The story of sunshine

Image by Bartosz Kosiorek, courtesy of Wikimedia.

It all started about 4.5 billion years ago. A small, unremarkable star began to shine, warming a small, unremarkable planet. After a mere billion years, life began to emerge. Another three billion years later, plants began to appear, and all that sunshine started being put to use.

Half an aeon on, and humans came on the scene. They took the solar energy that had built up over the previous few hundred million years – transformed from plants into oil, natural gas, and coal – and began burning it. They burned it so they could run things like steam engines and internal combustion engines. They also burned it to generate electricity. This allowed neat things to happen like the industrial revolution, the Space Age, and the Internet.

However, all that burning had the unfortunate side effect of destroying the planet. Oh, not all at once, of course. It started off slow, but like a snowball rolling down a mountainside, the rate of destruction got faster and faster until it looked like nothing could stop it.

This wasn’t an accident. Certain businesses had become very big and very rich by getting the oil, natural gas, and coal out of the ground. The people running those businesses tried to use their vast wealth to convince everyone that there was no problem with what they were doing. They did their best to prevent people from realizing that the carbon that came from their products was, in fact, nasty. They also did a very good job of blocking efforts to stop the planet from being destroyed. It seems a bit odd that they would do this, since their businesses rather depended on having a planet to reside on, but the things people do sometimes don’t make much sense.

Somewhere in the middle of all that burning, a clever person noticed something remarkable. If you took the right kind of material and shine sunlight on it, you get electricity. You can skip that whole multi-million-year step of waiting for dead plants to become oil, you could skip the step of burning that oil to boil water into steam, you could skip the step of using the steam to turn a turbine to generate electricity, and you could skip the whole planet-destroying thing as well.

It took a while for solar cells, as they were called, to take off. Perhaps that’s a poor choice of words, because one of the first things they did was literally to take off – or, actually, to lift off. At first, the only places where it made sense to make electricity from sunlight were ones in which nothing could burn because there was no air – outer space. As more and more solar cells were produced for things like satellites and deep space probes, some solar cells came down to earth, finding their way into other things like pocket calculators and marine navigation aids. The more solar cells that were produced, the cheaper they became.

Some people in government became concerned that the planet was getting warmer and the weather was getting weirder. There were more droughts, more floods, and more freak storms that killed people and did lots of damage. Those government people also noticed that oil, natural gas, and coal just kept getting more and more expensive, and tended to come from countries that were nasty and warlike. They thought that being dependent on those energy sources was a bad idea.

They began doing things to help solar energy to grow. Terms like feed-in tariffs, tax incentives, loan guarantees, and renewable portfolio standards started being bandied about. As governments set up programs to help solar, people and businesses responded. Soon solar panels – made up of dozens of solar cells –started appearing on rooftops and in fields.

The first people to get in the act were the ones that were most concerned about the planet. They decided to follow the put-your-money-where-your-mouth-is philosophy. Other people were in it for the cash. They couldn’t believe their luck – their roof used to be a liability, needing to be re-shingled every couple of decades at huge expense. Now, their roof had become an asset, like having a tenant in a basement apartment – except this tenant never had parties late at night, never took up any living space, and never skipped a rent cheque.

Early on, it was important to find a good roof. The best ones faced south, and had a rectangular shape. You could still make money if your roof faced southeast or southwest – you only lost about a tenth or so. Even if you had, say, a triangular roof (called a “hipped roof”, although it didn’t look anything like the part of your body that holds your pants up), you arranged the panels in a brickwork pattern and used up what space you could.

As time went on, the panels came to look less and less like an add-on, and more and more like they were always intended to be part of the building. They also got more efficient, so even roof areas that got only a bit of sun were worth wiring up. Most of all, solar panels just kept getting cheaper and cheaper.

The cheaper that solar panels got, the more that people wanted them. Soon, they were so cheap that governments didn’t need any programs to convince people to buy them. It was cheaper to buy solar panels and to get the power from them, than it was to buy the power from the local electric company.

