How Solar Energy Became Cheap

Book Overview

When I began working on solar energy in 2002, the technology was seen as an intriguing novelty, serving a niche, but widely dismissed as a serious answer to social problems associated with energy use. Since then solar photovoltaics (PV) has become a substantial global industry—a truly disruptive technology that has generated trade disputes among superpowers, threatened the solvency of large energy companies, and prompted serious reconsideration of electric utility regulation rooted in the 1930s. More favorably, its continually falling costs and rapid adoption are improving air quality and facilitating climate change mitigation. PV provides some of the lowest cost electricity in the world and prices in 2018 are now below where even the most optimistic experts expected they would be in 2030.

How Solar Became Cheap is now available from Routledge!

Gregory F. Nemet

is a Professor at the University of Wisconsin–Madison in the La Follette School of Public Affairs, USA.

Link to Greg's personal website here

Despite the large literature on solar we still do not have a dispositive answer to the question: How did solar become inexpensive? This ignorance persists because we are missing a comprehensive assessment, one that is truly global, documents the historical evolution of the institutional context in which solar has developed, and deals with the full supply chain of the industry—from sourcing silicon, the primary input material, to the activities of people installing panels on roofs, to the motivations behind adoption behavior.

As a 2017 Andrew Carnegie Fellow I have had the opportunity to dive deeply into this question, drawing on new data sets, analyses, and a growing literature. The fellowship enabled me to conduct extended interviews with approximately 70 individuals in 18 countries.

Solar PV is exciting not just because of the massive solar resource available and low current prices, but because of how far solar has come. I am convinced that the payoff from understanding the reasons for solar’s success includes learning how to support other low-carbon technologies with analogous properties. While many technologies do not fit into the solar model, some including small nuclear reactors and direct air capture, have the characteristics that make them suitable for following solar’s path. They can benefit from solar’s drivers: scientific understanding of a phenomenon, evolving R&D foci, iterative upscaling, learning by doing, knowledge spillovers, modular scale, policy-independent niche markets, robust policy support, and delayed system integration challenges.

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Part 1: Creating a Technology

However, it took solar six decades to become low-cost. The urgency of addressing climate change means that key challenges in applying the solar model are to find ways to speed up innovation. A second important research question is thus not just how solar became cheap, but also why it took so long. The capstone of this project is a set of nine innovation accelerators—actions that would have sped the development of PV and which could be applied to new low-carbon technologies that fit the solar model.

These accelerators include:

My perspective is that committed government action in multiple jurisdictions can enhance each of these nine innovation accelerators and stimulate improvement in and adoption of the broad set of technologies we will need to address climate change.