Transitioning to clean, renewable energy is one of the world’s most important targets as we strive to mitigate climate change.
A key part of this transition is solar power, which will also save consumers money and bring reliable power to low-income countries.
The cost of building a new solar plant is now less than 1 percent of the cost of building a new coal plant.
Solar is among the fastest-growing new energy sources in the U.S., especially in the South and West, and the cost of electricity from new solar installations is now significantly lower than the cost of electricity from a new coal plant. With solar energy becoming an ever-brighter climate solution, here are five things you should know.
1. Solar energy creates fewer greenhouse gases than fossil fuel
Imagine a group of kids running around a playground; occasionally, one rises into the air and then descends (stay with me!).
You might realize that if you installed a slide to catch them on their way down, you could turn their downward momentum into useful energy.
Semiconductor manufacturing expert Holland Smith used this analogy to describe solar power to podcast Explain Like I’m 5. The children are electrons in a semiconductor material (usually silicon), and they shoot up when hit by photons from the sun (rays of light). The slide is the photovoltaic cell, the basic unit of a solar panel. Capture and convert the electrons’ energy, and voilà!
The sun is powering your toaster, community center or commuter train. Aside from manufacturing and disposal, which we’ll talk about in a moment, generating solar power is as carbon-neutral as kids at a playground.
Every 90 minutes, the world receives enough sunlight to handle our global energy needs for a whole year.
While we may not be able to capture all of the sun’s rays in a single day, experts say the U.S. could be on a 90 percent clean-power grid by 2035. This would create an additional 500,000 jobs a year, reduce economy-wide greenhouse gas emissions by 27 percent from 2010 levels, and avoid $1.2 trillion in health and environmental damages through 2050.
The world’s energy sources are mostly fossil fuel–based and account for three-quarters of global greenhouse gas emissions.
The International Panel on Climate Change (IPCC) has said we must halve carbon emissions by 2050 to avoid catastrophe.
The world’s current energy sources are mostly fossil fuel–based and account for three-quarters of global greenhouse gas emissions. In order to produce 1 gigawatt hour (GWh) of electricity, an average coal plant emits 820 tonnes of CO2 equivalent (tCO2e).
Oil emits 720 tCO2e to produce the same amount; natural gas, 490. With solar energy emitting as few as 5 tonnes per GWh, it’s clear which energy source contributes most to global warming. In a future fueled by renewable energy sources, we’ll all be walking on sunshine.
2. Solar power isn’t a perfect solution
So now you’re vying for photovoltaics.
Solar naysayers, however, often point out the hidden costs of both household and large-scale solar systems, from system inefficiencies to the environmental impact of batteries.
What happens when it’s cloudy?
One particularly glaring question (see what I did there?) for those who want to install their own system is: where does your home or business get electricity from when it’s dark or cloudy? One option is to remain hooked up to the traditional grid to access bumper power when you need it.
Your state might even have solar net-metering, which allows you to “trade” your excess solar energy for traditional grid energy.
How can solar energy be stored?
Alternatively, you can go completely off-grid and buy a battery system that stores solar electricity to help balance out the ups and down.
While most households can’t (yet) afford their own batteries for energy storage, this is essential for larger, utility-scale solar plants. (Read our article on giant batteries like theHornsdale Power Reserve in Australia to learn more.)
Since their market debut, lithium ion batteries have made solar way more viable. In 2010, they cost $1,100 per kilowatt hour (kWh), but as of 2020, that cost was down to $156. But that’s still a pretty penny, and they might not get much cheaper.
The mining & manufacturing associated with batteries creates pollution and has been linked to labor and human rights issues.
And alas, lithium ion batteries don’t disappear into the sunset at the end of their short 5 to 15 year life.
Some estimates say fewer than 5 percent are recycled (yikes!), which means components don’t get reused and instead release toxins into landfills.
In addition, the mining and manufacturing associated with these batteries creates pollution and has been linked to labor and human rights issues. Critics also point to the carbon footprint of photovoltaic (PV) construction and transportation, and to potential human rights violations.
The thing is, while these issues definitely need to be addressed, the environmental, social and economic costs of fossil fuels are significant as well. As Sir Robert Watson, former chair of the IPCC, told National Geographic, “burning fossil fuels comes at a giant price tag, which the U.S. economy cannot afford and not sustain.”
The number on that tag?
One report estimates that extreme weather plus the health-related consequences of burning fossil fuels have been costing the U.S. economy at least $240 billion a year, a number that’s set to balloon to some $360 billion annually. On balance, solar is still a crucial step on the way to a greener, safer world.
3. Solar energy is still only a fraction of U.S. power, but is growing fast
American solar has grown c.50% a year, and there’s now enough capacity to power almost 18 million homes.
In the early days of solar, only hippies and engineering nerds had rooftop panels, but the times are changing.
In the past decade, American solar has grown more than 40 percent per year, and there’s now enough capacity in the country to power more than 18 million homes. The majority of that capacity is made up of utility-scale installations, but business and residential are gaining quickly.
How many Americans use solar power?
