PV: FUTURE PROSPECTS
Introduction
In China, there are legends and idioms about the sun and the people’s attempts to utilize the sunlight. The Chinese have been dreaming of harnessing solar power for thousands of years. As we finally have entered the 21st century, it is time to make full use of this power. For the energy sector, the PV revolution embodies the ultimate replacement of traditional energies. In environmental protection, PV stands for the ultimate solution to pollution. For other related industries, like automobile, aircraft, and housing, PV represents the inexhaustible impetus.
PV matters a great deal to humanity. With it, humanity can say goodbye to the Oil Age and welcome the Solar Age. People will not need to fight each other for scarce coal and oil. Centralized industrial production as well as social organizations will become distributed, people will have a more open and inclusive mind, believing that resources are only used but not owned by them, and advocating sharing rather than monopoly.
Solar power has transformed people into the “PV generation,” living under the blue sky and surrounded by green mountains and clear waters. They can achieve self-sufficiency in resources, and use clean and sustainable energy to provide inexhaustible power to automobiles, planes and ships. This is the “PV dream” of the Chinese people.
The PV Century
Why did the Americans dare to predict that by 2050, solar power will provide 69% of their electricity and account for 35% of their total energy consumption? Why, as the PV industry develops rapidly and coal and oil are phased out, aren’t resources such as shale gases, nuclear power, biomass and tidal power the future of the energy sector? Why will solar power definitely replace fossil fuels in the future? It is because the 21st century will be the solar century—the PV century. This is the impact of the PV industry on the energy sector.
Technology is Advancing Rapidly
Based on our experience with technological transformation and the development of PV, we may conclude the following.
First, technology transformation will continue to make the PV industry progress. PV technologies have developed for more than 40 years. As early as 1969, the world’s first solar station was built in France and the PV industry was born. Since then, technological breakthroughs have been made. It is worth noting that Germany also made technological progress after France. In April 2011, Bosch Solar Energy achieved a 19.6% efficiency for large-area PERC (Passivated Emitter and Rear Cell) solar cells, which were the most efficient solar cells in the world at that point. Besides European countries, the United States has also made breakthroughs in this field. In July 2011, First Solar successfully produced cadmium telluride cells with an efficiency of 17.3%.
As Europe and the US have made huge efforts in experimenting with solar energy, technologies are advancing faster than anyone could have expected. When we founded the China New Energy Chamber of Commerce in 2006, the cost of solar power generation was 3–4 yuan/kWh. In 2009, less than 3 years later, we had reduced the cost to less than 1 yuan/kWh, and the current cost is about 0.5 yuan/kWh.
PV technologies today are advancing rapidly and becoming more and more mature. We will make bigger breakthroughs in the technology of monocrystal silicon, polycrystalline silicon and thin film, and we will also improve the conversion efficiency of solar cells as well as equipment manufacturing and system integration technologies. We are confident in predicting that in the near future, we are to witness tremendous transformations and a developed PV industry with lower power generation costs, as technologies continue to improve and commercial applications grow in popularity.
Second, new technologies will foster big companies, who will in turn drive the development of new technologies. As thin-film technology has advanced, many companies that rely on it have risen in the US, South Korea, Japan and in Europe.
Other examples include computer technology giving birth to first-class computer companies, e.g., IBM. IBM, with its investment and R&D in personal computers made the computer an everyday item for ordinary people.
However, companies can be doomed if they go against new technologies. Motorola is an example in the communications industry. Before the 1990s, Motorola had been the pioneer in the communications sector. In July 1969, the Motorola-made wireless device sent back the first greetings from astronauts on the moon. However, in the 1990s, when other communications companies were transforming from analog communication to digital communication, Motorola failed to catch up with the trend and consequently was bought and marginalized by Google.
The End of Fossil Fuels
The new technology revolution and new Industrial Revolution mark the rise of solar power and the advent of the PV century; on the other hand, they also indicate that fossil energies will soon be phased out.
Fossil energies will be phased out because, on the one hand, industrialization’s consumption of fossil energies is dramatically high. Emissions from burning fossil fuels also cause global environmental pollution. On the other hand, the development of fossil fuel substitutes, especially renewable energies, has made the replacement of fossil fuels possible, and the development of PV has made this trend irreversible.
The exhaustion of fossil fuels is eminent, which can be demonstrated by the two major oil crises after the Second World War. The two crises, which lasted from 1973 to 1974 and from 1979 to 1980, resulted in oil price hikes on the international market (for example, the price soared from USD 13/barrel in 1979 to USD 34/barrel in 1981), and severely impacted Western countries.
Meanwhile, the mass use of fossil energies has given rise to pronounced environmental problems. Unusual phenomena in the world such as global warming, the greenhouse effect and sea level rise are all caused by the use of fossil fuels.
Right now, as fossil energies are on the verge of exhaustion and are placing the environment in great peril, the development of renewable and clean energies enables mankind to restructure and optimize the energy mix. According to the BP Statistical Review of World Energy 2013, the power generated by renewables in 2012 increased by 15.2%. When the growth of the world’s total power generation slowed down, renewables other than hydropower contributed to 4.7% of the total generation mix. In the same year, the growth rate of CO2 emission from energy use was slower than that of 2011. Reducing its usage of coal will help America reduce CO2 emissions to the level of 1994.
The development of PV has accelerated the replacement of fossil fuels by new energies, which is manifested in two respects: first, some countries have proposed replacing fossil fuels with PV; second, consumers are willing to pay more for PV.
Many countries have specific plans to replace fossil fuels with PV, and the United States is a typical example. In 2008, Ken Zweibel and two other American scholars devised a grand scheme: by 2050, solar power will provide 69% of electricity and 35% of the total energy consumption (including transportation-related energy consumption) of the United States. They predicted that energy prices for the same period will be 5 cents/kWh, which is approximately the same as the price now. If wind energy, biomass and other energies are fully developed, then 90% of the energy supply and consumption in America will have been derived from clean energies by 2100. Currently, the shale gas frenzy may have slowed down the development of other new energies, but the U.S. is still a major player in solar power development and utilization.
