Economic and Environmental Consequences of Widespread Expansion of Solar energy

Gaurav Satija, Purdue University


The purpose of the thesis is to examine the sustainability of an expansion in solar energy subject to resource constraints of Indium. Coal and natural gas are taken as competitors for solar in the energy market. The consumer electronics market also competes with solar PV production because of Indium's use in the manufacturing of LCD screens. A partial equilibrium model is made which determines the rate of extraction of indium, coal and natural gas endogenously. Consumer demand is modeled by the use of cost shares. Generation of electricity and production of LCDs are modeled using Constant Elasticity of Substitution functions. Initial production capacity for both electricity and LCD is considered in the model. The model then endogenously determines the level of investment required. Model simulations are performed to predict the extraction paths and production levels for a timeline of 100 years. A sensitivity analysis is performed to see the reaction of the model to changes in consumer demand and learning rates in solar energy. The response of the model to imposition of various emission caps is also shown. Results of the model show that indium scarcity prevents solar from expanding significantly to a level where it can take over from non-renewable sources of energy. Increased research in solar technologies would not be of much help unless more Indium is available, either by recycling of solar PVs and LCDs or searching for alternate technologies to manufacture LCD screes. Emission caps are able to control excessive usage of fossil fuels and preserve them for a longer time.




Zhao, Purdue University.

Subject Area

Alternative Energy|Mechanical engineering|Materials science

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