I don’t write much about energy. I love economics and policy, but there’s only so many fields you can get excited about. I normally prefer to focus on transport, cities, the labour market, taxation, trade and technology.
But the developments in solar energy make the field impossible to ignore.
The price of solar energy is now lower than its competitors throughout most of the US. In fact, there are 36 states that are either sunny enough (California) or far enough away from the oil (Vermont) that solar will be the cheapest choice in 2016.
The potential of solar is enormous.
Currently, solar provides around 1 per cent of Australia’s energy. But we have the rays to make a lot more:
The long-time global leader in solar power is Germany. They use the sun for 3 per cent of their electricity needs. Here’s that
same* map for them. Note the scale is different. Germany’s red is equivalent to Australia’s light green.
Obviously solar is not yet dominant in Australia, and the technology is far from settled..
Even the basics can improve a lot more. For example, placement of panels. The traditional choice has been between having them fixed and having them move to chase the sun. The former is generally preferred for it simplicity.
When fixing them, obviously you should point them at the midday sun. Right? Apparently not. The smartest thing to do is point them at the sunset. The point is not to maximise supply, but to maximise supply when demand is highest – i.e. people get home from work. The late afternoon is when traditional coal-burning power stations ramp up, and when solar can best counter the spike in prices.
The other problem with solar panels that all point at the midday sun is packing them in. Solar arrays have to use more space because the panel in front casts a shadow on on the one behind. A british academic reckons east and west facing panels can be packed in twice as densely.
Battery technology also needs to improve for solar to manage the evenings and cloudy days.
You can see the impact of clouds on this super-cool interactive and animated live map that shows the share of Australian electricity demand being met by solar panels. As I type this at 9am, Queensland is winning with 5 per cent of electricity coming from solar. Click to play with it.
Solar energy may need a boost from government, but the policy space around energy is a hot mess.
I wanted to say something smart about it, but between The Renewable Energy Target (which the government is trying to change) and the Clean Energy Finance Council, the Clean Energy Regulator, the Australian Renewable Energy Agency, feed-in tariffs and solar subsidies, the Solar Cities Program and Direct Action, I’m not sure if we end up with too little policy or not enough.
But overall I note that Australia lacks large-scale solar, which doesn’t seem ideal.
I suspect economies of scale mean individuals putting their own solar panels on their roofs won’t be the dominant trend for ever. Installation costs are pretty significant in the life-span of a solar panel. Furthermore, homes mainly use energy at night.
Costs will fall if big organisations can do solar at scale on the roofs of industrial buildings and in areas where land is cheap. Like this massive installation in rural NSW.
I look forward to a day when you drive the Australian outback and know the bloke leaning on a fence post and chewing a stick of grass is as likely to be an electrical engineer as a drover.