WEBVTT - How the Sun Won (The Solar Era, Part 1) 0:00:15.356 --> 0:00:24.756 Pushkin. Here is an underappreciated world historical fact. In the 0:00:24.796 --> 0:00:29.036 past twenty years, the price of solar panels has fallen 0:00:29.796 --> 0:00:34.276 not by twenty percent, not by half, but by more 0:00:34.556 --> 0:00:39.516 than ninety seven percent, and as a result, solar power 0:00:39.556 --> 0:00:43.476 has gone bananas. The amount of solar power that was 0:00:43.516 --> 0:00:46.996 installed in the world over the past two days, just 0:00:47.116 --> 0:00:51.436 today and yesterday, is greater than the total amount of 0:00:51.476 --> 0:00:54.876 solar power that existed in the whole world in two 0:00:54.956 --> 0:00:57.956 thousand and four, and the rate of new installations is 0:00:58.036 --> 0:01:02.516 still growing. This is very good news for the world. 0:01:03.316 --> 0:01:06.076 Wildly cheap and abundant solar power won't solve all of 0:01:06.116 --> 0:01:08.916 our climate problems, but it will solve a lot of them. 0:01:09.716 --> 0:01:13.196 Solar combined with batteries, will provide a huge chunk of 0:01:13.196 --> 0:01:16.436 the world's electricity in the decades to come. On top 0:01:16.436 --> 0:01:18.836 of that, the spread of solar means that within a 0:01:18.876 --> 0:01:23.636 few years energy may be free, free energy in the 0:01:23.716 --> 0:01:26.076 middle of the day in many parts of the world, 0:01:26.516 --> 0:01:30.316 and that free energy will create new opportunities, new ways 0:01:30.356 --> 0:01:33.956 to generate and store fuel and heat, new ways to 0:01:34.036 --> 0:01:43.076 fight climate change. I'm Jacob Goldstein, and this is what's 0:01:43.116 --> 0:01:47.036 your problem. Starting today and continuing over the next few weeks, 0:01:47.276 --> 0:01:49.076 I'm going to be talking to people who are in 0:01:49.116 --> 0:01:52.196 the middle of the solar power revolution, people who can 0:01:52.236 --> 0:01:56.436 tell us how this extraordinary thing happened, this ninety seven 0:01:56.476 --> 0:01:59.156 percent fall in the price of solar panels, and what 0:01:59.196 --> 0:02:02.996 it means for the world. My guest today is Jenny Chase. 0:02:03.556 --> 0:02:06.396 She's one of the world's top solar analysts. She's been 0:02:06.436 --> 0:02:09.356 covering the industry for something like twenty years. She's a 0:02:09.356 --> 0:02:12.236 writer at Bloomberg ne Ef and she's also the author 0:02:12.316 --> 0:02:16.196 of the book Solar Power Finance Without the Jargon. I 0:02:16.196 --> 0:02:19.076 talked with Jenny about how solar power got so cheap 0:02:19.436 --> 0:02:23.636 and what it means for us now. So okay, So, 0:02:24.036 --> 0:02:27.876 so it's the turn of the century. Solar power is 0:02:28.116 --> 0:02:32.956 very expensive. It's four dollars per wattch just for the 0:02:33.036 --> 0:02:38.396 solar panels. When does that start to change? What sort 0:02:38.396 --> 0:02:40.956 of the first key moment in this story of solar 0:02:40.996 --> 0:02:41.876 power getting cheaper? 0:02:43.476 --> 0:02:47.676 So the first the first moment was probably solar power 0:02:47.716 --> 0:02:52.436 getting like slightly more expensive. Because the Germans brought in 0:02:52.996 --> 0:02:55.436 an expanded version of a previous program called a Freedom 0:02:55.476 --> 0:02:59.116 tariff in two thousand and four. This was the by 0:02:59.196 --> 0:03:03.676 far the biggest incentive driving the most solar build that 0:03:04.516 --> 0:03:06.756 the world had ever known. And there was a kind 0:03:06.756 --> 0:03:09.076 of sucking noise as all the world's solar module stuff 0:03:09.356 --> 0:03:10.116 going to Germany. 