Renewable Energy Big Pic: Part 1 (Including 34 Charts & Graphs)

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As I mentioned in my article covering the latest US Solar Market Insight report (which I just published a few hours ago), I was “out of the office” today giving a presentation on solar power growth. But the presentation was actually on much, much more than that, as you’ll see in the article below and in the one to follow tomorrow.

It’s a Small World

Unbeknownst to me until a few months ago, there’s a renewable energy graduate program at a university here in Wrocław (the city where I live). Turns out that at least one of the students currently in the program is a CleanTechnica reader. He noticed that I was living in Wrocław, and decided to reach out to me. We met up at a coffee shop one day to talk solar energy (for several hours), and not long after that I was invited to give a guest lecture to his class.

Knowing that the students were more focused on the science and engineering side of things, I decided to focus my presentation on the solar and wind energy markets and key policy topics. I gave the presentation earlier today, and figured it would also be worth sharing it with you all (with plenty of text added in place of my vocal commentary, and with some chart switcharoos and additions, including a few from the new US Solar Market Insight report, which was released less than an hour after my presentation ended).

So, anyway, that’s the story; let’s get rolling….

thomas edison clean energy

Notably, the info below doesn’t even take into account the tremendous health costs of coal and natural gas, which would make them much more expensive “at the register” if actually included in the price.

Solar Power Price Drops

1.5 years ago, GE projected that solar power would be cheaper than fossil fuels (on average) within 5 years. With 3.5 years left, GE’s prediction definitely seems within reach. In fact, GE was putting big money into a solar cell manufacturing plant in Colorado, but in January it pulled the plug on that due to the fast-falling prices of competing solar cells. In other words, solar prices are falling even faster than GE had thought they would (and faster than most analysts and renewable energy followers thought they would).

I’ve shared the following two graphics a few times in the past couple years. They make a rather important point that doesn’t seem to get enough attention: solar power projects go up relatively fast, while nuclear and coal power plants require many more years to get designed, planned, permitted, and built. With nuclear and coal costs rising while solar costs are quickly falling, by the time a new nuclear or coal power plant would be built, its electricity would already be more expensive than electricity from solar (or wind, for that matter):

solar power cheaper than coal
Solar is cheaper than coal, practically speaking. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)
solar power cheaper than nuclear
Solar is cheaper than nuclear power, practically speaking. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

In fact, one report from 2010 found that the solar–nuclear crossover occurred a few years ago.

Solar and Nuclear Costs: The Historic Crossover

Now, an assumption in all of these projections mentioned above is that solar prices will consistently drop at a good rate. And that’s exactly what’s been happening. As I just shared a couple weeks ago, here are a few nice graphs of solar PV price drops in Germany:

October 2012

Lest you think it’s only Germany seeing such price drops, below are similar graphs from the US.

This first one shows that the installed price of residential and commercial solar dropped from an average of about $12/W in 1998 to about $6/W in 2011 (~50%).

Similarly, this next one shows the drop in the price of solar modules from 1985 to 2011 (from over $6.5/Wp to about $1/Wp):

Here’s a look at the drop simply from 2009 to 2011:

And here’s one graph published just a few hours ago for the drop from Q4 2011 to Q3 2012 (for solar modules and specific module components):

Wind Power Price Drops

So far, of course, we’ve just been looking at solar, but the other big renewable energy player these days is wind energy. It has followed a very similar path, just a bit earlier than solar energy. It actually hit a big grid parity point last decade… before natural gas prices fell off a cliff:

Note that the figure on the right should be $25-40/MWh.

Without taking too long of a side tour here, it is worth noting that natural gas prices fell off cliff as certain fracking practices became commonplace, and those only became commonplace once Dick Cheney got a ridiculous policy enacted for the fracking industry on his way out of office (and yep, Cheney was previously CEO of Halliburton, the company probably benefiting the most from this policy). What is the policy? Known as “The Halliburton Loophole,” it’s essentially that fracking fluids are exempt from the Clean Water Act (for no clear reason) and companies engaged in the process don’t even have to disclose what chemicals they are using. Needless to say, countless health externalities from the fracking process are not being accounted for in the price of natural gas, and can’t even be calculated by anyone outside the industry. (And, of course, no one inside the industry is going to do that.)

