Everyone’s talking about all the new oil and gas being produced thanks to new drilling methods.
But there’s another narrative nipping at the shale boom’s heels: solar energy. And it’s expanding just as fast.
It’s just that the scale is not quite the same. But that’s changing.
Citi has just named solar photovoltaics, which convert solar radiation into electric currents via semiconductors, to its list of 10 world-disrupting technologies.
In a note this week in advance of the disruption report, Citi’s Jason Channell said that in many cases, renewables are already at cost parity with established forms of electricity sources.
The biggest surprise in recent years has been the speed at which the price of solar panels has reduced, resulting in cost parity being achieved in certain areas much more quickly than was ever expected; the key point about the future is that these fast ‘learning rates’ are likely to continue, meaning that the technology just keeps getting cheaper.
Below is a chart showing where “socket” or grid parity has already been achieved. (Grid parity is when a source of power becomes cost competitive with other sources.) The lines represent the pattern of expanding solar power in a given year — so at peak solar exposure, parts of the southwest U.S. are now already capable of meeting their electricity needs via solar panels.
He also adds this cool chart showing that the Age of Renewables has only just begun.
The rapidly expanding parity provides enormous scope for growth in the solar industry, driven by standalone economics as opposed to subsidies, which are becoming ever scarcer in an austerity-driven world.
As a previous Saudi oil minister once noted, “The stone age didn’t end for a lack of stones…”, and this substitutional process can be well demonstrated looking at the US energy mix over the longer term.
Gas isn’t going away, but renewables are coming on strong.