Can’t Stop the Shining
Solar power is the world’s most promising clean energy solution, but governments must abandon outdated policies for it to succeed.
The spectacular growth of solar power around the world has masked a disappointing stagnation in solar technology innovation. By the time today’s solar panels reach their limits, it might be too late to develop superior technologies before time runs out to slash the world’s carbon emissions. To prepare for the future, governments must make investments in technological innovation today.
Today, over 90 percent of solar panels are made from silicon, a material that has fallen in cost from over $4 per watt to under 40 cents per watt in the last decade. Yet even though silicon solar panels are cost-competitive with fossil fuel power plants today, they might not be in the future. As more solar panels are installed, they will flood the grid with electricity in the middle of the day. Soon, customers will no longer need much more power during lunchtime, when solar panels are pumping out electricity; when they do need power, at dinnertime, the sun will have set and solar electricity will be nowhere to be found. So even though solar electricity may well be cheaper in the future than it is today, its ability to meet customer demand — which underpins its value — could decline even faster than its cost. In other words, solar power could be a victim of its own success; as more of it connects to the grid, the next solar project will only be able to sell electricity at a fraction of the price that the first solar project was able to. Investors will no longer be interested in funding new solar projects that do not generate enough revenue to justify their cost of construction. As a result, the growth of solar power could hit a wall.
For solar power to remain economical even as more of it is deployed, the cost of producing it must fall much faster than it is today. And that will require commercializing new solar materials that are dirt-cheap and highly efficient at converting sunlight into electricity. Fortunately, promising alternatives to the existing silicon technology already exist in scientific laboratories around the world. The frontrunner, a material known as “perovskite,” could one day enable industrial-scale printing of rolls of high-efficiency solar coatings in a range of colors and transparencies. In the future, solar power could be ubiquitous, with flexible, lightweight, and aesthetic coatings wrapped around urban skyscrapers and deployed atop flimsy roofs in the slums of the developing world.
In addition to these new solar coatings, other emerging technologies could harness the sun’s energy to produce portable fuels. For example, artificial leaf technology — inspired by plants’ ability to use sunlight to produce sugars that store energy — has already made impressive strides in the laboratory and can exploit sunlight to split water into hydrogen and oxygen. That hydrogen can then be used as a fuel in its own right — to power vehicles, for example, or to produce liquid fuels in a reaction that combines hydrogen with the carbon dioxide emissions from fossil fuel plant smokestacks, negating the environmental impact of those emissions. Such clean fuels, produced with the sun’s energy, could weaken the oil industry’s grip on fueling cars, trucks, ships, and airplanes.
Commercializing these breakthrough technologies will require public investment. A decade ago, private investors plowed venture capital funding into innovative solar startup companies, but nearly all of them disappeared when Chinese companies — flush with loans from the central government — began exporting massive quantities of silicon solar panels to the rest of the world. As a result, the private sector is now skittish about funding solar technology bets. Rebuilding its confidence will require public funding for solar research and development to grow new technologies that private firms can commercialize.
In 2015, all of the world’s major economies signed the Mission Innovation pledge to double public funding for clean energy R&D. But the world’s leading R&D spender, the United States, has reneged on its commitment under President Donald Trump, who wants to slash renewable energy R&D spending by two-thirds. This would be disastrous. China already dominates global production of solar panels, and the only way for the United States to capture a share of the rapidly growing market is if its firms can manufacture technologically superior products.
Trump’s recent decision to impose tariffs on solar imports aimed to bring back solar manufacturing from China, but because the tariffs are set to decline and expire within four years, they will stimulate neither domestic manufacturing nor innovation. Instead, Trump’s policy will raise the cost of deploying solar power in the United States, and because the majority of jobs in the U.S. solar industry involve the installation of panels, the tariffs will destroy many more jobs than they create. A far better strategy would be for the United States to invest in solar R&D, for example through the Advanced Research Projects Agency-Energy, an agency modeled off its military counterpart DARPA, to fund farsighted innovations in energy technology. Moreover, the U.S. government should help start-ups scale up the production of breakthrough technologies at home by building facilities that companies can use to test advanced manufacturing techniques. Finally, the federal government should fund first-of-a-kind field demonstration projects, to embolden the private sector to invest in the mass production of new technologies.