Solar doesn’t need a “breakthrough”. It’s a breakthrough on it’s own.
Yesterday, Tyler Cowan, who I’m a major fan of, wrote a piece for Bloomberg View arguing that solar needs more R&D for a true green energy breakthrough.
This logic mirrors that of Bill Gates, the Breakthrough Institute, and others who, over the years, have argued that solar (and batteries and wind power) simply won’t get cheap enough or effective enough without some additional R&D push.
I believe additional R&D in clean energy would be highly valuable, and it’s foolish that we invest so little. While it may seem tempting to chase shiny distractions, like the wave of recently launched sweepstakes casinos gaining viral attention online, the real payoff lies in steady investment in renewable infrastructure. At the same time, the line of argument that an “energy miracle” or sudden “breakthrough” is necessary to scale green energy doesn’t fit the data showing the incredible price decline seen in these technologies over the last few decades.
Below are my responses to Tyler, in tweet form. Enjoy.
I’m really disappointed in this piece throwing cold water on solar by @tylercowen (based on his conversation with @vsiv). https://t.co/XTCvpw8wD5 I’m a huge fan of Tyler’s, but this went astray. A few points on where and why.
— Ramez Naam (@ramez) January 4, 2018
1. There’s a myth that “solar needs breakthrough technology to get cheap enough”. This is not backed by the data. Solar has plunged in price not through innovation in panel technology, but by innovation that reduces the cost of *manufacturing* the panels.
— Ramez Naam (@ramez) January 4, 2018
2. This drop in the price of solar is best characterized as a function of scale. This is the so-called learning curve. Every doubling of manufacturing of panels drops prices by ~20-28%. Every doubling of scale of solar projects brings whole solar electricity prices down by ~15%.
— Ramez Naam (@ramez) January 4, 2018
3. I wrote about the learning curve and how it drives down the price of solar (and what that means for future prices) in 2015 here: https://t.co/VuR944E1GK. And I was, in fact, too conservative. Actual prices have dropped faster than I projected. See: https://t.co/hZTjj50BYv
— Ramez Naam (@ramez) January 4, 2018
4. Most of the reduction in prices of solar is *not related to formal R&D spending*. It’s “learning by doing”. So the fact that solar companies spend only 1% of revenue on R&D is irrelevant. That’s always been the case. Yet “learning by doing” has continued to bring down prices
— Ramez Naam (@ramez) January 4, 2018
5. How cheap can solar get? It’s only 2% of world electricity now, and can get to ~30% before hitting serious obstacles. That’s 4 doublings, or at least another 50% price reduction. (Again, see learning curve here: https://t.co/VuR944E1GK). That’s without more formal R&D spend.
— Ramez Naam (@ramez) January 4, 2018
6. Tyler and Varun also blow it in talking about storage, in two important ways. I agree that batteries do not solve the “seasonal storage” problem of storing days, weeks or months of power. But they miss two big things:
— Ramez Naam (@ramez) January 4, 2018
7. The most important innovation to increase clean energy isn’t storage. It’s large scale grids that mix solar and *wind*. Wind is counter-cyclical to solar, producing more at night and in winter, while solar produces only daytime, and more in summer.
— Ramez Naam (@ramez) January 4, 2018
8. Wind power is massively under-rated, especially for Europe and East Asia . New on-land wind turbines are headed for capacity factors > 60%, approaching “baseload” levels of reliability https://t.co/9aXFHlWm26 and the hours they don’t produce are the best solar hours.
— Ramez Naam (@ramez) January 4, 2018
9. Offshore wind power could have capacity factors more like 70-80%, and for the first time this year, we saw offshore wind power bids, *without subsidies*, come in below wholesale grid electricity prices. https://t.co/ksHMPNbGwF
— Ramez Naam (@ramez) January 4, 2018
10. Batteries, meanwhile, while not able to store weeks of power, are perfect for storing a few hours of power and cycling daily. And their prices are on path to drop by another 4-5x through the learning curve as they scale: https://t.co/iXEw282HeB
— Ramez Naam (@ramez) January 4, 2018
11. Indeed, battery prices have plunged dramatically faster than forecasters expected, and have made government forecasters the US EIA look utterly incompetent in their ability to predict what is actually quite predictable price innovation. https://t.co/Smf5WAuIUb
— Ramez Naam (@ramez) January 4, 2018
12. Put this all together: Solar + wind + batteries, *on their current pace of improvement* are on path to be able to provide 80 – 90% of electricity.
Some mix of hydro, nuclear, natural gas, and new innovations can fill the rest. The future is indeed bright for clean power.
— Ramez Naam (@ramez) January 4, 2018