Paper Example on Solar Power: Cost Reduction for Grid Parity

The costs of solar around the world are rapidly dropping. However, solar energy remains to be more expensive than other alternative forms of renewable energy. The sectors that deal with solar power are still in need of policies implemented by the government for their support. These policies are primarily driven by goals and objectives that go way beyond just realizing and gaining grid parity. Achieving grid parity by rapidly reducing the cost of solar electricity remains to be the ultimate societal objective (Dickinson, 2018). The reason is that, through this means, there will be a facilitated widespread solar deployment without necessarily requiring additional financial support. Many governments including the US government, the Russian government and the China government, through the recent crisis in the economy have been forced to venture into the use of austerity means. This has so far reduced their zeal for constant subsidies for purposes including the development of solar. The US has adopted various policies regarding solar power that have been able to affect the policies of other countries and in particular Russia and China in their policies for solar power energy (Dickinson, 2018). The local levels, as well as the federal state, are responsible for shaping the policies on renewable energy in the US. However, the question remains to be, are the policies effective in meeting their goals?

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The thesis question is of importance because it tries to create awareness when it comes to the importance of policy making in renewable energy. It shows that for a policy to be termed as effective, it must first satisfy and meet its designed objectives. The specific policies of interest in the discussion are the FiTs also known as the Feed-in Tarrifs and the Renewable Purchase Obligation policy (RPO) which is also known as the Renewable Portfolio Standard (RPS). These are examples of popular pull policies that aid in the development of solar energy as a form of renewable energy (Yenneti, 2016). The main objectives of these policies are to activate the demand for solar energy by keeping the solar energy costs low for the affordability of an economy that is growing. They also aim at addressing the issue of environmental effects of electricity generation by coal in the mitigation for climate change (Creutzig et al., 2017). Coal which is the number one revenue earner in the US and China is popularly known for its emission of greenhouse gases such as CO2 into the atmosphere after combustion. Feed in Tariffs is higher prices on the purchase of electricity that are mainly based on renewable energy generation cost and is a pathway for sustainable energy (Chu, Cui and Liu, 2017). Guaranteed grid access, as well as long-term contracts, often accompany FiTs. The RPO/RPS is a renewable energy target that needs a minimum generation of electricity percentage wise.

The development and effectiveness of energy policies require several groups. The key actors involved in the formulation of these policies are the private citizens, the legislators, scientists and the groups of special interest who have been tied together by policy decision beliefs that are common to them.

These policies relate to the larger question of energy sustainability in the sense that they all aim at offering possible solutions to handle the issue of climate change resulting to global warming through greenhouse gas emissions (Carley and Christie, 2017). They do this by providing sustainable, affordable and reliable energy that minimize pollution and protect the overall health of individuals

The impacts that these policies have on the ecosystem locally and even globally are that they promote the use of clean energy and reduce emissions for the sake of public health as well as the well being of the ecosystem. For instance imposing heavy taxes on companies that produce high emissions of CO2 in the atmosphere through the FiTs will reduce emissions that in most cases result in global warming and environmental degradation (Yenneti, 2016).

The over-dependence on carbon-based fuels led to the creation of these policies. Most of the homes and factories were using electric plants that were fired by coal in the 1960s. There was a need to make a transition from carbon-based fuels to other alternative forms of fuel that were environmentally friendly. This transition included considering the sensibility of the environment and regulating the emissions of greenhouse gases as well as markets deregulations. The US, China and Russia have adopted different historical approaches in making policies in the sector of energy (Wang and Chen, 2015). The reason is that their needs and priorities are different and also because their systems of government differ. However, the US to date has not been able to ratify the Kyoto protocol which discourages the use of coal, claiming that by eliminating its use, it would pose serious economic threats to the country.

The systematic factors that led to the formulation of these policies were first, the energy crisis that resulted from the use of other forms of energy and in particular coal. China, US and Russia mainly use coal for energy production (Wang and Chen, 2015). However, since there was a complaint on the global scale about greenhouse gas emissions that result in global warming, these policies had to come in effect to regulate these effects that brought about climatic concerns. The ability to have a functioning economy also led to the formulation of these policies. The reason is that apart from capital and labor, a country requires energy for processes such as communication, manufacturing transportation among others (Kabir, Kumar, Kumar, Adelodun, and Kim, 2018). Therefore, these sectors require laws and regulations that will at least govern the countries when it comes to adopting alternative forms of clean energy that would still keep the economic status functional.