0:03:10.596 --> 0:03:15.396 Okay, and so it's great I think for world historical 0:03:15.436 --> 0:03:17.556 reasons that Germany did this. I wish they called it 0:03:17.596 --> 0:03:19.956 something other than a feed in tariff. Does it make 0:03:19.996 --> 0:03:22.316 more sense in German? I hate this phrase feed in tariff? 0:03:22.356 --> 0:03:25.116 Is it sensible in German? And it's just a bad translation? 0:03:26.196 --> 0:03:32.876 No, not really, It's an unspizer for gutungen in German. 0:03:33.356 --> 0:03:35.676 And does it mean feed in tariff? 0:03:36.116 --> 0:03:37.836 Okay? So what is a feed in tariff? 0:03:38.396 --> 0:03:41.596 So it means that you get paid a fixed price 0:03:41.996 --> 0:03:44.116 for the electricity that you feed in to the grid. 0:03:44.716 --> 0:03:45.076 I see. 0:03:45.356 --> 0:03:48.156 So it's basically the German government saying we promise to 0:03:48.236 --> 0:03:52.276 pay anybody who puts up solar panels a certain amount 0:03:52.436 --> 0:03:55.036 for the energy those panels produce. 0:03:55.276 --> 0:03:58.276 For twenty years. I think it's almost twenty five years. 0:03:58.316 --> 0:03:59.236 It's twenty years now. 0:03:59.596 --> 0:04:04.716 Okay, And so tell me more about this unfortunately named 0:04:04.956 --> 0:04:07.356 policy that helped kick off the solar power revolution. 0:04:09.596 --> 0:04:13.476 Well, basically, for the first time, it was actually profitable 0:04:13.756 --> 0:04:17.796 to put solar power plants on fields. I mean historically, 0:04:17.876 --> 0:04:19.956 nearly all solo models have been as stall and rooftops 0:04:20.796 --> 0:04:25.116 because you just didn't buy the huge numbers of solar modules. 0:04:25.156 --> 0:04:27.516 You bought small numbers of solar models because they were expensive. 0:04:28.196 --> 0:04:31.756 And so for the first time there were actually specialized 0:04:32.036 --> 0:04:36.036 development companies who were rolling solar panels out on fields 0:04:36.236 --> 0:04:38.396 and they were raising money from investors. And for the 0:04:38.476 --> 0:04:42.836 first because the feed in tariff is paid for the 0:04:42.956 --> 0:04:47.196 lifetime of the system more or less almost then you 0:04:47.316 --> 0:04:50.316 can do things like get bank debt for it. So 0:04:50.476 --> 0:04:54.716 banks and Germany also had a support for bank debt 0:04:54.796 --> 0:04:57.796 for projects. But for the first time, European banks in 0:04:57.836 --> 0:05:00.116 particular could get really comfortable with the fact that the 0:05:00.196 --> 0:05:03.156 cash flows from these solar projects were extremely reliable, and 0:05:03.236 --> 0:05:06.276 so you could lend money to these projects at quite 0:05:06.316 --> 0:05:07.356 a low rate of interest. 0:05:09.196 --> 0:05:12.676 Germany creates the feed in tariff. It means it's easier 0:05:12.716 --> 0:05:15.156 to get loans because now the government is promising to 0:05:15.236 --> 0:05:17.476 give you a stream of income for twenty five years, 0:05:17.476 --> 0:05:20.796 which is a lender's dream come true. It's a sovereign 0:05:20.916 --> 0:05:26.796 bond like investment. You start getting commercial development of solar 0:05:26.876 --> 0:05:28.716 power for the first time in the history of the world. 0:05:29.396 --> 0:05:33.076 What happens next and you get manufacturers ramping up, So 0:05:33.236 --> 0:05:38.116 you get US sunhower and evergreen solar, Chinese Suntech, German 0:05:38.236 --> 0:05:40.876 Q cells coming in, and they went onto the public 0:05:40.916 --> 0:05:44.436 stock markets and raised money to expand their factories and 0:05:44.596 --> 0:05:49.036 also to secure supplies of their raw material, polysilicon. 