Feb 14, 2022

Solving the Solar Problem

Clean Tech
Energy Transition
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In the last decade, solar energy has become the cheapest way to generate electricity, surpassing even the price of coal! Despite this, solar energy still only accounts for around 3.1% of global electricity.

This leads to two very obvious questions: why aren’t we using way more solar energy? And since when did it become so cheap?


In 2005, a single photovoltaic cell (or solar cell) would have cost around $4 a watt. By 2020, the same cell had dropped in price to around 20 cents per unit.

This dramatic change in price only takes into account the last 15 years: if you consider trends over an even longer period of time, the price drop for photovoltaic cells becomes even more impressive! According to the International Renewable Energy Agency, at this rate the levelized cost of electricity from solar energy will be close to reaching the cost range of fossil fuels!

So how exactly did solar energy become so cost-effective? Well, it wasn’t just because of one country: rather, it was collaboration between many countries that built on each other’s developments. From creating demand to providing supply, three countries in particular took large-scale solar energy production from a pipe dream to reality.

The first country of interest? The United States. Modern photovoltaic cells made from silicon were first invented in the United States in 1954 primarily for use in the space industry. At this point, prices were still very expensive, decreasing slightly as solar technology improved over time.

Secondly: Germany. Germany created a market for solar energy in 2000, when the German government passed the Renewable Energy Sources Act. This law aimed to boost energy development and was monumental because it placed a fixed price on energy generated from renewable sources, including solar and wind.

By providing incentive for individuals and companies to build solar panels, Germany influenced a third country of interest to grab a slice from the solar pie: China. China made it incredibly cheap to build relevant technologies, developing a solar industry on a scale that the West really wasn’t able to keep up with or match.

China was almost a non-existent player in the renewable energy game just two decades ago. Today, they remain the biggest producer of solar panels, accounting for upwards of 70% of the world’s production of photovoltaic cells.

This is where we are now: clean energy makes business sense, and so major power players want in. But if solar energy is so great and has advanced so much in the last 20 years, why don’t we rely on it more? Why not just completely switch gears from fossil fuels?

Well, one big problem remains: storage.


Solar energy is only effective when the sun is shining. When weather conditions are cloudy or when it is dark, even the best photovoltaic cells are unproductive, which is an issue since those are the times when we need solar energy the most.

Let’s consider how someone living somewhere without much sunlight uses energy from non-renewable sources like coal and gas throughout the day: there is a spike during mornings before energy usage levels out in the mid-day, before going back up during the evening when people come home, and drop off again late at night when people go to bed.

In places with lots of solar, these patterns suddenly change: a similar spike in demand for non-renewable energy in the mornings remains, but when the sun rises and solar energy goes up in production, demand for non-renewable energy decreases, up until the sun sets and conventional demand shoots up again much more sharply.

The problem? Well, there are several.

Firstly, traditional power plants are not very good at ramping up production quickly, which means that they have to keep operating at a certain output all day, even when there is a lot of solar energy production.

This means that a surplus of solar power is produced in the middle of the day than what is used, leading to the second problem: there is only so much energy we can put in the grid before it is overpowered. If too much solar energy is produced, some has to be discarded.

However, all hope is not lost, as there is now an easy solution to the storage problem. Chances are that you have it right on front of you now: a lithium-ion battery.


Storage technologies being developed for use in solar energy production work using the same principles as the batteries in our electronic devices.

Multiple batteries can be stringed together into packs to operate vehicles, or scaled up even further to use for stationary power next to solar and wind farms.

Even more, lithium-ion batteries have become a lot better and cheaper than projected in the last few years. They’re now a viable option for storing and shifting at least a few hours’ worth of solar energy as needed.

For instance, most lithium-ion battery packs can store solar energy produced in the middle of the day to the evening, when there’s often a peak in electricity demand.

So, the storage problem that solar energy always had is actually not that much of an issue anymore!


Sometimes, there is need for even longer-term storage, such as in places without much sunshine. This is why many companies are continuing to improve existing storage technologies, and even developing other solutions.

For instance, another type of battery known as a flow battery separates the charge outside of the photovoltaic cell. The advantage? More energy storage for a much longer period of time. The problem? This is still very expensive.

There is also pumped hydro storage, which is already used extensively in some places, and takes advantage both of solar and hydropower. During the day, solar energy actively pumps water from a lower elevation lake to a higher secondary lake located nearby. When energy is required at night, water from the second lake is ran down through a turbine to generate electricity. Easy enough, right? All you need is, well… two lakes and a hill.  

Energy Vault, a Swiss company, is also working on gravity energy storage, essentially building a tower that autonomously lifts and lowers blocks using solar energy, releasing potential energy stored in the elevation gain to create electricity. However, much like pumped hydro storage, this technology also requires a lot of space.

Some methods are also currently in development to use solar energy to produce hydrogen, which can be used as an alternative fuel to power cars and industrial process, but these methods are currently very costly and inefficient.


The answer right now to the solar storage issue will most likely be addresses using lithium-ion batteries, with other options playing a small part.

Although it is difficult for these other alternatives to compete with lithium-ion batteries because they are not as flexible or inexpensive, they may prove useful for specific applications or become more efficient in the future.

Over the past two decades, solar energy has addressed its biggest problems: cost and storage. Because of this, renewable research experts forecast that as much as 20% of global electricity will be solar by 2050. So, what’s next?

Solar has come a long way and the technology is in place: now’s the time to shine.

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