Allianz Knowledge: In some countries, solar panels have become a common sight on many buildings. Would large-scale solutions be useful too?
Lars Falck: Definitely, because economies of scale allow for much lower costs per kilowatt hour of electricity produced.

You have developed a 53 MW photovoltaic (PV) power plant in Germany. Does such a large project differ from small-scale projects?
Huge projects generally require excessive care during development, high voltage grid connection, utmost expertise in financing (agreements with banks and investors), professional construction planning, logistics and execution.

Compared to most coal- or gas-fired power plants a power plant with 53 MW is still miniscule. When will we see Gigawatt solar plants?
That is not our target. The beauty of solar power is that it can be harvested anywhere. It is much more intelligent to distribute the power generation to match the way consumption is distributed.

There may be single, very large installations in remote and sunny areas. But these are generally not close to consumers.

When does PV make sense and when would you suggest a solar thermal power plant with a steam turbine?
If you want a solution that has proven reliability, as few variables as possible, does not consume precious water, and even works when there is no direct sunshine, you would go for PV.

If you are sure of abundant direct sunlight and convinced that the necessary machinery, shiny mirrors, and water supplies remain as predicted, you may decide on a solar thermal plant.

You only built photovoltaic projects. Why?
For one, the countries where we are active do not meet the conditions for solar thermal plants. Secondly, the world market for solar thermal plants is quite limited and it’s not possible to develop smaller solar thermal plants.

With PV, we have an average plant size of below 5 megawatts and this allows us to spread our risk around many countries and projects. Solar thermal projects, in comparison, must be very large. We could have only few projects in few countries.

There are different types of PV panels. How do they differ?
The biggest difference is between thin film and crystalline technologies. While thin film production is merely always fully integrated and automated, crystalline technology involves more steps, more energy consumption, and more manual work.

Thin film today has the lowest module production cost, but it’s also less efficient when it comes to converting sunlight into electricity. So you need more space for a power plant and have to pay higher installation costs.

It is difficult to predict if either technology will win, that is pushing the rival technology below 10 percent market share. But the market share of thin film modules will certainly increase.

How long do normal solar panels last?
Accelerated aging tests make us confident that solar modules will last more than 30 years. Evaluation of the plants with a total capacity of 300 MW plants in our monitoring system shows that the power loss of the modules is very slow.

What are the biggest problems you have to overcome?
The biggest problem is that in most countries project development takes very long. That makes it really hard to come up with predictable prices and it also makes it harder to get the right components when you need them.

What about the declining subsidies in Germany, will this influence your business?
I believe that the number of installations will stabilize at a lower level. Prices have already gone down in recent months because of growing production and reduced feed-in tariffs. And the changes in Germany will cause additional price decay.

Critics also say that renewable sources need conventional power plants as back-up. Do you agree?
Yes, and I also have a horse in my garage as a backup should my car break down. But honestly, conventional energy is a limited resource, unless you wait 150 million years for new oil or gas reserves to be formed and become available. Even the idea that we could rely on conventional backup power plants for generations to come is a fairytale.

What role will solar power play in 20 years time?
I believe that the sun will be the biggest energy provider within this timeframe. Cost efficiency due to mass production and energy storage technology will be the fundamentals for this success.

What do you think about projects like Desertec where Europe receives electricity from giant solar parks in North Africa? Is this feasible?
Feasibility is not the main question. Energy production should be decentralized just as energy consumption is. This minimizes grid cost and risk.

Plus, we want to become independent of arbitrary changes in local politics. Why should we grant outsiders control of our energy supply if we don’t have to? We are lucky to live in quite peaceful times. Who can predict the future? Who guarantees that the situation will remain stable for 100 years?