Time for a lesson in commodities, systems integration, and hopefully a little comment on the value of jointly intentional group agency to develop solutions, nerded-down with the smooth phrasing: co-creation of knowledge.
But first, the News:
GreenTech media posted that: “Dow Chemical Sheds Its Solar Shingle Business”. My gut reaction was: finally, it’s about time. Dow was about the last of the niche photovoltaic (PV) manufacturers who were trying to carve out a commercial space for upper/upper-middle class homeowners to purchase conspicuous displays of wealth and/or to purchase carbon indulgences. They had a great idea born of the 1990s. It didn’t work. Why? First, because PV modules are global commodities, surprisingly similar to barrels of oil. Second, because solar adoption is now ultimately about people, working together to co-create the new identity of solar in that framework that I keep calling Solar Ecology. Let’s take a look.
Let’s say you just finished dropping off your kids at the swim/soccer/theatre summer practice and you see your tank is empty (yes, you know that you still have a car or truck, and I don’t care if you ride bike to commute sometimes this is a story, shutup). When you go to the gas station, do you request a super-special “magic octane” fuel made by Apple, or do you just pump some regular in and call it a day (soon to be followed with a beer, do you know how much kids summer swim/soccer/theatre costs?). You get the regular. Why? because special gas does jack for your car, and oil or gas is a fungible commodity–meaning gas is gas is gas (or petrol is petrol is petrol). You buy regular gasoline in State College, PA, and it’s the same darn thing as in Hibbing, MN. Both are capable of mutual substitution, and both products originated as barrels of oil bought and sold on a global market. Take a look at an excerpt explaining crude oil markets from one of our energy courses taught at Penn State by Prof. Seth Blumsack (EME 801: “Energy Markets, Policy, and Regulation”):
“Crude oil is one of the most economically mature commodity markets in the world. Even though most crude oil is produced by a relatively small number of companies, and often in remote locations that are very far from the point of consumption, trade in crude oil is robust and global in nature. Nearly 80% of international crude oil transactions involve delivery via waterway in supertankers. Oil traders are able to quickly redirect transactions towards markets where prices are higher.
Oil and coal are global commodities that are shipped all over the world. Thus, global supply and demand determines prices for these energy sources. Events around the world can affect our prices at home for oil-based energy such as gasoline and heating oil. Oil prices are high right now because of rapidly growing demand in the developing world (primarily Asia). As demand in these places grows, more oil cargoes head towards these countries. Prices in other countries must rise as a result. Political unrest in some oil-producing nations also contributes to high prices - basically, there is a fear that political instability could shut down oil production in these countries. OPEC, the large oil-producing cartel, does have some ability to influence world prices, but OPEC’s influence in the world oil market is shrinking rapidly as new supplies in non-OPEC countries are discovered and developed.” –credit: Seth Blumsack
In a similar fashion, solar PV modules (the blue or black panels) can make electricity from sunlight with relatively similar conversion efficiencies, and have competitive costs per unit of power conversion. Plus, you can ship a crate of PV modules around the planet as easily as a crate of smart phones. Meaning: the unit cost (dollars per peak watt) of PV is comparable globally, and everybody just wants regular PV power). Don’t have quite enough efficiency? This is flow-based systems thinking (e.g. oil is stock-based systems thinking)…just add another PV panel or two.
Here’s the rub. Nobody really cares what kind of PV module you buy in the end–and really, nobody but you, your state Public Utilities Commission, and your suburban homeowners association cares if the PV is on your roof at all. Electricity is electricity is electricity. I imagine looking back in 20 years time: there will be a blip when people will have cared about publicly displaying their use of PV to generate low-carbon electricity. Even now, there is even a phenomenal contagion effect to having PV on your house and your neighbors getting PV on their house. But someday folks are going to find out that they don’t really need the PV exactly on the roof, and it will be like finding out that you don’t really need a desktop computer in your house to check your email (working in the “cloud” means email is in your smart phone, at the library, school, or any number of distributed devices).
