"Here comes the sun", says solar evangelist Ramez Naam, as his newest charts show how transformingly cheap this form of energy will become

Photo by Karsten Würth on Unsplash

Everything is connected. Covid-19 is only one consequence of our human disordering of the biosphere. Global warming, due to the carbon emissions of our current energy, transport and manufacturing systems, is another. But it’s surely dawning on many that we must join up these challenges in much bigger frameworks - otherwise it’s quite possible advance in one area could mean regression in another.

We’re reminded of this when we survey this otherwise startling and hope-inducing report from the solar-power evangelist and forecaster Ramez Naam (whose podcast interview with Azeem Azhar we featured about six weeks ago here). This is the first in a series from Naam (which we’ll keep an eye on) that promises to sketch out how a full-sector, massively decarbonised energy sector is possible (deploying “wind power, grid-scale energy storage, super-long-term storage, electric vehicles, and hydrogen”).

But here Naam wants to make some very clear points about the future of solar energy, based on one solid fact about the past: that predictions for the decline in the cost of producing solar electricity, and the market cost of that electricity, were massively and absurdly conservative. Not only his predictions, as an independent consultant, but also that of official agencies (like the International Energy Authority, or IEA).

Naam shows all this in a few striking graphs.

Here’s the first example of the IEA’s 2010 forecast, and Naam's 2011 forecast being miles out - “less than half the price I forecast in 2011, less than a quarter of the price the IEA forecast in 2010”.

Another graph shows that even if you add more recent forecasts (from Naam 2015, and the IEA 2014), their predictions for low solar electricity costs are literally decades out. Now we’re at the rate they anticipated for the 2030s:

Why is this price declining? Naam’s claims it’s explained by Wright’s Law (which is a bit like Moore’s Law, which successful predicted ever-cheaper computation over time). Wright anticipated that the bigger the scale of anything manufactured, and the more “learning-by-doing” it involved, leads to a percentage reduction in the costs of making it (as industries straightforwardly just got better at doing it). First tried out in the 30’s for making airplanes, it’s been proven right for at least 60 other technologies.

The usual “learning rate” for an industry is in the 10-20% range - that is, how much more efficient a technology is, if the investment in the people and equipment to make it keeps doubling in size. (Naam anticipated a “learning rate” of 16% for solar in 2015). It’s turned out to be between 33% and 43% - a “stunning pace of decline… far higher than the bulk of academic studies and industry projections”.

So, if we apply Wright’s Law, and project from the current rates, how cheap and bountiful will solar energy get, compared to fossil-fuel sources.

Naam, a little chastened (as he urges other to be) by his own conservative prediction, nevertheless assumes a conservative estimate of solar electricity amounts and prices, based on a 30% “learning rate” (lower than the lowest rate cited above, in the previous graph).

The important element to note here is the grey zone, which is what megawatts of electricity cost that come from "already built fossil power plants”.

Even on Naam’s conservative estimate (and even in locations where the cost is high to make solar power), solar electric is heading way below fossil-fuel generated electric.

Project that out on a yearly basis, and sun-drenched areas are already outpricing fossil-fuel generation, with even high-cost locations outpricing by the middle of next decade (see the graph below).

Looking around him, Naam sees even more conservative estimates coming from IEA and other official agencies, and points out what they’re not appreciating: “You can’t expect to forecast the growth of a technology, if you consistently expect it to cost 2-4 times what it does”.

In a closing section, titled “solar is amazing - it isn’t a panacea”, Naam notes:

The future solar costs we’ve just projected have massive implications. They give us hope for cleaning up our electricity system and providing clean power for the electric vehicles that will dominate ground mobility in the future.

They give us hope for being able to use ultra-cheap clean electricity to decarbonize electricity or produce energy carriers like hydrogen at a cost low enough to help us do so. 

Solar isn’t, however, a panacea. First, projections are only projections. I believe the forecast above should be taken seriously. But we shouldn’t blindly assume that it will happen.

There will be real obstacles – technical, economic, social, regulatory, and political – that will all need to be overcome to bring this to bear. And there may well be a physical floor price that solar reaches, as prices drop close to the cost of land and other resources that are resistant to cost decline.

Second, the sun doesn’t always shine. To power evenings and night times, we’ll need to continue progress on cheap energy storage. And even more challenging is that solar peaks in the summer. In many regions, electricity demand peaks in the winter.

In Germany, for instance, solar power output in December is just 1/5 of the solar power production in June, even as electricity demand is higher in winter than summer.

Solar will need to be combined with other technologies such as wind power, hydro, long-term storage, and nuclear in order to have its greatest impact in decarbonizing society – particularly in areas with poor sun, long dark winters, or winter electricity peaks.

Even so, the incredible pace of solar provides us an incredible tool for decarbonizing our electrical grid, while ultimately lowering costs for consumers, businesses, and industries. 

For now, have hope. Technology innovation – initially kicked off by farsighted policy – is giving us better and better tools to decarbonize society, while reducing the cost of energy, and increasing global prosperity.

Here comes the sun.

More here - and stirring stuff. But here’s the caveats:

• Does any of this address what the ecological economists call “material throughput” the amount of resources actually being worked over in our consumerist societies, the mountains and miasmas of trash and particulates that they strew through our natural environments?

• Never mind the calls to have an essentially rebalanced and more connection relationship to the biosphere - which the chasing after an endless energy source (which solar is) may stop us from fully addressing?

Ubiquitous, cheap and never-ending solar power (along with other renewable sources, and shifts of tech usage (ie electric cars) is a huge part of the solution - and it’s a rare note of optimism, in that previous standards and investment decisions look like being genuinely far-sighted. But as we said at the beginning: everything connects, to get to a survivable future.