In terms of the consumer, in 2009 the International Environmental Protection Organization and Association announced that, according to an Ipsos survey conducted in ten cities in China, about 80% of the interviewees agreed that the use of coal would heavily pollute the air, and that they are willing to pay a 19% price hike to buy clean energies like solar power and wind energy.
A prerequisite to the above predictions is the current development of the PV industry. If development evolves into revolution, then the replacement of fossil fuels by PV will not take 40 years, but only 35 or 30 years, or even less.
The Irreversible “Ultimate Substitute”
Statistics suggest that, even though fossil energies like coal and oil are still playing a predominant part in the energy mix, they will eventually be replaced by renewables, and this trend is irreversible.
New energies such as nuclear power, wind power, biomass and tidal power are reshaping and optimizing our energy mix. According to the BP Statistical Review of World Energy 2013, oil is still a globally dominant fuel, accounting for one-third of world energy consumption. However, according to data reaching as far back as the first BP energy review in 1965, the share of oil in the world energy consumption mix is at a record low. The use of coal is growing faster, but compared with historical data, coal is among the fossil energies with the fastest declining growth rates.
The substitution for fossil energies by renewables is imminent. In only 10 years (2002–2012), the percentage of renewables—except hydropower—in world energy consumption grew from 0.8% to 2.4%. The substitution may not be huge in total size, but nonetheless significant in growth rate.
However, the prospects for other renewables such as nuclear power and biomass are not as bright as that of solar power. According to the BP Statistical Review of World Energy 2013, power generation from nuclear power decreased by 6.9%, its biggest recorded decline for two consecutive years. As the output of biofuel in the United States decreased by 4.3%, the world’s biofuel output also dropped for the first time since 2000. In addition, due to unstable power generation and uneven resource distribution, the development of wind power has met setbacks in recent years.
Nuclear energy is subject to limited uranium resources; biofuel requires a large number of crops, which is not cost-effective; tidal power also requires a lot of resources and it entails a huge impact on the environment. As for shale gases which have been advocated by the Americans, it belongs to the category of fossil fuels, not to that of clean and renewable energy.
Considering all the relevant factors, only a new type of energy meeting all the following criteria may serve as the ultimate solution to the energy problems of mankind. First, the substitute must be clean and renewable; therefore shale gases are not an option. Second, the substitute has to be distributed evenly, so tidal and wind power are out of the discussion. Third, the substitute’s production and utilization process must be safe and controllable; therefore nuclear power is not an option, either. Fourth, the substitute has to be cheap and its cost controllable, so coal and oil are excluded.
PV energy meets all the above criteria. First of all, solar power is derived from the sunlight, posing no risks in matters of geological development and irreplaceable development. PV is thus a genuine renewable energy. Second of all, solar power is distributed in an even and balanced manner, leaving no idle equipment and giving every region equal access and chance to develop solar power. Third of all, PV poses no threat of a leak, and the production of PV is pollution-free. Last but not least, despite a short development history and imperfect industrial base, the PV industry has high power-generating efficiency.
Therefore, replacing fossil fuels with solar power is not one of the choices, but the only choice. From a practical perspective, solar power is the inevitable trend in the long run. When is mankind going to completely phase out fossil energies and apply PV technology to the globe as a whole—it is only a matter of time, technology, location and politics.
Replacing fossil fuels with PV is absolutely feasible. As mentioned before, the cost of PV power generation has dropped to 0.5 yuan/kWh. This figure is significant, because if we consider the cost of environmental damage caused by fossil energies, the total cost of fossil energies would be higher than 0.5 yuan/kWh. It is time for us to massively replace fossil fuels with PV!
However, it is worth noting that this substitution is not an interim one, but the ultimate one. This means that when we complete the replacement, there will be no other substitute for solar power. Men will bid farewell to coal and oil, oil wars and nuclear leaks, and enter an eternal solar age.
New Landscape on Wheels
When talking about solar energy, people immediately think of solar water heaters on rooftops. Is that all that solar energy has to offer?
Why did Li Shufu, Chairman of Zhejiang Geely Holding Group Co., Ltd, and I decide to install a solar sail on a car roof to generate electricity? Why not fuel future planes with solar energy?
The influence of PV on related industries includes but is not limited to the issues mentioned above. PV has a bearing on ground power stations, buildings, transportation, and even common consumer goods like lamps and tents.
The Burgeoning PV Stations
Back in 1893, Chicago was preparing for a World Expo. Founded in the 1820s, this international commerce and trade event grew along with industrial development, incorporating elements of science, art, and life into exhibitions. At that time, two great minds in science—Edison and Tesla—both set their eyes on the World Expo and prepared for a showdown on this international stage that was the focus of the world.
The reason for their competition was that the organizing committee was looking for lighting equipment to illuminate the entire venue, and the candidates were Edison’s DC solution and Tesla’s AC solution. As a result, in January 1893, more than 90,000 AC-lights illuminated the venue at the opening of the expo.
In 1895, equipped with Tesla’s AC technology, the world’s first hydroelectric power plant was built in Niagara Falls. Electricity generated was transmitted to Buffalo, 35 kilometers away from the plant. This event implies that AC vanquished DC, making the latter an outdated technology.
DC and AC wrote the prelude to the second Industrial Revolution, and the application of AC gave birth to ground stations, which will be further impacted by PV, the forerunner of the third Industrial Revolution.
The impact is mainly of two kinds: on the one hand, stations powered by clean technologies, e.g., PV, will gradually replace traditional fossil-fuel-powered ones; on the other, since solar energy is extensively distributed, future power stations will also be run in a distributed manner.
In terms of the current structure, traditional power plants are still the major electricity suppliers. According to Bloomberg New Energy Finance (BNEF), despite the fact that statistics for different regions vary in terms of power generation, fossil fuels remain the dominant source of power generation. Thanks to the incentive policies issued in Europe, the US and recently in China, electricity generated by renewables—except nuclear power—increased by 64% from 2006 to 2012. Wind and solar power grew the fastest. Indeed, with huge cost cuts, solar power generation has been developing rapidly.
