Solar Energy and Digital Business

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.

INTERRUPTED BEGINNINGS

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.

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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.

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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.

10 comments

  1. I didn’t realize how long solar has been around and just not cost effective enough to use. It seems like there’s a real possibility to switch over as long as economic incentives are aligned. It’s crazy how much politics goes into the equation even if it is not only the right solution for the environment, but could also be personally cheaper for many people. It was my understanding that when people have solar panels installed, they get at least cheaper energy and can then sell what is unused back to the power companies. Is it only in Florida that homeowners don’t get compensated for extra power they generate? I’m curious if solar catches on, if the amount of sun that property gets will eventually be factored into real estate prices.

  2. This is a great article! This summer, I actually interned at a solar energy company. It’s crazy how many regulations and bylaws are passed that truly limits the scope of solar energy, and this absolutely contributes to why it has not truly taken off yet! Each town has their own zoning bylaws, with unique provisions regarding solar energy, including how much is available on their “grid”. I truly believe that solar is the future, but these regulations and bylaws have to be loosened in order to see its true impact.

  3. Interesting post on solar energy; I, too, didn’t realize the history or effectiveness of it either. So do you think in the future, as our power usage grows consistently larger, solar panels will ever be an ordinary decoration on regular homes? Or will it never become that efficient for it to outweigh the costs of installation/maintenance? And you’re right about the electricity usage of a gaming computer – I’m constantly amazed at how much energy mine burns through haha

  4. Really interesting post! I didn’t know much about solar energy and how effective it is. It seems as if solar energy is being underutilized and that we should definitely reap the benefits of it. I don’t understand why Florida is so restrictive of the use of solar energy though. Shouldn’t they want people to use solar energy to get their power back after natural disasters???

  5. Nice post. I know some of the big tech companies are investing in all sorts of renewable power, precisely because of the power demands of the industry.

  6. Great post Owen. Some of the protectionist and political policies you laid out here that prevents the more widespread use of solar energy is ludicrous. Considering how far solar power has advanced, more cities and districts should be open to the implementation solar infrastructure. For me personally, I would not set up solar panels on the roof of my house just yet. From what I can tell, the harnessing power of the panels are still not where they need to be, and expensive relative to fossil fuels considering efficiency. Maintenance costs seem to be an issue as well, as the panels must be kept clean and free of debris at all times for them to operate at their full capacity. And my biggest concern of course, is that I don’t live in a place where the sun is always shining. At the same time, I agree with you that it’s impossible to keep a better alternative out of the market for long. Once solar power gets to it’s full potential, I really hope to see it represent a larger portion among the sources of US energy generation.

    1. I hear ya. I’ll put them on my house someday though. If you google “solar savings estimator” google maps has a nice little widget to look up if solar is worth it. Not sure of the accuracy though. Still waiting on these:
      https://www.scientificamerican.com/article/im-getting-my-roof-redone-and-heard-about-solar-shingles/

  7. Interesting post. Whether or not you believe in global warming, it is smart business to start exploring solar and other types of renewable energy. As they continue to get more cost efficient and the price of non-renewable energy sources increases, the market will demand a shift to these types of energy. Since there is no dominant player right now (like you said, only 1% of energy comes from solar) an oil company could leverage their current networks to ensure their survival in the future by developing solar products.

  8. Owen, Great Post!!!
    Technology is always getting better and as that technology is improving, it is going to require more and more power. Renewable energy is going to need to increase to give us an unlimited source of power. Our natural resources are limited, so we need to find other sources.

  9. This is so interesting. I never thought of solar energy related to digital business. It will be so interesting to see what happens with bitcoin. Maybe it will pay for itself through solar energy. I feel like especially in areas with disaster, this will become increasingly important. Is there anything more related to the future of this? Would love to hear more about it!

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