Soon after writing the post in which I reported Carbon War Room CEO Shigar Khan’s prediction that within this decade incremental energy will all be coming from renewables I saw Paul Krugman’s latest column in the New York Times. He draws attention to the rapidly falling cost of solar power:
If the downward trend continues — and if anything it seems to be accelerating — we’re just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.
That, of course, is the point at which there’s no longer any question of continuing with new coal or even gas powered electricity generation.
Not that it’s a matter of simply waiting for that to happen. Krugman points out that it would likely already have happened if fossil fuels were priced to take into account the external costs they impose. And he sees the fossil fuel industry fighting hard to oppose and delay the transition.
Let’s face it: a large part of our political class, including essentially the entire G.O.P., is deeply invested in an energy sector dominated by fossil fuels, and actively hostile to alternatives. This political class will do everything it can to ensure subsidies for the extraction and use of fossil fuels, directly with taxpayers’ money and indirectly by letting the industry off the hook for environmental costs, while ridiculing technologies like solar.
The failure of the solar panel company Solyndra is currently being proclaimed by some in the US as a sign that renewable energy is on a downward slide. But, as Krugman points out, the failure of Solyndra can be better understood as testimony to the rapidly lowering costs of panels, which the Solyndra technology was unable to match.
Krugman refers to an illuminating Scientific American blog post by computer scientist and entrepreneur Ramez Naam (pictured). It’s well worth reading in full, but I’ll pull out a few points here. Naam begins by reminding readers of just how much energy the sun provides to Earth. In 14 and a half seconds it provides as much as humanity uses in a day, in 88 minutes as much as we consume in a year. In 112 hours – less than five days – it provides 36 zettajoules of energy – as much energy as is contained in all proven reserves of oil, coal, and natural gas on the planet. Capturing one tenth of one percent of the solar energy striking the earth – one part in one thousand – would give us access to six times as much energy as we consume in all forms today, with almost no greenhouse gas emissions.
Up to now solar energy provides only 0.2 percent of all energy production. The energy itself may be abundant but the systems to capture it have been expensive and inefficient. But Naam explains that that is changing. The price of capture has been dropping exponentially, to the extent that people are starting to talk of a Moore’s Law in solar energy, not as dramatic as in the computing world in which it has been formulated, but possibly with similar dynamics. He produces graphs to show the exponential nature of the dropping price.
Two factors contribute. One is manufacturers learning how to reduce the cost of fabrication. The other is the continual improvement in the efficiency of solar cells so that they capture higher proportions of the sun’s energy that strikes them. Manufacture of the panels is only part of the cost. Historically installation costs have been half of the total. But they too appear to be dropping at a similar pace.
So where are we headed?
The cost of solar, in the average location in the U.S., will cross the current average retail electricity price of 12 cents per kilowatt hour in around 2020, or 9 years from now. In fact, given that retail electricity prices are currently rising by a few percent per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America.
And from there on in it’s an ever-widening gap:
10 years later, in 2030, solar electricity is likely to cost half what coal electricity does today. Solar capacity is being built out at an exponential pace already. When the prices become so much more favourable than those of alternate energy sources, that pace will only accelerate.
Naam acknowledges the need to be careful in extrapolating trends out. The exponential eventually levels off or becomes linear. But he reports that physicists and engineers in the solar world are optimistic about their roadmaps for the coming decade.
As he concludes, that’s good news for the world.
But it’s only good news if it is allowed to happen. We shouldn’t underestimate the dark forces in our economies which will fight to preserve favoured treatment for fossil fuels. Look at the commitment of the New Zealand government to support oil and gas and coal mining more vigorously than renewable energy, to cash in on other nations’ burning of the fuel we hope to export, to disastrously develop our lignite fields. Renewable energy shouldn’t have to make its way against an opposing tide of government-supported fossil fuel development. Investment should now be flowing overwhelmingly to green energy, encouraged and supported by government action to price carbon properly and discourage or stop the mining of fossil fuels. Until then the good news remains somewhat muted.