Lily Pads On The Pond

Before I start, I just wanted to note that economist Richard Tol is conducting a survey on science and related topics here: http://www.surveygizmo.co.uk/s3/1973949/Flash-poll-bequest , which I mention because of the title of this post.

One of the preliminary questions in his survey is something I use in defense of solar. Solar power is routinely attacked by skeptics as a niche provider of power, which is certainly true.

But, if lily pads grow on a pond by doubling the area they cover every day and it takes 48 days to cover the pond, how much area is covered by lily pads on the 47th day? (Sorry, Richard–hope I didn’t blow your survey.) The answer is 50%, of course.

Solar power is the lily pad of energy.

The amount of energy it provides today could best be described as an asterisk, the reason other totals don’t add up to 100%. In the United States in 2014 it produced 0.4 of the roughly 100 quads Americans consumed that year. The amount of solar energy used in the world is so small that it doesn’t even show up in totals of renewable energy produced worldwide–it’s still an asterisk.

In most of the world solar power is more expensive than almost any other type of energy you can think of and must be subsidized by government or charity to be even taken seriously.

Worse, it is an intermittent source of energy–things like night really have an impact on solar. To a lesser extent, so do clouds. And when the sun is shining brightly and a panel produces more electricity, if the grid doesn’t need it at the moment, where do you put it until you do need it? (Roy Scheider was misquoted. What he actually said was ‘We’re going to need a bigger battery.’)

And yet I am convinced by looking at the data that solar power will be the energy source that we will be depending on in the future.

Solar power keeps getting less expensive. In the U.S., one of the most expensive markets for solar (we pay those rooftop installers pretty well), prices for installed residential solar systems declined 11% over the course of 2014. The cost for commercial installed systems declined by 14% in 2014. And prices globally are dropping significantly as well.

This significant improvement in the price performance curve isn’t exactly new:

solar-cost_curve

 

And it isn’t expected to stop any time soon.

Jan. 30, 2015 “Putting a new kind of photovoltaic material on top of a conventional solar cell can boost overall power output by half. Researchers at Stanford University added a type of material known as a perovskite to a silicon solar cell, validating an idea for cheaply increasing the efficiency of solar power that was first proposed several years ago.”

Way up above I wrote that solar provided only 0.4 quads of the energy Americans consumed last year. What makes that number interesting is the fact that in 2013 the figure was 0.2.

Globally, analysts expect another typical year for solar–growth of about 20%. That’s not 50%–the lily pad analogy is never perfect–but installations of solar did double in 5 years worldwide. While dropping in price by more than 70%.

Critically, for free market enthusiasts who seem almost horrified at the success of solar (okay, that’s an exaggeration), solar power is winning in the marketplace even though it is (for the moment) more expensive than alternatives. This is because there are more signals in the market than price. Many people who can afford solar are also environmentally conscientious and wish to use green energy. Many NGOs and charities are pushing solar into regions where conventional electricity cannot go. Many governments that wish to lessen their dependence on imported oil are happy to switch subsidies from fossil fuels to solar (and wind, of course).

Postscript: Solar won’t really win in the marketplace until the issue of storage is settled. Consumption of energy is not limited to sunny daylight hours, so we need better batteries. That will be my next topic.

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