When most people think of “solar power,” they think about one of two things – vast arrays of solar collectors laid out in hot deserts (the left-hand panel below) or smaller arrays on rooftops or highways (the right-hand panel below). This is perhaps the most ubiquitous method of converting solar energy into electricity, but it is not the only method. These arrays of solar collectors are known as “solar photovoltaic” installations or Solar PV for short.

Solar PV installations consist of individual collectors called cells, which are packaged together in bundled modules. An individual cell does not generate enough electricity to power much of anything, which is why they must be bundled together. A single module might be enough to provide electricity for a single parking meter or roadside telephone. A number of modules can be further bundled together to form an array (see below). Multiple arrays might be needed to provide electricity for a building or a house.

There are many different kinds of solar PV cells in existence (and even more being developed in research laboratories), but they all work in more or less the same way. Unlike virtually any other type of power plant (be it coal, natural gas or wind), there is no turbine in a Solar PV cell. In fact, there are basically no moving parts at all. .

Solar PV cells harvest solar energy through a phenomenon called the photovoltaic effect, discovered in 1839 by the French physicist Bequerel. Photons of solar energy interact with electrons to “excite” them, causing them to move through conductors, thus producing an electric current. The first solar PV module was made at Bell Labs in the 1950s, but was too expensive to be more than a curiosity; in the 1960’s NASA started to use PV modules in spacecraft and by the 1970s, people started to explore their use in a wider range of terrestrial applications.

This following video explains a bit more about how Solar PV cells work and describes the different Solar PV technologies in use today. One of the potentially most important evolutions in Solar PV technology is the use of semiconducting materials other than silicon in Solar PV cells. These materials are of interest because they could, in concept, allow more of the sun’s energy to be captured on a single array. But they face barriers in the form of high costs and, in some cases, questions about the availability of raw materials.

Video: Photovoltics, a Diverse Technology (4:26)

Most modern Solar PV technologies are relatively inefficient compared to other forms of electricity generation. Remember here that “efficiency” refers to how much of the fuel that is injected into an electricity generation system is actually converted into useful electricity, versus being rejected as waste heat or otherwise escaping from the generation system. While modern coal-fired and gas-fired power plants can have efficiencies as high as 60% (or sometimes even higher), most Solar PV cells convert sunlight to electricity with an efficiency of 20% or less (see below), though this number has been rising over time.

Whether the efficiency of Solar PV cells is all that important is a matter of some debate. On the one hand, higher-efficiency cells would require less land or space to produce a given amount of electricity. Land use (or the number of rooftops) can be a significant limiting factor in the deployment of Solar PV. On the other hand, fuel from the sun is free and there is no scarcity of sunlight, so whether Solar PV cells can achieve 30% efficiency versus 20% efficiency may not be such a big deal, and may not be worth the extra economic cost to produce such high-efficiency cells.

If you have ever left a cold drink out in the sun during the summertime (or if you have children, if you have ever left water in the kiddie pool out in the sun for a long time), you would notice that the formerly cold water gets warm – maybe even hot. If it happens to be summertime where you are living right now, try it! Whether you realize it or not, this little science experiment is the basis for a second way of harnessing the sun’s energy to produce electricity, called “concentrated solar power” or CSP. (This technology is also sometimes called “solar thermal.”)

The following video explains how CSP works. The basic idea is that a collection of mirrors reflects the sun’s light (and heat) onto a large vessel of water or some other fluid in a metal container. With enough mirrors reflecting all of that sunlight, the fluid in the metal container will get hot enough to turn water into steam. The steam is then used to power a turbine just like in almost any other power plant technology

In addition to being free as a source of energy (it does cost money to harness it and turn it into electricity), energy from the sun is practically limitless. The surface of the Earth receives solar energy at an average of 343 W/m². If we multiply this times the surface area of the Earth, about 5x10¹⁴ m², we get 1715x10¹⁴ W. But, 30% of this is reflected, and only 30% of the Earth is above sea level, so the usable solar energy we receive on the land surface is about 360x10¹⁴ W. We need to reduce this further because not all of the land surface is suited to installation of solar PV panels — we don't want to cut down forests, and ice-covered areas are not suitable, so we reduce the area by about one half. Over the course of a year, this amount of solar energy adds up to 66x10²² Joules. In 2018, we used about 600x10¹⁸ Joules of energy, which is just a shade less than 0.1% of the harvestable solar energy we receive on the land. This means that even if we got all of our energy from the Sun, we would not make a dent in the total! The potential is vast — 10,000 times what we need!