0:05:49.756 --> 0:05:49.956 Huh. 0:05:50.476 --> 0:05:57.396 Now, until the Germans started this, this crazy solar expansion, 0:05:58.156 --> 0:06:01.396 the solar industry had got along just fine using offcuts 0:06:01.396 --> 0:06:04.556 from the semiconduct to industry huhs for their silicon. 0:06:04.796 --> 0:06:09.396 The offcuts meaning just scraps from chip factories. Yeah, okay, 0:06:11.076 --> 0:06:13.436 So what does it mean for just this raw material, 0:06:13.516 --> 0:06:17.996 the silicon, once the industry becomes industrialized and starts ramping 0:06:18.076 --> 0:06:19.716 up after this German policy change. 0:06:19.916 --> 0:06:23.436 Well, first of all, polysilicon factories are quite really expensive 0:06:23.676 --> 0:06:27.716 and they require a lot of technological expertise to do. 0:06:28.516 --> 0:06:31.956 There's nasty chemicals, there's a point in your where you 0:06:32.076 --> 0:06:34.956 have to be simultaneously heating and cooling different parts of 0:06:35.036 --> 0:06:39.396 a reactor. There's all kinds of gases that you're trying 0:06:39.436 --> 0:06:43.756 to purify. There's a huge amount of incredibly technical expertise there, 0:06:43.796 --> 0:06:45.716 and at the time there were only really five companies 0:06:45.756 --> 0:06:47.516 that are worldwide that could do it, which was fine 0:06:47.516 --> 0:06:50.276 because they were only supplying the semiconductor industry, right, the 0:06:50.356 --> 0:06:53.236 demand was not that great, but solar panels use a 0:06:53.276 --> 0:06:57.356 lot of silicon compared with semiconductors, and so demand just 0:06:57.476 --> 0:06:57.876 went up. 0:06:58.316 --> 0:07:01.876 So before the Germans, before two thousand and four, you 0:07:01.996 --> 0:07:05.756 could get silicon for about twenty five dollars a kilogram. 0:07:05.836 --> 0:07:08.876 What's the price go up to after when everybody's trying 0:07:08.876 --> 0:07:10.316 to get into the solar panel So. 0:07:10.356 --> 0:07:13.876 The spot price went up to over four hundred kilogram. 0:07:13.996 --> 0:07:15.636 Oh wow, So it went up by like, I don't know, 0:07:15.716 --> 0:07:20.116 almost twenty x exactly. So there is this thing people 0:07:20.196 --> 0:07:22.996 love to say about commodities, right, which is the cure 0:07:23.076 --> 0:07:26.516 for high prices is high prices, which basically means if 0:07:26.556 --> 0:07:29.276 there is a high price on some commodity thing, more 0:07:29.356 --> 0:07:31.436 people will will make it, we'll pull it out of 0:07:31.476 --> 0:07:35.156 the ground, whatever, and that increased supply will drive down 0:07:35.196 --> 0:07:39.596 the price. And that happens here, right, More polysilicon factories 0:07:39.636 --> 0:07:41.876 come online, so the price of the raw material falls, 0:07:42.316 --> 0:07:46.396 and then demand for solar panels grows, but not as 0:07:46.436 --> 0:07:49.236 much as people expected. So there is this collapse in 0:07:49.316 --> 0:07:52.356 the price, right, this first big decline where between two 0:07:52.436 --> 0:07:55.396 thousand and eight and two thousand and nine the price 0:07:55.636 --> 0:07:59.076 falls from four dollars a WoT to two dollars a WoT. 0:07:59.996 --> 0:08:02.716 So what does this first big decline mean for the industry. 0:08:03.116 --> 0:08:06.836 It has a little wobble, But the German market expanded 0:08:06.876 --> 0:08:09.036 because of course Germany still had its feet and tower, 0:08:10.356 --> 0:08:13.276 no cap and suddenly you've got two dollars what modules 0:08:13.396 --> 0:08:15.956 rather than four dollars of what modules. So developers in 0:08:15.996 --> 0:08:21.956 Germany were basically going catching the US market. There's this 0:08:22.116 --> 0:08:24.276 blot called Jiga Shah, who some of you may have 0:08:24.356 --> 0:08:26.916 heard of, who since about two thousand and three had 0:08:26.956 --> 0:08:31.676 been running a business called San Edison that sold commercial 0:08:31.796 --> 0:08:35.076 rooftop solar in America to enterities like Walmarts. 