is called for because we want 12 percent photovoltaic electricity in the German grid by 2020. And that can surely be achieved. And much more cheaply than expected because, according to plan the next EEG cut will already be on July 1, 2013.
Crisis despite year-end rally
In spite of all the euphoria: At the end of the year 2011 there will nevertheless be a decline in sales in the industry in Germany, 2010 possibly even 30-35 percent. Low remuneration and low system costs are logically expressed in sales. And that alone is reason enough for market volume in GWp to be as if it was in a crisis. And naturally substantially developed capacities at every stage of the value output chain have contributed to the fact that even close observers saw a slight boom, but were nevertheless surprised by the strength of the two last months. The entire market can simply install ever-larger quantities at an ever-faster pace, thanks to learning and scaling effects.
Quickly developed potentials
However, the marvelous year-end rally continues to demonstrate how great the potential is for photovoltaics to make clean, ever-cheaper solar electricity available. Thus the second half of the year 2009 and the year 2010 were not just a flash in the pan although many "premium roofs" are already occupied and the areas of arable land have disappeared. This comes as no surprise if the high overall potential and roof, fronts and "worthless" conversion areas are taken into consideration. Yes, photovoltaics can renew more than 1.5 percent of the electricity supply within a year.
And that is what is intended by all of the political parties, at least in verbal terms. As a result of the easy implementation and minimal or even lack of an effect on the environment, such projects can be implemented extremely quickly. This is compared with conventional investments in the energy sector, since the plants can still largely be integrated into the low-voltage system and there are substantial development possibilities with the least amount of required resources (e.g. through extended inverter functions or local grid transformers that can be cheaply replaced). And the large roof or outdoor systems are usually integrated into medium voltage structures in close proximity to where consumption takes place. Here too decentralized approach makes quick development with reasonable and affordable technology and/or grid adaptation possible.
The PV crowd: purely decentralized
The only genuine decentralized form of energy increasingly functions like movements on the Internet. The movement that is designated there as a "crowd" is not only capable of celebrating Facebook-organized drinking parties, but already today more and more financing, among other things, is being organized directly via the Internet, without the banks and instead with the crowd.
And it appears that this is only just the beginning of organizational forms of an interlinked world that will make changes to the system. And in such a way approximately 1.1 million operators of solar electricity installation are now achieving something that the big four of the outdated power supply never could despite their large share of the market – namely, more than EUR 70 billion in new investments in three years. And the photovoltaic crowd knows no limits when it comes to financing because a lot of small financing creates the large mass. And it is so fast because thousands of enterprises are able to install the power stations and thousands and thousands of companies worldwide form a delivery structure that is free from oligopolies and monopolies. A structure that is so extremely flexible that even experienced insiders are completely surprised again and again.
At the same time the photovoltaic crowd can hardly be predicted when it comes to its market behavior; what moods and situations on the market result in “ignition” and "cooling off" of the market have thus far been imprecisely described and produces market crises and rallies on a monthly basis. And the photovoltaic crowd will also create local storage possibilities in the next stages. This is hardly understandable for insiders, and for the rest of the world completely inscrutable. In short it’s ‘hell on earth’ for losers in the change in energy policy because the photovoltaic crowd cannot be stopped. And it is for this reason that I make a renewed and unambiguous appeal to make these connections public again and again because the majority of the population continues to be enthusiastic about this technology.
New market and cost realities
Instead of combating "less photovoltaics", the industry should recognize and convey the new reality will absolute self-confidence. And this reality is that for increasing numbers of citizens, already this year, it will become advantageous to use the photovoltaic electricity they generation. Self-consumption is becoming the imperative. And here I do not mean the private power consumption regulation in the EEG that should be quickly transformed into an “intelligent grid and storage bonus”, because of the fact that it will soon be made obsolete due the substantial cuts in remuneration and the decline of such remuneration below the price of electricity for private households. But rather the market is changing in that photovoltaics will justify itself through pure savings, without fixed remuneration.
Because the time is ripe to offer other alternatives starting on January 1, 2013 at the latest, when there will only be a remuneration of 18 euro cents for small plants. The market for large-scale installations will follow suit.
And naturally the industry must also pass on further costs reduction benefits directly to fellow citizens in the form of increasingly lower prices for electricity and thus remuneration.
Yes, the story that "photovoltaics is expensive" is history.
Forget it and tell them all:
"Photovoltaic electricity is the feasible energy alternative and ‘price cutter’ in the hands of the citizens!"
Friday, 20.01.2012 18:58
I'd also suggest that it would be most helpful to equate spending the huge cost of insuring each of these Nuclear reactors to the total amount of new solar that could be added to the grid, if these reactors are decommissioned instead! Given the yearly "payback" from solar I bet the amount of new solar would be significant!
I'm proud of what Germany is doing and fully expect them to not only convert to Solar but do it in such a way that Germanys "Tech" will be in demand Globally!
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