Clean Energy Investor Ramez Naam shared an excellent post on his blog recently titled “Solar’s Future is Insanely Cheap.” He made 4 points in this post –
1. Solar cost dropped 5x over the course of the last decade – that was a whopping 25% of what the International Energy Agency forecast in 2010. It was also 50% less than his own optimistic forecast from 2011
2. To understand this drop, we must understand Wright’s law – the cost of a technology drops exponentially as a function of cumulative scale of production. So, as we produce more of a certain technology, we learn how to better optimize its production.
In solar energy’s case, every doubling of cumulative production has resulted in a 30%-40% decline in prices.
3. Even with very conservative forecasts, it is likely that even medium cost solar plants will be cheaper than the cheapest fossil power plants within a decade.
This doesn’t mean the journey will be straightforward – but, we continue to make progress at a pace that exceeds any previous expectation.
4. Of course, the presence of cheap solar energy isn’t going to be a panacea until we make significant progress on cheap energy storage. We will need to combine solar with the likes of wind, hydro, and nuclear power to de-carbonize places that get little in the way of sunlight. And, we’ll need all the solar we can get as we transition toward Electric vehicles.
But, we’re making a lot of progress and there are plenty of reasons to remain optimistic.