I think this speaks to the power of economic incentives as a force multiplier for climate change action. In the end, people are usually self-serving. Doubly so on a nation-state level. China is...
I think this speaks to the power of economic incentives as a force multiplier for climate change action. In the end, people are usually self-serving. Doubly so on a nation-state level.
China is leveling their emissions not because the US or the EU told them to, it’s not because of international climate agreements, it’s just because it makes economic sense for China to do so. And that only happened because the cost of solar fell off a cliff over the last two decades.
Of course, the next frontier is India, and India doesn’t have the benefit, in this area, of China’s much stronger governmental control.
I think that Pakistan is a great example of how solar can become ubiquitous without significant governmental control. The economics of it make sense in areas with minimal infrastructure without...
I think that Pakistan is a great example of how solar can become ubiquitous without significant governmental control. The economics of it make sense in areas with minimal infrastructure without any subsidization, as long as they have access to inexpensive Chinese panels. Though with the tension between India and China that might not be on the table.
More importantly, the cost of solar fell off the cliff because China decided to make a lot of solar panels. Solar is actually quite unprofitable right now, the rapidly falling price makes it hard...
More importantly, the cost of solar fell off the cliff because China decided to make a lot of solar panels.
Solar is actually quite unprofitable right now, the rapidly falling price makes it hard to recoup your investment as a supplier.
Climate change is not something the free market will solve, fossil fuels are simply more profitable that everyone having free electricity (at least generation-wise). We need to remember how to use industrial policy.
Comment box Scope: comment response, information, opinion Tone: neutral Opinion: yes Sarcasm/humor: none Cost is the #1 factor, but generation efficiency can be superseded by other motivations....
Comment box
Scope: comment response, information, opinion
Tone: neutral
Opinion: yes
Sarcasm/humor: none
Cost is the #1 factor, but generation efficiency can be superseded by other motivations. Most of these analyses focus narrowly on price per watt or LCOE. The $ benefits can be more indirect.
Market actors can accept some inefficiencies. For a government, energy independence is a strong reason to choose solar even under "irrational" market conditions:
Fossil fuels (especially oil) have relatively centralized production and are subject to price fluctuation from unfriendly governments. Europe is having this conversation already to reduce dependence on Russian oil.
Fossil pipelines can easily be sabotaged by hostile actors, rendering delivery very challenging. Sabotage occurred in the underwater Nord Stream pipelines. It's hard to protect linear, centralized, pressure-sensitive infrastructure, especially when it's not in landed territory or crosses land borders. Solar delivery is comparatively decentralized (many Pakistani deployments are household-level; that's not as locally efficient as grid-level deployment, but it's way more reliable for the end-users).
The best solar panels are from China, but very good ones are available (pg 87) from other Asian manufacturers at less than 5% more cost. American and European panels are like 25% more expensive. That's meaningful, but potentially well worth it to ensure one's country has electricity in spite of upset neighbors.
It just so happens that governments don't necessarily have to make that choice. Solar is just THAT cheap. New techniques improve efficiency. Perovskites use very little material. Cell lifespan is increasing across the board, including in perovskites. Cost is dropping faster than governments can even respond to geopolitical tension,. Market pressures are stronger in basically all democracies and all capitalist systems.
Experimental solar technology increasingly uses more globally abundant materials, so future manufacturing will rely less on Chinese silicon. This further incentivizes solar even if cost stops dropping. But it will continue to drop: there are so many independently promising chemistries and new techniques.
It's convenient that energy independence has a broad financial benefit even if marketed otherwise. Not purely political. I think in some places, like the USA right now, there's a pressure to build/buy American (at very high cost) for cultural and political reasons; Americans want to feel important and reminisce about the old days. It's possible to satisfy that desire for what is functionally a kind of energy independence AND have lower cost of generation with solar. Really remarkable. So as you say, it all comes back to economics.
I think that may reverse the arrow of causality. Why did the cost of solar fall off a cliff over the last two decades? I would argue it's because of those international climate agreements and the...
I think that may reverse the arrow of causality. Why did the cost of solar fall off a cliff over the last two decades? I would argue it's because of those international climate agreements and the associated funding for research into solar. The agreements produce the conditions for the economics.
What’s the evidence for this? Almost the entire cost reduction of solar panels was driven by China, who had significant political reasons to pursue it. They are an energy hungry country that...
I would argue it's because of those international climate agreements and the associated funding for research into solar.
What’s the evidence for this? Almost the entire cost reduction of solar panels was driven by China, who had significant political reasons to pursue it. They are an energy hungry country that notably has little oil reserves of their own, and a major vulnerability has always been energy independence.
We know the companies that led to that, like Sunrise. I don’t see any indication they really gave any shits about international climate agreements, and the funding was from provincial governments in their usual fight for accomplishments.
