How global shortage of chipsets will raise cost of solar power
A solar water heating system made by Steelstone Kenya Limited during the Renewable Energy Day at Meteorological Department of Kenya in Nairobi on January 28,2020.
An acute worldwide shortage of the raw material for making semiconductors is now threatening to crumble efforts towards widespread adoption of solar power in an era of unsustainable non-renewable sources of energy.
Polysilicon, the main material used in solar panel production, has hit an all-time scarcity, caused by rocketing demand for solar cells, which collect sunlight and convert it into electricity.
Investment in new polysilicon plants has remained slow, leading to the current shortage.
Consequently, chip manufacturers across the globe are finding it difficult to match the demand in the productions of chipsets critical to the functioning of solar panels and inverters used in off-grid solar systems.
American energy tech company Enphase, for instance, says it is grappling with various hurdles in the global semiconductor supply chain.
The company has seen a strong increase in demand recently for its microinverter systems, which convert solar power from direct to alternating current.
Japan-based Panasonic Corporation is also halting the production of silicon chips for solar cells due to the global supply crunch.
Last June, the company alarmed client distributors that supplies would be delayed for power conditioners used in residential solar systems, with output falling by as much as 30 percent in the interim.
Although solar-cell makers and housing companies are moving to secure replacement products, that switch could take time since a substitute needs to be tested and certified for durability.
This, experts have argued, is expected to raise the price of solar components shipped to Africa, curtailing the recent energy revolution that has seen many Kenyan corporates and households switch to solar to cut costs and guarantee power reliability.
Grid connections
According to the 2019 Kenya Population and Housing Census report released by the Kenya National Bureau of Statistics, solar lighting in the country averages 19.3 percent connectivity, with rural areas recording above average rates of connectivity of 29.9 percent, higher than the rural national grid connections that stood at 26 percent.
The same report showed that over 70 percent of households in 20 counties in Kenya did not have access to the grid and, in nine counties, this number was over 80 percent.
Kenya is a pace-setter in off-grid solar solutions in Africa, and in 2019, it was estimated that there were some five million pico solar products — solar generators used to provide indoor lighting in off-grid locations — and 700,000 solar home systems in use by households.
Underlying these numbers is a fact well-known by industry practitioners: The national grid only reaches about 50 per cent of Kenyan households, with 25 percent of households being served by solar energy, according to the census report.
Amos Wemanya, renewable energy senior adviser at Power Shift Africa, told Climate Action that the scarcity of silicon chips is detrimental to affordable solar power in rural Kenya.
“The shortage has been caused by the Covid-19 pandemic and the strained business relations between the United States and China. This will definitely make solar power more expensive and many people will not afford,” he said.
The adoption of frontier technologies such as 5G and Artificial Intelligence services has also been regarded as a cause of the shortage.
In an Internet of Things (IoT) system, for instance, where several wireless devices are connected, more advanced chipsets are required to keep the connection instantaneous.
Koray Köse, an analyst at Gartner, says the rise of 5G increased demand for chips, and the decision by the US to prevent the sale of semiconductors to Huawei escalated the shortage.
American wireless chip maker Skyworks Solutions has said it expects each 5G smartphone to use Sh2,500 worth of front-end chips, compared to Sh1,800 per 4G smartphone and just Sh800 per 3G phone.
But the shortage began back in 2018 when Intel, the world’s largest computer chip manufacturer, suffered a scarcity when it started making 10-nanometre chips that reduced production of the widely used 14-nanometre chips.
Production costs
A subsequent dip in the price of chips before the pandemic meant Samsung, SK Hynix, and Micron Technology had to scale down production leading to a global shortage during the pandemic that is now shrinking the production of solar panels.
While Intel has said the shortage could last for two years, the cost of shipping containers around the world has ballooned because of sudden shifts in demand during the pandemic and a rise in air freight fees.
And although semiconductors only contribute a minute percentage of solar cell production costs, the higher logistics fees are expected to raise their price, ultimately pushing the price of solar panels up.
“Governments need to introduce an import subsidy or a tax exemption on solar components to promote access to electricity in homes located far from the national electricity grid,” says Mr Wemanya.
Even with silicon being an abundant mineral, he calls for alternate materials to be used in the manufacturer of chips as depending on one material has created a limitation that could deepen exclusion in power consumption as the world opens up in the post-pandemic period.
“The world needs alternatives but ensure they are readily available. Again, the current shortage opens up the possibility of using renewable materials in the production of renewable energy,” he notes
Semi-conductor researchers around the world have looked into the idea of one day replacing silicon in the manufacture of electronics, but the possibility lies several years away.
“Silicon is reaching the limit of its performance in a growing number of applications that require increased speed, reduced latency and light detection,” says Stephen Doran, CEO of the UK’s Compound Semiconductor Applications Catapult.
Next-gen semiconductors made from two or more elements whose properties make them faster and more efficient than silicon could be what the world needs now to fix the solar power crisis.
“Compound semiconductors combine two or more elements from the periodic table, for example, gallium and nitrogen, to form gallium nitride. They outperform silicon in the areas of speed, latency, light detection and emission,” says Mr Doran.
Graphene and carbon nanotubes, which have existing electrical, mechanical and thermal properties that go much beyond what can be done with silicon-based devices have been reported to be alternatives, but to replace silicon in the future, the manufacturing tools required to achieve that will have to be developed.
