Sunshot Vision Study February 2012 ACKNOWLEDGMENTS
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SunShot Vision Study February 2012 ACKNOWLEDGMENTS The U.S. Department of Energy would like to acknowledge the project coordination and in-depth analysis conducted by the National Renewable Energy Laboratory (NREL) and the contributions by the Solar Energy Industries Association, Solar Electric Power Association, and the many organizations that participated in the development of this report. The preparation and production of this report was coordinated by New West Technologies, LLC, Energetics Incorporated, and NREL. All contributors to the report are listed in Appendix D. Cover photo renderings by Joshua Bauer, NREL MESSAGE FROM THE DIRECTOR OF THE SUNSHOT INITIATIVE The SunShot Initiative was launched in February 2011 with the goal of making solar energy cost- competitive with conventional electricity generating technologies within the decade. Achieving this goal will require dramatic decreases in the cost structure of solar technologies—on the order of a 75% reduction—across all markets including residential, commercial, and utility-scale deployments of solar. To do this most effectively, the SunShot Initiative spans the full spectrum from basic science to applied research and development. It also spans across multiple U.S. Department of Energy (DOE) offices, including Energy Efficiency and Renewable Energy (EERE), Advanced Research Projects Agency- Energy (ARPA-E) and the Office of Science (SC). The SunShot Vision Study explores the implications of achieving the SunShot Initiative’s targets both in terms of potential benefits as well as potential challenges. The potential benefits include solar contributing an increasingly significant share of electricity generation over the next 20 to 40 years, creating thousands of new jobs, and saving consumers money by placing downward pressure on electricity prices. The potential challenges include scaling-up manufacturing capacity, integrating large amounts of solar energy into the grid, and improving access to financing. The benefits and challenges of achieving the SunShot vision are discussed in detail in the study. By design, this study focuses on solar technologies and presents a “best case” solar scenario. It was specifically designed this way to highlight the potential for solar electricity to significantly impact the electricity generation portfolio and to explore the challenges likely to be encountered as the industry grows. The basic elements of this study include an analysis of the share of the total electricity market under the SunShot targets, while keeping other competing technologies (such as wind, geothermal, natural gas, etc.) on nominal cost-reduction curves. The reason to explore such an aggressive hypothesis was to ask the fundamental question: what is the upper bound of the electricity market share that can be captured by solar electricity, given the envisioned SunShot cost structures? This study is not intended to be viewed as a prediction that solar will beat out other competing technologies, but rather an exploration of how far solar could go under a specific set of assumptions. The study indicates that under these assumptions, solar electricity could contribute up to 14% and 27% of the total electricity demand by 2030 and 2050, respectively. While there are many challenges along the way, achieving this vision would represent a transformation in the way we generate, store, and utilize solar energy. Ramamoorthy Ramesh Director, SunShot Initiative Table of Contents Abbreviations and Acronyms .................................................. xiii Executive Summary .................................................................. xix 1. Introduction ........................................................................... 1 1.1 The SunShot Vision: Deep Price Reductions Spur Rapid, Large-Scale Solar Deployment ............................................................ 1 1.2 Solar Energy Basics .............................................................................. 2 1.3 Solar Energy History, Status, and Potential ....................................... 3 1.4 Modeling the SunShot Scenario ........................................................... 5 1.4.1 Defining the SunShot and Reference Scenarios ................................... 5 1.4.2 Solar Growth Results ........................................................................... 6 1.4.3 Differences between PV and CSP Deployment and Electricity Production ............................................................................................ 8 1.5 SunShot Impacts ................................................................................. 10 1.5.1 Electricity Generation and Fossil-Fuel Use ....................................... 10 1.5.2 Electricity Transmission..................................................................... 11 1.5.3 Cost .................................................................................................... 13 1.5.4 Environment ....................................................................................... 14 1.5.5 Employment ....................................................................................... 16 1.6 Realizing the SunShot Vision ............................................................. 17 1.6.1 Technology Improvements and Cost Reductions ............................... 18 1.6.2 Raw Materials .................................................................................... 18 1.6.3 Manufacturing Scale-Up .................................................................... 19 1.6.4 Grid Integration .................................................................................. 19 1.6.5 Siting .................................................................................................. 20 1.6.6 Financing ............................................................................................ 21 1.7 Conclusion ........................................................................................... 22 1.8 References ............................................................................................ 22 2. Solar Energy Market Evolution and Technical Potential ................................................................................25 2.1 Evolution of U.S. Solar Markets ........................................................ 25 2.1.1 Photovoltaics ...................................................................................... 26 2.1.2 Concentrating Solar Power ................................................................ 30 2.1.3 Solar Industry Employment ............................................................... 32 2.1.4 Hedging Against Energy Price Increases ........................................... 33 SunShot Vision Study – February 2012 i TABLE OF CONTENTS 2.2 Solar Resource Availability and Technical Potential ...................... 34 2.2.1 Photovoltaics ...................................................................................... 34 2.2.2 Concentrating Solar Power................................................................. 35 2.3 References ............................................................................................ 37 3. Analysis of PV and CSP Growth in the SunShot Scenario ............................................................................... 41 3.1 Introduction......................................................................................... 41 3.2 SunShot Growth Scenario .................................................................. 41 3.2.1 Analysis Models ................................................................................. 41 3.2.2 SunShot Scenario Assumptions and Total Solar Deployment Projections .......................................................................................... 42 3.2.3 Generation and Capacity Mix ............................................................ 47 3.2.4 Regional Deployment ......................................................................... 50 3.2.5 Transmission Requirements ............................................................... 53 3.2.6 Operational Impacts ........................................................................... 57 3.3 Costs and Benefits ............................................................................... 61 3.3.1 Costs ................................................................................................... 61 3.3.2 Carbon Emissions ............................................................................... 63 3.3.3 Employment ....................................................................................... 64 3.4 References ............................................................................................ 67 4. Photovoltaics: Technologies, Cost, and Performance ..... 69 4.1 Introduction......................................................................................... 69 4.2 Today’s PV Technology ..................................................................... 70 4.2.1 Components of a PV System .............................................................. 70 4.2.2 PV Module Technologies ................................................................... 70 4.2.3 PV Performance and Price ................................................................. 73 4.2.4 Levelized Cost of Energy ................................................................... 76 4.3 Overview of Strategies for Reducing PV System Prices ................. 77 4.4 Reducing PV Module Prices .............................................................