Reuters yesterday published a very interesting analysis article on the future of solar power in Saudi Arabia. Perfectly located for solar power generation, Saudi Arabia currently has just 12MW of installed solar capacity – less than was installed in the UK in the first half of May, and a long long way behind the 5,000MW of capacity installed in China during 2012.

Saudi Arabia is has relatively low natural gas reserves, but vast oil reserves, so Saudi power stations are oil fired power plants which give an efficiency of just 30%. Since oil used in domestic power generation is oil which cannot then be sold on the international market, there are billions of dollars per month of opportunity cost, effectively pricing Saudi electricity generation at a huge 26 cents/KWh.

With the price of solar panels falling to US$0.80 per Watt, and assuming installed costs of US$1.50 per Watt for utility-sized solar power plants, solar generation costs would be just 9.6 cents/KWh – less than half the cost of using domestic oil.

For these simple economic reasons, the Saudis plan to install 5,000MW of solar over the next 5 years, and 41,000MW over the next 20 years which will give them billions of additional barrels of oil to sell on the international market.

Click here to read the full Reuters article.

Unlike most of its North African neighbours Morocco has negligible gas and oil reserves to exploit. It does however have a near perfect geographical location and climate for solar power.

This month work started on the first of a series of huge solar power plant construction projects which by 2020 will have a generation capacity of 500 Megawatts and cover 3000 hectares. Located by the desert city of Ouarzazate 200km drive from Marrakesh, this concentrated solar power (CSP) plant will eventually meet the electricity needs of the city’s 1.5 million residents.

Phase one is a 160 MW solar power plant to be built by a consortium led by Saudi company ACWA Power. The contract for the second phase will be awarded later this year which will raise total capacity up to the targetted 500 MW.

Morocco are planning to construct five such solar power plants over the next 10 years giving it a generation capacity of 2000 MW at a cost of around US$9 billion. Funding will come from The World Bank, the African Development Bank and the European Investment Bank.

Morocco are aiming to generate over 40% of the country’s total power needs from renewable energy sources by 2020, with additional plans for huge investment in wind farms along their windy Atlantic coastline to mix with the solar to give it renewable electricity generation night and day.

If these projects are all completed and others are developed, it is likely that Morocco will look to export clean electricity to their European neighbours, a model likely to be repeated across North Africa and something we looked at back in 2008 in our article Solar Power for Europe from the Sahara.

In our article Are Prices of Solar Panels Going to Fall or Rise we looked at how Chinese-made PV solar panels have been flooding the European market driving prices down. Over the last few years, Chinese manufacturers have snapped up 80% of the $30bn+ annual European market for solar products.

The European Commission, interested in protecting German and other struggling European solar panel manufacturers, has been looking into this and are considering levying punitive tariffs on solar panel imports from China to stop Chinese manufacturers dumping their government subsidised panels in the European market at unfair prices.

Chinese made PV panels are currently almost half the price of European made panels and so the import duty is likely to be set at from 40-50% bringing Chinese and European panel prices in line with each other, and therefore increasing the price of solar products to the consumer considerably.

Provisional levies could come into force on 6th June 2013 before negotiations with Beijing on a long term levy structure. The USA put import duties on Chinese solar energy products back in 2012 to protect their market from oversupply.

The journal Science had details today of research into a special coating for photovoltaic solar cells which could potentially increase the percentage of solar energy which is converted into electricity by 6%.

Solar panels do not convert all wavelengths of light into electricity – photons of light from the blue (higher energy) end of the spectrum are converted into heat if they are not reflected from the solar panel which a) means that that solar energy is wasted, and b) means that the solar panel gets hotter, which as our article (Effect of Temperature on Solar Panels) showed, reduces efficiency.

Since the 1960’s it has been known that a material called pantacene (an organic semiconductor pictured above) has an interesting property. When a photon of light from the blue end of the spectrum hits pantacene, TWO electrons are generated. When a photon of light from the red end of the spectrum hits a normal solar cell, ONE electron is generated. Therefore by making a solar cell with a coating of pantacene, light from the whole visible spectrum can be exploited and the efficiency of the hybrid solar cell will be higher than the simple silicon solar panels currently available.

This is still very much in the prototype phase with many years of research still to come before it could become commercial. Pantacene though abundant, carbon-based, and organic, is currently expensive and technology has to be developed to enable the economical manufacture of hybrid solar panels.

Back in 2007 we announced that Spectrolab (a subsidiary of plane-maker Boeing) has set a new world record for solar cell efficiency at 40% with a multi junction solar cell with concentrated sunlight (with lenses or mirrors). That record was subsequently broken, but is still around 41%.

Now Spectrolab have announced that they have broken the world record for solar cell efficiency without solar concentration achieving 37.8% efficiency, and they believe that the technology they used to achieve this is capable of getting to efficiencies of eventually getting up to 45%.

Spectrolab specialise in making high efficiency multi-junction PV solar panels for use in space to provide power to satellites, but their technological advances will eventually work their way down to the consumer market. Increasing the efficiency of solar panels is important, because high efficiency means physically smaller panels which need less materials, cost less to transport, and can be used in more situations.

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.