Long story short: natural gas fracking as it is happening today is artificially legal (i.e. should be illegal).

Furthermore, even with things as they are today, many are projecting that the price of natural gas will rise again in the coming years, making wind the cheaper option by far… yet again:

And, even today, wind energy is the cheapest option for new electricity in many, many places.

But, that’s not the end of the story — the price of wind power, like solar, is on a downward trend. Numerous technological improvements are bringing the price of wind down to an absurdly (in a good way) low number:

As we just reported about a month ago, a recent report by Bloomberg New Energy Finance has documented some important technological and other wind power cost reductions over the past four years. Two of the key findings were that:

  • O&M costs have been 38% lower in 2012 than 2008.
  • The price per megawatt of wind power is down to €19,200 from the €30,906 it was at in 2008.

The report also noted technological improvements and price reductions. Also worth noting is the birth and growth of Chinese wind turbine manufacturing firms, which is driving down prices and increasing competitiveness.

Solar Power Boom

A rapid price drop and an installation boom are naturally going to go hand in hand. As the price falls, more solar gets installed. And as more solar gets installed, the price falls. This is the kind of feedback loop we like. 😀

Here’s annual solar power growth from 2000 (almost no solar power installed) through 2010 (about 17 GW installed):

solar power growth

Here’s a similar chart for US solar power growth:

Here’s a look at installation data from 2010 & 2011 and installation projections through 2016 (chart just released earlier today):

And here’s a broader look:

Here’s solar PV, wind, and biomass growth in Germany through 2011 (and I know 2012 has added a ton onto that):

germany renewable electricity generation

Wind Power Boom

Of course, it’s a similar story for wind, with projections that the growth will continue at a fast clip for decades to come:

Installed wind power capacity in the US under the 20% electricity demand by 2030 scenario. (click to enlarge)

Some key stats regarding global wind power are that 1) it had a compound annual growth rate (CAGR) of 25% from 2005 through 2010; 2) by the end of 2011, 200,000 MW were installed; and 3) by 2030, 1,750,000 MW are projected to be installed.

Europe Leading The Way

As a sign of things to come in Europe and many other places, the EU’s new power installation split in 2011 was quite uplifting — as I reported in February, 70% of new EU power was from renewable energy sources in 2011:

Why have I just been focusing on solar and wind energy in this article/presentation? Because solar and wind energy are the dominant renewable energy options these days. You can see in this chart that 96% of 2011 renewable capacity additions were from solar and wind:

And here’s a look at all net capacity changes in the EU in 2011:

You can see in the next chart that wind and solar have come to dominate new power installations in the EU in just the past 5 or so years (note that solar PV is green not yellow in this chart):

Perceptions, Oy…

Despite all of the above, there are big misconceptions about energy. Perhaps it’s because people heard things 10 years ago that they still keep in their heads and think are true today. Perhaps it’s because people hear things that are simply false (from pseudoscience fossil fuel think tanks, utility companies, and misguided media). But the bottom line is that many (or the large majority of) people don’t realize how cheap solar and wind have gotten.

Here’s one look at the difference between perceptions of the levelized costs of wind and perceptions of the levelized cost of coal:

cost of wind versus cost of coal

We also have a post coming soon showing that UK residents don’t realize how cheap solar has become, and how much money they can save by going solar. I’m sure the same is true for the US and other countries/markets.

Rooftop Solar PV Competes With Retail Electricity

Something that doesn’t get emphasized nearly enough is that rooftop solar PV essentially competes with the retail price of electricity, not the wholesale price.

If you’re an average Joe considering whether or not to go solar, you don’t compare the price of solar with the wholesale price of a coal or natural gas power plant — you compare it with what you would pay for electricity from your utility. In many places, solar is already cheaper. And in many, many more places, that will soon be the case. (In other words, utilities have something to be worried about).

