My recent Forbes article Cheap Photovoltaics Are Eating Solar Thermal’s Lunch about how the rapidly falling price for photvoltaic (PV) modules is undermining the case for concentrated Solar Thermal Power (CSP) is just one instance in a larger trend: In the modern energy economy, modular technologies advance more rapidly than large scale technologies because it is easier to get experience with them in the field at reasonable cost.
PV started with sub-watt sized cells in solar powered calculators. Solar calculators may not seem to have much to do with today’s multiple hundreds of megawatt (MW) sized plants which can be a billion times larger than a solar calculator, but the manufacturing experience with those tiny cells allowed manufacturers to bring costs down to the point where kilowatt sized systems started to be used on off-grid homes, which in turn brought down the price enough to allow subsidies to make solar affordable for most homeowners, and 1-2 MW commercial plants, and now we’re seeing announcements of solar farms approaching a gigawatt.
CSP, on the other hand, only starts to make sense at around 100 MW, so building each new plant represents a much bigger financial commitment than even a million calculators. Looked at this way, PV’s potential eclipse of CSP perhaps should have not been all that surprising. But hindsight is 20-20.
This also has implications for the advance of other energy technologies. Look for the modular technologies to gain ground at the expense of the industrial scale technologies.
- Gas Turbines
- Land Fill Gas
- Grid based battery storage
- Energy Efficiency
- Smart Grid / Demand Response
- Fuel Cells
Industrial Scale Technologies
- Ocean Thermal Energy Conversion (OTEC)
- Geothermal Power (sometimes small scale, but limited places it can be built)
- Compressed Air energy Storage
- Pumped Hydro
- Flow Batteries
That’s just a few energy technologies off the top of my head, and I’m not trying to say that modular technologies will always win out over industrial scale technologies. But I am saying that price per kWh is not everything… sometimes small scale leading high prices per unit of energy but low prices for individual systems can allow a rapid evolution to lower prices per kWh. We’ve certainly seen that in Solar.
What’s next? LEDs were also able to develop rapidly because they were useful in a large number of specialized niches, such as indicator lights on electronics) despite the high initial cost per lumen.