I saw an interesting talk by Travis Bradford on the topic of solar energy. Travis is a strong believer in the solar energy. In fact, one of his main arguments was that it is economically, more so than environmentally, inevitable for the use of solar energy to dramatically increase in the future. I’ll briefly summarize his argument.

One important characteristics of solar energy is that it is the only form of renewable energy that can be taken advantage of both centrally (in terms of large centralized plants) and distributed (by deploying solar panels). Consider alternative sources of energy available today, including hydropower, wind, geothermal, ocean, and bio-mass, and they all require large centralized plants. Travis believes that the distributed use of solar energy will become increasingly practical over the next few decades because of two factors:

• Cost of fossil fuel will continue to increase due to higher demand and decreasing supply
• Cost of solar energy will continue to decrease due to “learning rate” (which he estimates to be 20%/yr)

It is interesting to note that the cost of electricity that will be replaced by solar energy is high. Consider that electricity demand is high during the day than night, and during summer time than winter time. Obviously the cost of electricity during high demand is higher than that during low demand. It so happened that solar energy can most efficiently be obtained during the day and during summer time. According to Travis, solar energy will be economically competitive to fossil energy at peak cost by 2020.

Travis envisions three phases of solar energy development. In phase 1, solar energy replaces expensive power, as mentioned above. This can happen around 2020. In phase 2, some form of storage will be available for unused energy. An example would be charging an electric car using solar energy. This can happen as early as 2030. In phase 3, solar energy will become more viable economically than any other forms of energy, and there will be a disruptive transformation in the entire energy industry.

The Solar Revolution will bring many benefits, aside the environmental ones. First, it will create more employment opportunities in terms of R&D, production, installation, and maintenance. Second, and more importantly, the decentralized nature of the solar energy system allows distribution of cheap electricity to remote locations where electricity was previously unavailable. This contributes to wealth creation, especially in developing nations.

Technically speaking, the Solar Revolution is sure to happen, but the acceptance and the spread of solar energy will not automatically happen without effective policy support. For example, Travis proposes the introduction of “solar mortgage” to encourage existing homeowners to install solar energy system. He also proposes new building codes which enforce the installation of solar panels in new homes and buildings.

The energy industry used to work under the economy of scarcity, ie, there are finite amount of resources available and we needed to work within the constraint. The Solar Revolution transforms the industry into the economy of abundance. It will likely have a lasting impact in shaping the future of the world.