EXPLAINER: Iran war revives European rooftop solar demand to cut energy bills

Demand for rooftop solar systems across Europe has surged since the start of the Iran war, as households rush to shield themselves from soaring power prices triggered by the worst global energy disruption in history.

The conflict has pushed oil, gas and electricity prices sharply higher, hitting companies and households alike and accelerating efforts to find cheaper alternatives and reduce exposure to volatile energy markets.

Solar is among those options, with demand from homeowners more than doubling for some industry players since the war began in late February, according to interviews with more than half a dozen energy equipment wholesalers and renewable utilities in Germany, Britain and the Netherlands.

It's a timely boost for a technology that accounts for about a third of Europe's total power capacity, but saw the pace of new installations dip last year for the first time in nearly a decade. Industry advocates argue Europe still needs to do far more to cut its reliance on imported oil and gas.

Replacing fossil fuels is often described as a simple shift from old energy sources to newer, cleaner ones. But in practice, the process is more complex.

Solar and wind power are expanding rapidly, but their output varies with weather and time of day. That means electricity systems need investment not only in new generation, but also in grids, storage and other sources of backup power.

Batteries are becoming more widely used in cars and power systems, but they are less straightforward to deploy in sectors such as aviation, shipping and some heavy industry.

Biofuels can substitute for oil in some areas, but their growth is limited by feedstock availability, land use and sustainability concerns.

These constraints help explain why the shift away from fossil fuels is likely to happen at different speeds across different parts of the economy.

The key questions:

WHY IS IT HARD TO REPLACE FOSSIL FUELS?

Fossil fuels are used across much more than electricity generation. Oil, gas and coal remain deeply embedded in transport, heating, manufacturing and heavy industry. They are also relatively easy to store and transport, and in many cases the infrastructure to use them is already in place.

"One of the reasons we're so dependent on fossil fuels is they're basically an end-to-end energy product. So, they have the energy in them and they can be stored indefinitely. That's not the case for renewable technology, which is totally weather dependent. So that's why fossil fuels are so prolific," Chris Hocknell, from sustainability consultancy Eight Versa, told Reuters.

WHY CAN'T SOLAR AND WIND DO IT ALL?

Solar and wind can provide large amounts of low-carbon electricity, but they do not generate power continuously. As their share in the energy mix rises, power systems typically need more grid capacity, more storage and other ways to balance supply and demand. In that sense, the challenge is not only building renewable generation, but adapting the wider system around it.

"The renewable's technologies are fundamentally geography driven and this is what we often forget. So solar works really well in some parts of the world....But in parts of the world where it's obviously less sunny, we actually need to look at better technologies like nuclear," said Hocknell.

WHY ARE BATTERIES NOT A UNIVERSAL SOLUTION?

Batteries are proving useful in passenger vehicles and for shorter-duration electricity storage. But they may be less practical in sectors where energy demand is high, operating times are long, or weight is a major constraint.

"Main problem is density, again, because a battery versus liquid fuel like diesel or kerosene, the fuel - the liquid fuel, fossil fuel - will have 50 times more energy density than a lithium battery. So that's a real problem and that's why we don't have long term storage. Whereas with fuels, you can stick a barrel of oil in a warehouse and it will sit there indefinitely," said Hocknell.

WHY ARE BIOFUELS ONLY PART OF THE ANSWER?

Biofuels can help reduce fossil fuel use in some sectors, particularly where liquid fuels are still difficult to replace. But supply depends on the availability of crops, waste oils or other feedstocks, and expansion can raise wider concerns about land use and sustainability.

"Biomass, in many respects, is probably one of the least good low carbon technologies," said Hocknell. "I think we're in an economic paradigm where we're going to see food prices increase. So substituting land for energy production versus food production is not a very intelligent thing to do."

WHAT DOES A REALISTIC TRANSITION LOOK LIKE?

The transition away from fossil fuels is likely to be uneven, with progress varying by sector and by region.

Some parts of the economy may move relatively quickly, especially where cleaner alternatives are already competitive and easier to deploy. Others may take longer, particularly where industrial processes, transport needs or existing infrastructure are harder to change.

"The real myth in the renewable energy space is that renewables are cheaper than their fossil fuel counterparts. And I can say unequivocally that is not the case," added Hocknell.

The International Energy Agency (IEA), however, says solar PV and onshore wind remain the lowest-cost options for new electricity generation in most countries. It also says that, as more wind and solar are added, power systems often need extra investment in grids, storage and flexibility to maintain reliability. That suggests the cost comparison depends on whether the focus is on new generating capacity alone or on the wider costs of running the power system.

Hocknell added: "Every technology has its downsides. There isn't really a technology which solves all the problems and comes at low cost and there's trade-offs all across every single technology."

-Matt Stock/Reuters