Its something I think about a lot, it's so weird to me that generating literally free energy from the sky is not considered to be incentive enough on its own. I mean even if you ignore all forms...
Its something I think about a lot, it's so weird to me that generating literally free energy from the sky is not considered to be incentive enough on its own.
I mean even if you ignore all forms of climate change and pollution from fossil fuels, things like solar and wind energy just make sense... It's literally free energy.
Obviously the costs of creating the tools to harness that energy aren't free, but we've already proven that when there is enough willpower; it's possible to make those costs incredibly low, to the point where they're negligible. Solar is by far the cheapest way to generate electricity (and will likely be the cheapest even after storage costs are factored in if we continue to see such massive advances in grid storage technology) of course it's going to be heavily pursued for its economical advantages alone.
I don't know enough about the relevant companies to know if it actually applied here, but I could see an argument that knowing there's forced demand being added to your sector makes increasing...
I don't know enough about the relevant companies to know if it actually applied here, but I could see an argument that knowing there's forced demand being added to your sector makes increasing investment more appealing.
I think this speaks to the power of economic incentives as a force multiplier for climate change action. In the end, people are usually self-serving. Doubly so on a nation-state level.
China is leveling their emissions not because the US or the EU told them to, it’s not because of international climate agreements, it’s just because it makes economic sense for China to do so. And that only happened because the cost of solar fell off a cliff over the last two decades.
Of course, the next frontier is India, and India doesn’t have the benefit, in this area, of China’s much stronger governmental control.
I think that Pakistan is a great example of how solar can become ubiquitous without significant governmental control. The economics of it make sense in areas with minimal infrastructure without any subsidization, as long as they have access to inexpensive Chinese panels. Though with the tension between India and China that might not be on the table.
More importantly, the cost of solar fell off the cliff because China decided to make a lot of solar panels.
Solar is actually quite unprofitable right now, the rapidly falling price makes it hard to recoup your investment as a supplier.
Climate change is not something the free market will solve, fossil fuels are simply more profitable that everyone having free electricity (at least generation-wise). We need to remember how to use industrial policy.
Comment box
Cost is the #1 factor, but generation efficiency can be superseded by other motivations. Most of these analyses focus narrowly on price per watt or LCOE. The $ benefits can be more indirect.
Market actors can accept some inefficiencies. For a government, energy independence is a strong reason to choose solar even under "irrational" market conditions:
It just so happens that governments don't necessarily have to make that choice. Solar is just THAT cheap. New techniques improve efficiency. Perovskites use very little material. Cell lifespan is increasing across the board, including in perovskites. Cost is dropping faster than governments can even respond to geopolitical tension,. Market pressures are stronger in basically all democracies and all capitalist systems.
Experimental solar technology increasingly uses more globally abundant materials, so future manufacturing will rely less on Chinese silicon. This further incentivizes solar even if cost stops dropping. But it will continue to drop: there are so many independently promising chemistries and new techniques.
It's convenient that energy independence has a broad financial benefit even if marketed otherwise. Not purely political. I think in some places, like the USA right now, there's a pressure to build/buy American (at very high cost) for cultural and political reasons; Americans want to feel important and reminisce about the old days. It's possible to satisfy that desire for what is functionally a kind of energy independence AND have lower cost of generation with solar. Really remarkable. So as you say, it all comes back to economics.
I think that may reverse the arrow of causality. Why did the cost of solar fall off a cliff over the last two decades? I would argue it's because of those international climate agreements and the associated funding for research into solar. The agreements produce the conditions for the economics.
What’s the evidence for this? Almost the entire cost reduction of solar panels was driven by China, who had significant political reasons to pursue it. They are an energy hungry country that notably has little oil reserves of their own, and a major vulnerability has always been energy independence.
We know the companies that led to that, like Sunrise. I don’t see any indication they really gave any shits about international climate agreements, and the funding was from provincial governments in their usual fight for accomplishments.
Its something I think about a lot, it's so weird to me that generating literally free energy from the sky is not considered to be incentive enough on its own.
I mean even if you ignore all forms of climate change and pollution from fossil fuels, things like solar and wind energy just make sense... It's literally free energy.
Obviously the costs of creating the tools to harness that energy aren't free, but we've already proven that when there is enough willpower; it's possible to make those costs incredibly low, to the point where they're negligible. Solar is by far the cheapest way to generate electricity (and will likely be the cheapest even after storage costs are factored in if we continue to see such massive advances in grid storage technology) of course it's going to be heavily pursued for its economical advantages alone.
I don't know enough about the relevant companies to know if it actually applied here, but I could see an argument that knowing there's forced demand being added to your sector makes increasing investment more appealing.
An inconvenient truth for those of us over here who want to brush of climate change with a "Well China burns coal so why should we change??".
That’s ok, we have old reliable India to scapegoat still. 🙄
Wonder what the west’s excuse will be when they both look like this and we’re still burning fossils.