1. Generating solar energy is only possible in countries with an abundance of sunshine
The fact is, the sun's energy is the most evenly-spread source of energy in the world. In any part of the world where there is light, solar panels will work. The world’s largest market for solar energy is Germany, a country not particularly blessed with long sun-filled days, but a country with a smart government nonetheless. In the summer, almost 10% of the household electricity in the south of Germany is generated by solar panels.
Of course, when you’re developing systems in the Sahara region, your return on investment (ROI) will be higher - but many other factors come into play, such as the presence of a grid, the local consumer price for electricity, your energy usage pattern, the political stability in your country, your need for independence from external sources of energy, and much more. As an example, in Northern Alaska it is smarter to invest in solar energy than to pull a cable from a far-away power plant or grid connection point.
2. Solar panels are only attractive in niche markets
Solar energy is an attractive product in any place in which people need electricity - which nowadays is anywhere in the civilised world, globally. That is a much larger market than just large-scale solar plants in desert areas, which are very competitive markets because they require the creation of new grids, are competing with wholesale electricity prices and are crowded with many other power-generating enterprises.
When you focus on solar panels that can be mounted on a rooftop, for household or entrepreneurial use, you can compete against the local consumer and corporate rates for electricity. You can compare this with the market for compact fluorescent lamps, where the consumer saves money on a longer term by investing a small sum of money. The ROI is made at the end-consumer level: the cost of the electricity bill. The investments are very simple, and no new grids or other types of costly infrastructure are needed.
3. Solar energy needs a lot of public financial support and could never become competitive
“People will never buy laptops.” “Flat-screen televisions are too expensive for the general consumer market.” “Mobile communication is too expensive in comparison with landlines.” These are some of the opinions that we have heard in the past - and how untrue they are! Laptops, flat-screen televisions and mobile phones are now everywhere, because people wanted them and were willing to pay for them - with the result that in the end prices fell due to mass production methods that could be applied for these innovative products. The same is now happening with solar energy systems.
In the past three years, the prices of solar panels have dropped by half, as a result of the introduction of large-scale production methods. Market research shows that innovative consumers want solar energy now. In five years’ time the masses will also switch over, as throughout Europe solar energy will have become cheaper than the polluting electricity from the grid.
Public funding was created in the past to accelerate this process of acceptance by the general consumer. In the largest markets, subsidies are now in the process of being terminated. By next year, Italy and Germany will see their non-subsidised solar energy already proving cheaper than electricity from the grid. The other European countries will soon follow this trend.
And further countries will follow worldwide, for the simple reason that the global market is growing bigger and solar systems are being produced on a larger scale, resulting in cheaper modules. That is one thing that’s for sure. The other side is that nobody knows what the costs for traditional energy will be 10 years from now. Today, new nuclear plants are not even being built without substantial government funding because their future is so insecure.
4. The efficiency of solar panels is still too low
True, there’s room for improvement. Like cars getting more economical every year, solar panels are getting more efficient every year. Does this mean that the current panels aren’t good enough? No, the technology is mature. What is at stake now is not the efficiency of panels, but the price per generated kilowatt-hour. Just as it is no longer about the type of motor in a car, but rather about how much fuel the motor consumes per mile.
There will still be new types of solar panel developed, with improved efficiency, but the real success of solar energy in the future will lie in large-scale production and the growth of the global market. A low purchasing price for a solar panel will be the determining factor for low-cost generation of solar energy for the consumer.
Are you waiting before buying a car because the models will be better, faster and greener in two years' time? Not if you need a car right now… In the same way, people need solar panels right now and buy them now, because they help them realise certain goals, such as independency from the grid, lower electricity costs and a carbon footprint shift. No new technologies are needed to create a breakthrough for solar panels. Solar panels are the breakthrough.
5. Solar panels have a high carbon footprint and are not sustainable
Solar panels are usually made from silicon. Silicon is found in sand, one of the most widespread natural elements on earth. The ovens used to transform the sand into silicon use a lot of energy - that is true. But the payback time for the energy used to produce a solar panel is only one to two years. This means that in this time the panel generates the total amount of energy that has been used in its entire production.
All power generated after the payback time is pure green profit, while solar panels can last 25 to 40 years! Other sources of energy have much longer payback times. Specifically, nuclear power plants have extremely long payback times - so long in fact that it is questionable whether all the power that generated during their lifetime is enough to pay for the energy used to build and disassemble them.
6. Solar panels are unreliable because they do not work on cloudy days or during the night
Right now, the wind energy market is (still) bigger than the solar energy market, although the sun is a more reliable source of energy than the wind. But solar energy will soon surpass wind energy - firstly because solar panels can be used anywhere, and secondly because they can be implemented in a modular way. This means that it is very easy to expand the solar energy system over the course of months or years.
The combination of solar and wind energy is a nice option, but the future lies in the combination of solar energy with energy storage at both the local and central levels, especially now that the market for transport of electricity is set to develop further.