Meanwhile, the investment market for new forms of power plants—and especially solar plants—is also booming. BNEF statistics suggest that PV and other renewables enabled global investment in clean energy to score a 17% compound annual growth rate (CAGR) from 2006 to 2012, highlighting the future of the industry.
From the perspective of cost, PV plants are already more competitive in price than traditional power plants. The advantage is not so prominent if we simply compare the costs in their absolute number, though. However, if we take the plummeting cost of PV systems and include reduction in carbon emissions, the price of solar power generation can compete with that of coal-fired power generation. As PV technology continues to develop, the price edge that solar plants have will become more pronounced.
The trend shows that 2020 may be the turning point, where new energy power stations replace traditional ones. By then, solar power generation will be the second largest growth pole apart from wind power generation, and 427GW of solar power capacity will have been newly installed. It is worth noting that such analysis is made in line with, rather than in advance of, the steady progress of PV revolution.
In the meantime, as mentioned above, solar power is distributed extensively and unevenly, so future power plants are likely to be operated in a distributed manner rather than a centralized one. Distributed power generation often refers to highly-efficient and reliable power-generating units, which are small modules with a generating power ranging from several kilowatts to hundreds of megawatts (some people set the range between 30 and 50 MW) distributed near users.
The beauty of distributed PV power generation is its low cost and high efficiency. Building a traditional power plant requires a one-time investment of several billions and a construction period of 5 to 15 years, entailing huge fund risks. Distributed power plants require less investment and can be quickly put into operation. If we replace traditional power plants with PV stations, we can provide customers with quality and reliable electricity without worrying about the complicated structures of traditional plants. At the same time, distributed PV stations can break up monopoly and factor in competition so as to increase the utilization of the energy. This power generation model can also be applied to wind power or biomass.
BIPV
After discussing PV’s influence on power plants, let’s look at the impact of the PV revolution on the construction industry.
Figure 6–1 The sectors of PV application in the world between 2008 and 2012
When speaking of the impact of solar power on buildings, ordinary people often refer to solar water heaters on rooftops. This is actually a misunderstanding. Those heaters are only an application of the photo-thermal effect of solar power, not an application of PV technology. The impact of PV on buildings is in BIPV.
BIPV is the integration of architecture, technologies and aesthetics, and does not deface buildings as solar water heaters do.
In June 2012, IKEA declared its strategic partnership with Hanergy: all IKEA stores in China will be equipped with solar PV panels to promote the energy conservation and emission reduction project of the IKEA Group. More than half the electricity used in IKEA buildings worldwide is produced by clean energies like wind and solar power. 250,000 solar panels have been installed on IKEA buildings around the globe. IKEA owns and maintains 80 wind turbines. Taking IKEA Beijing as an example, the installed power capacity of its rooftop solar panels has registered 416.24kW, reducing annual carbon emissions by 426 tons.
Wu Changhua, the Greater China Director of The Climate Group, an international non-profit organization, has said: “China is going through a unique development period and it has to deal with unbalanced and urgent challenges and opportunities, among which attaining clean energies and emission reduction quotas are the top priorities requiring immediate action of leading enterprises. We appreciate the timely alliance between IKEA and Hanergy, and meanwhile, we expect that more companies and all walks of life will actively get involved so that we can join hands to realize the beautiful Chinese Dream featuring a clean, green and low-carbon life.”
As for the BIPV industry, China, in the current context, can carry out pilot projects before mass promotions. For industrial, business and residential buildings both in place or under construction, the government can slash or exempt deed tax, property tax or other taxes as long as the buildings are BIPV-renovated. The government can also take BIPV installation as a prerequisite for the approval of new buildings, and thus encourage self-consumption, feeding in the grid and paying for the net volume of electricity transmission between the grid and BIPV systems. In addition, such policies as loan priorities and preferential interest rates will motivate BIPV enterprises.
PV-Based Transportation
The PV revolution will bring disruptive change to the automobile and transportation industry.
Cars are regarded as the “machines that changed the world”: machines whose emergence and development created the auto industry, invigorated the oil industry and changed people’s way of work and life. The whole of society now sits on wheels. In 2011, global automobile production was 80.1 million units, with a year-on-year growth of 3%, and global car ownership was 1 billion. During this period, the automobile industry also became an economic pillar for America, Japan, Germany and other developed countries. There are cars everywhere, making the Earth a world of cars.
However, the increasing number of cars comes with two consequences. One is that rising automobile production leads to greater oil consumption. Global oil consumption reached 88 billion barrels a day in 2011. Another is that increasing oil consumption brings about more serious pollution from auto exhaust. Thirty-five percent of the world’s carbon emissions is derived from oil consumption, of which cars are the major source. Though we recognize the convenience brought along by cars, we should also be aware that reducing oil consumption and addressing car-related pollution have already become major challenges calling for immediate action.
Replacing oil with electricity to fuel cars has been a trend since long ago. Actually, electromobiles were invented earlier than motor vehicles. In 1886, the German, Karl Benz, “father of cars,” invented the first vehicle powered by an internal combustion engine. However, back in 1834, the American Thomas Davenport had already invented the first DC-motored electromobile, the first of its kind in a real sense. Then electric vehicles (EV) soon substituted for steam-powered ones, thanks to their speed and driver-friendly operation. However, they failed to gain popularity because of battery restraint. In 1908, cars powered by internal combustion engines were invented by Henry Ford for mass production and soon took over the market. Their popularity boosted the development of the oil industry and lowered oil prices, which in turn reinforced the popularity of those vehicles. EVs were soon abandoned.
Yet six decades later, EVs seized the opportunity of the two “Oil Crises” of 1973 and 1979 to challenge traditional cars twice. However, they failed again because of chronic flaws: low cost-effectiveness, inconvenient recharging, and short ranges.
Today, the rise of the PV revolution has granted EVs new opportunities. And here I want to share a story.
