Stunning Breakthrough Might Be Solar Power’s “Holy Grail”

October 15th, 2014
in contributors

Money Morning Article of the Week

by Kent Moor, Money Morning

The great stumbling block for solar energy has always been storage.

When solar panels generate abundant electricity in the bright sunlight, how can homeowners store that energy for night time and dark days?

Conventional batteries, even the most high-tech ones, are inefficient, expensive, and don't last more than a few years.

Follow up:

But this week, researchers at Ohio State University announced a breakthrough battery that's 20% more efficient and 25% cheaper than anything else on the market.

It's the game-changer that could finally make solar energy competitive...

Tapping Solar Energy When the Sun Isn't Shining

Solar power has always had one major drawback: when the sun isn't shining, the electricity stops.

Homeowners can either draw power from the local power company, which is much more expensive than the "free" energy solar panels provide, or they can store electricity in banks of lead acid or lithium ion batteries.

Both are expensive and inefficient.

A bank of batteries with enough capacity for two days of usage, along with the electronic controls they require, can cost $5,000-$15,000, and last 5-12 years. Because solar panels typically last 20 years or more, homeowners can count on replacing back-up or auxiliary power batteries 2-4 times during the life of their solar panels.

And in conventional set-ups, 20% of the electricity solar panels generate is "lost" before it even gets to the batteries.

A breakthrough published in the scholarly journal Nature Communications this week by Ohio State University researchers could change all that.

It sounds deceptively simple. Funded by a grant from the Department of Energy, a team led by researcher Yiying Wu, professor of chemistry and biochemistry, has combined a solar panel and rechargeable battery into one unit.

"The state of the art is to use a solar panel to capture the light, and then use a battery to store the energy," Wu said. By combining the two, Wu's team can produce a battery that eliminates the usual 20% efficiency loss between panel and battery, at a cost that's 25% less than existing technology.

The battery has one other high tech wrinkle. To boost efficiency, Wu noted, "Basically, it's a breathing battery. It breathes in air when it discharges, and breathes out when it charges."

To the industry, this breakthrough in battery technology is potentially huge.

"For many companies, energy storage is seen as the holy grail," said Logan Goldie-Scot, an analyst at the data provider Bloomberg New Energy Finance. Added Dean Middleton, of the California-based Trojan Battery Company, "Ten or 15 years ago the battery was an afterthought because the photovoltaic module was the new, exciting technology. Today, there's much more of a focus on the battery."

Solar Energy Use Predicted to Quadruple

New battery technology is timely. According to a recently updated global energy plan by the International Energy Agency (IEA), solar energy will be needed to supply 27% of the world's energy by 2050. The IEA expects current solar energy capacity to quadruple by 2040, and continue rising. To keep the lights on in 2050, the IEA says, would require solar energy to provide the equivalent of 200 new Hoover Dams, one of the largest hydroelectric power plants in the world, each year.

Right now, Ohio State University's new technology is the leading candidate to making that possible. The university plans to license its technology to industry.

More Potential Battery Breakthroughs

With batteries so critical to the future of solar energy, a number of scientists and researchers are chasing the double prize of greater efficiency at lower cost.

In a closed Sony TV factory in Pittsburgh, start-up Aquion Energy, partially funded by Bill Gates, is developing a saltwater battery. Led by Carnegie Mellon professor Jay Whitacre, the company says its Aqueous Hybrid Ion (AHI) battery will cost the same as the cheapest batteries on the market, last twice as long, and is made of materials so safe they can be eaten (though they'd taste terrible).

Near Modesto, California, new comer EnerVault is developing an iron-chromium redox flow battery based on technology developed by NASA. Current prototypes are sized for industrial, not home use, but show great promise, storing enough energy to light 10,000 100-watt bulbs for an hour.

At the same time, researchers at the Massachusetts Institute of Technology (MIT) are testing lithium-air batteries that are lighter and smaller than conventional batteries, yet offer three times the energy density.

None of these battery developers is publicly held. One stock for investors to keep an eye on is SolarCity Corp. (NASDAQ:SCTY), the country's leading solar energy installer.

What makes SolarCity intriguing is its chairman, Elon Musk, head of both Tesla Motors and SpaceX. Tesla, whose all-electric cars are considered the most advanced of any on the road, has deep expertise in battery technology. The company is currently building a gigafactory in conjunction with Panasonic to produce advanced batteries in Nevada. Tesla's technology, which gives its cars a range 2-3 times greater than its competitors, could provide the same performance boost to home solar energy systems.

The key for investors will be to monitor who develops or licenses new battery technology, and how quickly they bring products to market. With 500,000+ homes and businesses now using solar energy, and solar panel installations up 49% in 2013, solar energy use is skyrocketing in the U.S. The first company to market with an efficient, cost-effective storage solution will see its business skyrocket as well.

PS: Kent has uncovered a geopolitical conflict that could shake up the energy world. Right now there are 230 nuclear weapons and 650,000 troops "in play," but this could get much bigger. The shocking video is here.

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