With the increasing use of “time of use” (TOU) pricing, and the fact that peak power demand (when prices are highest) often coincides with peak solar PV output, this clean technology gets even that much more attractive (i.e. cheap relative to electricity from the grid).

Leading Countries

You can’t give a big picture summary of clean energy without noting which countries are leading the way.

In absolute terms, you can see the world’s current solar and wind power leaders here:

Solar Installations 2011

I love rankings and top 10 lists as much as the next guy, but these absolute installation rankings always irk me a bit. Isn’t relativity important these days?

Little Einstein by • Happy Batatinha • (some rights reserved)

Without finding good rankings based on relative solar and wind leadership on the interwebs, I decided to create such rankings myself.

You can find a lot more rankings and info at the links below, but for a quick snapshot, here are a few key “relative leadership” rankings:

Top solar power countries per capita:

Top solar power countries relative to population. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

Top solar power countries per GDP:

Top wind power countries relative to GDP. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

Top solar power countries per TWh of electricity production:

Top wind power countries relative to electricity production. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

Top wind power countries per capita:

Top wind power countries relative to population. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

Top wind power countries per GDP:

total installed wind power by country per gdp
Top wind power countries relative to GDP. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)

Top wind power countries per TWh of electricity production:

Top wind power countries relative to electricity production. (To enlarge, hold down ‘ctrl’ or ‘command’ and click the ‘+’ key, or click on the image and then click on the link to the image on the next page — that’s the link that indicates the size of the image.)


So, what are the leading countries doing to lead in the energy sector? What about energy subsidies and incentives? What about technology improvements? What about merit order pricing? What about energy storage?

These are all topics I got into in the second half of my presentation (update December 12: Renewable Energy Big Pic: Part 2 is now published).

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19 thoughts on “Renewable Energy Big Pic: Part 1 (Including 34 Charts & Graphs)

  • nice overview! it will be an interesting couple of years!

    the thing is with gas, you build a gas station which will generate x amount of energy every year. with solar you build a solar factory which will produce solar panels of x amount of energy every year.

    so with gas you will have x in year 1 and 2 etcc

    with solar you will have x in year 1 and 2x in year 2 10x year 10. and only when the solar panels get at their end of live (after 30 or more years) than it will level of….

    the solar factory’s build today will keep on producing panels every year!

    • yes. and something we don’t note enough (and most people never note) is that solar panels seem to produce a good amount of electricity for many years after their warranty is up. Know of some of the first installations from over 30 years ago that are still pumping out what was promised in their first several years. who knows how long they’ll go? and imagine how much the technology has improved since then!

      • That’s a very good point.
        This also means that Germany will get roughly 15% of it’s electricity almost for free in the year 2032…. propably 30% by 2036, simply because the guranteed feed in tarif will expire and the technology will still be there.
        (Modern wind turbines also don’t break after 20 years… and maintaining them shouldn’t isn that expensive)

        • We’re just replacing the turbines in our first (?) wind farm at Altamont Pass, just east of San Francisco.

          Those turbines were still pumping out electricity after 30 years. 10 years of low cost electricity after a 20 year payoff.

          At the end of 30 years they were starting to require more maintenance and it made sense to replace them with much larger, taller rigs which could produce a lot more power.

          Newer technology is likely far better and this set might operate for 40 or more years. The weak spot for turbines is mainly the gear train. Some turbines are being built without gears.

          Where gears are used it is now possible to install sensors to detect when, for example, there might be a problem with lubricating oil and a small preventative repair can be performed lowering costs and extending equipment life.

          • That’s good stuff to hear. Got any links for those last parts? Hadn’t seen that. 😀

          • A little looking didn’t turn up the article I’d read but I did find this mention along with a lot of technical stuff about using wireless sensors to monitor blade stress.

            ““Gearboxes are really the Achilles’ heel of the system,” said José Zayas, senior manager of renewable energy technologies with the Sandia National Laboratories in New Mexico.