The market for decentralised energy storage is also going to be a phenomenal growth market. Decentralised energy storage in batteries makes it possible to store the power generated during the day and use it in the night. An example is charging your electric car at night. Energy storage is already a hot item - you only have to think of laptops, iPods, iPads and electric scooters and bicycles - but solar energy will give this market a massive boost. The combination solar power generation and energy storage for later use is a perfect one.
The central energy storage market and solar energy systems market will stimulate each other mutually because when storage gets cheaper, it becomes cheaper to generate solar energy with the purpose of storing it and using it at a later stage.
7. The major energy corporations do not believe in solar energy and thus it cannot be good
Shell has ended their engagement with solar energy. Exxon does nothing with solar energy. Many of the large energy corporations prefer to invest in coal power plants. But, don’t expect a wholesale slaughterhouse to specialise in gourmet green meat products. Shell has oil in its blood and their business is based on it. Large multinationals are like large tankers on the ocean: they are very difficult to manoeuvre and cannot make quick changes in their course.
Solar energy is a sport for fast and flexible entrepreneurs, with a preference for innovation and sustainability. The market is volatile and ever-changing, like the wind in the sails of an elegant and fast-sailing ship. An entrepreneur in solar energy has to be like the shipper of such a sailing ship, sometimes tacking in headwind, sometimes sailing with ease down the wind - but never windless…
And in this light, the electronics market giant Sharp, a worldwide market leader in solar panels, has shown us that some large companies do believe in solar panels. Sharp has understood that the mass production of solar panels would lower their price, and that ‘mass = cash’. The mass market for solar panels is about to enter the playing field – and not just in Japan.
Shell has predicted that in 2040, 50% of worldwide energy will be generated by sustainable sources. Chances are big that sooner or later Shell will buy one of the consolidated winners in the solar energy market. Some of the ‘small’ solar panel-producing companies have already grown into large corporations, with thousands of employees and turnarounds of a few billion dollars per year.
Google grew in ten years to become one of the largest companies worldwide - so why not a company in solar energy systems?
8. Solar energy has no role in global energy generation
Today, solar energy provides only 1% of the worldwide energy needs. But this contribution could be growing surprisingly fast. Germany is the guiding country, where it is expected that in five years' time, 10% of all energy used will come from solar panels.
And what Germany can do, other countries can do too. For emerging economies, building large coal or nuclear power plants has already become redundant, as solar panels are becoming so cheap so quickly. You can compare this with the introduction of the mobile phone in India and other countries that didn’t even have a mature landline grid. Those grids were never further developed and never will be, because they were made redundant by the introduction of the mobile technology. The same thing could happen with the introduction of solar energy in emerging countries' markets. The building of new, large power plants will become redundant, because individual, decentralised power generation is cheaper, more efficient and much more flexible.
The photovoltaic world market has grown by over 100% in 2010, compared to 2009, and it already started to grow in this way in 2009. If this logarithmic growth percentage of 100% continues, then solar energy will cover the entire global energy needs in less than ten years' time!
9. Solar panels are unsightly and take up a lot of space
That really depends on personal taste. Of course, there will always be people who believe a smoking chimney of a coal power plant is the apex of industrial technology and aesthetics. Other people don’t mind showing that they are generating their own electricity and therefore have solar panels on their roofs. Anyway, there will always be enough space on earth for all the solar panels ever needed.
Mind you, only a relatively small desert area of 200 by 250 kilometres (125 by 155 miles) filled with today's solar panel technology would be needed to fulfil Europe's entire electricity requirements. But, luckily, we don’t have to enter into those beautiful desert landscapes because there is enough roof area available in Europe to realise this supply. And on a lot of roofs, the panels won’t even be visible.
Also, more attractive panels will be introduced on the market as production methods and innovations progress. Compare this with modern-day cars, which are so beautiful, compared to the vintage cars of the ‘sixties and seventies… or not?
10. Solar energy systems are unreliable and require maintenance
Solar energy systems do not have moving parts and therefore require no or hardly any maintenance. The most fragile part in a grid-connected solar energy system is the inverter, which converts the DC from the solar panels into AC equal to the voltage of the grid.
An inverter costs about 10% of your total energy system cost. It consists of some pieces of micro-electronics, can last about ten years, and can easily be replaced - and by then probably at an even lower price.
Only in dry and dusty climates can it become necessary to clean the panels regularly with a little water. If you live in an environment where it rains often, you don’t even need to do that.
A solar panel recycling programme has already been implemented in many countries, so if, after 25 years of loyal service you need to replace your solar panel, the solar energy sector has processes to recycle all panels 100%. And no coal power plant can beat that.
Edwin Koot is CEO of Solarplaza, organiser of The Solar Future: UK Conference on 29 June 2011 in London. More info can be found at www.thesolarfuture.co.uk and www.solarplaza.com