Let’s consider what it would mean for us to get all of our energy from Solar PV — how much of the Earth’s surface would we need to cover with panels? The black dots (radii of 100 km) in the figure below represent areas that could generate enough energy from sunlight to completely power the planet for an entire year. Practically, there are barriers to running the planet entirely on sunlight (everything would need to be electrified, we would need very large quantities of battery energy storage, and so forth), but the dots are useful as a demonstration of just how vast the energy production potential from solar is.

One of the important differences between Solar PV and CSP is that CSP requires more intense sunlight, and as such, it is not a viable option in many places. In contrast, Solar PV works just about everywhere — it is more versatile. Another important difference is in scale — CSP is really suited to utility-scale power plants, whereas Solar PV works at both the utility-scale and the very small scale.

The map below shows the PV potential for the world. The variability in the map is mainly a function of cloudiness and latitude. Many of the big, utility-scale solar PV plants are located in the red areas, but there is a surprising amount of Solar PV energy being harvested in places like Germany and Japan, both of which are fairly cloudy. But, even in a fairly cloudy place like Pennsylvania, you can see from the map that we could expect about 1460 kWh per year from a 1 kW PV array. From this, you can calculate how many square meters of PV panels you’d need to provide the electricity for a house that uses the typical 10,800 kWh per year. If you divide 10,800 kWh by 1460, you see that you’d need about 7kW of solar panels, which would fit on a typical house roof. The main point here is that Solar PV is a viable energy source in most parts of the world where people are living. In contrast to Solar PV, energy from CSP is only viable in places where the daily totals in the map above are higher than 6 kWh/day. Nevertheless, there are many regions where CSP viability and human population coincide, so it too can be an important energy resource in the future.

The generation of solar energy – primarily through Solar PV – is a story of exponential growth. Since 2000, the global Solar PV industry has grown by around 25% per year on average, so installed capacity has been doubling every 2.7 years (see below). Even so, solar represents a very small sliver of total global power generation — for now.

This shows the history of global solar energy generation in Exajoules (EJ) of energy each year (1 EJ = 10¹⁸J). This growth history is following an exponential curve. In 2018, this represents a small fraction of global energy consumption, which is almost 600 EJ.

Click for a text description of the Global Solar Energy Generation History graph.

The image is a line graph illustrating the historical trend of global solar energy generation from 1985 to 2020. The x-axis represents the years, marked from 1985 to 2020, while the y-axis indicates the energy generated per year in exajoules (EJ), ranging from 0 to 6. The graph depicts a sharp upward trend starting around 2005, indicating significant increases in solar energy production. The blue line that represents the data forms a steep curve upward after 2010, emphasizing rapid growth. A text box on the graph annotates that the average growth rate is 25% per year. The title of the graph is "Global Solar Energy Generation History."

Source: David Bice, data from BP Statistical Review of Energy, 2018

The nice thing about exponential growth is that it is easy to project it into the future. Over the time period shown in the graph above, solar energy generation has grown by 25% per year; if we continue that into the future, we find that before long, we would have enough solar energy to make up a substantial portion of the global energy needs by 2030 (see figure below). By the year 2040, this growth would rise to 1360 EJ, more than twice the global energy consumption of the present. Of course, that makes no sense — we would not produce more energy than we need, and this reminds us of an important fact, which is that exponential growth cannot continue forever.

This shows the history of global solar energy generation in Exajoules (EJ) of energy each year (1 EJ = 10¹⁸J). This growth history is following an exponential curve. In 2018, this represents a small fraction of global energy consumption, which is almost 600 EJ.

