WE all know solar energy is the cleaner choice, but you can't blame an investor for wondering if it's the more competitive option. It's a popular question, and while we're at it, here are a few more that echo down the industry's corridors with some regularity: Can the solar industry sustain itself if you subtract government subsidies from the equation? And, is worldwide grid parity a reality, or an elusive, somewhat fanciful projection? These questions gain significance in light of Solar Impulse 2, the world's first solar-powered aircraft capable of flying during the day and the night without consuming a single drop of fuel, setting off on it's historic around-the-world flight earlier this month from Abu Dhabi. And while solar-powered planes may not be ready for commercial deployment just yet – Solar Impulse 2 can carry only two people at a time and hit a top speed of just 43 miles per hour; in contrast, the world's most widely used commercial jet, a Boeing 747-400 can carry over 400 people at a time and achieve a top speed of 570 miles per hour – it's still an impressive feat, with many spillover benefits. More specifically, the Solar Impulse 2's engines have had to be engineered to be extremely energy-efficient – the four motors on the plane only lose about 3% of their energy as waste heat, whereas conventional motors lose about 70% – and this new efficiency grade spurs advancements in the solar applications industry. But back to the competitiveness of solar energy: through the last decade, intense, properly funded R&D initiatives, innovations in manufacturing processes, leaner supply chains, lower interest rates and improved economies of scale, have fuelled an upswing in the solar industry. In fact, the International Energy Agency, which has historically taken a conservative approach to evaluating solar power's prospects, has projected that by 2050, in a best-case scenario, solar energy could potentially be the single biggest source of power, generating as much as 27% of the world's electricity. Meanwhile, German financial services firm Deutsche Bank recently predicted grid parity in 80% of the global market by 2017, meaning that soon solar energy costs will be at the same level as conventionally produced electricity or even below in most parts of the world. This is because grid-based electricity prices are rising across the world, while solar costs are still falling. Competing with fossil fuels In its landmark report Renewable Power Generation Costs in 2014, the International Renewable Energy Agency (IRENA), housed in the UAE's increasingly green energy-conscious capital Abu Dhabi, revealed solar PV module costs have fallen 75% since the end of 2009, and the cost of electricity from utility-scale solar PV has fallen 50% since 2010. Today, unsubsidized rooftop solar electricity costs between $0.08 and $0.13 per kilowatt-hour of capacity (KWh), or 30% to 40% below the retail price of electricity in many markets globally, as per IRENA. As a result of plummeting manufacturing expenses, solar energy is now competitive with the wholesale price of electricity even in the Middle East, where solar power has to compete with naturally abundant fossil fuel-fired electricity generation. To put this into perspective, as per figures published by the Middle East Solar Industry Association (MESIA), only 70 megawatts (MW) of solar photovoltaic system (PV) projects were awarded across the region between 2007 and 2013. But in 2014, that figure climbed to 287MW – an impressive fourfold increase within just a year. Saudi Arabia, in an effort to counteract the nation's escalating domestic usage of fossil fuels – the opportunity cost of which is evident in the mounting deficit in international sale – stands out as the largest potential market for solar energy in the region. The Saudi Arabian government, therefore, to reduce its potentially crippling dependency on oil and gas for electricity production, created the King Abdullah City for Atomic and Renewable Energy (K.A.CARE), an entity now charged with building a sustainable future for the country, and in turn the region, through renewable and alternative energy programs. K.A.CARE recently estimated 23,900MW of renewable energy installed by 2020, and announced an ambitious target of 54GW of renewable energy by 2032. The Dubai Integrated Energy Strategy 2030 to diversify energy sources had initially set the percentage of renewable energy in Dubai's energy mix to be 1% by 2020, and 5% by 2030. But at the World Future Energy Summit 2015, the Dubai Electricity and Water Authority (DEWA) announced increased targets of 7% by 2020 and 15% by 2030, with claims that energy generated by photovoltaics – or solar panels – in 2016 will be enough to power more than 700,000 homes. Crystalline versus thin-film Ensuring the cost competitiveness of solar energy entails selecting the right technology, or in this case, the composition. In contrast to traditional crystalline solar technology, in thin-film solar technology the semiconductor is deposited on a glass substrate. This technology is named for the fact that the conductive layer is about 90 times thinner than in crystalline technology. Simply put, thin-film photovoltaic cells can convert sunlight into electricity with much less material than conventional crystalline silicon solar cells, resulting in a potential for lower material cost. Additional advantages of thin-film PV modules include possible improvements in production yields and field performance. Conventionally, the limiting factor for thin-film solar technology has been efficiency grade when compared to crystalline solar technology, but advancements in manufacturing processes are now nudging this gap shut. Specifically, the efficiency of thin-film modules when mass-produced is at a level comparable to that of multicrystalline solar cells; the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW), secured the world record in efficiency grade for thin-film solar technology – an unprecedented 21.7% – and the goal with thin-film technology is to transfer lab efficiencies to mass production. BIPV growth Building-integrated photovoltaics (BIPV) incorporate photovoltaics as an integral building component, such as part of the roof or the façade of the building. It does not entail unnecessarily complex planning and architectural challenges as initially assumed. Today, a BIPV project can be a synergy of architectural design and functional properties. And although solar modules are preferably installed on roof surfaces due to good irradiation values, façade surfaces have enormous potential. Global BIPV revenue to photovoltaic manufacturers is expected to increase to $1.9 billion by 2019, equaling a compound annual growth rate of 6.4% for the five-year period of 2014 to 2019. Façades are the most significant market segment in 2014 and will maintain that position through to 2019. The big advancements in the BIPV industry have been powered by thinner cells, lighter modules and the ability to incorporate hard surfaces into standard-sized external building components such as roof tiles, cladding, curtain walls, windows, skylights, breezeways and so on. Another contributing factor is the ability to incorporate individual designs into the module by the printing preferred patterns such as arabesque. Initially also dubbed an environmental ‘extra' and a way to upgrade green building ratings, new research from Abu Dhabi suggests that building integrated photovoltaics are not just a green luxury item. The recent Middle East-based study found that governments and builders might consider the expense of BIPV because in hot, sunny regions like the UAE, these solar panels can slash energy costs by as much as 33%. In fact, the installation of BIPV in a typical residential home in the Gulf can provide an average electricity surplus of 25,000kWh a year, after meeting electricity needs, and reduce household energy bills by at least 25%. The estimated of $1.17 billion worth of construction projects across the MENA region over the next decade will create a massive increase in energy demand –already growing at between 7 to 8% a year – and solar is emerging as a key power source to sustainably meet these supply challenges. Meanwhile, the development of technologies to store electricity – in particular, batteries – has also furthered solar power's development. Without storage, solar power can be harnessed only when the sun is shining; with storage, it can be used at any given time. The costs of battery storage have declined by about 70% over the last five years, and are projected to decline another 70% in the coming decade. So there you have it: while coal, natural gas and nuclear power, which today supply approximately two-thirds of global power, are not about to fade away overnight, technological jumps, widespread adoption and robust projected growth rates in the solar sector have, in spite of modest rates of market penetration, brought about a marked shift in the economies of electricity. It would not be surprising if future housing developments, office buildings and public spaces such as shopping complexes, especially in the sunshine belt of the Middle East, were built incorporated with solar modules – the onset of the solar power age is definitely gathering momentum. • The writer is VP of Sales, MENA, Manz AG