In fact, the panels got so cheap that some governments found themselves in the awkward position of trying to explain why they had spent a ton of money building another way to make electricity – nuclear power. This type of energy was hugely expensive, hugely risky, hugely inflexible, took a very long time to build, had to be built a long way from the cities where the power was used, and had a nasty habit of producing poisonous waste that lasted thousands of years after the people who had used the electricity were quite dead. In other words, it was the exact opposite of solar in every way except that it produced watts. Half-built, abandoned nuclear power plants – and embarrassed politicians – became an all-to-common sight.

While all this was happening, something else was changing – the way people and stuff moved around. As oil, natural gas, and coal became more expensive, people started buying vehicles that ran on something else – electricity. Interestingly, people who owned this kind of vehicle were more likely than everyone else to buy solar panels. Something about being guilt-free while at home and on the road.

Solar carports started appearing in parking lots. Retail stores built them to attract electric car drivers. Businesses built them to show their employees that they cared about the environment. Municipalities built them to provide much-needed money, by charging people for charging their cars (in addition to charging them for taking up space in the parking lot).

The best thing about all these solar panels was that they lasted an incredibly long time. They would still produce power after a hundred years, long after the people who installed them were pushing up daisies. Instead of leaving behind a ruined planet and a bunch of poisonous garbage, people could choose to leave behind free electricity. In other words, solar gave people the chance to leave their children with a better planet rather than a worse one.

Eventually, the oil, natural gas, and coal companies went the same way as the stuff they once were paid so much to get out of the ground – they became fossils. The nasty carbon that their products spewed into the air began to subside, helped along by factories that pulled the carbon out of the air and used it to make other kinds of useful stuff. People realized that it was a good idea to plant trees instead of just cutting them down – since trees pull plenty of carbon out of the air, they helped repair some of the damage that had been done.

The electricity continued to flow steadily off the rooftops. The electric cars continued to hum down city streets free of smog and noise. The weird weather gradually calmed down.

And the sun kept right on shining.

Please note: The tone and language used in this post was inspired by The Story of Stuff. Although I am a huge fan of TSoS and recommend that you watch it, neither I nor this blog are affiliated in any way with TSoS. No infringement of their copyright is intended.

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Meet the new boss

No more kid gloves

Kids are very aware that some rules are enforced and some aren’t. They test every rule constantly. They keep testing in the hopes that the parents will get exasperated and drop the rule to avoid the hassle of enforcement.

Will mom and dad notice if I just leave the dishes beside the sink, instead of putting them in the dishwasher like I’m supposed to? After all, they do the morning dishes after I’m safely off at school, and the evening ones when I’m safely tucked in bed.

The answer (at least in my household): Yes, we will notice. Yes, you will hear all about it. And yes, next time you’ll get stuck with an extra punitive chore like emptying the dishwasher or taking out the garbage as a lesson not to cut corners with your responsibilities again.

In its handling of the Feed-In Tariff (FIT) review, the Ontario Power Authority (OPA) has behaved like the child cutting corners with household duties.

When the Green Energy and Green Economy Act (GEGEA) became law in 2009, its most prominent feature was the FIT program. One of the three categories of the FIT program, MicroFIT, includes systems up to 10kW in size. MicroFIT is synonymous with solar photovoltaic (PV) systems – PV accounts for 99.99% of MicroFIT contracts released in the current tranche.

A key objective of the FIT was to build an industry, creating green energy jobs for Ontarians, growing the corporate and personal tax base, and producing spin-off economic benefits. For the first two years, all looked well. MicroFIT created an entire sub-industry focused on rooftop and ground-mount solar PV installations. The industry included installers, distributors, manufacturers, and more. It looked like the GEGEA was living up to the billing.

Fast-forward to the present day, and it ain’t going so good. The OPA bears much of the responsibility for this, for behaving like a recalcitrant child. The Ministry of Energy and the Government of Ontario bear the remainder, for not being sufficiently stern parents.

In October 2011 the OPA closed the province’s MicroFIT program to new applications. The program remained in a deep freeze for the next nine months. In the end, the Ministry of Energy had to issue a public directive demanding that the OPA stop sitting on its hands, finish its review, and reopen the program. The directive was issued July 11^th and the OPA obeyed and opened the MicroFIT window later that month. If I had been working for the OPA at the time, I would have been dreadfully chagrined, like the child caught shirking on chores. The exact same thing happened November 23rd; the province issued a directive demanding that the OPA reopen the small FIT window, and the OPA obeyed a couple of weeks later – more than a year after that portion of the program had been frozen. We can expect that the ministry will have to do the same thing again to get the OPA to re-open the large FIT window.

