This Could be a Game Changer for Solar Energy Stocks
Over the last few years, declining prices for solar panels has been the big story for solar energy stocks. Now, researchers in Australia have made an even more important breakthrough; one which could have a huge impact on the solar industry.
The innovation has to do with solar efficiency, or in plain English, how much solar power is generated from each ray of light. One of the biggest criticisms of solar energy is that it is wasteful, so advances in efficiency are crucial to the adoption of solar power technology.
Opponents of the industry argue that replacing fossil fuels would require too many solar panels over too large a space. However, a team of academics at Australian National University (ANU) has just taken an important step toward solving that problem.
Using a 500-meter solar concentrating dish, they have effectively raised the efficiency of solar energy technology to record levels. (Source: “ANU team cracks solar thermal efficiency of 97% – a world record,” RenewEconomy, August 22, 2016.)
“The overall efficiency of this receiver, with the measured as-built dish optics and at the reference solar elevation angle of 30° … was 98.7%,” the report said.
That’s unprecedented. If solar energy becomes as efficient as this new technology suggests, it would likely make solar power even more affordable. The cost of solar energy has already plummeted alongside the price of solar panels, meaning that this technology could compound the growing popularity of solar power.
Better still, policies like net metering (where users are provided a stipend for feeding their surplus energy onto the grid) have turned solar power into a profitable enterprise for individual users. However, some analysts have predicted that mass adoption can only occur when the price of solar is several times better than the price of the alternatives.
That’s where this project truly shines. Rooftop solar power generation is still functioning at less than 20% efficiency, yet it has made a positive value proposition. If utility-scale solar power farms could operate at 98.7% efficiency, as was done in the ANU test, then solar energy could cost as little as US$0.09 per kilowatt hour. It would be highly competitive.
“Ultimately the work in this project is all about reducing the cost of concentrating solar thermal energy,” said ANU’s Dr. John Pye. “Our aim is to get costs down to [AUS]12 cents per kilowatt-hour of electricity, so that this technology will be competitive.”
Previous reports have shown that at 20% efficiency, it would only take a piece of land as big as Spain to power the entire planet. (Source: “Elon Musk just made a very important point about solar energy,” Tech Insider, December 15, 2015.)
If utility-scale solar farms could provide 98.7% efficiency at drastically lower prices, how much land would that take?
The team at ANU has yet to do the calculations, but the broader idea is simple: higher efficiency brings solar power that much closer to inevitability.
This technology would also proliferate more easily than rooftop solar because it doesn’t need to win over the “average Joe.” Utility-scale solar energy projects like these don’t sell solar power directly to the consumer. They set up large-scale solar energy farms and sell the power to existing utility providers, making their business more stable than rooftop solar. In other words, this breakthrough could end up affecting real-world energy consumption before long.