Time to make 2025 updates to my annual “opinions about solar” thread.
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2. 20 years ago when I got this job, I thought maybe solar would one day be 1% of global electricity supply. In 2024 it was about 7% worldwide, and rising fast. You can see this eating into fossil fuel power generation in, for example, Europe.
3. Solar will not solve every problem. But the biggest problem is that our civilisation relies on digging up fossil carbon and burning it, which is destabilising the climate, which multiplies a lot of very unpleasant threats. Solar is part of stopping us needing to do that.
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3. Solar will not solve every problem. But the biggest problem is that our civilisation relies on digging up fossil carbon and burning it, which is destabilising the climate, which multiplies a lot of very unpleasant threats. Solar is part of stopping us needing to do that.
4. We don’t need a solar technology breakthrough. The challenges to building solar are usually getting a grid connection and planning permission, or increasingly, power price cannibalization. Of which more later in thread.
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4. We don’t need a solar technology breakthrough. The challenges to building solar are usually getting a grid connection and planning permission, or increasingly, power price cannibalization. Of which more later in thread.
5. Solar modules now cost 8.9 US cents per Watt (higher in US, India due to trade barriers). Solar panels are cheaper than most ordinary fencing materials. For rooftop installs, non-module cost is still $0.50-3.00 per Watt, so further module price declines make little difference.
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5. Solar modules now cost 8.9 US cents per Watt (higher in US, India due to trade barriers). Solar panels are cheaper than most ordinary fencing materials. For rooftop installs, non-module cost is still $0.50-3.00 per Watt, so further module price declines make little difference.
6. These prices mean that few makers of solar modules are profitable right now. If manufacturers stop selling at these prices, they will permanently lose customers. They are locked into a game of chicken. There will be bankruptcies and eventual price stabilisation.
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6. These prices mean that few makers of solar modules are profitable right now. If manufacturers stop selling at these prices, they will permanently lose customers. They are locked into a game of chicken. There will be bankruptcies and eventual price stabilisation.
7. Solar manufacturing has always been a horrible business, and that’s unlikely to change. It’s very commoditised, barriers to entry are fairly low, and incremental improvements in cell and module tech make factories obsolete in less than four years.
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7. Solar manufacturing has always been a horrible business, and that’s unlikely to change. It’s very commoditised, barriers to entry are fairly low, and incremental improvements in cell and module tech make factories obsolete in less than four years.
8. India and the US have solar import tariffs, so modules are pricier there (~15 and ~27 cents/W respectively). Both countries are subsidizing local manufacturing capacity. This is a perfectly good strategy as long as it doesn’t slow down their energy transition, but...
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8. India and the US have solar import tariffs, so modules are pricier there (~15 and ~27 cents/W respectively). Both countries are subsidizing local manufacturing capacity. This is a perfectly good strategy as long as it doesn’t slow down their energy transition, but...
9. Thank goodness we’ve collectively stopped the nonsense of boasting about "lowest ever solar auction prices", most of which were Middle East opaque transfer prices or had other features. PV power prices below $25/MWh unsubsidized are still too low. This is very cheap power, but solar still does cost money.
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9. Thank goodness we’ve collectively stopped the nonsense of boasting about "lowest ever solar auction prices", most of which were Middle East opaque transfer prices or had other features. PV power prices below $25/MWh unsubsidized are still too low. This is very cheap power, but solar still does cost money.
10. 'Power price cannibalization' for solar happens because solar plants in one area all generate at the same time. This means that they reduce the price of power at that time, “cannibalizing” their own revenues.
11. High solar penetration resulting in power price cannibalization also affects other power plants, but not as much as it affects solar, because solar plants generate most at times when solar is pushing the price down most. This will inhibit further solar build.
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10. 'Power price cannibalization' for solar happens because solar plants in one area all generate at the same time. This means that they reduce the price of power at that time, “cannibalizing” their own revenues.
11. High solar penetration resulting in power price cannibalization also affects other power plants, but not as much as it affects solar, because solar plants generate most at times when solar is pushing the price down most. This will inhibit further solar build.
12. This is already obvious in Spain, California, Australia and even Germany. Now that the global liquefied natural gas price hike related to Russia invading Ukraine in 2022 has eased, lower power prices drive solar developers to seek long-term contracts again.
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12. This is already obvious in Spain, California, Australia and even Germany. Now that the global liquefied natural gas price hike related to Russia invading Ukraine in 2022 has eased, lower power prices drive solar developers to seek long-term contracts again.
13. By 2030 most countries will have spot power prices of zero in sunny hours. This will be passed on to end consumers, to encourage them to shift power demand to sunny periods by electric vehicle and battery charging, preheating, precooling, etc.
14. Low power prices may be great for consumers but they are very bad if you're trying to build more clean power plants. Without demand-side flexibility, the energy transition will fail before fully pushing fossil fuel out of the mix.