Click for a text description of the Global Solar Energy Generation Projection graph.

The image is a line graph titled "Global Solar Energy Generation Projection," depicting projected solar energy generation from 1985 to 2030. The x-axis represents the year, ranging from 1985 to 2030, and the y-axis represents the energy generated per year in exajoules (EJ), ranging from 0 to 120. The graph starts with a nearly flat blue line from 1985 to around 2015, indicating little to no growth in solar energy production. After 2015, the line turns orange and begins to curve sharply upward, showing a significant increase, projecting exponential growth in solar energy generation up to 2030. A text box within the graph notes "Projection into the future assuming 25% per year growth."

Source: David Bice, data from BP Statistical Review of Energy, 2018

One reason to trust this projected future growth is that the price of solar energy has fallen dramatically over time as can be seen in the graph below. In fact, if the generation of solar PV energy has been growing exponentially, the price has been dropping exponentially.

The price history of solar PV cells in $/watt shows an incredible decline in price. This is due to technological advances and the economy of scale as more and more PV cells are manufactured.

Click for a text description of the graph: Price History of Silicon PV Cells.

This bar chart illustrates the decline in the cost of silicon photovoltaic (PV) cells from 1977 to 2015, measured in US dollars per watt ($/Watt).

Key Observations:

1977:

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  • The price of silicon PV cells was $76.00 per watt, the highest recorded in the dataset.
  • Marked by a tall blue bar at the far left.

1980s:

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  • Significant price reduction as PV technology improved.
  • By 1985, the price dropped to around $10 per watt.
  • The bars become progressively shorter, showing a steep decline.

1990s:

•  
  • The price stabilized around $5–10 per watt.
  • The bars maintain similar heights, indicating slower reductions.

2000s:

•  
  • Continued gradual decline, reaching around $2 per watt by mid-2000s.
  • More efficient manufacturing and increased adoption contributed to lower costs.

2015:

•  
  • The price reached $0.30 per watt, as indicated by a highlighted blue label at the bottom right.
  • This marks a 99.6% reduction from 1977 prices.

Additional Details:

• A text box in the center of the graph reads:
  “Price history of silicon PV cells in US$ per watt”
• Data Source: Bloomberg New Energy Finance & pv.energytrend.com
• The trend follows Swanson’s Law, which states that solar PV prices drop by 20% for every doubling of cumulative shipped volume.

Source: Price history of silicon PV cells since 1977 by Rfassbind from Wikimedia Commons

The price decrease is following a pattern that has been given a name: Swanson’s Law, which states that the price drops by about 20% for each doubling in the number of PV cells produced. This law suggests that the prices of solar PV energy will continue to decline in the future.

This brings us to an important question — how does the cost of solar energy compare to other sources of energy? Energy economists have come up with a good way of comparing these costs by adding up all of the costs related to producing energy at some utility-scale power plant (a big wind farm, a big solar PV array, a CSP plant, a nuclear plant, a gas or coal-burning power plant). This is called the levelized cost of energy, and you get it by taking the sum of construction costs, operation and maintenance costs, and fuel costs over the lifetime of a plant and then dividing that by the sum of all the energy produced by the plant over its lifetime. This cost provides us with a way of comparing the energy from different sources. Since the boom in natural gas production due to fracking, natural gas has been the lowest cost form of energy (which is why coal is being used less and less), but energy from solar and wind have been decreasing rapidly, as can be seen in the following graph. When a renewable electrical energy resource such as solar or wind becomes equal in cost to the cheapest fossil fuel source of electricity, we say that the renewable resource has reached "grid parity". Once grid parity is achieved, the renewable resource makes sense from a purely economic standpoint, and as it drops below the grid parity point, it is the smartest electrical energy resource.

