This is a topic I’ve been thinking about for a while now. The underlying factor in all of these advancements we talk about is power. In many cases, technology in the battery industry has enabled us to have devises like smart phones, laptops, and wireless headphones. But they also use a huge amount of energy. A gaming PC, for example, uses more electricity than 3 refrigerators. I’d like to focus on solar energy because anecdotally I believe it’s the future of energy and I think that is solidified in my mind after researching for this post.
If we use common sense, eventually, one day, we will run out of natural resources to burn for electricity and power. The date of reckoning is widely debated, and some even think we will never run out of oil. Maybe you don’t think that global warming is caused by the burning of fossil fuels. While that’s not ok to think that, even in the very small percentage that is true, I would sure like to have a backup plan.
This goes beyond availability or environmental awareness. Solar and wind is now the same price or cheaper than new fossil fuel capacity in more than 30 countries. The World Economic Forum estimates that by 2020, solar will have a lower cost of electricity than coal throughout the world.
Solar technology goes way back. In 1878, a scientist named Augustin Mouchot invented a solar steam engine. It worked but couldn’t compete with cheap coal. In 1897, Frank Shuman, a U.S. inventor, built his own solar engine. This time, he was able to take the technology a little farther. He established the Sun Power Company in 1908 and built the world’s first solar thermal power station in Egypt. His power station was able to pump 5,800 gallons of water per minute from the Nile River to nearby agriculture fields. Alas, a few world wars and the discovery of cheap oil derailed any solar progress. By the end of World War II, coal and oil had built a huge infrastructure that kept solar at bay physically and politically.
It wasn’t until the 1970s before solar saw a revival. The OPEC nations exercised their economic power which caused price spikes of gasoline and shortages at the pump. More investment was made in the industry and several large solar power plants were built in the 1980s. New solar plants were promising to bring the price per kilowatt hour down to compete with fossil fuels. Same old story however. The largest solar company that provided the vast majority of solar energy filed for bankruptcy in 1991. Declining fossil fuel prices were a major factor but political pressure from traditional energy firms depleted governmental support for solar.
WHERE WE ARE TODAY
Coal and natural gas still account for 62% of the world’s energy generation but solar is gaining. In the last 5 years, commercially available solar panel efficiency has jumped from 15% to 22% with prices falling by 80%. In 2016, solar power was the most added type of power (9.5 GW compared to natural gas at 8 GW) in America. This is a huge jump from previous years; the addition of 9.5 GW is more than all of the solar additions from 2013-2015 combined.
As we can see, solar only contributes to about 1% of our total power generation. Still lagging WAY behind other types of energy but making leaps and bounds.
IF SOLAR IS SO GREAT, WHY DON’T WE HAVE MORE?
Great question. I would say protectionism and politics. This past September, America’s International Trade Commission (ITC) ignored the concerns of large swathes of the solar industry and ruled that two of the country’s solar-cell manufacturers had suffered serious injury as a result of imports, which primarily come from Asia. This would lead to tariffs and import quotas which would hinder America’s solar production for years to come. It is thought that President Trump will sign off on these protections because of the perception that American made products are universally better than foreign and he’ll be able to show that he’s strong against China.
Ok so what about putting solar panels on my house? Take Florida for example, a state with A LOT of sun. Well, power company executives and regulators have worked successfully to keep most Floridians from using sunshine to generate their own power. Some Floridians do have rooftop solar but Florida Power and Light (FPL) through successful lobbying, places several mind-blowing restrictions on your use of solar. Take Hurricane Irma this past year. If you lost your power during the hurricane, it’s ILLEGAL for you to use your own solar panels to turn your lights back on. FPL charges you up to $1000 for the right to put your own solar panels on your roof and you’re required to link it to their power grid so if you don’t use all of your power, it gets fed back into their supply.
SOLAR AND DIGITAL BUSINESS
While this isn’t a topic that is purely about advancements in digital business, I think it has a lot of implication on digital business. Take Bitcoin for example. Bitcoin mining consumes more electricity a year than Ireland. An article written in 2013, states that the digital economy uses 10% of our world’s power … and that was 4 years ago! That percentage will grow as we rely more on computing and invest more in a digital economy.
The good news is that it’s hard to keep a better alternative out of a particular market. As we’ve seen, the cost of solar keeps plummeting every year and it will eventually be a better energy provider than fossil fuels. Cheaper energy will lower barriers in technology and only spur more innovation. How long with that take? Write your Congressman.