The prices of photovoltaic solar panels (PV) have been falling consistently for years, and particularly for the last couple of years. The success of generous feed in tariffs in Germany first and subsequently in the UK amongst other countries greatly increased the demand for PV solar panels, demand which was rapidly met by new Chinese manufacturers.

Thanks to large government subsidies solar panel manufacturing boomed in China with companies such as Yingli and Suntech selling more and more PV panels at lower and lower prices grabbing well over three-quarters of the world solar market. Panel prices are now a quarter what they were in 2007/8. Global manufacturing capacity is now over 60 Gigawatts per year, but demand in 2013 is predicted to be half that at just 25-30 Gigawatts.

Subsidised over-production resulted in panels effectively being sold at a loss and now many of China’s 500+ solar module manufacturers are deep in debt and facing bankruptcy with no sign of a bail out from the government. It is likely that there will be many business closures, consolidation, and reductions in supply in the coming months and years as the market adjusts itself.

At the same time commercialisation of new technologies which offer more efficient solar panels which can be made more efficiently, more cheaply (with future economies of scale) and with less damage to the environment has been delayed because consumers’ demand has been met with the (unsustainably) cheap conventional silicon PV modules.

Even with the latest manufacturing processes, cheap labour, and government subsidies, existing technology solar PV is still more expensive than fossil fuels. Until there is commercialisation of more advanced solar PV technology we will not see PV compete on a level playing field (i.e. without subsidies) and beat fossil fuels on price.

Therefore although in the short term we can expect solar module prices to level or even rise a little, this will finally open the door to the commercialisation of new technologies currently waiting in the wings (e.g. thin-filmsolar panels) which in the medium/long term will finally give us economically sustainably low-priced fossil fuel beating panels.

The world’s largest concentrated solar power plant started operation on Sunday 17th March 2013.  Costing US$600 million to build, Shams I is located in the desert in the west of Abu Dhabi. The 100 Megawatt power plant will supply electricity to more than 20,000 homes in the United Arab Emirates.

100MW Solar Power Plant – Shams I

Covering 2.5 square kilometres, Shams I is an array of 768 solar tracking mirrored parabolic troughs which concentrate the sun’s energy onto a pipe running through the troughs through which oil is pumped. This solar heated oil then passes through a heat exchanger generating steam which drives an electricity generating turbine. More than 250,000 mirrors were used in the construction of the parabolic solar collectors.

Shams I – 768 tracking parabolic solar concentrators

Shams I has a dry-cooling system which greatly reduces the amount of water this power plant will use – a vital feature considering its arid desert location. Dry-cooling uses the air to condense exhaust vapour from the steam turbine instead of water. Water cooling is cheaper where possible/practical, but the best geographical locations for solar generation unfortunately tend to be very dry places. It is approximately 5% more expensive to build a concentrated solar power plant with dry-cooling, and the electricity generated will be 10% more expensive than from a water cooled power plant.

At US$600,000,000 for 100,000,000 Watts of installed power, it sounds quite expensive – US$6 per Watt, but perhaps it was all of the associated infrastructure which added to the cost rather than the choice of solar concentrator technology over simple solar photovoltaic technology.

Comparing the costs of this solar concentrating power plant with solar photovoltaic power plants of equivalent size, the Rovigo PV Power Plant in NE Italy cost 276 million Euro for 72MW of installed PV capacity when it was built in 2010 becoming briefly the World’s largest PV power plant (US$5 per Watt), but since then the much larger 145MW Neuhardenberg Solar Park in Germany was constructed for US$365 million, or just US$2.50 per Watt.