Recently, I traveled abroad with national leaders as a representative of Chinese entrepreneurs. On the flight back, I happened to sit next to Li Shufu, president of China’s first private automobile company, Jili. We talked and both learned something new from each other. Of course, our conversation was centered on the topic which concerned Li the most: vehicles. He told me that every kilowatt-hour of electricity an EV consumes allows the car to travel 8 to 10 kilometers, and I was amazed by the fact that so little electricity was enough to power a car. Relating to Hanergy’s technical advantages, I replied: “Covering cars with thin-film PV can create a solar power system with a capacity of 2–3kW, which ensures a range of more than 100 kilometers.” Li was impressed as well because he had not known that thin-film PV was so developed.
The shocking information we learned from each other inspired innovation. We immediately agreed to cooperate in designing solar-powered vehicles. Meanwhile, we also came up with an interesting idea—to install an adjustable solar sail that can increase lighting as needed, generate more electricity and allow the car to travel further. We have already begun the upfront R&D of such cars.
In developing and promoting the use of EVs, insiders make calculations based on the economic indicators of EVs. If an oil-fueled car consumes 10 liters of gas every 100 kilometers, and suppose every liter costs 8 yuan, traveling 100 kilometers would cost 80 yuan. If road conditions and other variables are kept the same, an EV will consume 12 kWh of electricity every 100 kilometers, supposing the power tariff is 0.5 yuan/kWh, the cost for an EV to travel 100 kilometers is only 6 yuan—not even one-tenth that of an oil-fueled car. However, the calculations are only applicable for plug-in EVs. With current PV technologies, it is possible for us to depend on thin-film PV covering the vehicle to generate electricity. If such PV cars can be widely put into use, it will mark the third challenge initiated by EVs to their oil-fueled rivals.
Concerning the battle between PV-powered and oil-fueled vehicles, let’s just wait and see who will be the ultimate winner and dominate the market. The final result is obvious and the traditional auto industry will be subverted, triggering a huge industrial transformation involving billions of yuan.
With the application of the PV revolution in the auto industry, similar energy substitutions in trains, planes and ships should also be within our reach. It sounds like a fairy tale, but in a world making such rapid scientific and technological progress, we have already seen the beginning this fairy tale in reality.
On July 8, 2010, “Solar Impulse,” the solar aircraft flown by the Swiss explorer André Borschberg, successfully completed the first test flight of its kind, setting a record for non-stop flight of 26 hours and 9 minutes. Another Swiss explorer, Raphaël Domjan, cooperated with Swiss and German manufacturers to create a solar catamaran in 2009. The catamaran started its journey in Monaco in September 2009, traveled a total of 60,000 kilometers in a year and a half and finished in Monaco on May 5, 2011. On June 6th of the same year, the world’s first solar train was put into operation.
Household PV Appliances
The influence of the PV revolution is not limited to the power industry, the building industry or the transportation industry. As such a revolution intensifies, the impact will also extend to goods for everyday consumption which are closely connected with people’s economic life. Household appliances are the number one example.
The extensive application of electricity in human life is an important characteristic of the second Industrial Revolution, and its application in consumer goods catalyzed the rapid development of household appliances in the industrial structure.
Currently, widely used household appliances include fridges, washing machines, air-conditioners, TV sets, telephones, computers, lights, electric cookers, etc. All these constitute material essentials in people’s lives; indeed, we can hardly imagine a life without them.
The household appliance industry is well-developed. To take the Chinese market as an example, China Market Monitor Co., LTD, a third-party research institution, predicted that the household appliance market in China would be worth 1,188 billion yuan in 2013, with a year-on-year increase of 3.2%. And appliances in the broad sense, such as computers or telephones, were not included. Otherwise, the size of the domestic market would be even bigger.
The further development of the PV revolution will exert a profound influence on the household appliance industry, an influence backed-up with evidence.
Actually, as we are embracing the third Industrial Revolution, the household appliance sector has already been reshaped by Internet technologies, which are also part of the revolution. At present, profound changes are taking place in the Internet-friendly household appliance industry, e.g., “the cloud appliance,” with successful efforts in fridges, washing machines, air-conditioners, etc. At the same time, with the help of Internet technologies, domestic tycoons like Media and Hair have achieved the mobile interconnection of home appliances.
The PV revolution will improve household appliances in a holistic manner. On the one hand, appliances that used to be powered only when plugged in will now have access to electricity generated from solar power: solar cell phones, solar computers, solar printers, solar lamps, solar induction cookers, ovens etc. On the other hand, the PV revolution will broaden the range of appliances, even taking non-appliances into the sector: solar tents, solar watches, solar tables and solar tea sets, etc.
The booming household appliance industry over the years has made energy consumption and pollution problems even more acute. To address relevant issues concerning industry development, the Chinese government has been focusing on setting standards so as to increase competition in promoting energy conservation and pollution reduction. Appliance industry analysts at S&P Consulting believe that higher standards for energy efficiency would phase out many products, cut the number of producers and reshuffle the industry.
The PV revolution will address issues of energy consumption and pollution for good by strongly impacting the household appliance industry. It will also introduce more investment into the industry as 3D and smart household appliances become a reality.
A Green Home Is Not a Dream
China missed the first Industrial Revolution, and only got involved in the last 30 years of the century long second revolution. We were unfortunate but at the same time we were also lucky in all our misfortunes.
It is easy to interpret our experiences as misfortunes. But by “lucky” we mean: fossil fuels brought about two Industrial Revolutions together with a severe eco-crisis. Since we were not fully involved in the first two revolutions, yet we are ready just in time to catch up with the third, we can grasp the opportunity of developing PV and realize our dream of building a “green home.”
Ecological Crisis Looms Just Ahead
“If civilization develops spontaneously rather than consciously, it will only leave humans with deserts.” One hundred and thirty years ago, Marx warned people of the Industrial Revolution that was developing by leaps and bounds. Sadly, although this quote was highlighted in Marx and Engels: Collected Works, Volume 1, those who led the revolution did not heed its profound meaning. Therefore, human beings keep on walking further and further along the road of “desertification,” seriously damaging the eco-balance.
