IEEFA Guest Commentary: Solar’s Expanding Role in the Global 21st-Century Economy

January 20, 2017

Gerard Reid

When we talk about energy today,we first think perhaps of oil, then coal and gas.

Increasingly, however, people are mentioning solar, which makes sense, given that nearly all our planet’s energy needs are already met either indirectly or directly by the sun.

Plants depend on sunlight for their energy needs and in fact we would have no fossil fuels if it were not for the sun. But the sun’s energy has proved difficult for mankind to master. It is difficult to store, unlike, say, coal or oil.

The good news is that we are learning to use it by way of cheap solar photovoltaic (PV) technology that enables us to produce electricity with increasingly cheap, robust solar panels. Going forward, further cost reductions and improvements in energy-storage technologies will make solar PV the driver of electrification and the most important energy source in the 21st century.

Renewable-energy advocates are correct in saying that if w cover a small part of the Sahara Desert with solar panels, we can power the world. This of course begs the question as to why we aren’t doing it yet. The short answer is that we’ve come to rely on a huge and heavily subsidized global infrastructure built up over the past 100 years to excavate, transport and harness fossil fuels.

That is changing as renewable sources of electricity are powering more homes, more businesses and more economies.

Up until about 10 years ago, solar-energy technology was expensive and limited to use in niche market applications such as for powering satellites.

That changed over a decade ago thanks to the German government’s decision to put in place policy mechanisms to support solar. This gave the industry just the kick-start it needed. Costs have since fallen by over 85 percent and yearly installations have grown on average by over 40 percent and totaling a record 74 gigawatts.

The trend is set and the momentum gains pace. As this century unfolds, fossil fuels will be relegated to backup status, usurped by the rise of renewables.

Gerard Reid , the founder of Alexa Capital and former Managing Director and Head of European Cleantech Research at the US investment bank Jefferies & Co., blogs at EnergyandCarbon.com.

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