Solar PV is a Commodity
During the 80s, 90s, and 00s, solar grew to be interpreted exclusively as PV (solar photovoltaics to convert light into electricity). Solar was still expensive, and the emerging goal from the top was to cram photovoltaics into the built environment–arguably using poorly construed financial and engineering arguments. Many years and many dollars went into developing “nifty” variants of PV tech for what was called BIPV (Building Integrated PV). It was like a supply-side techies wet dream. You replace the façade of your home (roof/window/wall) with a specialized PV module, and somehow reduce the cost of the PV module…(the financial analyses get very grey here, as the BIPV tech was ultimately more expensive than the commodity). Unfortunately, a systems integration message was lost along the way, and you often designed a unique device that worked worse than a traditional PV panel (overheating is undesirable in PV), and a building element that functioned worse than a traditional roof/window/wall. A snippet from my textbook Solar Energy Conversion Systems (Academic Press (2013)):
One of the systems that are popular targets for integration are buildings, hence the term Building Integrated PV (BIPV). However, we should note that a building itself is composed of many complex systems such as roofs, windows, awnings, and walls–each system composed of real components that functioned together as a whole. The historical meaning of BIPV originated in the 1980s as a cost reduction strategy, whereby a designer was expected to remove a functional part of a wall system or roof system within the built environment and replace that component with a photovoltaic module. The exchange in cost for the removed component (such as a shingle or a pane of glass) was supposed to defray the net cost of installing the photovoltaic module–in essence, sacrificing a functional piece from the whole to make room for cost. Unfortunately, integration for better building costs does not imply integration with the goals of the system. From this perspective, a window–mounted air conditioning unit would be classified as “building integrated AC,” rather than the actual BIAC from a forced air exchange and integrated ducting… –credit J. R. S. Brownson
In essence, Bill Gates and peers have been working to save the world (or to grow their own vision of the world) by proposing “energy miracles”–a better technology to capitalize upon from the top-down. Meanwhile, the rest of the world is working with what we’ve got, just making good use of what is available from the bottom-up, or deciding to not make use of a newer technology at all. A “special” kind of PV panel is no longer anyone’s vision in the solar field–because they are fungible commodities: interchangeable, substitutes abound, and there is no significant cult of product to be found in a PV module at present. And so, there are very few niche PV industries (e.g. ECD, Evergreen, or Solyndra) really left standing; the belated Dow solar shingle enterprise was ultimately just one of the later additions to the graveyard, perhaps propped up by a very large petrochemical industry parent company. For an annual update on the recently deceased players of the solar manufacturing world, see Rest in Peace: The Fallen Solar Companies of…. All is not lost in though, as one can observe when solar technology cycles (and the emergent shakeouts) are compared to semiconductor memory business cycles.
While working with the Solar Decathlon team from 2007-2009, we developed a new term to be more specific, called Systems Integrative Photovoltaics. SIPV was used to describe our work in GRIPV systems (Green Roof Integrative PV), but still leaves out the dynamics of the locale and the stakeholders from solar design solutions.
SIPV: Systems Integrative Photovoltaics. Coupling performance between system and surroundings, including microclimate effects of irradiance and temperature. From a sustainability systems perspective, SIPV would include increasing ecosystem resilience.
As I noted in my work on Solar Energy Conversion Systems, it is well past the time to move beyond removing parts to make room for PV.
Solar PV is about People
There is also the deep challenge of incorporating solar awareness and the story of solar into our mindsets. So not only is solar a commodity exposed to a global market, but it also is a technology that has not experienced a significant period of social reflection as to its place in the new energy-information economy. As such, entrepreneurs and communities will really benefit from thinking about what behavioral economist Prof. Sendhil Mullainathan calls “the last mile” problem. Problems that we seem to know how to solve, but collectively don’t achieve. Here he is talking about technology solutions in medicine and agriculture, and the challenge of technology when the innovators miss the opportunity to “recognize the complexity of the human mind”, and address the nudge to solve social challenges that are linked with technology.
Change is in Co-Creation
The challenge: Solar energy as a resource is thoroughly decentralized, pretty much non-exclusive (you can’t block the Sun for the most part), and highly-context dependent. Solar energy design and planning depends a lot on societal norms, meteorological and climate regimes, and yes, economics. Think about local organic farming, energy efficient building design, even grape growing for wines. It’s all about the locale: what we would call the contextual constraints in space and time the local solar resource, local ecosystems, local energy costs, and local policies (i.e. all solar is local). It’s also closely tied to the preference and values of the participating stakeholders surrounding a community. If the people don’t see a local value to solar (let’s keep using PV as a solar example), no amount of nifty technology will sway them in the short term. As such, there are relatively few “turn-key business” solutions in solar photovoltaic energy to deploy at a major commercial level (that certainly doesn’t stop innovative companies from trying, though). So we need a shift, a transformation in solar discovery that addresses local community and personal needs, rewards local knowledge, and aligns with the regional ecosystems supporting the community at hand.
The key, embodied in the Solar Ecology school of thought, is working with people: working with stakeholders to co-design or co-create a systems integrative solution; working with our communities in the places where they live, and listening to the unique and place-based ways that they embrace the space that they live and work in. I do love words, and co-creation is a beautiful term that has emerged to describe working among all stakeholders, to collectively align and form a localized integrative design strategy. When used skillfully, co-creation of knowledge can mean a multi-stakeholder engagement process for learning and implementation of localized, meaningful solutions–here in solar design. In the building design world, this would be called the integrative design process, tested in practice for years by architects and by my friends and peers at 7group, based in PA.
And so, almost a decade after beginning solar team work at Penn State with the advent of the Solar Decathlon, I am continuing my work among large teams of people as an act of design. I have found amazing discoveries occur while working with communities, here in Central PA, and as far off as Burkina Faso, West Africa. I am rediscovering that the key to solar transformation and solar adoption: pay more attention to people and place, and less attention to the flashy novelty of the newest tech or materials.
Now get going and dig in with your own community for new discoveries in Solar Ecology. There is a new age of energy exploration out there!
-JRSB
More Reading is Fun!
- More reading on the Global Markets for Crude Oil can be found in my colleague Prof. Seth Blumsack’s course “Energy Markets, Policy, and Regulation” from Penn State. This course is open content licensed under Creative Commons CC BY-NC-SA 3.0, as a part of the Open Educational Resources initiative of Penn State’s John A. Dutton e-Education Institute.
- More reading on Integrative Design from 7group. “7group is a multi-disciplinary collaboration of leading professionals dedicated to developing sustainable and regenerative solutions for the built environment.”, and they literally wrote the book on integrative design.