Vai dal Barbieri: The solar paradox. Here’s why the energy of the future is at risk of dimming

Over the past few years, solar energy has attracted significant global investment and increasing attention as a sustainable solution to fossil fuels. However, the transition to a renewable-based energy system is not without its challenges. As the sector expands, significant obstacles emerge that complicate its large-scale adoption. A personal experience with the breakdown of a row of photovoltaic panels above my parents' business prompted me to reflect on the real possibility of intensively scaling this technology to provide a robust alternative to fossil fuels.

To date, solar energy accounts for about 1 percent of global primary energy consumption and about 5 percent of global electricity generation. Despite substantial investment over the past decade, with $358 billion deployed in the first part of 2023 alone globally in renewables , this resource still covers a tiny portion of global energy consumption. This paradox between investment and output raises crucial questions about the scalability and sustainability of solar energy.

Two market numbers: China dominates the global solar module market, producing about 80 percent of the world's panels. Thanks to state support, the country has literally flooded the market with its products, causing prices to fall by 90 percent since 2009. This dramatic drop in costs has put many other producers in several countries out of business. Only recently have protectionist measures, such as the imposition of tariffs, been introduced, particularly by the United States, to protect its domestic industries.

The oversupply of solar modules in 2023 has further reduced prices by 40 percent, making a U.S. solar panel 60 percent more expensive than its Chinese competitors. The situation is so critical that even Janet Yellen, U.S. Treasury Secretary, highlighted the problem during a meeting with Chinese leader Xi Jinping. At the end of 2023, China's annual production capacity for finished solar modules was 861 gigawatts (GW), according to data from the China Photovoltaic Industry Association. This capacity is more than double the global module installations of 390 GW. Another factor contributing to China's dominance in this market is its use of one of the world's most polluting manufacturing processes: polysilicon melting. This process, which is less regulated in China than in other parts of the world, allows the country to keep production costs low.

On the investment front, China also excels. In the first half of 2023, the country invested $177 billion in new solar projects. Globally, a total of $239 billion was invested in large- and small-scale solar systems, accounting for two-thirds of total global investment in renewable energy in the first six months of the year. This marks an extraordinary 43 percent increase over the first half of 2022 according to Bloomberg Nef data.

These numbers demonstrate the People's Republic of China's massive commitment to solar energy and its ability to influence the global market. However, the concentration of production in one country and the use of polluting processes raise concerns about long-term sustainability and the need for more balanced and less damaging global policies.

In conclusion, while China continues to dominate the solar module market with massive production and significant investment, the rest of the world faces the challenge of maintaining competitiveness and promoting more sustainable production practices.
I would like to bring some points as to why this technology is difficult to apply on a large scale.

One of the main problems in integrating renewables into the power grid is their intermittent nature. For example, solar energy reaches its peak production in the middle of the day, while energy demand on the grid peaks around 7 a.m. and 7 p.m. This discrepancy between solar power production and peak demand, known as the “Duck curve,” is one of the most significant challenges to large-scale adoption of solar power.

The “Duck curve” is so called because of its characteristic shape, which resembles the profile of a duck. During the middle hours of the day, when the sun is shining and solar output is high, the demand for energy from the traditional grid drops significantly. However, when the sun goes down and solar production drops, the demand for energy on the grid increases rapidly, creating a bottleneck that the grid must be able to handle.
In addition to this, it should be considered that the effectiveness of solar energy varies greatly depending on latitude. In equatorial countries, where solar exposure is constant and intense throughout the year, solar is a very effective solution. However, in regions far from the equator, seasonal variations and lower solar intensity significantly reduce energy output, further complicating the integration of solar energy into the power grid.

To mitigate this imbalance, it is critical to use batteries that can store excess energy produced during peak solar hours and release it when demand is high. However, currently, these batteries have high costs. For example, to store an amount of energy equivalent to that of a barrel of oil, which is about 1700 kWh, the cost would be about $51,000, based on the $300 per kWh price of Tesla Megapack, which also includes the software needed for management. In comparison, an average oil storage tank costs only $17 to store the same amount of energy.

These high costs are a significant barrier to large-scale adoption of batteries as an energy storage solution. In addition, much of the energy stored in batteries is used to stabilize the power grid and prevent blackouts, known as “load shedding.” This intensive use highlights the need for further innovation and investment to make batteries more economical and efficient.

In summary, although solar energy offers great potential, its effective integration into the power grid requires innovative solutions to overcome the challenges of intermittency and storage costs.
Other key issues to consider are the durability and longevity of solar panels, which are closely related to seasonality and variations in degradation over time. Two of the main factors affecting the costs of solar technology are the efficiency with which sunlight is converted into energy and how this efficiency changes over the years. The ability to accurately quantify the rate of degradation, that is, the reduction in power generated over time, is crucial to understanding the longevity and sustainability of a solar system. Addressing the issue of solar panel durability requires attention to two main issues. First, cleaning the panels is essential to maintain their efficiency. Each panel requires an average of about 2 liters of water to clean, an operation that must be done twice a month. This poses a significant problem, especially in regions where water is a scarce resource. The need for regular maintenance and the use of large amounts of water pose significant logistical and environmental challenges. Second, temperature variations have a major impact on the durability of solar panels. Thermal fluctuations can cause electronic components, such as diodes, which are essential for panel operation, to overheat. When these diodes overheat, they can burn out and compromise the entire system, reducing the efficiency and lifetime of the panels. This phenomenon of thermal degradation is a major concern for engineers and technicians working in the field of solar energy.

Another decisive factor to consider is the extent of land required for large-scale energy generation. Recent estimates indicate that to produce 26 TWh of energy-equivalent to the capacity of a nuclear power plant and enough to supply electricity to about 6 million people-would require 130,000 acres of solar panels or 250,000 acres of wind turbines. This poses a significant problem for the future. According to a Cambridge University paper, by 2050 more than 50 percent of the global population, estimated at 9 billion people, will live in so-called mega-cities.

In such densely populated urban settings, there will not be enough space to meet energy demand exclusively through renewable sources. In addition, large-scale electrification poses additional challenges related to the size and capacity of the electricity grid, which would have to increase by at least six times its current size in Germany, for example, and undergo costly upgrades. Without taking into account the issue of recycling of materials that are no longer functioning, which to date apart from in Europe is not supported as an activity.

Surely renewables will find their place, but I believe that at present there are a number of limitations to be resolved in order to guarantee a limited base load supply that completely excludes traditional energy sources.