
The introduction of solar photovoltaic at a scale significant for the energy industry is not possible at the present cost level. One example will service to show the scope of financial support which that would require. Say we wanted to produce 10% of Germany’s electric power from photovoltaic. It would be necessary, given German irradiation conditions, to install a photovoltaic output capacity of all power stations existing in Germany in 2007. If that large number sounds surprising, remember that under German conditions, a photovoltaic facility with one kW of rated output can only produce a little less than 1000 k Wh of electricity a year – half what it could deliver in sunny areas elsewhere in the world. It could be assumed that, given this large number of systems, the investment costs would drop considerably- and the electricity-generation costs along with them. We have noted that photovoltaic power now costs 35 cents per kWh; let us assume that we could force that down to only 25 cents per kWh: we would then still have to bridge a gap of about 20 cents per k Wh compared with today’s production expenses in new power stations. Projected onto a 10% share of electric-power generation, that would represent a total of Pound billion per year in additional investment funding for photovoltaic that would have to be raised. One might correctly object at this point, that in terms of the kilowatt hour, that would only be a matter of a few cents. But the appropriate question in this situation is a different one: Could not the same desired environmental and resource –saving effect be achieved with less money – for instance, by investing it in energy-saving measures? That would permit environmental goals in the form of CO2 reductions to be achieved more cheaply than by such an expansion of photovoltaic.
The above examples and arguments apply to conditions in the first decade of the 21st century. They may no longer apply in twenty or thirty years. As the examples show, the key to the introduction of photovoltaic at a scale relevant to the energy economy is not a price increase for fossil fuels, since, while that might narrow the gap, it would not close it. The key is the reduction of the costs of photovoltaic production. There are a number of approaches which would make such a reduction realistic over the course of the next few decades.
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