Through his production and lifestyle, man is accountable for Earth’s ecological problems, especially those caused by the excessive and inappropriate use of fossil fuels.
Taking the greenhouse effect as an example, the scientific community believes that fossil fuel consumption leads to GHG emissions. The increased GHG concentration then enhances the greenhouse effect and causes global warming. Since 1860, the world average temperature has risen by about 0.4 to 0.8 °C. According to an IPCC report on future climate change, CO2 is the major component of GHG, and 90% of manmade CO2 emissions are caused by fossil fuel consumption.
China’s experience with development is inspiring as well. What developed capitalist countries achieved in 200 to 300 years of industrialization only took us 30 years of reform and opening up. However, for that, there is a price to pay. Due to lack of natural resources, we are becoming increasingly reliant on imports from international markets.
Under such circumstances, China has prominent environmental concerns. The total amount of GHG emissions in China has been enormous and the growth is so fast, imposing greater challenges to addressing climate change. China’s cumulative CO2 emissions between 1850 and 1990 only accounted for 5% of the world’s total and little pressure on the environment then. Now, we are already ranked the world’s top CO2 emitter, contributing 24% of the emissions worldwide. As the IEA predicts, China will overtake the EU in cumulative emissions to become the second largest emitting country in the world in 2035.
Environmental issues trigger discussions on many major topics, such as economic development, energy utilization, international competition, people’s well-being and the destiny of human society, etc.
For developed capitalist countries, outsourcing heavily polluting industries like manufacturing to developing countries has already become force of habit. For example, in the last 40 years of the 20th century, after achieving skyrocketing economic development, Japan transferred more than 60% of its heavy industry overseas due to labor shortage, as well as in an attempt to control cost and improve the domestic environment. During this gradient transfer of industries, America has also transferred 40% of its highly-polluting industries outside the country.
Fifty years ago, developed countries were able to shift the environmental crisis to the rest of the world. But today, it is impossible for China to follow suit as Internet technologies are highly developed and everyone attaches great importance to environmental protection.
Therefore, we are faced with the arduous task of tackling these environmental issues. In 2012, the 18th CPC National Congress made comprehensive arrangements for ecological development and incorporated the promotion of ecological progress into the CPC Charter. It was a first in the development or ruling history of any political party. The academic community regarded this initiative as a leap in cognition, an innovation in theory, and a breakthrough in practice. It is a milestone in ecological development which set China on a new march toward sustainable development. It is also a sensible act considering the grim pollution levels in China.
Solving environmental issues in China may be the dream and cause of a whole generation of people. According to estimated statistics from the relevant industries, total expenditures for water treatment in China will register 2 trillion yuan; when it comes to air pollution, the data are similar. So, altogether, treatment costs 4 trillion yuan, but the national fiscal revenue in 2012 was only of 11.72 trillion yuan. What’s worse, although we can calculate the cost for tangible items, the intangible value of time spent is hard to predict, and it may take a whole generation’s time before our final goal is attained.
The PV Revolution is the Way Out
As a bystander at the first Industrial Revolution and a latecomer to the second one, China may have been spared from the development model of “pollution first and treatment later.” Thirty years of industrialization did leave behind some ecological problems, but they are not serious enough to get us mired. If we can seize our chance with the third Industrial Revolution and quickly move into the new energy age, we will probably pay less than Western countries in economic development, energy utilization and environmental protection, thus countervailing the negative effects of the past two Industrial Revolutions.
Fortunately, we are living in a society where technologies evolve with each passing day. Thanks to PV development, China may spend less time than America getting rid of pollution and embracing a clean environment.
The PV revolution favors environmental consciousness. First, solar power is clean and renewable, generating neither poisonous gases nor hazardous wastes. Second, solar power generation is distributed, so it causes no water pollution or noise pollution unlike major construction projects. Third, the urbanization of China is in full swing. The integration of urbanization and the PV revolution will prevent us from making the mistake “pollution first and treatment next.”
Of course, the energy substitution brought along with the PV revolution is only a physical measure to prevent ecological damage. If we want to eradicate environmental problems for good, we have to become environmentally conscious, which is the fundamental solution. In this regard, the “zero carbon home” and “zero carbon community” promoted by foreign countries are good examples of an environment-oriented awareness. The “zero carbon suburb” of Sutton in South London is a good example.
Designed by the famous British eco-architect, Bill Dunster, the community was built on waste-backfilled ground, with every detail focusing on the recycling of sunshine, waste, water, air and lumber. The Beddington eco-village in London is a community taking up one hectare, and is home to hundreds of buildings, thousands of square meters of office area, an exhibition center, a kindergarten, a community club and a football field. Dining in a zero-carbon home, you will find that leftovers are turned into raw materials for heating and power generation. The sloping rooftops of the “zero carbon community” look like waves with solar panels installed on southern rooftops, which serve as the main energy source for the zero-carbon buildings. The facade skin of the buildings comprises several layers (from outer to inner): cement fiberboard, natural insulation materials, bracing structures for exterior walls, and high-density gypsum plaster for interior walls. Such design incorporates all kinds of natural energies, be it the sunshine or rainfall, and transforms them into electricity and drinking water as well as water for other usages.
The Zero Carbon Community, with solar power as its energy source, has a whole package of designs and solutions to minimize the negative impact of human activities on the environment. And in practice, we can break down the idea of a “zero carbon community” into individual solutions targeting water, solar power, and household refuse. Without mature conditions, these individual solutions can also protect the environment. Replacing our most polluting energy with PV dramatically alleviates environmental pressure. It is the substitution of traditional energies with PV and the “zero carbon community” that enable China to dream of an eco-civil development.
PV Contributes to the Chinese Dream
Why do we say that the PV revolution goes hand in hand with the Chinese Dream? The answer to this question explains the significance of PV in China—the PV industry in China emerges right as Chinese PV companies are starting to dream and drive. “The Chinese PV dream” is not only an important component of the Chinese Dream; it is most importantly a cornerstone of the Chinese Dream.
