Today, solar supplies just two percent of the world’s electricity and even though it might look like solar power could keep on growing exponentially, its rise could very well hit a ceiling, flattening out in coming decades, far before it unseats dominant fossil fuels. In Europe, we’re already seeing this slowdown, and if that happens on a global scale, the solar revolution could sputter out. Preventing that is the point of my new book, Taming the Sun. I argue that three types of innovation are needed to unlock Solar’s full potential.
The first innovation is financial. Right now, solar needs to attract trillions of dollars to fuel its rise but so far, the world’s most deep-pocketed investors have largely sat on the sidelines. So, the solar industry needs to take a page out of the playbook from the fossil fuel, automobile, and mortgage industries, and bundle together solar projects, so big institutional investors feel comfortable buying and trading them. I’m pretty confident the industry will figure that one out. But just as soon as solar gets over that funding speed bump, it could run into a much more serious obstacle, known as value deflation.
See, all this investment will help the industry produce and deploy more solar panels, driving down the cost of building a new solar project. That’s the good news. But the bad news is that the value of the electricity produced by solar will plunge even faster. As more solar panels come online, they’ll flood the grid with power in the middle of the day, but shut off when the sun sets. Even though customers will need power during dinnertime, the next solar panel will just feed them more lunchtime power. That’s not very valuable. Soon, the value will fall below the cost, so it won’t make economic sense to install any more solar panels.
That will halt the momentum of solar’s rise. Overcoming this barrier starts with technological innovation. Breakthroughs in solar technology could cause the cost of solar to plunge, enabling more solar to be deployed economically. Next-generation technologies, such as perovskites, already exist in laboratories. They could transform today’s heavy, rigid, and frankly ugly solar panels into lightweight, flexible, and colorful coatings that tomorrow could cover cityscapes around the world.
Additionally, developing advanced solar thermal plants could convert the sun’s energy into heat, and use that heat to generate power 24/7, rather than just at lunchtime. And one day, artificial leaf technology could even harness sunlight to make portable fuels, finally making oil obsolete. Still, even with these two types of innovation, solar will need a third to limit the decline of its value as more of it’s deployed.
This would be systemic innovation, which includes things like Continent-spanning power grids that link sun-drenched deserts to power-hungry cities; Energy markets that pay for energy storage and flexible generators to smooth out the volatile swings of solar power;
Smart software that can turn electric vehicles into mobile batteries to resupply the grid once the sun goes down. These innovative energy systems would preserve solar’s value by making sure that solar power can be used no matter when it’s produced or how it fluctuates. Promoting all three kinds of innovation will require urgent investments by governments all around the world.