Photovoltaic Systems: Mankind’s hope for the future

As the planet runs out of fossil fuels, humans need to find viable alternatives to produce energy and electricity if they are not to return to the dark ages again. Already rising fuel costs are putting a strain on humans. Aside from temporary ups and downs this strain is bound to increase in future since simply put, we reduce the amount of available fossil fuel every day we live while no new such fuel is being produced. It takes millions of years for mother earth to produce these fuels that have driven modern civilization over the past few centuries.

Photovoltaic systems that produce electricity with help of sunshine are emerging as a promising alternative. The primary difficulty so far has been cost but their costs have been coming down over the past few years. Already for certain applications they have become competitive with traditional methods. For example the cost of electricity from these solar cells is cheaper than diesel generator sets for stand alone operations such as agricultural water pumps, communication towers etc. Part of the cost is that of the accessories such as invertors and storage batteries. However, when these are eliminated as they can be when they are used for daytime operations like water pumping or when they are supplementary to a grid, then costs come down further. Such systems are most attractive in countries with abundant sunshine such as India rather than Europe. Another feasible battery less application is air conditioning in hot summers. The sun is up when space cooling is needed most.

Some experts have argued against photovoltaic systems in Europe on the basis that there are cheaper methods available to reduce carbon emissions that fossil fuels produce. This is true because the cheapest way to reduce carbon emission is just to plant some trees. However in this article photovoltaic systems are not being viewed as a means to reducing carbon emissions but rather as one to produce affordable electricity.

Countries such as India that import crude oil would do well to encourage and maximize use of photovoltaic systems. As already mentioned, this electricity is already competitive in certain stand alone applications. A second method is for governments to permit individual home or commercial owners to connect their small systems to the grid with a payment for the electricity they supply to the grid whenever it is surplus to their needs. Home owners can thereby reduce their electricity bills and even earn a profit.

Whenever governments are asked to encourage a technology the mind of administrators goes towards providing subsidies. This method proves to be counter productive in the long run. Not only does it strain  government budget, it also distorts proper development of technology by distorting prices. It also encourages creation of inefficient industries that live on subsidies. There is another way that governments can encourage  rapid development of photovoltaic systems. It is through a tax policy. In a much older post this blogger had suggested the use of taxation policy for reducing carbon emissions. This blogger is happy to announce that such policies are now implemented in several countries in various forms. Here is a proposal to encourage the use and development of photovoltaic systems:

Let the government announce that any industry that has a turnover of more than fifty percent from sale of solar photovoltaic panels will be completely exempted from corporate taxes.

Such a regulation will result in cheaper photovoltaic systems and encourage many industries to produce this product in order to make use of generous tax benefit not just on their solar panels but also the other fifty percent of products whatever they may happen to be, even soaps and perfumes, if not the accessories of the solar panel. True the government would lose some tax revenue but they would gain by reducing their trade deficit for importing crude. This system can also become a savior of many communities where electric supply from the grid is poor or absent.

The present tax concession is just one suggestion. Other innovative solutions may be devised. A second idea needs consideration since that might encourage private owners to introduce SPV systems in their homes is if an additional advance could be arranged for the home owner that is deducted monthly by adding to his electricity bill. If the home owner contributes to the grid he would not feel the burden of this deduction and eventually perhaps over an eight year period would end up with a free system. 

Needless to say all these proposal are effective only if home owners are permitted to link to the grid so that they can cut down their bill or even get a credit if they feed in surplus. It would provide individual homeowners with an incentive to install such systems and give a huge boost to such production. That is something that has not been done in many countries yet and needs to be done in any country that is serious about increasing use of Solar energy for electricity. It is hoped that International climate change groups that are focusing on broader issues would focus on such specific issues as well,  over which agreement can be achieved more readily and thereby help make the planet greener, sooner.

 UPDATE, August 22. 2014

India and other countries need to catch up on the benefits of linking home systems to grid quickly as revealed by the following:

“In the last several years solar installations in the U.S. have increased approximately six-fold from 2,000 megawatts to 12,000 megawatts as installation prices have dropped by more than half. Approximately 200,000 American homes have already gone solar and SolarCity, a top residential solar provider, estimates that another 30 million could benefit from installing a solar system.”

From: http://thinkprogress.org/climate/2014/08/21/3471998/homeowners-associations-solar-power-future/