How solar energy got so cheap

The year is 1953. The US purchases this from Bell Labs... the first commercial silicon solar cell. But these first solar cells are not exactly efficient. If you were to put them on your roof and try to generate electricity it would cost you about $300,000 a month. Fast forward 70 years and that cost has come down. Way down. Solar energy is the cheapest it's ever been... nearly 90% cheaper than it was just in 2009. In a lot of places it is now cheaper to generate electricity with solar... than with coal, natural gas, or nuclear power. This is an unqualified success story. And if we can take the right lessons from it... this story can help us create and deploy all the other technology we will need to keep our planet livable. They just became cheap so quickly. It's really an amazing breakthrough that is going to come to define the 21st century. So how did solar energy go from prohibitively expensive to cheaper than fossil fuels? “We're in an energy crisis now.” In the 1970s, with the oil crisis there was a really big push on research and development for alternative energy. “Today, in directly harnessing the power of the sun we're taking the energy that God gave us... and using it to replace our dwindling supplies of fossil fuels.” With Project Independece, as it was called... the US federal government allotted more than $8 billion to solar research and development. That really made a huge difference and probably doubled the efficiency of the cells. It was a guy named Paul Maycock who came from Texas Instruments. —Oh, like the calculators? —Yeah! Working on calculators, and he found for calculators... the more they built, the cheaper the calculators got. And he said, same thing for solar. If we build more, the cost will come down. But before the US could really test Maycock’s idea President Reagan canceled Project Independence. Fortunately, two countries were ready to step in and put Maycock’s hypothesis to the test. Like the US, Japan had been hit hard by the oil crisis in the 70s. They started funding solar research and development around the same time and soon they developed solar cells small and powerful enough to run watches, calculators, and toys. Trivial, in terms of the global energy system... but crucial in that large companies were now becoming interested in solar and crucially, figuring out how to construct solar... at really low, low cost. That knowhow came in handy when the Japanese government announced a major subsidy for rooftop solar in the mid-90s. But the global market for solar technology was still relatively small. Until Germany stepped in and truly changed the game. The most important policy on this whole chain, if I had to pick one it would be the German feed-in tariff. Feed-in tarriffs. Which was basically a program that deployed solar at scale. Here's how it worked. Starting in 2000, the German government basically said to power companies... Hey, if you can start producing renewable energy we will buy it from you. We promise for double the market price and we will keep paying you at that rate for the next 20 years. And so for developers of solar projects in Germany, all of a sudden... it became like a no-brainer to do this. Even though Germany is not the sunniest place in the world. Companies responded to the incentives by building solar farms like this one. In one year, the installations for solar went up by a factor of 4 and then it just grew. The more panels they produced, the cheaper it got to generate electricity with solar. Then another country picked up the baton... and made solar cheaper than even Maycock could have imagined. So it really starts with Deng Xiaoping in the 1980s and had this plan for a thousand Chinese students to go abroad and come back and see what they came back with. One group of students went to the University of New South Wales in Australia, where they worked with a team that was producing some of the most efficient solar cells in the world. After a few years, one of those students went back to China... and opened up the country's first commercial solar manufacturer Suntech in 2002. With that new German law in place the company had so much success selling solar panels to Germany... Suntech success attracted competitors... which helped drive down prices in part because all of this demand inspired Chinese manufacturers to produce at an unprecedented scale. Policymakers around the world noticed the falling prices and wrote laws to create new markets in their countries, including the United States. The United States passed an important law. It's called the Energy Policy Act 2005. And buried deep within that law was an investment tax credit. Sounds kind of boring, but it turns out it was absolutely critical to deploying solar... because what it said was that if you put out a new solar project... you can get 30% of those costs back for a tax credit. This sparked a phenomenon called solar leasing... where companies would look for places to put solar so that they could reduce the amount they owed the federal government in taxes. Other policies helped create markets for solar modules in Spain, Italy and crucially, in China. The Chinese devised their own subsidy program that was modeled on the German one where you get a guaranteed price. By 2011, China was not only the biggest producer of solar... but the biggest producer of solar electricity. In the course of a single lifetime solar energy has transformed from a niche technology to the cheapest way to bring clean, reliable power to billions of people around the world. But the markets that brought us these lower prices didn't just magically appear by some invisible hand. Political leaders in countries all over the world created these markets, then subsidized them for decades to the tune of billions of dollars. By investing that money you got the solar to come down in costs to the point where you don't need to subsidize it anymore. We're doing that on purpose with things like batteries and electric vehicles. We're doing that with things like heat pumps. Solar provided us with a playbook for how to do that for other technologies.

Channel: Vox

Views: 844,086

Keywords: Vox.com, explain, explainer, renewable energy, science, solar, solar panels, solar power, solar technology, sustainable energy, tech, vox, suntech, china suntech, germany, german solar panels, subsidies, solar subsidies, us subsidies, energy subsidies, energy, vox liz scheltens, jimmy carter, reagan, ronald reagan, paul maycock, leah stokes, gregory nemet, cheap solar, solar upgrade

Id: V8Vtb0bn30M

Length: 6min 31sec (391 seconds)

Published: Thu Apr 13 2023