A Trade War May Scuttle This Huge Solar Breakthrough
As investors in the energy sector, these are the stories that we're always looking for.
But unless you're an avid reader of technical journals, you probably missed this one.
Every energy source available has its own “breakthrough” promise that will transform the sector and make the source the most energy efficient. But it's very rare for engineers to find and actually achieve them.
We usually call these sorts of breakthroughs a “Holy Grail.”
For solar energy, that elusive prospect has been something called “Multiple Exciton Generation” (MEG).
MEG equals the amount of energy flowing from the external circuit of a solar cell divided by the amount of energy flowing into it. If the MEG measurement comes out above 100%, then look out…
Because something very big is happening.
No photovoltaic (PV) cell (the most common type of solar cell) has even been able to return to the circuit anything like the energy of the photons (i.e., light) that are hitting it.
In this sense, by definition, any cell developed so far has been inefficient on its face, limited in its ability to provide electricity to the grid at a reduced cost.
Until last week.
This Breaks the Barrier
In a December 16 paper (“Peak External Photocurrent Quantum Efficiency Exceeding 100 percent via MEG in a Quantum Dot Solar Cell”), scientists at the Department of Energy's National Renewable Energy Laboratory (NREL) in Golden, Colorado, announced they had achieved 114% MEG.
This is a huge deal.
The announcement is likely to hasten the emergence of the next generation of PVs intent on (finally) making solar power an efficient source of electricity.
The primary advantage is the expectation of reducing the overall costs of using PVs, thereby bringing solar energy into the mainstay of power generation – without the need for ongoing costly government subsidies.
Of course, this is good news for everyone.
Actual production remain several years away, but following the NREL announcement, development of so-called “Quantum Dot Solar Cells” hold distinct promise of increasing the power conversion of PVs by at least 35%.
These new cells also have the advantage of being produced by very inexpensive, high-throughput, roll-to-roll manufacturing.
And it could happen soon. Everything needed to pull this off is already here.
The combination of a significant cut in production expenses and an equally significant improvement in efficiency results in a potential advance of truly global proportions.
And that could provide a tremendous energy potential to areas in desperate need of it.
Unfortunately, we operate in a world run by politicians.
Government Intervention Could Halt Progress
For the new wave of MEG applications to make it to market, genuine global collaboration needs to take place.
Usually, that is what happens with new developments. Scientists, technicians, and business applications in a number of markets work together to refine, perfect, and improve.
In solar energy, that means central involvement by the U.S. (where the latest advances are being revealed) and China (now the world's leading manufacturer of PVs and solar wafers).
But therein rests the problem.
The U.S. government has accepted a petition from American solar producers asking that tariffs be imposed on imports of Chinese solar cells and modules.
The justification is the claim that Chinese producers have been heavily subsidized by the government in Beijing (not all of which shows up on company books). These so-called subsidies allow these producers to sell solar products at unfairly low prices.
It comes as no surprise that some Chinese companies have now asked their own government to impose tariffs on imports of American solar products, arguing that U.S.-based producers have also been heavily subsidized.
As MIT's Technology News put it on December 19, “And just like that, the production of affordable and competitive solar products has become a political liability in the world's two largest producers and consumers of energy.”
If free markets have taught us anything over the past century, it is this.
Collaboration and competition increase efficiency, reduce costs, and improve product quality.
Far from being an impediment, the global marketplace has provided the main avenue for win-win situations.
As Martin Green, the executive director of the Photovoltaics Centre of Excellence at the University of New South Wales (UNSW) in Australia, put it in the MIT article, it has been the collaboration of U.S. companies driving down the price of silicon and Chinese companies coming up with innovative and low-cost methods for producing high-quality solar cells and modules that has propelled solar power forward so far.
“Together, they represent a formidable force that has relentlessly driven down the cost of solar electricity with remarkable consistency for more than 30 years. In isolation, they're relatively powerless,” Green added.
Green ought to know, because many of the leaders at those Chinese companies revolutionizing the manufacture of PVs are his graduates from the center at UNSW.
Finding a way to continue the collaboration will have a major positive impact on the energy sector and populations around the world that depend upon it.
On the other hand, as the MIT publication aptly put it, politics as usual is resulting in “a solar trade war that could put us all in the dark.”
This is a major story that has huge investment opportunities down the road if collaboration is possible. And I'll be sure to let you know what happens no matter what…
Until then, I'm off on Monday…
Marina and I are settling our brains for a long winter's nap. Happy holidays to you and yours.