            Some manufacturers, like Siemens and General Electric, have begun using a technology called direct drive that eliminates the gearbox and uses a lower-speed generator. However, that technology uses rare earths, among other drawbacks, according to Mr. Madsen, who said that Vestas’s gearboxes were reliable and that the company was not using the direct drive technology.
            Companies are also starting to use more sensors to monitor things like the properties of oil in the gearbox, Mr. Zayas said — in the same way that newer cars may have sensors to tell the driver to change the oil when it is necessary, as opposed to the old pattern of changing it every few thousand miles.”

        • If we calculate a LCOE for solar at 6 cents based on a 20 year payoff but those panels really last 40 years then over time we will be drifting into the range of 3 cent per kWh electricity.

          Each year we will have to replace some panels as other panels are paid off.

          But we have no information that there is a 40 year “cliff” for solar. Panels are basically a thin sheet of rock behind a pane of glass. Maybe the usable number is longer than 40 years.

          The first solar panel made is over 50 years old and still working. It’s not a true test of lifespan, however, since it was stored out of the sunshine for many years.

        • yeah, this is a huge handicap put on solar and wind LCOE. of course, some other power plants also last longer than the LCOE assumptions used for them, but there’s a big difference with wind and solar — their fuel is free. I wish a good research institute would do a really good comparison of a more accurate LCOE for the various energy options. i’m sure wind and solar would look a lot more attractive.

          • Why not tweak some of your contacts to produce a 30/40 year price for some select generation technologies?

            It shouldn’t be a big job. Take the current 20 year LCOE data and find the operating expenses for the third and fourth decade. Average.

            We’re seeing right now that operating expenses for paid off, post 20 year, nuclear plants is high enough to make roughly 25% of our reactors non-competitive with wind and natural gas.

  • Thanks for the Renewable Energy Growth picture Zach. It look good. I look forward to the overall growrh uf renewable energy in general Foreign and Domestic.

  • Solar power price graphs – questionable.

    Right now Germany is installing solar at $2/watt. That’s an average price and includes more residential (higher priced) installations than utility installations.

    $2/watt in most of the lower 48 would mean an LCOE of 8 cents or less. I suspect we’ll reach the $2/watt point in the next few years since our extra costs are largely installation inefficiencies, we use the same equipment and our labor costs are similar.

    I suspect we’ll see 7-8 cent prices closer to 2015 than 2020.

    The solar/nuclear cross-over point. I believe the authors used prices for the solar which included federal subsidies. They were arguing that it made sense for North Carolina to install solar rather than nuclear if they took advantage of available subsidies.

    But with the rapid drop in solar prices post 2010 that graph is outdated anyway.

    3rd quarter, 2012 installed solar prices are out. Average residential cost was $5.21/watt, non-residential (commercial) was $4.18/watt and utility was $2.40/watt. We’re about double Germany’s price.

    In November Germany’s average per watt price dropped further to € 1,570. $2.05.

    Solar cell average spot prices dropped to $0.34/watt and silicon module price to $0.66/watt. Thin film dropped to $0.62/watt.

    (Heck of a lot of good information, Zach.)

    • Thanks. 😀

      Yeah, intend to use this post for awhile as a go-to one for overall renewable energy info. But will need to update some of the charts, and continually updated it as these quarterly reports come out (oy.. :D).

  • China is likely to move up in the solar rankings very rapidly.

    When Fukushima melted down China put their nuclear program on hold and reevaluated the route they were taking. They raised their 2015 goal of having 5 GW of solar on their grid to 21 GW (20 PV and 1 solar thermal). Apparently they are getting ready to formally announce a new 2015 goal of 40 GW.

    China cut back on the amount of nuclear they plan to build, eliminating all the inland plants. Apparently availability of cooling water caused them to drop plans for inland builds.

    • Yeah, believe me, when putting this together and presenting it, I was dying for 2012 info. 😀 The industry is changing so fast. Drop me a note if you see that China announcement made — not surprising at all, but amazing!

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