The levelized cost of solar energy in the US has been dropping fast in recent years and has been slightly cheaper than electrical energy from natural gas since 2015. The point in time where the two are equal is when solar energy achieved what is called grid parity. Wind energy reached grid parity by 2012, so at this point in time, both of these renewable sources provide cheaper energy than the cheapest fossil fuel source.

Click for a text description of the graph: Levelized Costs of Solar, Wind, and Natural Gas (2008–2018).

This line graph displays the levelized cost of energy (LCOE) for solar, wind, and natural gas from 2008 to 2018 in 2018 dollars per megawatt-hour (MWh). The LCOE represents the total cost of generating electricity from each source, considering installation, maintenance, and fuel costs.

Key Observations:

Solar Energy (Red Line)

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  • In 2008, the LCOE for solar was about $180 per MWh, the highest of the three energy sources.
  • The cost declined rapidly over the years, reaching approximately $40 per MWh by 2016.
  • By 2018, solar became the cheapest energy source at under $30 per MWh.
  • The decline reflects advances in solar panel technology, manufacturing efficiency, and increased adoption.

Wind Energy (Green Line)

•  
  • The cost of wind energy fluctuated between $60–80 per MWh from 2008 to 2010.
  • After 2010, wind costs began to decline, reaching a low of about $20 per MWh in 2018.
  • The drop can be attributed to larger and more efficient wind turbines, better grid integration, and falling installation costs.

Natural Gas (Blue Line)

•  
  • The LCOE for natural gas remained relatively stable, fluctuating between $40-60 per MWh over the period.
  • Natural gas was cheaper than solar for most of the timeline but was surpassed by both solar and wind by 2018.
  • The stability of natural gas prices is due to fuel costs, infrastructure maintenance, and policy factors.

Overall Trends:

• Solar energy saw the most dramatic cost reduction, making it one of the cheapest electricity sources by 2018.
• Wind energy also experienced a significant drop, becoming the least expensive energy source by 2018.
• Natural gas remained relatively stable, but was no longer the most cost-effective option by the end of the period.

Source: David Bice, data from Lawrence Berkeley Labs.

Part of the reason that solar and wind have expanded in recent years has to do with government policies — a number of countries have instituted subsidy and incentive programs that offset a large portion of the construction/installation costs of solar and wind technologies or devise rules that otherwise give advantages to electricity generation from renewables. Subsidies enacted in various countries have included feed-in tariffs (which guarantee an above-market sales price for solar power); rebates (which directly offset capital and installation costs); and favorable tax treatment (which is like an indirect feed-in tariff). Germany has one of the world’s largest Solar PV markets not because it has the best solar resource on earth but because it has been willing to support a generous feed-in tariff on solar power. (For many years the tariff was over 30 cents per kilowatt-hour, or more than five times the average power price in the United States; in recent years the tariff has been reduced.) These government policies have effectively stimulated the growth of these renewable energy resources, which has, in turn, resulted in lower prices.

In a conventional power plant (fueled by coal or natural gas), combustion heats water to steam and the steam pressure is used to spin the blades of a turbine. The turbine is then connected to a generator, which is a giant coil of wire turning in a magnetic field. This action induces electric current to flow in the wire. The workings of a wind turbine are much different, except that instead of using a fossil fuel heat to boil water and generate steam, the wind is used to directly spin the turbine blades to get the generator turning and to get electricity produced.

The inner workings of a wind turbine consist of three basic parts, seen in the figure below. The tower is the tall pole on which the wind turbine sits. The nacelle is the box at the top of the tower that contains the important mechanical pieces – the gearbox and generator. The blades are what actually capture the power of the wind and get the gears turning, delivering power to the generator. The direction that the blades are facing can be rotated so that the turbine always faces into the wind, and the pitch of the blades (the angle at which the blades face into the wind) can also be adjusted. Pitch control is important, especially in very windy conditions, to keep the gearbox from getting overloaded.

The amount of power (in Watts) collected by a wind turbine is explained in the following equations:

The Kinetic Energy (KE) of the wind is:

$$K E = \frac{1}{2}m v^{2 }$$

Where m = mass, and v = velocity of wind.