0:08:35.796 --> 0:08:37.836 And I should mention so Jigger Shaw, this guy you're 0:08:37.836 --> 0:08:39.996 talking about, he actually was on this show. He now 0:08:40.236 --> 0:08:44.596 runs an office in the US federal government that's basically 0:08:44.636 --> 0:08:48.236 in charge of lending out money to energy transition companies, 0:08:48.276 --> 0:08:50.916 companies you know, trying to make clean cement and that 0:08:50.996 --> 0:08:53.316 sort of thing. So what's he doing back at this time? 0:08:53.796 --> 0:08:56.716 So At this time, he was convincing companies like Whole 0:08:56.756 --> 0:09:01.516 Foods and Walmart to sign twenty year power purchase agreements 0:09:01.956 --> 0:09:04.836 with his company so that he could put solar power 0:09:04.916 --> 0:09:05.556 on their roofs. 0:09:06.276 --> 0:09:09.796 So it's again this idea of finance, this idea of 0:09:10.676 --> 0:09:14.836 if he gets some institution like Walmart that everybody trusts 0:09:14.836 --> 0:09:16.596 and everybody thinks is going to be around for twenty 0:09:16.676 --> 0:09:20.116 years to promise to buy solar power for twenty years, presumably, 0:09:20.236 --> 0:09:22.676 then he can get the financing to build the panels. 0:09:22.716 --> 0:09:25.956 Now I mean, is that the basic idea exactly? 0:09:25.996 --> 0:09:28.076 And then he would go to the financiers and say, look, 0:09:28.516 --> 0:09:31.116 I'm selling this power to Whole Foods under a twenty 0:09:31.196 --> 0:09:35.636 year power purchase agreement. This is not risky. Lend me 0:09:35.756 --> 0:09:40.556 some money. And he had to do some convincing to 0:09:40.756 --> 0:09:43.596 very and find the right person in each division, but 0:09:43.916 --> 0:09:49.196 he did, and he was able to offer these retailers 0:09:49.956 --> 0:09:53.156 solar power at prices which were reasonably attractive to them. 0:09:54.036 --> 0:09:57.516 So it worked, it worked, and I think he did 0:09:57.636 --> 0:09:59.596 very nicely in two thousand and nine because just like 0:10:00.156 --> 0:10:04.596 because this company also had fixed PRICEE power purcuse agreements 0:10:04.676 --> 0:10:08.476 in place, and suddenly modules were much cheaper than they'd expect. 0:10:08.596 --> 0:10:13.476 Huh ah, huh, So his margins go up the cheaper 0:10:14.076 --> 0:10:16.636 modules are. He's still getting paid the same for twenty 0:10:16.716 --> 0:10:19.956 five years. It's great for him. So clearly the rise 0:10:20.156 --> 0:10:25.756 of Chinese manufacturing of solar panels is a big part 0:10:25.796 --> 0:10:29.676 of this story, is it? Where does that happen in 0:10:29.756 --> 0:10:30.156 the story. 0:10:30.676 --> 0:10:33.556 It's been happening all along. I mean one of the 0:10:33.676 --> 0:10:37.276 companies that did an IPO in two thousand and five 0:10:37.316 --> 0:10:42.436 with Suntech, which is the Chinese. Essentially it's using technology 0:10:42.476 --> 0:10:44.756 developed in Australia at the University of New South Wales, 0:10:44.836 --> 0:10:47.116 but it's it is a Chinese company went by a 0:10:47.196 --> 0:10:51.836 Chinese person. And yeah, so the Chinese are there from 0:10:51.876 --> 0:10:55.916 the beginning. But around this time, the polysilicon price is 0:10:55.956 --> 0:10:58.396 coming down as well. So the polysilicon price is coming 0:10:58.436 --> 0:11:01.236 down to the sort of sixty dollars a kilogram range 0:11:01.236 --> 0:11:02.596 from four hundred dollars a kilogram. 