Although only 4 percent of U.S. homes currently have solar systems, a recent report estimates that rate will reach more than 13 percent by 2030. Photovoltaic installers are on track to be the third-fastest-growing profession of the next decade.
Even in the depths of the COVID-19 pandemic, U.S. solar capacity increased. But still, solar only accounts for just over 2 percent of U.S. utility-scale energy. The promise of photovoltaics hasn’t nearly reached its peak.
Old power grids need to be upgraded for solar energy
It can be hard to teach an old grid new tricks.
But with seven states creating binding commitments to 100 percent clean energy by 2050, governments are going to have to step up.
California, for example, is exploring smart grid technologies to accommodate its energy-efficient home target of every new build making as much energy as it uses.
Managing the sun’s highs and lows means that big solar can only be as strong as its storage.
New systems are getting better at generating in cloudy conditions, but America’s old-school infrastructure just wasn’t designed with intermittent power in mind.
Managing the sun’s highs and lows means that big solar can only be as strong as its storage. Considering the flaws of lithium ion batteries, alternatives like liquid Flow batteries need more investment.
When it comes to household solar, more incentives and rebates will help ease installation costs, which can tally $20,000 on average, even after tax credits. Net metering has been a game-changer, but many of the states which currently allow it are looking to strike it down, calling it an “unfair and unnecessary subsidy” — with no successor in place.
That said, depending on where you live, panels could pay for themselves within 10 to 20 years, and you could save up to $30,000 over the lifetime of your system.
4. Solar energy’s popularity is sky-high, while rates are racing down
During the first decade of the 21st century, highly credentialed analysts tried to predict the future of clean energy. Most of them vastly underestimated the promise of renewables. Luckily for the planet, they were wrong.
How much does solar energy cost?
Always the overachiever, solar has experienced the biggest cost decline of all energy sources. In 2009, a megawatt hour of solar cost a global average of $359. In 2019, that cost was down to less than $40.
One researcher compared this to renting an apartment for $3,590 and then renting the same apartment 10 years later for $400.
A “Solar for Dummies” book might say costs have gone down because efficiency has gone up. This seems obvious, but since the 1950s, the solar industry’s learning curve makes it unique among energy forms.
With each technological breakthrough, panel and power costs plummet. Economies of scale (AKA countries such as the U.S. with lots of economic clout) have taken advantage of these lower costs, all while consumer and business demand climbs.
Low-income home energy bills, by a percentage of overall income, are three times higher than their higher-income neighbors.
How do these solar price drops impact the average American?
Photovoltaics are still inaccessible to millions, even if systems pay for themselves in eight years. But solar’s monthly savings would mean the world to the low-income homes whose energy bills, when assessed by percentage of overall income, are three times higher than their higher-income neighbors’.
That’s why 20 states are offering incentives for low-income households to go solar.
Small-scale developers and community organizations also struggle, so crowd-funding investment groups like Raise Green are connecting them to resources and funding. The push for accessible alternative energy sources is under way.
5. Solar power could address energy poverty in low-income countries
The number of people without electricity has been dropping for the last decade; but the World Bank says that 8% of people will still live this way by 2030.
What does energy poverty look like?
Who do you picture when you think of global energy poverty?
Farmers who can’t refrigerate their produce before it gets to market? A healthcare worker who can’t power medical equipment? Children unable to do schoolwork after dark?
Although the number of people without electricity has been dropping for the last decade, the World Bank says that 8 percent of people will still live this way by 2030.
In sub-saharan Africa, more than half the population have no access to electricity.
Even when low-income regions do have access to the grid, power outages threaten daily life. For millions across Africa and Asia, the amount of in-home energy might barely charge a lightbulb, let along a fridge. These are far more than inconveniences. They threaten health, livelihoods and safety.
Believe the hype: Solar is changing lives in developing nations.
Solar energy can be scaled up for massive plants, or scaled down to be distributed across small communities. Bangladesh, where more than a quarter of the rural population doesn’t have electricity, now boasts one of the world’s largest domestic solar programs. The sun has helped 14 percent of Bangladeshis light up, tune in and switch on over the past two decades.
COVID-19 has put 20 million people into energy poverty, as supply chains and funding channels for renewable energy stall out.
It’s no wonder experts predict that low-income countries could make a full switch to clean power by 2050.
Tragically, the COVID-19 pandemic has put 20 million people back into energy poverty, as supply chains and funding channels for renewable energy stall out. This is all the more reason for governments to prioritize solar investment and access.
Looking toward a brighter future
Most new electric generation capacity will be from renewables in 2021, so if you’re dreaming of home panels, first figure out your home’s solar potential. (Online info abounds, including these sites for the U.S. and Canada.)
Next, see if you qualify for any rebates, tax credits or other incentives. (American residents can review the Database for State Incentives for Renewables and Efficiency, while Canadians can browse by province via this Natural Resources Canada website.)
Then search online for installers, panel options and other information relevant to your region.
As we look towards a world lit brightly by solar panels, we might glimpse a future that is not only electric, but equitable.
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada, RBC Ventures Inc., or its affiliates.