Power (P) in the wind is the KE per unit time, so we replace the mass(m) with the mass flux rate dm/dt:

$$P = \frac{1}{2}\frac{d m }{d t }{v}^{2 }$$$$\frac{d m }{d t }= \rho A v$$

Where p = air density, and A = swept area of blades.

So the wind Power(P) is:

$$P = \frac{1}{2}\rho A v^{3 }$$

If the wind turbine collected all of this power, the wind would have to stop and the blades would stop spinning. If you want the blades to keep spinning, it turns out that you can collect about 60% of the power (called the Betz limit).

So, collectible Power(P) is:

$$P = 0.3 \rho A v^{3 }$$

How much power could we get with a turbine whose blades are 100m long, with a wind speed of 10m/s (about 22mpg>, with an air density of 1.2kg/m2?

$$P = 0.3 \times 1.2 \times \pi \times {100}^{2 }\times {10}^{3 }= 11 , 304 , 000 \text{ Watts } = 11.3 \mathrm{MW}$$

This is clearly a lot of power! But, mechanical inefficiencies related to the gears and the generator mean that we might only get 30% of this figure, but that is still a lot of power from one turbine.

All wind turbines have a minimum wind speed that differs depending on the size but is typically about 4-5 m/s (10 mph) and maximum wind speed above which they shut down to avoid damage, usually around 20-25 m/s (about 50 mph). Most wind turbines have a maximum spinning rate, reached a bit above the minimum velocity, and when the wind speeds up, the pitch of the blades is adjusted so that the rate of spinning remains more or less constant. The figure below shows a typical "power curve" for a small wind turbine.

The wind, as you may have noticed, is highly variable in any given place, but as a general rule, it is stronger and steadier as you rise up above the ground. This is because friction between the wind and the land surface slows the wind. But there is also a lot of regional variation in the wind velocity. Both of these factors (elevation above the ground and location) can be seen in the maps below, showing the average wind speed in the US at two different heights.

The graphs above show annual average wind speeds in the US at 2 different heights above the ground surface. For reference, 10 m/s is 22.3 mph. You can see that the wind speeds at 100 m are far greater than at 30 m — this is the friction effect of the land surface (which is minimal above large water bodies). As you can see, the Great Plains have great wind potential, as do the Great Lakes and offshore areas on both coasts.

The area covered by the turbine’s blades is another important factor in determining power output. While wind turbines are available in a wide variety of capacities, from a few kilowatts to many thousands of kilowatts, it’s the larger turbine sizes that are being deployed most rapidly in wind farms. Several years ago the image on the right side of the figure below of a Boeing 747 superimposed on a wind turbine gave an astonishing representation of the scale of the state-of-the-art wind technology. Now, turbine rotor diameters are approaching the size of the Washington Monument!

Over the last 20 years, growth in the total installed capacity of wind energy generation across the globe has been growing rapidly. Germany was the first country to lead the development of wind power, but the US and China have dominated the growth since 2010. China is especially impressive in terms of its recent growth.

Part of the reason for this growth is the steady decline in the cost of wind energy, as discussed in the previous section on solar energy. But government policies are another important factor. The United States has one of the most volatile markets for wind energy in the world, while those in Europe and China have been among the most stable. This is due in part to differences in how governments in these countries treat wind energy. In many parts of Europe, wind energy (and other renewable generation technologies) enjoy subsidies and incentives known as feed-in tariffs. The feed-in tariff is essentially a long-term guarantee of the ability to sell output from a specific power generation resource to the grid at a specified price (typically higher than the prices received in the market by other generation resources). The United States, on the other hand, has favored a system of tax incentives called the “Production Tax Credit” (PTC) to encourage renewable energy deployment. In theory, a tax incentive should not work much differently than a feed-in tariff (both are just payments based on how many kilowatt-hours are generated). But the PTC has historically needed to be re-authorized frequently by the US Congress – this “on-off” policy strategy has been a major factor in the volatility of wind energy investment in the US as shown in the figure below. It is worth noting that the PTC was recently renewed for 2013, but will lapse again at the end of 2019, so it is difficult to say what impact it will have on wind investment going forward.

