Battle for the Crown: Solar PV vs. Solar Thermal

I can picture it now, Michael Buffer steps out into the ring and grabs the microphone that just descended from the rafters, “In the near corner, gaining popularity among manufacturers worldwide, dropping in cost 41% over the past few years, meet Solar Photovoltaic aka PV.  In the far corner, holding steady at $0.27 per kilowatt hour, the old favorite but current underdog, Solar Thermal.  Let’s get ready to rumble!!!”  The crowd goes nuts, Larry Merchant goes to the tale of the tape.  Who will be crowned the king of the solar world???

Ok, I may be nuts, but sometimes a blog needs some excitement.  This boxing metaphor is actually an illustration of what is happening in the solar energy world where solar PV has taken an early lead in terms of implementation.  Solar PV is what you think of when you think solar panels on a roof.  The past few years have seen a push in terms of government funding for the technology (don’t even get me started on Solyndra), now the market is pulling the cost way down.  I promise to write a post later about the push-pull dynamics and what that means for the technology and the price, but that is a tomorrow problem.  In any case, China has been cranking out the solar panels at such a quick rate, that the cost has been plummeting.  Worldwide output of PV in 2010 doubled the 2009 output.  See right.  Now, PV is down to $0.17 per kilowatt hour versus the $0.27 for solar thermal.  Bloomberg New Energy Finance predicts that PV will reach grid parity with other forms of energy by 2015.  Unfortunately, this means that many solar thermal projects are now switching to solar PV instead, you can read the Bloomberg Businessweek article here.  So what should we do?  At this point, it seems that the pull dynamics of the market have embraced the idea of PV cells and will continue to make them cheaper and better than the previous generation.  Now would be a great time to continue to push the solar thermal technology until it is embraced by the market in much the same way.  Most types of renewable energy cost between $0.03 and $0.30 per kilowatt hour depending on the source, you can see a breakdown of the exact prices here.  In order to gain widespread traction and compete with conventional sources of energy, renewable costs will have to come down to the $0.03-$0.07 per kilowatt hour range.  As the cost comes down, there will be less resistance to switching to renewable energy and I think our bodies and our wallets will thank us for it.

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