The less reliance on oil and coal also led to the formulation of solar energy policies. Even though solar energy remains an expensive means of power, it has been known to have no environment efects (Kabir et al., 2018). However, industries tend to engage in industrial activities that facilitate greenhouse gas emissions through machinery that are fired by coal and oil. Therefore, formulating these policies aimed at making a gradual transition from relying on oil and coal and adopting solar energy as one of the renewable energy forms by 2030. The most substantial energy end-use remains to be heat with the consumption of heat remaining to be fossil fuel based (Miller, Richter and O'Leary, 2015). Therefore, the dissipation of this heat continues to be the primary contributor to the generation and production of CO2. New renewable sources of heat particularly the solar thermal that is used in space heating, as well as water heating, was found to account for about 10% of the heat consumption globally. Therefore, putting these policies in place would continue promoting the use of renewable alternatives for heat production that would lessen the CO2 emissions that have detrimental effects on the environment and a transition from fossil fuels to renewable energy (Miller, Richter and O'Leary, 2015). Sustainable development that leads to the formation and generation of sustainable economies also aided the formulation of these policies. These will eventually lead to a complete and considerable natural gas, oil and coal replacement with solar energy as an alternative form of renewable energy not only in individual countries but also on an energy consumption global structure.

Analysis

These policies have so far achieved their goals which are mainly to activate the demand for solar energy by keeping the solar energy costs low for the affordability of an economy that is growing. They also aim at addressing the issue of environmental effects of electricity generation by coal in the mitigation for climate change. The main objective of a national energy policy is usually the development of the economy (Strantzali, and Aravossis, 2016). Many countries just like the US would want to see that their economies are flourishing in one way or another. There happens to be a very close connection between energy and the economy. Therefore, it is almost impossible for the manufacturing and delivery of goods and services to take place without the generation of electricity. High prices of energy lead to an increase in the prices of products and services. Therefore the RPOs has ensured that the economy remains to be in a good position by ensuring that there is a low percentage of electricity generation that would, in turn, lower the energy prices and reduce the overall costs of goods and services. The FiTs, on the other hand, have played an enormous role in maintaining the whole state of the environment by ensuring that industries that produce emissions through the use of coal and oil are heavily fined (Yenneti, 2016). This has significantly reduced greenhouse gas emissions and has called for sanity aimed at promoting an eco-friendly environment that can sustain life.

The evaluation of the efficiency of the solar energy policies is determined by measuring and being able to bench mark the overall outcomes that the policies have been able to deliver after their implementation. It is considered efficient if its strengths can outweigh its weaknesses. The International Energy Agency (IEA) deals with the evaluation and comparison of approaches taken in policy implementation to be able to see its effectiveness and efficiency. The efficiency of policy and in particular the FiTs and RPO policies is also determined through measuring whether the specified policies have been efficient economically when it comes to the expended resources in the renewable energy delivery (Yenneti, 2016). This can either be in social impacts or costs or financial terms. Input outcomes are represented by the use of indicators such as USD/MWh of the generation of electricity or even USD/MW of the installed capacity. Such indicators include the consumer cost indicator which primarily focuses on the consumer bills total impacts and overall level ambitions. The consumer cost indicator provides a simplified representation of economic efficiency in the societal dimension.

The total cost indicator is yet another indicator that comprises of premium payment full cost against the electricity generation additional amount. The efficiency of a policy is also determined by its ability to reduce the consumption of energy as well as prices and helps in the provision of energy security. The policy is also efficient if at all it can increase the overall competitiveness of a state as well as its social progress and developments (Yenneti, 2016). Finally, the efficiency of the policies is determined through measuring if at all the specified policies have been able to ensure environmental sustainability as well as mitigating climate change for the sake of the human health and the overall state of the environment.

SWOT Analysis of the Efficiency of the Policies

Strengths

• Ability to keep the solar energy costs low for the affordability of a growing economy.
• The policies have been able to address environmental sustainability and mitigate climate change.
• Produce minimum amounts of electricity from solar energy as a renewable source of energy.
• The policies ensure a strong commitment to government incentives as well as promotion.
• The policies ensure that solar energy is a domestic source.
• The policies ensure the provision of new opportunities for business through the encouragement of solar energy use in institutions and other government entities.
• The policies pose the ability to provide a central state control.
• The implementation of the policies has lead to the establ...