0:11:02.876 --> 0:11:05.996 Okay, So this time where it's like twenty eleven something, it's. 0:11:05.876 --> 0:11:08.956 About twenty eleven twenty eleven, module prices have dropped to 0:11:08.956 --> 0:11:10.996 one dollar or what one dollar? 0:11:11.036 --> 0:11:13.356 Okay, so they've fallen in half again. They went from 0:11:13.476 --> 0:11:17.156 four to two and out of one. And you mentioned polysilicon. 0:11:17.316 --> 0:11:19.716 Silicon prices are coming down. That's because what people are 0:11:19.796 --> 0:11:21.956 building more and more of these factories. There's an economy 0:11:21.996 --> 0:11:24.916 of scale. It's that's the sort of classic industrial development. 0:11:25.156 --> 0:11:27.356 What you're starting to get then, is Chinese companies figuring 0:11:27.396 --> 0:11:31.876 it out. So there were hundreds, I mean pretty probably 0:11:31.956 --> 0:11:35.116 literally one hundred Chinese companies attempted to make polysilicon. But 0:11:35.196 --> 0:11:38.436 making polysilicon is hard, and most of them failed, and 0:11:38.596 --> 0:11:41.676 some of them were extremely random companies. Then again, the 0:11:41.756 --> 0:11:45.356 largest polysilicon maker in China these days, Tongway, started as 0:11:45.356 --> 0:11:46.436 a fish food maker. 0:11:46.316 --> 0:11:51.356 So fish food, and then they decided to pivot to polysilicon. 0:11:51.516 --> 0:11:52.596 No, they still make fish food. 0:11:53.076 --> 0:11:58.956 Aha, how'd that happen? Is there some genius there? They 0:11:59.036 --> 0:12:01.756 make a million different things? Or do they just make 0:12:01.836 --> 0:12:03.116 fish food in polysilicon? 0:12:03.516 --> 0:12:05.596 They do just make fish food. No, now they make 0:12:05.676 --> 0:12:10.276 polysilicon fish food sold a wafers, cells and modules, U huh. 0:12:11.196 --> 0:12:13.596 But they still get about ten percent of the revenue 0:12:13.636 --> 0:12:14.156 for fish food. 0:12:14.596 --> 0:12:21.596 Amazing. So with two thousand and eleven or so, China's 0:12:21.836 --> 0:12:27.476 kind of not just solar panel industry, but the raw materials, 0:12:27.516 --> 0:12:30.356 the polysilicon part is coming online, and you're getting this 0:12:30.556 --> 0:12:34.436 kind of manufacturing ecosystem for which China is famous in 0:12:34.476 --> 0:12:36.716 a lot of industries, right, Like they don't just make 0:12:36.796 --> 0:12:39.756 one thing. There's often a region where lots of different 0:12:39.836 --> 0:12:42.876 manufacturers are making sort of components for each other, and 0:12:42.916 --> 0:12:45.476 there's kind of a whole value chain in one place. 0:12:45.596 --> 0:12:47.196 That happening in China at this point. 0:12:48.716 --> 0:12:50.756 This is probably when it's starting to appear. So in 0:12:50.836 --> 0:12:55.476 Jiangsu Province, if you want to buy encapsulant or silver paste, 0:12:55.636 --> 0:12:59.356 then you can talk to somebody twenty kilometers away instead 0:12:59.356 --> 0:13:01.756 of talking to somebody in another country. And this is 0:13:01.796 --> 0:13:04.076 starting to be very convenient. 0:13:04.636 --> 0:13:08.076 Like clearly the price has kept falling by a lot 0:13:08.316 --> 0:13:11.396 from one dollar, Like why does the price keep coming 0:13:11.476 --> 0:13:12.596 down after two thousand and eleven. 