The Economist’s solar debate shows the world is starting to see the light
The Economist’s debate on solar started with a simple, but thought-provoking question: “Can solar energy save the world?” The consensus was a resounding yes
I’ve really enjoyed seeing the passionate comments from both sides of this debate, from both energy experts and arm-chair spectators alike. The remarkably diverse comments that the Economist debate attracted underscores just how complex issues like tackling climate change and diversifying our energy mix are.
Solar is quickly reaching grid parity in many geographies, and has reached a large enough critical mass to pose questions about grid stability. It is also causing a reexamination of utility business models and critical discussions on a strategy and roadmap for integrating renewables into a smarter power grid.
A lot of the comments centered on Germany as a role model for the industry. Many experts argue that if solar can make it there, it can make it anywhere. The country has more than six times the population density of the US, half the solar resources per area, and an often cloudy European climate. But it manages to get 25% of its energy from renewables while running one of the world’s largest, most industrial economies.
So in many aspects, Germany has been an important proving ground. But I think the next few years will be even more important measure, as Germany gradually phases out its subsidies (its feed-in tariff program) on the confidence that the industry can continue growing without government support. This in the end is the ultimate question for solar – can it survive and flourish without subsidies?
I am very optimistic that the answer is “Yes!” Germany’s early, committed entry has greatly contributed to taking the solar industry to the next level of competitiveness in terms of innovation and cost efficiencies. This in turn creates a knock-on effect in global footprint growth, continued innovation and increased expertise and service support…The solar industry is in a state of flux, in the short term this means uncertainty but in the long term the growth outlook is strong.
And in the meantime, the rest of the world is getting on-board, in large and small ways. This year, for the first time since 2004, Germany will no longer be the global leader. Some of the world’s major energy markets including the US, China and Japan are expected to exceed Germany in new PV capacity for 2013.
Ontario, Canada is creating a green energy cluster of wind and solar power with some 1.369 MW in capacity. According to the International Energy Agency, new PV capacity in Ontario increased by 70% in 2012 compared to the previous year. And at the grass roots level, the scalability of solar is also helping it get a foothold – for example PV generation for remote and rural communities, where new solar capacity is often cost competitive with diesel generators.
After huge growth spurs in recent years, the solar PV market is starting to stabilize and we will continue to see steady growth. This is healthy for the industry as it allows time for some of solar’s well known challenges to play out such as energy storage, smart grid evolution, and a re-examination of utility business models.
I think its clear that the momentum for solar is there, and the grid parity is on its way. The debate over whether solar can continue growing without subsidies can be endlessly argued by both sides. But one point that we cannot argue is that our end game should be affordable and sustainable energy. Solar gives us both.