Firstly, congratulations on continuing to produce thought provoking materials to stimulate industry development. It is a credit to your continued commitment to giving back to the community. There are some excellent conclusions in this article but the implication that Solar PV will beat CSP costs in the long run by several cents seems to based on shaky ground and limits the debate to energy generation costs not distributed costs.

Including subsidies to get to the lowest cost in the PV range and then projecting forward from there not only favours PV over CSP, it potentially changes the conclusion completely. In particular the California Performance Based Incentive ranges from 39c to 3c per kWh and declines as capacity expands so depending on how you apply it over time you could get PV costs falling below zero—unlikely to be entertained by tax payers for long. Starting with your unsubsidised cost of 26c and reducing it by 53% gets to a result of 12.2c per kWh as the long range target—slightly higher than PV (albeit with great uncertainty). From that point, the debate would shift to comparing the distributed costs of PV vs CSP, with PV being attractive due to its ability to be installed near the point of use, thereby giving the opportunity to avoid capital expenditure in distribution network expansion.

We are very keen on solar power plant set up in Cambodia through Public-Private Partnership projects. I will be keen looking at entities who are keen to invest in far east with efficient alternative energy systems.

Recently the McKinsey Quarterly published an article showing continuing cost improvements in photovoltaics, to the point of economic dominance within 10 years. The sun may not shine at night, but at some point those numbers will affect lenders’ risk perceptions on a 20-year coal plant’s bonds. Part of the complacency with coal is that these plants are really structures and not machines. The ones we built 50 years ago are mostly still around. Things will change when investors see that past performance is no insulation against future risk.

SUNTCO’s entrant to the renewable energy market is solar liquid paint that will coat and paint environmentally responsible, highly efficient, and safe electrical power on rooftops, houses, buildings, and other applications. But we recognize as scientists and business people that one single technology for Earth will not be the final solution across all weather environments. Hopefully affordable and reliable consumer-level power will start a cultural shift where conservation-and-use architectures (such as planned, smaller distribution centers) are used rather than large infrastructure development projects (such as utility companies building more power plants).

It would be interesting to see more analysis of the technologies, specifically with respect to cost reduction potential in capital investment per MW annual production. I think it would be one useful measure of each technology’s viability as industry dynamics shift—especially with the emergence of 500+ MW projects. With the anticipated pace of innovation and growth, can the higher capital cost per MW production of C-Si compete with leading thin film technologies? Which technologies can build out capacity even with reduced average run rates, and still have strong returns on invested capital? This may differentiate the winning module technologies as they meet high growth yet potentially very lumpy demand from mega-projects.

I found the estimates for the take-down rates in cost encouraging. However, the price of solar will still exceed wholesale (grid) electricity through 2015, according to this analysis. This means that the US needs to stimulate the proliferation of solar to participate in the cost reductions associated with manufacturing scale; in short, we must continue to subsidize the cost difference.

At present, there are a variety of approaches at the state level ranging from renewable energy credits to feed-in tariffs to reduce the difference in solar versus grid. Other states as well as the Department of Energy have chosen to award specific grants to stimulate solar adoption. Finally, the Income Tax Credit and Accelerated Depreciation allowances continue to reduce the investment threshold. We must continue to press innovation both in materials as well as in volume manufacturing—in part through state and federal assistance.

I would be interested to understand how effective are these incentive approaches in enabling the US to reach the cost-reduction targets suggested in this article. I would also be interested in a comparison of the various large-scale business models for behind-the-grid generation: solar manufacturer owned/operated, independently owned/operated, and leased. I would also like to see estimates of the adoption of solar by 2020 by marketplace such as agriculture, retail, manufacturing, residential, etcetera.

We have recently analyzed the techno-economic feasibility of CSP technologies for Indian conditions. For parabolic trough collector technology the capacity factor for most of the locations in Rajasthan and Gujarat states is observed to be more than 40 percent whereas for power tower systems the capacity factor is less than 33 percent. For India, locations blessed with annual direct solar radiation more than 1800 kWh/m2 are best recommended for installation of CSP systems.

On 31 Jan 2008, Sandia National Laboratories and Stirling Energy Systems set a new solar-to-grid system conversion efficiency record by achieving a 31.25 percent net efficiency rate, on Stirling Energy Systems’ “Serial #3” solar dish-Stirling system at Sandia’s National Solar Thermal Test Facility. The previous record of 29.4 percent was set in 1984.

It is refreshing to read this publication of engineering economics. The key take away for me is that this technology total cost of ownership is in decline. This is simply promising and wonderful news. My understanding is that the recent political stimuli and levers for engineering have only just begun to take effect in the USA. Additionally, beyond this one and many of our other engineering challenges, we need to engineer efficient power storage units and better distribution grids. Ultimately, no matter what solutions we engineer, we need politicians, economists and operators all to be part of the solution. Thank you for the article, and please keep publishing this type of material.

As this report demonstrates, the future of solar is bright, but which technologies will take the lead is difficult to predict. The information provided in this report is extremely useful, in particular the details, by technology, that enable comparison. Some are tempted to view the future of solar energy as a race with only one technology winning. However, the differing applications of each technology demonstrate that each will be needed and useful as we move forward, and continued technological advancements in each technology will increase the viability of solar energy as a whole.

