Commercial Viability of Solar Energy can Completely Change the World

Falling Prices of Solar Energy will Turn the Global Energy Dynamics Upside Down

Commercial Viability of Solar Energy can Completely Change the World
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With the world running out of fossil fuel, their prices skyrocketed in the last decade, while their emission externalities threatened with dire consequences. Just when energy scarcity had begun to look like the Achilles’ heel of human civilization, the acceptance of solar energy as a commercially viable option heralds a new era that will not only change businesses, but also impact politics, societies and culture. Arrival of the Sun God can completely change our world... for the good, hopefully!

Most ancient civilizations worshipped Sun as a God, which is not at all surprising, given the fact that energy forms the lifeline of everything in this universe, and Sun has been the ultimate source of all energy that we find at our disposal, till we discovered nuclear energy, which can be conceptualized as our own artificial micro-Sun deriving energy from within the atom.

The Fossil Fuel Conundrum

Since the beginning of industrial revolution, fossil fuels became the main source of energy, and in the last hundred years, humans exploited them to such an extent that the consequent ecological imbalances and ensuring global warming became a threat for all humanity. Their demand far exceeded their price and thus gave rise to large imbalances in international trade, creating inflation, destabilizing business cycles, precipitating asset bubbles that ended in crisis, and thwarting human development, particularly in the third world. With demand spiraling exponentially and international politics not conducive for collective action, the fossil fuel conundrum of humanity seemed destined to bring irreversible doom.

The Solar Revolution in 2017

There has been a lot of talk about solar energy since the turn of this millennium. In the beginning, there was some excitement as we come to realize that we have enough solar energy available to take care of all human needs. This was, however, followed very quickly with a pessimistic conclusion that the prohibitively high costs of solar energy will not allow its adoption in near future. Even when parts of the world took ambitious initiatives, like the California Million Solar Roof Initiative, there were enough pessimists putting blanket on any ambitions that arose from such inspirations.

However, all this changed in 2017.

The big change was not the addition of new megawatts of subsidized solar power capacity procured with public resources. The big news of 2017 consisted of four major developments, which together can reshape our energy universe. If the chain of events they seem to have precipitated lead to its expected conclusions, it can change everything around us – the businesses, the politics, the wealth distribution as well as the way we live our lives.

Solar Energy becomes a Viable Commercial Option

2017 saw Governments in countries like India opting for solar energy, not because of their preference for clean energy, but because of its commercial viability. In remarkable developments, solar energy was procured at a cost that was cheaper than every other source sans coal. The significance of this lies in the fact that most developing countries are relatively well endowed with solar insolation, but are unable to use it due to its higher costs. Though the costs have been steadily falling, it was only in 2017, when their viability got finally accepted. In several countries, leading to a spurt in solar capacity growth, but more importantly, laying the basis for a market led growth in future that can convert solar energy from an environmental initiative to a real energy revolution.

China, Japan, Germany and United Stated are already leading the charge and account for the most of solar power capacity today. But the solar energy carries far more importance for the countries of Africa, Asia and Latin America, which also hold the greatest potential of harvesting sunlight. While in richer countries, consumers are able to afford energy even today, it remains scarce resource in poorer countries. With the commercial viability of solar energy, all this can change very fast.

Skeptics often tend to undermine these developments, since nothing is going to change overnight. They are right to that extent, but they are wrong in undermining the significance of this change, since from now onwards, the growth of solar energy capacity is inevitable, and would be led by private enterprise. Industrial revolution took a few centuries and the internet revolution a few decades. The solar revolution is likely to be closer to the internet and mobile transformation, which means that we may see this new revolution getting manifested in our lifetime.

Big Strides in Energy Storage

The greatest limitation of solar energy is not the technology that harvests it, but the technology that enables its storage. Inefficient and costly batteries have been the greatest dampener of solar enthusiasm, and the problems they face are still far from over. However, the recent commercial initiatives, like the Giant Battery installed by Tesla in South Australia and the new batteries in large electric vehicles mark a new beginning of commercial projects for mega-scale storage capacity installation and set the stage for widespread use of solar energy.

Commercial Necessity can Expedite New Technology

The experience of 2017 established that the technology for solar energy production and storage, including its grid integration has reached a level where it can be applied in projects at competitive costs. Once commercial usage accelerates, the higher stakes are likely to lead to acceleration in technology development too. Fuel cell vehicles and hydrogen as a fuel are the next breakthroughs waiting to happen. Together, they can take the growth of solar capacity generation to an exponential level.

The Solar Alliance – A New Political Commitment

The major developments in solar capacity generation, so far, have been in the developed world and China. However, in 2017, a new political initiative got established in the form of International Solar Alliance, involving a large number of countries from Africa and Asia as well. France and India, which are also partners in sustaining the Paris deal after the unceremonious exit by President Trump, hope to make it functionally effective. Till the last year, when solar energy survived on public subsidy, their optimism would have not enthused many, as limitation of resources would have been considered a fatal restriction. But with commercial viability of solar energy, it can be a completely different ball game. Now onwards, Governments do not need funds to promote solar energy. Instead they can achieve its promotion through regulation and taxes – imposed on fossil fuel energy. Everyone knows the insatiable appetite of State for taxes. Now, by taxing fossil fuels, they do not run the risk of destroying economy, since solar energy will provide the backup option.

How Solar Energy Will Change the World

Commercially speaking, solar energy is just another product. Markets are used to the entry of new good at regular intervals. This will change the business dynamics, as growth of solar energy can dampen the demand for petroleum, and a lead to a consequent rise in solar products. These changes in business and economy are important, but the really great changes in our world are likely in the political, social and cultural arenas.

The politics of the twentieth century revolves around the politics of petrodollars. The oil producing countries of the Gulf and outside have seen the most politically unstable environments during the last century. The rise of extremism and terrorism has also been fuelled to a signficant extent by these very petrodollars, and often hurted these very countries the most. With the advent of solar energy, all this can change. If the largest economies of the world dissociate themselves from the regional conflicts, many of these conflicts may lose their relevance for the rest of the world, which may not be a bad thing. It may actually allow better sense to prevail among all stakeholders. Lesser cash may also mean more sensible spending and less of reckless destruction. We may even see peace!

In a globalized world, culture often becomes subordinated to prosperity. More resources for the poorer nations, and in particular, more resources for the poorer people there, by harvesting solar power in a decentralized manner, can help in the renaissance of their cultural well being. We may even see a slowing of Westernization of the World and the Americanization of Europe and China. Biggest beneficiaries could be countries in Africa and South Asia who sit right at the bottom in terms per capita income today, but may enjoy a far better future tomorrow.

Return of the God of Energy

It was around two thousand years back that the Sun God lost its place of eminence in Roman empire. 2017 may be remembered in the human history as the year when he finally returned to take his place at the helm of human affairs. His potential can be gauged by the fact that the energy supplied by the Sun to Earth in one hour is greater than all the energy that humanity consumes in a year!

Hail the Sun! Our New God has arrived!

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