The Ministry had good reason to deal decisively and publicly with the OPA. The long delay dealt a mortal blow to many small companies. One installer, focused on MicroFIT and small FIT, had to let go a third of its staff in the spring of 2012. Half of the remaining staff left in July just before the program finally did reopen. The company partnered with mine in August, but the damage had already been done. We bought out what was left of it last month. The owner is seeking greener pastures outside of the PV industry.

I toured a PV manufacturing plant in Mississauga last week and my host told similarly sad stories from among her customers – she cited a number of examples in which a customer had been ordering PV modules one month, and the next their phone had been disconnected. Even larger businesses such as Siliken were driven under because they had essentially zero sales for the better part of a year.

History may soon repeat itself.

When the MicroFIT window was again opened in July 2012, the OPA indicated that it would accept applications for contracts totaling 50MW. As of the biweekly MicroFIT report issued on February 4^th, the remaining amount is 13MW. Assuming the rate at which contracts are awarded stays constant, the current tranche will be completely used up at the beginning of April.

What then?

Many in the industry are pessimistic, and with good reason. They remember the lesson of 2011 too well. When the window closed in October of that year, the OPA was careful not to give itself a deadline for completion of its review. However, most indications were that it would be complete in a matter of weeks. The final public submissions were received in mid-December. I spoke to a number of people in the industry during that period, and most expected that the report would be issued and the program re-launched by March at the latest.

It took the OPA not three months, but seven.

How can anyone run a business under those conditions? Remember that nobody knew when the program would open again, but most thought it was imminent. It remained imminent for the better part of a year.

If the 50MW tranche is exhausted in April as anticipated, we have learned to expect the following:

1. The program will be completely closed to any new applications.
2. The OPA will not set a target date to reopen the program.
3. Even the most cynical observer will underestimate the dry spell.
4. More companies will close their doors.

The mandate of the OPA does not include managing an entire industry. However, with its monopoly over the province’s electricity market, it effectively has become the state planning department for green energy. This is a job the OPA is neither equipped nor willing to perform. It needs much closer supervision and direction from the Ministry of Energy, or the baby will get thrown out with the bathwater and the nascent Ontario green energy industry will starve to death.

Ontario has a new Premier. Since the GEGEA remains the boldest renewable energy program in the country, Canada also has, in effect, a new Most Powerful Patron of green energy. Kathleen Wynne has been making some encouraging noises on the topic, but it remains to be seen how truly committed she is.

This is a crucial time. It takes about four years to amortize the cost of a PV manufacturing plant. Several plants in the province are rapidly approaching that age. With plants fully paid for, PV module manufacturers may soon be able to reduce prices much further than the gradual but substantial drops we’ve already experienced in the four years since the launch of the GEGEA. This will benefit the green energy market not only within the province, but the export market to other provinces and to other countries (most notably the United States). If the industry can just make it through the next two years or so, price reductions in PV panels will mean that the Feed-In Tariff can drop significantly – eventually disappearing altogether.

Ms. Wynne, and her new Minister of Energy Bob Chiarelli, have the opportunity to usher in a new era – an era in which solar energy grows explosively with no government involvement at all. Perhaps this time the OPA will play ball, and the MicroFIT window will reopen with minimal delay. However, if history is any guide, Wynne and Chiarelli will only bring about that exciting green energy future if they are ready and willing to take off the kid gloves when dealing with the OPA.

The great leap inward

If there is an environmentalist’s dream technology, it is surely solar photovoltaic (PV) power generation. All you need is sunshine, and a PV array will produce electricity. No harmful byproducts. No carbon dioxide. No smog. No acid rain. No radioactive waste. No noise.

Tastes great. Less filling.

PV has grown dramatically since Bell Labs displayed the first demonstration unit in 1954. The International Energy Agency notes that the annual growth rate has averaged a mind-boggling 40% for the last two decades. Despite recently achieving the milestone of 100GW of worldwide installed capacity, growth continues – GlobalData estimates a 16.5% compound annual growth rate to 2020. This at a time when most other industries are struggling to avoid contraction.

