Peak oil is closely intertwined with the solar industry.
Solar energy is one of the few alternatives available to us as a replacement for fossil fuels.
1. PEAK OIL AND THE FUTURE OF THE SOLAR INDUSTRY
Solar energy – The solution that helps us overcome peak oil, our current energy predicament.
Peak oil production is likely to have been reached around 2007, at least as far as conventional oil reserves are concerned. Oil reserves discovered will not be as commercially attractive as those we have found in the past. Their economic value will probably be much lower.
Most of these reserves will be unconventional oil reserves. We have found and exploited the crude oil that is easy to extract. This oil was found nearly 100 years ago, beginning with exploration of oil deposits in the Middle East, Eastern Europe, the East Coast of the United States, and Central Asia. New oil discoveries will be more difficult to extract. We will likely see higher extraction costs and more cumbersome processing of crude oil. This could lead to a lower energy return on investment (EROI) ratio.
However, the energy required to extract the oil will spiral upward, driving up costs significantly. This may mean that we need to look for better alternatives in terms of energy sources. Unfortunately, there are not that many.
Solar energy offers a suitable alternative to fossil fuels. However, it is unlikely that we will rely solely on solar and wind energy. It is likely that we will supplement these energy sources with hydropower and geothermal energy – and more likely with nuclear power.
2. MARKET SIZE OF PHOTOVOLTAIC SYSTEMS DEPENDS ON THE ENERGY YIELD
What really matters to us is what we get out of a given energy resource. The sun is such an amazing source of energy. And the energy yield determines which energy sources will prevail in the future.
An important question of our time is how we can satisfy people’s hunger for cheap, environmentally friendly and constantly available energy. As the twilight of fossil fuels is approaching, humanity must find alternatives to the current energy paradigm. The most readily available alternative for a future energy supply is solar energy. Of all renewable energy technologies, solar has the largest footprint globally and make the greatest contribution to our energy future. The reason for this is the continuous availability of solar energy as a primary energy source.. Photovoltaics has a high energy return energy investment ratio.
Whether photovoltaics makes sense or not depends on many factors, including the location of the solar plants and the energy conversion rate. However, we must also include maintenance and other operating costs in our energy return calculation. For example, the energy costs for transport to the factory, installation and cleaning of the solar modules are not deducted from the energy return. Nevertheless, they are essential cost components. Cleaning the solar collectors costs a lot of energy and reduces the energy return. Therefore, solar panels look better than they are in terms of their viability as a long-term investment.
We must remember that solar collectors have a limited lifetime. The energy yield of solar collectors cannot be maintained throughout the life of the solar system. Energy density is another point to consider. The energy density of the solar panels slowly degrades over time.
3. WHAT ARE THE FUTURE PROSPECTS FOR THE SOLAR INDUSTRY?
We believe that photovoltaic systems continue to be good investments. However, they are only an option for the individual investor if their construction and operation is accompanied by generous subsidies. This would inevitably mean that levies could be imposed on the use of fossil fuels in the medium term. If you want to switch to renewable energy, this is not possible without subsidies. The simple fact remains that fossil fuels have a higher EROI.
This also depends on your perspective and investment outlook. The statement that solar energy will not be competitive with other energy sources due to low EROI would imply that newer technologies such as solar energy will not be viable in the short to medium term without subsidies. Large-scale renewable energy implementation could be hindered by a lack of investment in research. This is important to overcome the low energy return on solar panels.
In our humble opinion, the energy return of photovoltaic systems will not compensate for the shortage of available fossil fuels in the coming years. We also expect demand for fossil fuels to increase. Peak oil will hit society hard. It will affect all of us and increase the operating costs of fossil fuel and renewable energy plants. We will no longer be able to supply as much energy as in the past to meet the daily needs of industry and commerce. This may initially take the form of higher energy prices. But photovoltaics will definitely smooth the energy transition to get from A to B.
We can imagine a mix of nuclear and renewable energy sources in the future. That may apply more to industrialized countries and depends on local conditions. There are so many variations. Civilian use of nuclear energy requires a very different risk assessment. This should take into account a variety of aspects. Such an assessment should not only consider the energy yield of a particular energy source.