PV Supports the Chinese Dream
The PV revolution is an important component of the Chinese Dream. It provides indispensable physical support to the dream.
After 30 years of reform and opening up, China now stands at an economic crossroads. Our development mode is shifting from relying on investment and export to relying on domestic demand, and our growth model is turning from an extensive one to an intensive one. The ultimate goal of such transformation is the sustainable development of our economy.
In recent years, we indeed have uncovered many shortcomings in our extensive economic growth, including the imbalance between the quality and scale of economic growth, development at the cost of environment, lack in core technical competitiveness, and heavily indebted local governments. If these things remain unchanged, our economic development will be undermined, which will further jeopardize the realization of the Chinese Dream.
To prevent further deterioration, Premier Li Keqiang of the State Council required that measures be taken to regulate economic activities, restructure the economy, streamline government, plan out urbanization and promote economic transformation.
To be more specific, by regulating economic activities, we mean regulating the bad practices which give false signs of economic development. These practices include the oversupply of resources and low efficiency at the micro level. Efficiency here refers to the ratio between input and output. Currently, both the output and input of China’s economy are high, which is quite wasteful. Loss derived from low efficiency is seen as an internal waste in economic growth. There are many ways to achieve economic growth and technological advancement is the most important resort.
The PV-motivated energy revolution harmonizes perfectly with Premier Li’s demands for the regulation of economic activities.
PV stations are not subject to the regional environment. The construction investment is not as huge as that for traditional power plants. Since PV stations are more cost effective, many inefficiencies seen in traditional plants do not occur. The PV revolution can also boost industrial development in a way which represents the future development trend. Taking the automobile industry as an example, it is commonly admitted that new energy cars will eventually replace vehicles fueled by fossil energies. Amid the many solutions of new-energy automobiles, PV vehicles, with their advanced concept and energy efficiency, are destined to be the future. The PV revolution, other energies and the industrial revolutions influenced by PV will definitely play an important part in regulating the economic activities of China in the near future.
By restructuring the economy, we mean balancing the percentage of three particular industries (structural optimization of agriculture, pillar industries, and traditional/modern service industries) as well as to improving the fiscal and taxation system.
The PV revolution will play an active role in economic restructuring. The technology-led PV revolution will breed many energy companies based on PV and other supporting technologies, and the birth of such companies will optimize the energy structure of China. At the same time, if the PV revolution can be widely promoted, industrial companies with high energy consumption will be somewhat relieved from pressure. PV-inspired industrial transformation will lead to the upgrading of other industries. The “zero carbon community” mentioned above shows how new concepts and tremendous changes are introduced to the building industry.
Urbanization refers to the process by which rural people become urban people. An important indicator of urbanization is the urbanization rate: the ratio of permanent residents in a region against total local population. The world urbanization rate is already over 50%. The Outline of the National 11th Five-Year Plan identified the construction of urban clusters as a major means of promoting urbanization. The 12th Five-Year Plan again emphasized that based on big cities, we should cultivate influential city clusters and promote the coordinated development of both cities and towns, with a focus on mid- and- small-sized cities.
Regarding urbanization, there is an important consensus on the necessity of integrating urbanization and ecological development. The current technologies suggest that ecological development is not merely a concept. More importantly, benefiting from PV-inspired technological advancement, ecological development is a crucial way to treat pollution caused by energy consumption. Therefore, the PV revolution and urbanization are two interdependent concepts.
Transforming the development mode refers to the economic transformation and upgrading of China. China’s economy has boomed over the years, but meanwhile, it faces pressure from both home and abroad. In terms of the external environment, the world is speeding up its economic restructuring and a new pattern is taking shape. Developed countries attach great importance to real economy, and expedite developing new energy and new materials to take control of the future of science, technology and industries. As for our internal environment, profound conflicts and problems in industry are more and more prominent. We are facing imbalance in our industrial structure, overcapacity in certain industries, overdependence on investment and export, lack of innovation, core technology and domestic brands, and bottlenecks in energy development. In a word, China desperately needs to kick off economic restructuring and industrial transformation.
As for China’s economic upgrading, backbone enterprises have to innovate and set higher targets in order to upgrade themselves, which is even truer for PV companies with the ambition to lead in the international arena. The international financial crisis has accelerated progress in science and innovation, propelling industrial revolution and restructuring in the world. Developed countries are accelerating strategic adjustments for science, technology and industrial development, trying to make breakthroughs in green and low-carbon technologies. In 2012, America launched a green economic recovery program and the EU started green technology R&D. Both measures were intended to enhance competitiveness and take control. As for China, although it has world-leading thin-film PV technology, on the whole, its crystalline-silicon producing capacity remains huge. Our PV industry is now at a crucial stage that can only be sustained through transformation. Only then can PV technology contribute to the Chinese Dream.
Apart from its economic contribution to the Chinese Dream, the PV revolution has in itself great spiritual value. Values like “sharing” and “harmony” are advocated in this revolution and they will replace values like “possessing” and ”controlling” which took root during the first two Industrial Revolutions. Rooted in the third Industrial Revolution, which is triggered by the PV revolution, the great Chinese civilization, featuring modesty and fairness, will thus further promote other civilizations in the world along with China’s economic and social development.
PV Illuminates New Rural Areas
July 11, 2013 was a special day for the village of Fenghuangzhai in the town of Xinjie (Suizhou, Hubei). The first batch of power generation pilots for rural areas was installed in Fenghuangzhai and the village achieved on-grid power generation. Every year from now on, 20 households in the village will generate 60,000 kWh of electricity, allowing for economies equal to 20 tons of standard coal, and generating economic benefits of 52,200 yuan (based on an electricity tariff of 0.87 yuan/kWh).
