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One technology above all has exceeded all expectations over recent years: solar energy. Near-exponential growth has lowered manufacturing costs and efficiency of the solar cells to the point that building a solar energy generation plant is now significantly cheaper than its fossil fuel equivalent, or even maintaining an existing unit — and most importantly, leave a negligible carbon footprint. Today, virtually everything that most people think they know about solar energy, about the days when only subsidies made solar installations profitable and some generated power with diesel engines at night, is completely obsolete and outdated. The solar energy landscape has changed so much in terms of costs and performance that it requires completely new analyses.
Those who are unable to understand this change and who wish to continue to rely on the old way of generating energy using fossil fuels will surely be missing out on the most transformative technology we have seen in a long time. Investments in solar energy plants are multiplying all over the world and are now much cheaper than they were a few years ago, which is leading even some Arab countries or others, like India, to see them as a long-term solution. Today, solar energy is not simply cheap: it is dramatically and differentially cheap. In reasonably sunny places, it is by far the cheapest form that we humans have managed to invent for generating electricity.
Solar energy today is a great investment, with above-average returns, even taking into account that electricity will soon be too cheap to meter: in the future, energy will undergo a transformation similar to telecommunications: remember when calling someone was charged according the minutes the conversation lasted, and it was more expensive the farther away the person you were talking to was? Why is it that today in telecommunications prices are set at flat rates? Because technology has turned the cost of moving bits around the internet into something with a negligible cost, which is not worth measuring.
This is what is happening with solar energy: energy so cheap that we will end up paying for it at a flat rate, regardless of our consumption. A decade ago, solar energy represented less than 1% of the world’s energy. Now it is 9%, and growing fast. Solar plants routinely win power auctions with bids that reach 4 cents per kilowatt-hour, a price that is no longer cheaper than a coal plant: it’s cheaper than coal itself.
The United States Congress could wisely ignore the absurd war on solar energy being waged by Donald Trump, and consider introducing funding to install 30 million solar roofs on homes throughout the country as part of the next relief bill to be implemented following the pandemic, because doing so, in addition to being profitable in the medium and long term, would generate jobs and a sustainable economic foundation.
Obviously, solar energy is not the solution to everything. The sun does not shine at night, although the batteries needed to store the excess energy that the panels generate during the day are also increasingly cheap and accessible. But in many places, such as much of Europe, it barely does so at all in winter, which is precisely when the demand for energy is highest. In many countries, they will need to combine solar energy with hydropower, wind energy and storage to create a truly self-sufficient system. But in the case of countries like Spain, which has vast amounts of sunshine, the adaptation of the technology to the needs of the country will require a strong and unequivocal commitment to decarbonize industries that have come to depend on fossil fuels the country must now import, thus providing energy much more cheaply for people, business and industry.
It is simply a matter of making the right choice at the right time.
