For electricity generation, ground-based solar power has serious limitations because of its diffuse and intermittent nature. First, ground-based solar input is interrupted by night and by cloud cover, which means that solar electric generation inevitably has a low capacity factor, typically less than 20%. Also, there is a low intensity of incoming radiation, and converting this to high grade electricity is still relatively inefficient (14% – 18%), though increased efficiency or lower production costs have been the subject of much research over several decades.
Two methods of converting the Sun’s radiant energy to electricity are the focus of attention. The better-known method uses sunlight acting on photovoltaic (PV) cells to produce electricity. This has many applications in satellites, small devices and lights, grid-free applications, earthbound signaling and communication equipment, such as remote area telecommunications equipment. Sales of solar PV modules are increasing strongly as their efficiency increases and price diminishes. But the high cost per unit of electricity still rules out most uses.
Several experimental PV power plants mostly of 300 – 500 kW capacity are connected to electricity grids in Europe and the USA. Japan has 150 MWe installed. A large solar PV plant was planned for Crete. In 2001 the world total for PV electricity was less than 1000 MWe with Japan as the world’s leading producer. Research continues into ways to make the actual solar collecting cells less expensive and more efficient. Other major research is investigating economic ways to store the energy which is collected from the Sun’s rays during the day.
Alternatively, many individuals have installed small-scale PV arrays for domestic consumption. Some, particularly in isolated areas, are totally disconnected from the main power grid, and rely on a surplus of generation capacity combined with batteries and/or a fossil fuel generator to cover periods when the cells are not operating. Others in more settled areas remain connected to the grid, using the grid to obtain electricity when solar cells are not providing power, and selling their surplus back to the grid. This works reasonably well in many climates, as the peak time for energy consumption is on hot, sunny days where air conditioners are running and solar cells produce their maximum power output. Many U.S. states have passed “net metering” laws, requiring electrical utilities to buy the locally-generated electricity for price comparable to that sold to the household. Photovoltaic generation is still considerably more expensive for the consumer than grid electricity unless the usage site is sufficiently isolated, in which case photovoltaics become the less expensive.