Can Our Business Models Support Renewable Energies?

Our current business models may not support the implementation of renewable energies as our main energy sources in the future. Because the market for wind power is changing, many companies are finding it difficult to survive. Hydropower is continuously under discussion due to its environmental impact, and photovoltaic energy has been pressured by dropping market prices and overcapacity. Projects like DESERTEC, whose goal is to produce energy in the deserts of this world, are blocked due to the lack of connection between the desert and the areas that need the energy. The impact of biomass on food sources and the environment is being debated. Due to the discontinued production of renewable energies, storage is needed for times, where no energy production is possible, but  no satisfactory storage system exists today. A world with discontinued energy sources and varied lifestyles needs complex energy management, but this is currently only partially in place. We must overcome these difficulties and adjust the direction of developments so that a world supplied only with renewable energy can be achieved.

In the case of the photovoltaic industry, it was a fascinating idea to use the sun’s energy, which is available to produce energy everywhere. The physical basics were worked out for this long ago, and the first cells with crystalline silicon have been produced. However, using the same technology and the same sources used for semiconductors has made the solar cells very expensive. Because of this, the subsidies implemented for solar power have been very high. No one could have imagined the drop in prices that occurred after such a short time or the idea that solar energy could survive with little or no subsidy, but a strong price drop took place when the production of photovoltaic panels was moved to China. In addition, production capacity in China was initiated by government subsidies. Cheap silicon sources have been established and big production lines for photovoltaic solar cells have been built up, but worldwide the entire industry is dissatisfied with the profits that can be earned with this technology. This situation is favorable to the end user, but companies that cannot adjust to the strong price drop are sustaining heavy losses. Currently, the biggest solar power installations are done only in Europe (more precisely, in Germany and Italy), in the US, and now in China as well. The older installations were all founded by high subsidies and will require additional subsidies over the next couple of years. The developing technology focused primarily on optimization of the crystal silicon cells and frequency inverters, which make it possible to connect the photovoltaic panels to the grid. At this point, however, no company wants to spend any more money for photovoltaic because of the fear of not earning it back. Many developments are still necessary before we can finally implement photovoltaic as the world’s main energy source. We need to develop:

  • Thin-film technology in order for photovoltaic to escape the high energy demands of the silicon production process.
  • Biological photovoltaic in order to get flexible foils that can be glued onto windows or facades
  • Cheap, decentralized energy storage to equalize the discontinuity of solar energy production

 An energy management system and software to manage this highly complex energy system

We also need technological developments as well as business cases and social developments to guarantee the success of photovoltaic. These would include:

  • The introduction of photovoltaic in the countries that are not currently installing photovoltaic
  • Intelligent service and finance solutions to facilitate the implementation of photovoltaic in other countries
  • An energy pricing system, which includes the consequential costs for the fossil energy sources and for the nuclear energy (photovoltaic is close to 0.6 $/KWh compared to coal and nuclear energy, which are 0.35 $/KWh).
  • Worldwide awareness of the risk of climate change

There is much to do before photovoltaic will be finally implemented as the world’s main energy source. At present time, the entire photovoltaic industry seems to be afraid of the future and is not undertaking the necessary tasks that will shape it. Photovoltaic has a lot of potential for our energy future; now we must find the way to combine the technology with economical business models. The crystal silicon solar cell seems to have become a commodity. Future business models should not focus on the crystal silicon solar cell. Future business models should be created around the crystal silicon solar cells with view to the thin film technology.

Some examples of the kinds of business models that could develop the technology and services as well as society and the services in the right direction and could be done economically:

  • Companies could set up sales and service networks in Africa and/or South America to sell standalone solutions, which should then be developed into networks for villages, cities, or regions. These companies would need to have system knowhow, energy storage solutions, and project development processes.
  • Consultants could develop and execute energy awareness programs for countries and regions
  • Even in China and the US, where the big players are focusing on big projects, companies could develop systems to sell in individual-user markets.
  • European and US companies should focus on participating in networks that will further the development of photovoltaic technology.

These ideas should be developed further in order to disengage from the present situation. The strong price drop for photovoltaic should not be the roadblock, to develop photovoltaic further. It should be treated as a push in the direction to enhance further developments.

Leave a Reply

Your email address will not be published. Required fields are marked *