PV technology is not only applied in rural areas of central regions, but also in more remote areas. For instance, the countryside in Tibet lacks energy. Large- and mid-sized power plants are concentrated in populous cities. By contrast, only a few small power stations are built in counties and villages. For a long time, people have been using animal manure, lumber, and turf as fuel, putting greater pressure on the already fragile environment. Power shortage is a major roadblock to the development of rural areas.
Some rural areas in Tibet have resolved the above issues with PV power generation. By harvesting solar power, Tibet has made breakthroughs in terms of communications, broadcast TV power supply, and access to non-electrified regions, and it has successfully launched special solar programs, becoming the first and largest administrative region at the provincial level promoting special solar programs.
Rural areas in the Ningxia Autonomous Region are also pioneers of PV solar energy utilization, and the town of Yongkang of the Shapotou District in Zhongwei City is a typical case. In June 2011, 1,000 households in Yongkang Town installed solar panels with a power of 3.2kW on their rooftops, integrating into the urban grid of Zhongwei City via the 511 west optical line of the substation (35KV) in Xitai Town. The project implemented on-grid operation, equipment configuration, grid transformation, tariff estimation, and BIPV construction. After completing the project, local farmers can now use solar power for lighting, cooking, water-heating and showering.
The PV revolution has improved the living standards of local people, but also changed the local production model.
On March 1 2013, a PV-integrated 8.4 hectare vegetable greenhouse in the village of Zhangjiayingqian of the town of Daotian (Shouguang, Shangdong) went through all approval procedures for grid integration, and was successfully integrated into the State Grid. This demonstration park can generate 1.5 million kWh of electricity annually. Besides toughened glass and PV panels, the greenhouse’s rooftops are equipped with waterproof and photic insulation sheet. PV panels on the rooftops protect vegetables from ultraviolet rays and pests, to improve the quality and amount of produce. While generating electricity, PV panels ensure and facilitate the photosynthesis of plants.
The PV vegetable greenhouse in Shouguang, Shangdong is not a rare example. PV technologies also have been applied to village lighting, pest killing and water-pumping systems. Let’s take Xing’an County, Guiling City, in the Guangxi Autonomous Region of the Zhuang minority as an example. So far, 105 natural villages in the county have been endowed with 1,558 solar street lamps. This resulted in breakthroughs in solar insecticidal lights and solar pumps.
In conclusion, the PV revolution is the path to follow in order to improve production, our lifestyle, the sustainable utilization of rural infrastructures and environmental protection in rural areas.
The Sunshine Culture Reshapes the World
The second Industrial Revolution, represented by coal and oil, was based in a “black gold” culture. The third Industrial Revolution, inspired by PV, worships a sunshine culture.
In that sunshine culture, industries are developing from centralization to distribution, and organizations are shifting from being intensive to being flat. People will believe that resources are used but not owned by them, and they will advocate wealth-sharing rather than monopoly.
Solar PV will turn our mindset and actions upside down.
From Foes to Friends
The impact that PV exerts on culture and politics reminds me of a film, Black Gold. The film narrates a story which takes place in Arabia in the 1930s, as Americans find oil midway between two tribes’ villages. The chiefs of the two tribes disagree with each other on whether to exploit the oil well. They have the following conversation:
The opponent (O): “The Quran does not allow us to use oil or cars!”
The proponent (P): “If Allāh forbids us to use oil, why does he allow oil to be buried under our feet?”
O: “What on earth do you what?”
P: “I want an oil-rich land.”
O: “No way, I’ve promised it to…”
P: “You have no right to make promises; it does not belong to you.”
O: “Is it yours?”
P: “It belongs to them (Arabian tribes).”
O: “Then what will you use it for?”
P: “I will build hospitals and schools.”
The two tribes fail to reach a consensus and conflicts eventually escalate into a tragic war. The opponent and proponent represent the traditional Arabian culture and the “black gold” culture. The film is fiction. However, in the Gulf region, the evolution of the oil industry just might be even more intricate than the film.
At the beginning of the 1930s, after 20 years of war King Abdul-Aziz founded the Kingdom of Saudi Arabia, which was very poor at that point. A British advisor, Harry, told the king: “With numerous treasures lying under the ground, what is the point of being worried? You have abundant oil and gold underground, but you don’t allow others to exploit them.”
The king changed his mind and signed a contract with Standard Oil, agreeing to lease massive areas of land to the US company for 60 years. This agreement opened the Middle East to Western countries to exploit oil. And thus the “black gold” culture was transferred to the West with the sounds of tens of thousands of drills.
To the Arabians, “black gold” means avarice. In America, where the term was coined, “black gold” also has the same meaning. John Davison Rockefeller, an oil magnate who owned Standard Oil, was the forerunner who entered Saudi Arabia. He wrote a letter to his son: “If you carefully review history and human activities, you will get the conclusion that every society is established on greed.”
I think Rockefeller’s interpretation of greed is only valid in the second Industrial Revolution. Our generation is reading the last page of the second Industrial Revolution and turning to the first chapter of the third one. We will bid farewell to the “black gold culture” and welcome the “sunshine culture.”
The sunshine culture is a culture of harmony. This means two things. The first is harmony between man and nature. “War against nature,” “defeating nature,” and “man vs. nature” are cultures that have been punished by nature. The broad application of solar power, “chlorophyll economy,” and “green life” are the correct approaches for sustained development and the survival of mankind. The second meaning is harmony between people. This includes people in the same country, as well as people from different countries.
“We only have one Earth.” This is the reason for friction when fossil energies rule the world. However, when we have infinite solar energy, when we have to deal with global warming together, when we share economic achievement, the same quote becomes the most practical reason for human beings to forget about conflicts and start thinking about cooperation. To start making friends instead of foes.
Reshaping the Scale of Economy
From foes to friends, we see the impact PV exerts on politics and culture. From an economic perspective, PV is going to reshape the scale of the world’s economy.
