Time to make 2025 updates to my annual “opinions about solar” thread.
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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.
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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.
26. BNEF’s New Energy Outlook modelling doesn’t want to just solve the intermittency problem with loads of batteries. This is because the batteries get lower utilization rates the more you build. Batteries cannibalize batteries long before you get 100% clean power.
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26. BNEF’s New Energy Outlook modelling doesn’t want to just solve the intermittency problem with loads of batteries. This is because the batteries get lower utilization rates the more you build. Batteries cannibalize batteries long before you get 100% clean power.
27. Hydrogen made with renewable electricity will be used for steel and fertiliser manufacture. Some may be used to make shipping and aviation fuel. Some may even be burned for power in weeks of low renewables, which is one way to shift energy from summer to winter.
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27. Hydrogen made with renewable electricity will be used for steel and fertiliser manufacture. Some may be used to make shipping and aviation fuel. Some may even be burned for power in weeks of low renewables, which is one way to shift energy from summer to winter.
28. ...but sometimes net-zero electricity models want to put in hydrogen to cover weeks of low renewables just because the model isn’t given any other option. Deep decarbonization models do weird things. It may turn out there are easier pathways in practice.
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28. ...but sometimes net-zero electricity models want to put in hydrogen to cover weeks of low renewables just because the model isn’t given any other option. Deep decarbonization models do weird things. It may turn out there are easier pathways in practice.
29. Electrification of transport is far better than biofuels; solar plants can run an electric car on a small fraction of the land used to grow fuel to run a biofuel car.
30. Decarbonizing aviation is hard. The CEO of Lufthansa said in 2023 that running its fleet on sustainable aviation fuel made from electricity would take half Germany’s current electricity demand. BNEF thinks this an underestimate.
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29. Electrification of transport is far better than biofuels; solar plants can run an electric car on a small fraction of the land used to grow fuel to run a biofuel car.
30. Decarbonizing aviation is hard. The CEO of Lufthansa said in 2023 that running its fleet on sustainable aviation fuel made from electricity would take half Germany’s current electricity demand. BNEF thinks this an underestimate.
31. Direct electrification of aviation would be better. BNEF research did track orders for 989 electric aircraft (mostly small ones) as of early 2022, but this is a long term project. Fingers crossed. (www.bnef.com/insights/30267 ).
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31. Direct electrification of aviation would be better. BNEF research did track orders for 989 electric aircraft (mostly small ones) as of early 2022, but this is a long term project. Fingers crossed. (www.bnef.com/insights/30267 ).
32. Heatpumps are better for heating homes than hydrogen, but in seasonal climates like northern Europe will exacerbate the seasonal demand and supply mismatch for solar. We need to build wind and probably nuclear as well.
33. How mismatched is European seasonal solar supply and electricity demand? Well, here is the situation for my fully electrified house in Switzerland with 13.2kW of solar, a heatpump and an EV. I would have needed about 122kW of PV to be self-sufficient across December.
