What does “Power” mean to you?

If you think about it, there are only a handful of things that we have control over, and as
a result, we are often faced with external challenges that require alternative and
decentralized solutions. Fortunately for us, improvements in technology over the
decades have given billions of people worldwide access to all sorts of freedoms and
luxuries. This, coupled with the loss of trust in the centralized traditional systems,
volatile electricity prices, frequent power cuts, depending on where you´re from, and
other factors, have pushed people to seek out renewable energy solutions. While there
are many exciting topics to cover, the focus here is on the shift towards renewable
energy, namely solar systems otherwise called photovoltaic(PV) systems, which provide
us with the ability to take control of our own electricity needs. Over the years, we have
seen major improvements in the efficiency of the panels and therefore made solar
solutions more affordable and viable in areas with plenty of sunshine such as the
Algarve.

Price and efficiency

According to the World Economic Forum, the cost of solar has dropped around 80%
over the past decade. This is a result of efficiency improvements, allowing solar panels
to generate the same Megawatt hours using fewer panels. The overall aesthetics of the
panels have also improved significantly. For example, the first photovoltaic(PV) solar
cell panels in the 1960s had an efficiency of around 14% and were much bulkier
compared to some of the sleeker panels with over 21% efficiency made today.

Furthermore, If we were to do a comparative analysis of the long-term cost benefit of a
solar installation in relation to the cost of yearly increases in on-grid electricity prices
over a 5-year period or more, we would begin to understand why the demand for solar
has continued to rise in places such as Portugal, which conveniently gives off plenty of
sunshine throughout the year.

Swanson´s Law and Evolving Photovoltaic Systems

The decrease in the cost of solar energy is a result of evolving technology and the
overall economics of the industry, a better way to understand it in terms of economics is
by using Swanson´s Law which is defined by an article by Synchrosolar, according to
the article, it is the observation that the cost of production for solar panels reduces by
around 20% for each time the total solar capacity doubles. It is no new phenomenon
that prices of certain technologies decrease as they evolve. There are various examples
to compare this with, such as the first available computer for commercial use compared
to current computing technology which is much smaller in size and more affordable.

Furthermore, it is essential to consider that the current availability of affordable solar
solutions we have today is not necessarily always going to stay constant, for instance,
when supply cannot meet demand due to potential shortages in components used for
production, then, instead, we would see a price increase and extended waiting periods
for specific materials. We saw, as a result of lockdowns, more people began to work
remotely which resulted in computer chip shortages. Prices skyrocketed and are still
higher than they were pre-lockdown. It is useful to keep that in mind because the same
may occur for the solar industry. Potential factors, such as a sudden global energy crisis
that could last for months or maybe years, could directly affect the price of gas and
electricity, which may naturally increase the demand for renewable energy solutions. If
that were to happen, and supply could not keep up with demand, solar modules such as
inverters, batteries, and photovoltaic panels would see a sudden increase in price. Such
shortages in the solar industry have occurred in recent times with up to 1-year waiting
periods for solar battery modules. So from that perspective, and the tendency for history
to rhyme, is it not better to think ahead of the curve?

A shift to renewables

If the last few years have taught us one thing, it is that we cannot always rely on the
traditional system to work when we are hit by unprecedented times. You cannot predict
the future, but you can make informed decisions based on the data we have.

According to an article from Ember, Portugal now uses wind and solar to produce over
50% of its total electricity, which puts it ahead of many countries for the 2030 renewable
energy production goal. It is clear that more homeowners around Portugal are now
opening up to the idea of solar solutions for the various benefits, which include,

● Energy independence
● Saving on electricity or not needing to pay for it at all
● Cleaner energy by reducing emissions
● Cost-effective solutions compared to a decade ago
● Ability to live and produce electricity in remote areas with less infrastructure
● Easy to maintain
● Can serve the purpose of creating shade

These benefits have helped the industry grow and serve as a purpose for the solar
industry to expand even more. South Africa for example, has seen a massive boom in
solar energy amidst the ongoing energy crisis which has resulted in frequent “load
shedding”, leaving homes with scheduled power outages throughout the day.

In conclusion, the price trends for on-grid electricity have shown to be forever
increasing, whilst solar systems, which include panels, inverters, and batteries have
become more affordable. The technological advancements in photovoltaic efficiency
have created the ideal scenario of being able to generate more power for a fraction of
the cost. However, nothing is constant, and as we have seen before what supply chain
shortages can do to the price of certain materials and components, it may be better to
think ahead before any potential bottlenecks in the supply chain. Portugal has made
great progress in its renewable energy sector and is ahead in future-proofing itself from
any potential energy crisis that may occur.

Disclaimer, It is important to understand that everything mentioned in this article is not
intended to be investment advice but rather educational. It is up to you to do your own
research and decide whether or not an investment in solar makes sense. The benefits
listed earlier should guide you as to what solution you may need. Here at Solar2Power,
we can design a solution for you, using the most efficient and premium photovoltaic
systems to power your home. Once you have an idea of what you would need, feel free
to contact us directly through the link below for a quotation!

Click here for a quotation

John Langford
Marketing & Sales Manager
+351 914 461 021
info@solar2power.pt

References

Ewen, M. et al. (2023) Wind and solar produce more than half of Portugal’s electricity for the first time, Ember. Available at:
https://ember-climate.org/press-releases/wind-and-solar-produce-more-than-half-of-portugals-electricity-for-the-first-time/
(Accessed: 30 August 2023).

Solar 2018: What is Swanson’s solar price law (graphic) (no date) Synchro Solar. Available at:
https://www.synchrosolar.com/solar-prices-drop-what-is-swansons-law-with-graphic.html (Accessed: 30 August 2023).

The price of solar power has fallen by over 80% since 2010. here’s why (2021) World Economic Forum. Available at:
https://www.weforum.org/agenda/2021/11/renewable-energy-cost-fallen/ (Accessed: 30 August 2023).

Solvasto (2022) Solar Energy in Portugal: The future is more present than ever, SOLVasto. Available at:
https://solvasto.pt/solar-energy-portugal/?lang=en (Accessed: 30 August 2023).

(2023) Solar boom in South Africa as private investors sweep in with R300 … Available at:
https://businesstech.co.za/news/energy/707872/solar-boom-in-south-africa-as-private-investors-sweep-in-with-r300-million/
(Accessed: 30 August 2023).

Harding, A. (2023) South Africa load-shedding: The roots of eskom’s power problem, BBC News. Available at:
https://www.bbc.com/news/world-africa-65671718 (Accessed: 30 August 2023).