0:13:13.156 --> 0:13:19.436 So, solar panels are a manufactured commodity, and they they 0:13:19.636 --> 0:13:22.916 have something called the experienced curve, which probably a lot 0:13:22.956 --> 0:13:27.156 of things have, but then they're difficult to notice, particularly 0:13:27.196 --> 0:13:29.556 I they're not very commoditized. So Moore's law is a 0:13:29.556 --> 0:13:33.196 special sort of experienced curve. But the experience curve just 0:13:33.316 --> 0:13:37.716 means that every time you double cumulative experience that we 0:13:37.836 --> 0:13:42.076 have as a species doing something, we get a certain 0:13:42.116 --> 0:13:44.756 amount better at it, And in the case of solar panels, 0:13:44.796 --> 0:13:49.196 it's probably about twenty eight percent better at it. And 0:13:49.316 --> 0:13:51.676 that comes from having a better recipe to get your 0:13:51.716 --> 0:13:56.036 solar models more efficient, and you slicing your wafers more thinly, 0:13:57.836 --> 0:14:00.156 all kinds of little tweaks you make to use less 0:14:00.196 --> 0:14:03.756 material and to make your machines through output more energy 0:14:03.916 --> 0:14:06.156 and to make the thing more efficient. 0:14:07.236 --> 0:14:09.556 Uh huh. So I mean, in a way, is like 0:14:09.636 --> 0:14:14.476 the big story of technological development in human life, certainly 0:14:14.556 --> 0:14:17.196 since the Industrial Revolution a couple hundred years ago, right, 0:14:18.796 --> 0:14:21.716 you know, people make these incremental improvements one after the other, 0:14:21.796 --> 0:14:24.476 and things get cheaper and cheaper. And you're saying, that's 0:14:24.556 --> 0:14:27.956 basically how the price of solar panels fell all the 0:14:28.036 --> 0:14:30.756 way from four dollars a WAT to less than ten 0:14:30.876 --> 0:14:33.956 cents a WAT, which is where we are now. So 0:14:34.596 --> 0:14:37.116 I want to kind of take stock, like just what 0:14:37.356 --> 0:14:41.316 does this wild decline in the price of solar panels, Like, 0:14:41.636 --> 0:14:42.716 what does it mean for the world. 0:14:43.916 --> 0:14:47.676 I think it's basically really good news. So the power 0:14:47.876 --> 0:14:51.476 only only supplied about six percent of the world's electricity 0:14:51.636 --> 0:14:54.756 last year. But it's growing and nobody and you couldn't 0:14:54.756 --> 0:14:56.316 stop solid now if you wanted. 0:14:56.116 --> 0:15:00.076 To, just because it's so cheap. Like, yes, there are 0:15:00.156 --> 0:15:03.196 subsidies for it in various ways, but even without subsidies, 0:15:03.316 --> 0:15:05.996 in many cases it would be the best option. 0:15:06.156 --> 0:15:08.436 Is that the case exactly? And there are places where 0:15:09.156 --> 0:15:12.676 I mean, I love talking about Pakistan right now because 0:15:13.236 --> 0:15:17.996 Pakistan probably has about twenty gigawatts of relatively new solar panels, 0:15:18.436 --> 0:15:21.036 most of which the normal grid, that the traditional grid 0:15:21.076 --> 0:15:23.876 has no idea about where they are or whether they exist. 0:15:24.636 --> 0:15:27.316 Huh. So it's just people like going to the store 0:15:27.436 --> 0:15:29.756 buying solar panels and putting them up in their backyard 0:15:29.876 --> 0:15:30.436 or on their roof. 0:15:31.076 --> 0:15:35.436 And it's factories who are putting solar panels on their roofs. 0:15:35.516 --> 0:15:36.916 I mean, they're probably not just going to the store. 0:15:36.956 --> 0:15:39.916 They're probably buying the re bulk. It's farmers putting them 0:15:39.956 --> 0:15:42.396 in instead of to run their irrigation pumps instead of 0:15:42.436 --> 0:15:46.636 these or generators. I actually only know about this because 0:15:46.636 --> 0:15:48.796 I can see it in Chinese customs data. And then 0:15:48.796 --> 0:15:50.756 when you go to Google Earth and look at Lahore 0:15:50.916 --> 0:15:53.436 or Karachi or is Lamabad, you can see that all 0:15:53.436 --> 0:15:55.836 the roofs have solar panels on them. A lot of 0:15:55.876 --> 0:16:01.676 the activity in the developing world increasingly is outside government programs. 