How many of you have solar panels installed on your roof? This question was asked last week of an audience at the Wall St Journal’s annual ECO:nomics conference. The answer, from a room full of business executives and heads of state who are forging the road ahead for our energy future, was roughly 15 percent. Given that solar power accounts for less than one percent of total power generation in the U.S., it’s no surprise that the overwhelming majority of our nation’s homes and companies are not powered by the sun’s rays. Thus, most of the American public still thinks about solar power like they think of organic produce or electric vehicles – as something that is good for the world but sits on the shelf at a specialty store, around the corner from main street.
Yet for three days under Santa Barbara’s warm sunshine, industry leaders hailed solar’s arrival on the energy main stage. While recent years have seen investments in alternative energy plummet 20-30 percent, solar has quietly emerged as a key energy resource on a global level. In a recent TriplePundit article, RP Siegel discussed the long-awaited cost parity of solar power, at last achieved in countries like Germany, China, India, Spain and Italy.
As for the U.S., consider a few key points raised by industry leaders about the present economics of solar:
Price reduction: “In 5 yrs, the price of solar in the U.S. has dropped from $5 per watt to $.50 per watt, from one of the most expensive to one of least expensive energy sources.” – Arno Harris, Chairman and CEO @ Recurrent Energy
Market size: “Solar is now a $100 B market. This is twice the size of the computer processor market.” – Lyndon Rive, CEO of Solar City
Investment in job creation: “Every dollar bill invested in natural gas and traditional energies is better invested in solar, wind and renewables… there are more jobs created per KW in solar and wind than gas.” Michael Brune, Sierra Club
If any of these statements seem surprising to you, you’re not alone. According to Rive, “Often there is a stigma associated with solar – solar is expensive. This is not true. In fact, solar electricity in 14 states is cheaper than conventional energy…People need to start understanding that they can get cheaper and cleaner energy.”
Although incentives have almost disappeared in some states, the value propositions to the home or business have remained intact and there is still significant cost savings.
Former Secretary of State, George Shultz captured the solar conundrum batted throughout the conference, relating his personal experience with transitioning to alternative energies a little under 5 years ago when he installed solar panels on the roof of his home: “By this time, if I add up the savings, I’ve paid for what it costs me, and also the opportunity cost of the money I invested. And I’m driving an electric car which is far less than what my solar panels produce so I figure it’s free.”
Among energy leaders, there is an overwhelming sense of optimistic necessity for the increasing role of renewables in a future of broadly diversified energy sources. According to Rive, in 4-5 yrs, we’ll start seeing large adoption of off-the-grid homes running exclusively on renewable energies like solar and wind. In other words, it’s only a matter of time and continued cost reduction before more of us find the light – and the sun’s exceptional ability to help power our lives.