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13. By 2030 most countries will have spot power prices of zero in sunny hours. This will be passed on to end consumers, to encourage them to shift power demand to sunny periods by electric vehicle and battery charging, preheating, precooling, etc.
14. Low power prices may be great for consumers but they are very bad if you're trying to build more clean power plants. Without demand-side flexibility, the energy transition will fail before fully pushing fossil fuel out of the mix.
15. It's very easy to say "but batteries!" and those are definitely part of the solution. California has over 14GW of batteries in a grid with roughly 50GW peak demand, and the reliability of the grid has improved as its carbon emissions go down.
16. ...but batteries are still small. In 2024, about 181GWh of lithium-ion stationary storage was deployed worldwide, plus 974GWh lithium-ion batteries in vehicles. (https://www.bnef.com/insights/37025).
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15. It's very easy to say "but batteries!" and those are definitely part of the solution. California has over 14GW of batteries in a grid with roughly 50GW peak demand, and the reliability of the grid has improved as its carbon emissions go down.
16. ...but batteries are still small. In 2024, about 181GWh of lithium-ion stationary storage was deployed worldwide, plus 974GWh lithium-ion batteries in vehicles. (https://www.bnef.com/insights/37025).
17. Small-scale batteries are a thing too, even though the economics don’t always make much sense. 2024 battery attachment rates – proportion of residential PV buyers who get a battery too – were ~ 80% in Germany and Italy, ~ 50% in Switzerland, UK and California.
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17. Small-scale batteries are a thing too, even though the economics don’t always make much sense. 2024 battery attachment rates – proportion of residential PV buyers who get a battery too – were ~ 80% in Germany and Italy, ~ 50% in Switzerland, UK and California.
18. It is very difficult for installers and financiers to become large and long-term profitable in the residential solar and storage market. Margins are thin and there are diseconomies of scale.
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18. It is very difficult for installers and financiers to become large and long-term profitable in the residential solar and storage market. Margins are thin and there are diseconomies of scale.
19. In general this is a problem for solar, both for manufacturing and downstream: a distributed industry with low barriers to entry, and therefore few large firms, has little lobbying power. Industry associations work against this to represent the interests of renewables in politics, against those of more naturally consolidated industries like fossil fuels, but they do have a structural disadvantage.
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19. In general this is a problem for solar, both for manufacturing and downstream: a distributed industry with low barriers to entry, and therefore few large firms, has little lobbying power. Industry associations work against this to represent the interests of renewables in politics, against those of more naturally consolidated industries like fossil fuels, but they do have a structural disadvantage.
20. There is no way we can build a big enough battery to shift energy from summer to winter. The economics of battery storage are nearly impossible at one cycle a year.
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20. There is no way we can build a big enough battery to shift energy from summer to winter. The economics of battery storage are nearly impossible at one cycle a year.
21. Everyone is defining 'long-duration storage technology' wrong. It's not about 6 or 8 hours — you can do that with lithium-ion and probably will — it's about having the capex to add more GWh of capacity decoupled from the capex of adding more GW.
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21. Everyone is defining 'long-duration storage technology' wrong. It's not about 6 or 8 hours — you can do that with lithium-ion and probably will — it's about having the capex to add more GWh of capacity decoupled from the capex of adding more GW.
22. Examples of real long-duration storage technologies are pumped hydro (reservoir size is decoupled from turbine capacity), or where the storage medium is big tanks of molten salt, or hot rocks. But all of these do still cost a lot of money if they are only cycling once per year.
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22. Examples of real long-duration storage technologies are pumped hydro (reservoir size is decoupled from turbine capacity), or where the storage medium is big tanks of molten salt, or hot rocks. But all of these do still cost a lot of money if they are only cycling once per year.
23. Lithium-ion will probably continue to be the dominant battery technology. High prices for lithium in 2022-2023 drove interest in sodium-ion, and there are still products coming out, but new lithium production capacity has brought prices back down and so the impetus to switch has been reduced.
(The cure for high prices was, it turned out, high prices.)
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23. Lithium-ion will probably continue to be the dominant battery technology. High prices for lithium in 2022-2023 drove interest in sodium-ion, and there are still products coming out, but new lithium production capacity has brought prices back down and so the impetus to switch has been reduced.
(The cure for high prices was, it turned out, high prices.)
24. We oughtta be building more wind generation capacity. Seriously, solar will get built anyway, but wind needs some help, and wind blows in the dark and in the winter. It doesn’t help that solar pushes down power prices and generates renewable energy credits (where relevant), which hurts wind farm economics.
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24. We oughtta be building more wind generation capacity. Seriously, solar will get built anyway, but wind needs some help, and wind blows in the dark and in the winter. It doesn’t help that solar pushes down power prices and generates renewable energy credits (where relevant), which hurts wind farm economics.
25. To put it another way: when you tell an energy future model to optimise a power portfolio for clean power adequacy, it will give you more wind and less solar than when you tell it to optimise a least-cost electricity sector development.