With rising production volumes, prices have dropped, the technology has become attractive to a broader range of potential buyers, and the market has expanded. As this trend continues, PV promises to become cheaper than competing, environmentally damaging power generation technologies like coal and nuclear fission. It is in the best interests of our economy, our species, and indeed all life on the planet for PV technology to develop and to grow as rapidly as possible.

On the global PV manufacturing stage, one of the most significant players is China. Like many other products, PV modules manufactured there may not always have the best reputation for quality, but it’s tough to beat the price. If our objective is to have PV generating capacity spread as far and as wide as possible, supplanting its nastier non-green brethren, buying Chinese-made modules sounds like sound policy. If you can buy more generating capacity on the same budget, you can replace dirtier sources of energy that much more rapidly.

Not so fast. Although PV produces clean power, traditional energy sources are still required to produce the panels; no manufacturer yet claims to have built a breeder supply chain, in which all of the power to produce the PV panels comes from PV panels. If you want to make sure you’re producing clean power, you need to look upstream at the manufacturing end of things and assess whether that is as clean as the end product.

On this measure, China does not score nearly so well. The country burns a staggering amount of coal to feed its industrial machine – nearly 50% of global supply and still growing. Coal-fired electricity generation is the most carbon-intensive of the lot, to say nothing of all the other noxious emissions from this technology – remember the images of the choking smog in Beijing leading up to the 2008 Summer Olympics? Pollution in China is so bad that the government announced in December that it would spend US$56 billion to cut pollution in the countries major cities, according to professional advisor website Mondaq.

This must mean that if we want clean power, we would do well to steer clear of Chinese-made solar panels.

Right?

Right or wrong, it may soon be irrelevant.

China exports most of the panels it produces; 90% or so, according to GlobalData.  However, this state of affairs is changing. Chinese domestic demand is growing rapidly. It seems that government estimates are being revised upwards every time you turn around – a recent report in PV Magazine indicated that the state may be planning to double its previously published 2015 target of 21GW. That’s an incredible jump when you consider that only 2GW were installed in 2011, the most recent year for which data are available (not to mention the fact that the global install base only just reached 100GW). To hit a 40GW target, capacity will have to more than double every year.

If manufacturers in China will soon struggle to keep up with domestic demand, why would they bother continuing to invest in serving more costly and difficult export markets? Why indeed would the Ministry of Commerce do anything but discourage the sale of Chinese panels abroad? The days of cheap Chinese panels flooding Western markets and triggering trade disputes may be numbered. This is bad news for PV markets in Europe and the Americas, but good news for PV manufacturers in those regions.

It is also good news for the environment, be it the local smog level in Beijing or the worldwide atmospheric concentration of CO₂. A domestic PV install base that is growing by leaps and bounds will hasten the day that new Chinese coal plants become an absurd economic proposition. Further down the road, it will even bring about a state of affairs where it is more expensive to continue operating existing coal-fired plants than to replace that capacity with yet more PV. Coal plants that close up shop, or are never built in the first place, are coal plants that won’t put a burden on Chinese lungs and global weather patterns.

Since many environmentalists see the People’s Republic as Public Enemy Number One, they should welcome the trend of massively growing domestic PV installations. If fewer cheap Chinese panels are available in the rest of the world, so be it. Most of those countries (consider Germany and Japan) are driven by an agenda to phase out nuclear power generation. If they install more PV, it won’t make nearly the impact on global carbon intensity. There is one place where PV modules will do the most to mitigate climate change, and that one place is China.

China’s domestic PV market will grow. Chinese PV manufacturers will shift focus from outward to inward. Competition in the PV market outside of China will ease. PV customers in the rest of the world will struggle to obtain Chinese-made modules. PV module prices will continue to decline, but not at the rate that they have in the past. More and more PV panels will appear in Chinese fields and on Chinese rooftops. Chinese coal plants will stop being built, and some will close.

And we will all breathe easier.

Brighter Tomorrow is back after an eight-month hiatus, during which I was busy adapting to a new job, a new home in a new community, a new wife, and a new baby on the way. Thank you for your patience, and I look forward to providing you with more insights into clean energy!