In his book, The Third Industrial Revolution, Jeremy Rifkin summarizes world economic trends. He thinks that a flat world economy is the trend of the third Industrial Revolution. To be specific, the substitution of fossil energies by solar power will turn the focus of economies of scale from centralization to distribution. Centralized power generation will be replaced by distributed power generation; power consumers are turned into power producers as generation, supply and consumption of power will become the duty of the consumers themselves. There will no longer be a monopoly in the entire energy system, but coordination among multiple players in the game. The manufacturing industry will become decentralized, thus forever changing relations among manufacturers, suppliers, and consumers.
The Internet enables us to see such changes. Information delivery used to be an individual activity without any scale; later on, communication became a professional activity, whose professionalism was embodied in the centralized scale of communication. The marriage between the Internet and the economy gave rise to the “Internet economy,” which promotes distributed scales. In 1999, Nike launched its online customization business. Every customer could choose different soles and colors from the options provided online and even print names up to 8 letters long on shoes. At the same time, online shopping platforms like Taobao came into being. According to statistics on Taobao, in the first half of 2012, the number of registered users totaled 470 million, and the online transactions in that year amounted to 800 billion.
Nike and Taobao are examples of two different industries justifying the forthcoming changes in the world economy. Judging from reality and trends, the PV revolution will transform the world economy mainly through the phasing out and reshaping of large companies.
We can draw a conclusion from previous Industrial Revolutions: energy revolutions trigger Industrial Revolutions which give rise to large companies. Many of the world Fortune 500 are energy companies or companies closely linked to the energy sector. Changes in energy structure lead to changes in economic models. It should be assumed that the PV revolution will transform those large companies.
Besides changes in the macro economy and large companies, the production model of human economic society will also be reinvented. We have witnessed modern industry replacing the handicraft industry. Industry, whose scale is based on uniformity, improving efficiency with rigorous organization, and making profits with scale and efficiency, defeated the handicraft industry, characterized by customized products, independent labor, and low efficiency.
The third Industrial Revolution will overturn this replacement. In essence, elements like the freedom of individual behavior and personality in the handicraft industry will be integrated into traditional industry in order to overcome the weakness of traditional industry. In a sense, the third Industrial Revolution will promote handicraft industry and customization and reject large industry and uniformity. The development of flexible manufacturing and the 3D printer has given us more possibilities in the future economy. In fact, mass production and customization contradict each other. The beauty of mass production is diminishing marginal cost. However, if we continue producing massively, we may suffer great cost from the customization of such products.
Reconciling the contradiction between mass production and customization depends on a flexible manufacturing system, which is composed of three sub-systems—information control systems, material logistics systems, and NC processing equipment. Based on group technology (GT), the systems aim at improving organizational management for multi-category and small-batch production, resulting in economic outcomes as good as those seen in mass production.
The fundamental principle of GT is that it is based on the similarities of the structural features of parts, the engineering process and processing methods. It systematically groups all product parts, putting parts with similarities into the same group, setting up different processing units targeting different parts with corresponding machine tools. Such re-assembly turns small-size batch productions into big-size ones, tremendously improving efficiency.
The BPIV revolution with flat reinvention will provoke a series of transformations in the world economy. Against this backdrop, old corporate systems and monopoly powers will be demolished, and large companies will have to promote more flexible production models, thus reshaping the scale and structure of the world economy.
From “Exclusive Ownership” to “Sharing”
The PV revolution will also change our mindset in regard to consumption. The Sunshine Culture will lead people to prefer “sharing” over “exclusive ownership.” Things in limited quantity eventually trigger competition. As black gold, oil and coal evoke greed and desire, which can lead to pillage and war. However, pursuing something found in infinite amount is meaningless, and better utilization of such things becomes more important. Solar energy can never be exclusively owned by anyone.
In The Third Industrial Revolution, Jeremy Rifkin pays a compliment to car rental, online music services, and timeshare vacations, describing them as the “sharing” of the third Industrial Revolution and believing that they are changing our positioning and ideas about economic theories and time.
Rifkin thinks that, in the traditional capital market, profits are derived from margins of transaction costs. That is to say, in each link of the value chain, sellers charge customers more to reap profits. The end price of goods and services reflects this price hike. In the third Industrial Revolution, however, the transaction cost of information and energy is almost zero. It is impossible to make marginal profits. Therefore, we have to redefine profit.
Many others agree with Rifkin. For example, Rachel Botsman, in her book What’s Mine is Yours: How Collaborative Consumption Is Changing The Way We Live, commented on the phenomenon of “3 million people in 235 countries seeking short-term accommodation via the website of Couchsurfng,” saying “it has forced people to rethink private property, which, to some extent, might be a revolution as significant as the Industrial Revolutions.”
However, I don’t believe the “sharing” above is authentic “free sharing.” For example, the free download of music and books mentioned by Rifkin is a misleading concept because it is a violation of intellectual property rights. Some major search engines allow people to upload resources, namely other people’s works, to the Internet, making the search engine a huge database. Unauthorized uploads are considered copyright infringement. Would a new business model built on illegal activities be sustainable?
Chris Andersen, author of The Long Tail: Why the Future of Business Is Selling Less of More, wrote another book named Free: the Future of a Radical Price. He believes that a free business model on the Internet is emerging. He lists two free models: one is free for all, e.g., online news. Another is free for some users but charges other users money, thus providing them with better services and more information. As for the second model, (e.g., instant chatting software), software vendors first provide free services to users to gain popularity, and then develop value-added services and sell them to some of the users. The money paid by these users covers the operational cost and profits of the Internet company.
Based on the above analysis, even users of free services are assuming costs which are embedded in the sharing model, which is hard to identify because of the interest chain in the Internet business model. However, authentic sharing is not about gaining yields.
With changes brought to the economic system by solar power, exclusive ownership will become increasingly less important while sharing will become more significant. I’m not saying that there will be less exclusive ownership: sharing inherently ends with individual ownership. Sharing does not stand in the way of ownership, and people are free to select the information they need.
The new energy revolution combining the Internet and new energy together will create distributed power plants—relying on the omnipresence of solar power—and the smart interconnected grid, which will promote the culture of “sharing.” In my opinion, sharing is not a business model, but a social ideal, the theoretical cornerstone of the third Industrial Revolution.