Policy and Economics

The Policies for Ensuring the Accessibility and Affordability of Solar Energy

The growth in solar energy adoption has been unprecedented. At the end of 2011, there were 1 million residential homes with solar photovoltaic panels, and by the end of 2012, this number had grown to over 1.4 million (SEIA). This growth is driven by states such as California and New York that have adopted regulations requiring a certain amount of renewable electricity generation. These regulations further necessitate expanding efficient power production techniques such as solar, wind, and nuclear power. This report identifies the relative cost and technical challenges between the solar industry and a global market that will produce one billion units by 2020.

The global solar market is currently worth $100 billion a year and growing by nearly 25% annually. Only half of this value can be attributed to total installed capacity, as the rest is from distributed solar systems. The report describes the current global market for distributed systems and technologies and examines the potential for growth in distributed solar over the next decade. The information goes on to identify the key challenges facing distributed solar in both power plant design and economics. These challenges include long payback times, high system installation costs, grid integration issues, energy storage limitations, and technology divergence.

How To Ensure Accessibility and Affordability For Solar Energy and Socioeconomic Equity

1. Commercial and industrial activity.

Expanding the supply of distributed electricity from solar power in the developing world market will help to increase access to electricity for those who do not have current access. While the main focus for deploying solar energy is on residential energy needs, equity considerations require that government and other agencies also take steps to help meet this need. Therefore, a portion of future growth in distributed solar energy must be devoted to commercial and industrial developments. Offsetting this growth will be necessary for economic development to continue sustainably.

2. Grid-connected systems.

Emission-free energy is necessary for all communities with limited to no electricity access. However, solar energy is not the best solution for all communities, as some will find it too expensive to install and operate. Therefore, grids must adopt technology that allows all consumers to utilize power from the grid at a reasonable cost. The grid must also be adapted to use distributed solar energy systems to allow all citizens access to electricity. There needs to be a balance between the two extremes, where too much access comes with extremely high upfront costs, and too little access comes at a prohibitively high cost.

3. Mass production technologies.

Despite its growth over the last few years, distributed solar energy has yet to reach an industrial scale. It is because there are still significant technical challenges in the mass production of silicon cells and mirrors, as well as system integration and installation costs. Therefore, the solar industry must invest heavily in research and development of new manufacturing techniques. Moreover, governments and other organizations that support the goal of increasing access to electricity from solar technologies will need to invest in programs that help to accelerate this change.

4. Solar energy storage technologies.

Because storage can help increase the value of distributed solar energy systems, research will be needed to create more effective and efficient storage systems. Such storage systems help power companies offload excess power during periods of high production and sell back power when there is insufficient sunlight. Moreover, storage systems could provide power during periods of peak demand that the usual grid power cannot meet. Therefore, research and development will be needed to develop new storage technologies to take distributed solar energy to its full potential.

5. Utility-scale solar energy.

The main goal of solar energy is to replace fossil fuel technologies with sustainable future generation methods. It will require investments of billions of dollars to create an infrastructure that can unleash the full potential of solar technologies across the globe. However, the ownership of such large amounts of land and the high construction costs will make this goal unrealistic for many countries. Therefore, governments and other institutions must take steps to make solar energy more accessible for all citizens around the world. To accomplish this goal, utilities must create new programs that incentivize individuals and businesses that adopt distributed solar technology in their buildings. Additionally, these companies will have to invest heavily in research and development to tap into the full potential of distributed solar systems.

6. Research and development programs.

Although solar energy is a relatively old technology, it has been overshadowed by newer renewable energy sources such as wind power and hydroelectric power. Therefore, over the next five years or so, there will be a large spike in research and development to expand the use of distributed solar systems worldwide. Such research will focus on improving existing systems’ efficiency, technology reliability and lowering costs. This research must be done for distributed solar technology to become commercially viable in all world regions.

7. Education programs.

To reach sustainability goals, every citizen in all areas of the world must train themselves on using solar energy technologies. It will mean that all citizens must be educated on solar energy and installing systems in their homes. The technology is relatively new, and although many understand it, many still need to. Therefore, there must be a push toward increased education to treat all citizens equally.

8. Tax rebates and incentives.

As distributed solar energy technology becomes more productive, governments and other institutions of power will have to create programs that encourage the adoption of solar systems at an individual level. Such programs can include tax rebates and incentives for companies that invest in solar energy systems. It is also necessary that such incentive programs are rolled out in a short period. It is because the longer it takes to implement incentive programs, the longer it will take for countries to become sustainable using distributed solar energy systems only.

9. Cultural understanding.

The distribution of power throughout the world is not equal. For example, in most developed countries, electricity is owned by the government and distributed to their citizens at low costs. In developing countries, power is owned by a few central sources available for only a small percentage of the population. The distribution of power in all areas worldwide will have to be equal if all citizens have access to solar energy systems. To achieve this goal, cultural understanding must be increased for society to understand how distributed solar systems work and how they can benefit all citizens equally.

Distributed solar energy is a small but growing segment of the global electricity market. The significant investment required to exploit solar power to its full potential will ultimately need Federal and State governments to invest in research and development programs that reduce costs and improve know-how. The first step will be found by providing incentives for distributed solar systems.

The benefits of distributed solar energy can be achieved through research and development efforts, as well as educational programs to increase cultural awareness to help every citizen understand how distributed solar energy works. It will allow all public resources to be equally allocated by their owners, leading to an equal distribution of its benefits worldwide.