Global Energy Crisis Drives Solar Alternatives

A fundamental imbalance between supply and demand defines America’s energy crisis.  If electricity consumption continues to increase as anticipated, our energy needs will far exceed expected levels of production.

According to the Energy Information Administration (EIA: Short Term Outlook of 2006), World Electricity consumption is expected to double from 2003 to 2030. Non-OECD countries account for 71 percent of the projected growth, and OECD countries account for 29 percent.

With recent climate trends of above average temperatures,
electricity consumption is expected to increase by 0.6 percent
in 2006 and by 1.1 percent in 2007 (EIA; 2006)

In addition, electricity prices have been on the rise. This increase has been attributed to two factors. First, the costs of fuels for electricity generation have risen. For example, prices for coal and natural gas, which account for about 68 percent of the electricity generated, have increased substantially. Second, retail electricity price caps have been recently loosened in some States, particularly in New England and the South Atlantic region, as a result of restructured electricity markets. 

In 2005, residential electricity prices rose an estimated 5.1 percent nationally.  In 2006, these prices are expected to increase by 8.9 percent and, in 2007, by another 3.6 percent (EIA; 2006).

Energy Information Administration
Official Energy Statistics from the US Government
August 8th, 2006

Worldwide, electricity consumption reached 14,280,000,000,000 kWh/year in 2006 (World Fact Book). The United States, being the number one consumer, exceeded the European Union by approximately 1,000,000,000,000 kWh/year.

Such expenditures however, do not come without their problems. In 2001 the United States faced the most serious energy shortage since the 1970’s. Millions of Americans, particularly those residing in California, suffered from rolling blackouts and brownouts.

In response, renewable energy technologies have made tremendous advances in the past 25 years. Today, they offer significant advantages over conventional fuels for meeting energy needs worldwide. Over the next several decades, renewable energy (excluding large hydro) and solar power are projected to increase rapidly.

Solar power describes a number of methods for harnessing energy from the light of the sun. It has been present in many traditional building methods for centuries, but has become of increasing interest in developed countries as environmental costs and limited supply of other power sources such as fossil fuels are realized. Solar power is already in widespread use where other supplies of power are absent, such as remote locations in space.

Additionally, more than 2 million households in developing countries receive electricity from solar home systems. Most of these systems, as well as the recent growth in solar home use, are occurring in a few specific Asian countries. Other countries with active efforts include Australia, Canada, India, Nepal and New Zealand. The fast growing world market for solar energy reflects the growing rural electrification demand of less developed countries around the world.

Globally, solar energy demand has grown at approximately 25% per annum over the past 15 years (hydrocarbon energy demand typically grows between 0-2% per annum). Worldwide photovoltaic installations increased by 1460 MW in 2005, up from 1,086 MW installed during the pervious year. In 1985, annual solar installation was only 21 MW. The US market showed 27% growth in 2004 compared to a 17% in the previous year. Japan’s market reached 277 MW, an increase of 27%. Japan has taken over from the US as the largest net exporter of photovoltaic cells and modules. (Solarbuzz; 2006)

Solar energy prices have declined on average 4% per annum over the past 15 years. Progressive increase in conversion efficiencies and manufacturing economies of scale are recognized as the underlying drivers of this growth.

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