The above clarifies that government policies are important to the growth of renewable energy production (both wind and solar). In a very real way, you can think about these policies (feed-in tariffs or tax credits) as a form of investment. Governments can also provide investments in the form of funding for basic research related to these technologies. In general, these investments do not add up to a huge amount when seen in the context of a country's gross domestic product (GDP), which is a measure of the size of the economy, as seen in the figure below.

A quick look at an annually-averaged wind map of the world (below) shows the regions of the world that are best suited for the production of wind energy in colors ranging from yellows to red (where the average winds are at least 9.75 m/s or 20 mph). The offshore regions are clearly the best in terms of the energy potential, but not all of these offshore regions are close to where people live. Even for onshore portions of the world, the wind energy potential does not always coincide with where the people are concentrated. This points to the necessity of new transmission lines to deliver this wind energy to major population centers.

So, just how much energy could be produced by the wind? In 2009, a group of scientists makes some calculations to estimate the potential for the world and the US, using wind data and some assumptions about the size and spacing of the turbines. They assumed 2.5 MW turbines on land, and 3.5 MW turbines offshore, which were big for that time. They assumed that you could only place the turbines in unforested, ice-free, nonmountainous areas away from any towns and that the turbines had to be spaced by several hundred meters so they do not interfere with their neighbors. They further assumed that each turbine generated just 20% of its rated capacity to account for mechanical problems and intermittent winds. What they came up with is summarized in the table below, and it is pretty remarkable. The units here are exajoules (EJ = 1 x 10¹⁸ Joules) of energy over the course of a year. For reference, in 2018, the US total energy consumption (not just electrical energy) was 106 EJ and the global consumption was about 600 EJ. So, with just onshore wind energy, the potential is more than twice what we consume in the US, and more than 4 times the global consumption. But getting there is a matter of installing a lot of wind turbines!

Now let's consider a more practical question — how much wind energy have we managed to produce, and can we somehow project the past trends into the future? The figure below shows the global history of wind energy (solar is plotted too just for comparison), and you can see that it is growing fast.

Both of these curves are growing exponentially, and the history so far suggests a growth of about 25% per year on average. If we assume that they continue to grow in the further following this exponential growth, we can project where we'll be at any time in the future. Below, we see where we might be in the year 2030, just eleven years from now. What you see is that we end up with vast amount of wind energy by 2030 — if it grows at the same rate it has been growing at, we end up with almost 300 EJ per year, about half of the current global energy consumption, and if it grows at a smaller rate of 20% per year, we still end up being able to supply about 20% of the total global energy demand.

It is worth noting that, as with solar, wind investments are not always happening in the windiest areas. The reality is that there are a large number of factors that influence the development of wind energy globally. As the technology for wind energy has improved, other factors have also come together to create market drivers for wind power. These drivers include:

• Declining Wind Costs
• Fuel Price Uncertainty
• Federal and State Policies
• Economic Development
• Public Support
• Green Power
• Energy Security
• Carbon Risk

We have already mentioned the US Production Tax Credit, which is responsible for a good amount of the trend in US wind energy investment – both up and down! A decline in wind investment in 2010 and 2011 was due in part to the global financial crisis. A drop in natural gas/wholesale electricity prices has made some planned projects less competitive than originally expected and halted development. There has also been a slump in the overall demand for energy. Another factor that limits the growth of wind power capacity is the constraint on the transmission infrastructure. As can be seen in the wind capacity map on the previous page, many of the locations that experience the windiest conditions are not close to coastal population centers. The cost of upgrading this infrastructure is significant — perhaps \$30 to \$90 billion in the US by the year 2030 according to some estimates. This seems like a huge amount, but consider that our government spends about \$20 billion each year in direct subsidies to the fossil fuel industry, which would sum up to \$200 billion by the year 2030. In light of that, the upgrade cost for better transmission lines is a bargain!