> Solar panels are different from oil in that their producers cannot turn them off
Uhh they don’t last forever. So yeah. They can be controlled like oil if you are unable to make or source replacements.
Uhh they don’t last forever. So yeah. They can be controlled like oil if you are unable to make or source replacements.
So embargoing or blockading PV exports to the US would be a threat that the US might start to produce less energy 20 or 30 years in the future. This is very different from the situation with oil, where the Strategic Petroleum Reserve contains 19 days of petroleum consumption. https://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(U....
20 years versus 19 days is a significant difference, I feel. 20 years would be long enough for a functioning country to develop a solar-module industry from scratch, though the US probably couldn't. Think about the state of the Chinese PV industry 20 years ago, for example.
It means you can't replace panels destroyed and can't grow your energy production. If one side can and the other can't, that's a major problem.
> 20 years would be long enough for a functioning country to develop a solar-module industry from scratch
The best time to plant a tree was 20 years ago. The second best is today. We're twenty years ago.
1. The embargo would have to last decades.
2. The US would have to sit on its hands for those decades and deliberately choose not to develop its own manufacturing capability.
An oil embarge is absolutely more impactful than a PV embargo. That doesn't mean the latter isn't a problem.
> embargo would have to last decades.
My point is it wouldn't. An embargo would immediately limit America's ability to grow its energy base and replace e.g. panels destroyed closer to China (or hell, on the homeland through presumably sabotage). If you're at war and your energy is capped while your enemy's isn't, that's a strategic problem. Waiting for that predictable problem to manifest versus cauterising it today is madness.
They last for decades, and the resources (unlike with oil) to produce, repair, and rebuild them are readily available in the US (if through no other resources than recycling failed panels).
The biggest risk is that the US stops training engineers, scientists, and technicians who would be capable of doing that work.
The US annual oil demand costs around $500 billion (over 7 billion barrels used per year, but it's not all for energy). Since that does include other uses besides energy and energy demands are only increasing, it's still a useful baseline figure for estimating (because it's conservative, we'll likely need more in the future).
To acquire 20 years worth of our current demand would cost over $10 trillion (+ storage costs + future processing costs). Do you really think we can acquire 20 years worth of oil as easily as we can acquire solar panels? Panels which cost a fraction of that and don't require you to literally burn them to get energy, and instead can produce energy for decades with a little bit of maintenance (clean them, keep trees from growing over them).
You will notice that utility PV and CCGT are relatively similar in cost. Of course, replacing most of our energy infrastructure would have massive capex that one would add to the solar option. Note that the solar numbers do not include the cost of storage. And the storage requirements as you replace each GW of generation get higher, not lower.
Some evidence that it's not correct is that Saudi Arabia signed a PPA for wind last year at US$15.65 per MWh https://renewablesnow.com/news/saudi-arabia-signs-1-100-mw-o..., which is barely over half of Lazard's minimum LCOE for wind of US$27. So I don't think they're being too generous regarding renewables, though their solar numbers do look more reasonable.
Here's a quick LCoE exercise. Unlike Lazard, I show my work, so that, if it's wrong, anyone can see that and correct it. Suppose you're a utility that can freely import Chinese solar panels at the current €0.110/Wp (https://www.solarserver.de/photovoltaik-preis-pv-modul-preis...) in a region where single-axis trackers give you a 25% capacity factor, you are borrowing money at 5% to build a 100-megawatt-peak plant, the panel cost is 30% of the total plant cost, and the plant life is 20 years. (These are fairly typical numbers.)
The panels will degrade over the 20-year period, so you'll only get about 90% of your rated peak power on average over that time, and the capacity factor of 25% brings that down to 23 megawatts on average. (This is front-loaded, so the panels produce more toward the beginning of the plant's life when it matters more, but let's ignore that.) This works out to about 200'000 MWh per year.
To amortize a €36.78 million loan over 20 years at 5% you need to pay €2.9 million per year.
Dividing €2.9 million by 200'000 MWh gives you €15 per MWh (1.5¢/kWh, 55¢ per gallon of gasoline, US$4.30/GJ).
This is pretty far below where current European and US solar PPAs are coming in, and about half of what Lazard gives as the low end. So, either I'm missing something fundamental, or one or more of my assumptions above is inapplicable to most of Europe and the US. Here are my best guesses about what it is:
- A lot of European plants are being built in very polar and cloudy countries like the Netherlands and Germany, so the capacity factor is much worse than 25%. Like 10%.
- The US has massive import tariffs which more than double the price of solar panels.
- Maybe balance-of-plant costs have fallen far behind the precipitous drop in solar module prices, so maybe currently the cost of modules is only 15% of the plant cost instead of the usual 30% or so.
- Maybe lenders consider solar energy projects risky and so demand higher interest rates than the 5% or so that is usual for utility bond flotation.
What do others think?
It's really only that last couple of years top end that lets the comparison to gas prices stand. Without it, the document clearly shows that building new solar is as cheap as buying the gas to burn in an existing gas plant.
I think Lazard cost estimated have always been US specific, though I didn't see that spelled out explicitly at a glance.
I do not want to resort to Reddit-level insults but you are so misguided to imply you are trolling.
1) The Australian government is spending millions of dollars to ensure we can turn off excessive solar production to protect grid stability.
Every grid operator will do similar things when solar and wind reach 80% of the generation
2) Solar PV has an effective life of about 25 years and still produces about 75% of its nameplate capacity in 25 years.
If you are genuinely concerned about what the energy supply chain will look like in 25 years, you are either a fool or a liar or both.
Solar PV was invented at Bell Labs in 1954. Since then it has reduced in cost by more than 99.9%. And continues to fall in price.
To demonstrate how quickly solar can be deployed; Pakistan added 1/3 of its total generation capacity in 2024. That is over 17GW of solar in a poor and disorganised country.