If the limit of efficiency is 31% for photovoltaic and 29% for CSPs, why pursue the latter? The higher per watt cost of the photovoltaic will come down in time for sure.

Investment subsidies and other tax considerations are used in the economic evaluations presented here. So far, this has nothing to do with technologies but with policies. Technologies make progress in relation to process efficiencies and manufacturing costs—policies change in any direction. It’s already difficult to figure out the cost of energy generation, in any technology case. To include subsidies in the equation makes it even more complicated, less understandable, and probably fosters the policy decisions in the direction already taken. A virtuous circle for some, a vicious one for others.

A very useful document, especially because it summarises in broad strokes rather than digging too deep into any area. It would be interesting to also see an overview of solar water heating (SWH). While it may not fit in with conventional power generating technologies, it is far more attractive from a payback and cost/kWh point of view, which is not difficult to calculate. From a low-tech point of view, SWH is very attractive and is far more suitable for a developing country environment.

Promising technology. Need to assess

(1) the assumptions on ongoing technological improvements that drive cost down and efficiencies up,

(2) the impact on supply and price of silicon as production ramps up (essentially expanding this evaluation into identifying the bottlenecks along the procurement and production process),

(3) whether they are economic without subsidies (cost assumption in the piece includes subsidies), and

(4) the availability and efficiency of energy storage (perhaps scaling up the use of molten salt or something similar or better; using batteries in plug-in hybrids or all-electric cars could be a possibility down the road).

Although the piece suggests that some form of solar (especially CSP) could serve as baseload generation, the lack of consistent sunlight might prevent it from delivering steady electricity in large quantities, where frequency regulation could also become a issue. It might be more load-following or intermediate load, as the amount of sunlight has a stronger correlation with power use (for example, a sunny summer day versus a cloudy summer day).

Sometimes Solar photovoltaics’ promotion seems to get lopsided. Would some scientists and engineers—rather than marketing professionals and politicians—respond to nagging questions I have?

If we define “energy balance” as the ratio of energy it takes to manufacture a (say silicon, or any other material) photovoltaics unit and make it work, what is the realistic amount of usable energy it may generate in its life time? Similar definition is for environmental balance, then: (1) What is the energy balance of a solar PV with Silicon and other materials (including the energy costs of creating suitable battries). (B) What is the environmental balance of A above. That is, what are the environmental consequences of eventually making a silicon (or other materials) PV (including environmental costs of creating and eventually getting rid of its storage batteris) - in relation of environmental gains which may accrue by its deployment (C) What are the typical amount of subsidies (per unit, say per KW of installed capacity) of silicon based PV - range across countries/regions.

It seems that you may have over looked another important feature of the efficiency equation for solar panels and that is the impact of panel mounted support electronics such as inverters. If the integration is successful at the module level there will be a significant improvement in efficiencies.

I have a 6Kw sytem on a 2800 square foot, two-story home in southern California. I’ve reduced my electricity bill by approximately 80 percent. I installed panels of Sun Power’s highest efficiency units at the time, about 18% I believe, and it’s going to just improve over time. The technology is proven and, if my experience is a typical one, this is a steady and stable source of electricity which is becoming more and more affordable. It will pay off completely for us in approximately 5 years! After that, it’s all gravy! Try it! You’ll like it!

Thank you for the review of photovoltaics and concentrated solar thermal. However, you omitted Medium Temperature Solar Thermal in your review.

Medium Temperature Solar Thermal is the direct conversion of solar energy to heat, typically in the temperature range of 55 Celsius to 85 Celsius, for hot water applications. Systems range in size from a single panel on a home, to hundreds of panels on commercial buildings. It can generate energy for 5 to 7 cents per kWh. It is cost effective and has decades of high quality installations, especially in Europe.

Medium Temperature Solar Thermal is already a large contributor to clean energy. Today, well over 100GW of Medium Temperature Solar Thermal systems are installed worldwide—about 10 times the installed capacity for solar photovoltaics. Each GW of solar thermal energy generated replaces a GW of conventional, CO2 producing energy, even more if you factor in transmission losses for conventional electricity.

North America only accounts for about 3 percent of the worldwide use of Medium Temperature Solar Thermal, but this is changing rapidly. In addition to domestic hot water production, systems are being installed to provide process heat, space heating, and air conditioning.

There is a large and vibrant Medium Temperature Solar Thermal industry, and worldwide adoption rates are growing quickly because the economics of Medium Temperature Solar Thermal are favourable. A hot topic is the growth of the direct use of heat from Medium Temperature Solar Thermal to provide the main energy source for space heating and air conditioning systems, greatly expanding the ability to utilize this low cost renewable energy source for many more applications. In fact, the world’s largest solar thermal heating and air conditioning system was installed in late 2008 in the United States in North Carolina.

Medium Temperature Solar Thermal has huge potential to contribute to solar energy supply and reduce CO2 emissions. I encourage the McKinsey Quarterly to review this technology in future editions.

As usual for solar energy reviews, no indication is given of cost (including installation, support structure, controllers, batteries, etc.) or for energy saving (including energy to manufacture and install each part of the complete system). I have been the engineer of record on solar-photovoltaic systems and I can tell you that the cost is high and the energy saving is low. The best use is off the power grid.