The Solar Revolution - Past, Present and Future
For this week's episode of Cleaning Up, I sat down with BloombergNEF's Jenny Chase. She's the best solar analyst in the world, and apparently it's all my fault!
For this week's episode of Cleaning Up, I sat down with Jenny Chase - lead solar analyst at BloombergNEF and author of "Solar Power Finance Without the Jargon” - to chew over the past, present and future of the solar sector.
I recruited Jenny into New Energy Finance just under 20 years ago. Since then she has become the world’s leading commentator, trend-spotter and muckraker in the solar sector - the nearest the industry has to an Ida Tarbell.
On our watch, the solar sector grew from MW to TW scale, absorbing over $1 trillion of investment, creating and destroying fortunes, providing the first electricity to hundreds of millions of people, arousing incredible support as well as some weird hostility - all of which we talked about.
Here are a few of my takeaways from our conversation:
Jenny is smart, analytical, direct and fearless. That’s why she’s the best solar analyst in the world. The conversation reminded me how much fun we had in the early days of New Energy Finance, and the extent to which we were doing pioneering work.
It may feel like the solar sector of 2024 was an inevitable, straight-line development from the solar sector of 2004. It was anything but. Today’s solar industry is the result of the innovation, problem-solving, hard work, and risk-taking of uncounted thousands of people around the world. It could have ended up a much less important sector, and we owe them all a vote of thanks.
The sector has gone through very distinct phases over the past 20 years: the infant years, 2004 to 2008, chaotic and exploratory; the price crash of 2008-09; the emergence of the modern industry, with all its teenage pains, 2009-2015; grid parity 2015; the years of relatively uneventful growth, 2015-2020; the post-covid boom and Russia’s invasion of Ukraine, driving a huge acceleration, 2021 to today.
Looking back it is much easier to understand these eras, and the trends and forces which shaped them. At the time, however, it’s hard to know how many solar panels are going where. Jenny may be the best solar analyst in the world, but even her forecasts have been consistently overly conservative (except apparently once, in 2018!). It’s easy to criticise, but when hundreds of billions of dollars of client money hang on your figures, you can’t just swing for the boundary.
We are entering a new era of disruption. With over 1TW of annual manufacturing capacity today, the sector could in theory install enough panels to meet an additional 4.5% of global power demand each year. And with capacity growing to 2TW per year within two years, make that an additional 9%. So installations either grow to the TW-per-year scale and drive a coach and horses through the energy sector, or a lot of Chinese solar companies will be going bankrupt. Or both - as Jenny cheerfully opined!
The solar sector cannot grow any more as a standalone proposition. It will have to reach out to other sectors and create system solutions as never before if it is going to continue to succeed. Whether that is about battery or hydrogen storage, hybridising with wind, or integrating deeply into user applications, in the future it’s a case of “who shares, wins”.
This episode has it all: stories from the early days of NEF, data on costs and growth, respectful disagreements, predictions. It was huge fun to catch up with Jenny, and I think it shows.
Watch the episode now on YouTube, or listen to it on the podcast platform of your choice!
Many thanks to Patrick Hofer-Noser and 3S Swiss Solar Solutions for letting us record and film at your factory in Thun. Doing great things in true building-integrated solar.
And of course, don’t forget to buy Jenny’s book: Solar Power Finance Without the Jargon, you won’t be disappointed.
As someone who founded a solar business in the UK in 2007, I enjoyed this trip, I mean episode
Going by rooftop solar (I love, love, love it) it doesn't seem so impossible to build enough to top out above demand. Solar factory output of 1TW per year? I'd seen that as an IEA projection for 2025. Is it already exceeded?
I think solar pricing looks a lot like Zeno's paradox - edging ever closer to zero but unable to quite reach it - and that makes it a winner already. Yet it is heading for cheaper still - eg perovskite/silicon tandem edges closer to viability.
We can't know how the clean energy end game will turn out but we can foresee market saturation, where, like a rooftop, installed capacity exceeds all demand and production is for replacing existing solar, not adding more. It doesn't look like the cost of solar panels is a big constraining factor; developing the associated abilities to make the most effective use of it - transmission and storage and EV's that can be both, mostly - seems the space to watch.