How does solar work?
Photovoltaics is a growing industry. It began in the 70s during the oil crisis. With fuel costs sky-rocketing and around-the-block line-ups for gasoline, western countries became seriously worried about energy independence, perhaps for the first time in the industrial age. Photovoltaic (PV) solar energy was being heralded as the power of the future. It ended up being a blip in the energy landscape of the 70s. Soon the oil crisis was over, the fledgling PV industry came crashing down to earth, and everything went back to business as usual. However, the seeds of doubt about oil’s future had been sown, and the foundation of the modern PV industry had been cast.
Back in the 70s, solar cells were still quite inefficient – only about 12% (the theoretical efficiency limit for silicon is 28%). Researchers went back to the drawing board to figure out where all the losses were occurring, and how to overcome them. This sparked two decades of vying for academic supremacy in silicon solar cell efficiency. New cell architectures and manufacturing techniques were developed, pushing the efficiency of laboratory made cells to over 24% and commercially made cells to 18% by 2000. With the underlying physics of how to make a good solar cell now fairly well understood, the future was looking brighter.
The most successful government-supported feed-in tariff (FiT) program was born in Germany in the year 2000. Although the cost of PV was still high, the FiT enabled ordinary people to install solar on their homes for the first time – and make a profit. Demand for PV soared, and solar cell companies popped up around the globe. In 2006, the richest man in China was Zhengrong Shi, the founder of a solar cell company called SunTech Power. As the demand for PV grew, the supply chain began to feel the crunch. By 2006 there was a global silicon shortage, with silicon prices peaking in 2008 at about US$450/kg. After 2008, several silicon plants dedicated to producing solar grade polysilicon came online, and the price plummeted down to about $30/kg, where it sits today. Solar module prices dropped right along with the silicon prices. Companies locked into expensive multi-year silicon contracts, forged when prices were high, came crashing down too. The small, opportunistic companies started falling off the track. In 2013, one of the biggest companies in PV, SunTech Power, declared bankruptcy. However, the survivors of the price freefall have come out stronger and leaner with some very good products.
The largest cost in a PV installation is no longer the modules, but the other associated hardware, such as wiring and inverters. As the costs and limitations with the associated equipment are identified they are also undergoing rapid improvements. (Batteries and other forms of energy storage have become the new major focus in energy research.)
Ontario’s energy ride has also been a bit wild in the past decade. The micro-FiT program was started in 2009, and offered $0.82/kWh at one point – by far the best feed-in tariff in the world. While the cost was a boon to those that installed PV, and a bit of a hit to the government, there was another built-in caveat to the program that helped to spur the industry in Canada – that 60% of every installation must use made-in-Canada components. Ontario is now the proud home of three top inverter companies, many racking companies, and several module factories (so even though Canadian Solar, for example, has their cell manufacturing in China, it was worth their while to do the module assembly in Guelph). Ontario did lose an anti-competition ruling at the WTO organization, and has had to drop the made-in-Canada requirement down to below 30%; however, it was enough to get Canadian companies into PV and generate some jobs at home.