0:16:01.716 --> 0:16:03.916 I mean, there are some countries which in the developing 0:16:03.916 --> 0:16:06.716 world too, that have government supported billoms, like Vietnam also 0:16:06.796 --> 0:16:10.076 built about twenty gigawats of solar into nineteen and twenty 0:16:10.156 --> 0:16:17.836 twenty under a probably slightly badly calibrated government program. But 0:16:18.036 --> 0:16:22.876 increasingly it's actually the businesses and individuals that are buying 0:16:22.916 --> 0:16:26.636 solar themselves because it's just less effort than trying to 0:16:26.716 --> 0:16:28.716 go through the government than trying to get support. 0:16:32.396 --> 0:16:34.356 In a minute, what the world will look like in 0:16:34.436 --> 0:16:38.756 the relatively near future when solar energy is free in 0:16:38.836 --> 0:16:40.956 the middle of the day in a lot of places. 0:16:49.836 --> 0:16:52.836 Give me the big picture for like, where we are 0:16:53.316 --> 0:16:56.316 twenty years ago solar twenty yeah, twenty ish years ago, 0:16:56.436 --> 0:16:58.956 twenty five years ago. Certainly twenty five years ago, solar 0:16:59.036 --> 0:17:02.396 power was like, if you're a rich hippie in Marine County, 0:17:02.556 --> 0:17:04.316 maybe you spend a crazy amount of money to put 0:17:04.356 --> 0:17:07.316 solar power on your roof to feel good about yourself. Right, 0:17:07.436 --> 0:17:10.356 it was a kind of fringe thing. Where are we now? 0:17:11.716 --> 0:17:14.876 The sun is one solar power was the by far 0:17:15.116 --> 0:17:18.316 the largest source of new installed capacity last year, so 0:17:18.876 --> 0:17:23.036 of any generations. Now people hate it when you compare capacity, 0:17:23.156 --> 0:17:26.756 but about four hundred and forty four gigawatts of solar 0:17:26.796 --> 0:17:30.116 panels were installed last year worldwide. Okay, And bearing in 0:17:30.196 --> 0:17:33.796 mind that the whole power grid after that is about 0:17:33.876 --> 0:17:38.196 nine three hundred gigawads. So if we keep adding half 0:17:38.236 --> 0:17:40.196 a terror what a year, and we'll do more than 0:17:40.236 --> 0:17:41.836 that this year is going to be about six hundred 0:17:41.836 --> 0:17:44.996 gigawads this year. I mean, adding half a terror what 0:17:45.076 --> 0:17:47.116 every year to a nine point three terror what grid, 0:17:47.676 --> 0:17:52.316 you pretty quickly get to real amounts of contribution. And 0:17:52.876 --> 0:17:55.196 this is why I'm pretty sure that by twenty thirty 0:17:57.156 --> 0:17:59.636 power will basically be free whenever it's sunny. 0:18:01.116 --> 0:18:04.676 Power will basically be free whenever it's sunny in around 0:18:04.716 --> 0:18:09.716 the world pretty much twenty thirty is soon, especially in 0:18:09.876 --> 0:18:12.516 like energy terms, like twenty sol. 0:18:12.476 --> 0:18:16.356 Is fast, like most energy infrastructure is really slow to build, 0:18:16.436 --> 0:18:19.516 but solar is really fast and the only way. And 0:18:19.596 --> 0:18:23.036 we're already getting to the point where in California, even 0:18:23.076 --> 0:18:25.956 in Germany on a sunny day, the wholesale power price 0:18:26.076 --> 0:18:28.916 goes very low or even negative and what you have. 0:18:29.636 --> 0:18:32.956 So the most likely thing, the most sensible thing to 0:18:33.036 --> 0:18:36.556 do in response to that, is to hand free power 0:18:36.756 --> 0:18:39.796 at that time to the customers so they can actually 0:18:39.876 --> 0:18:42.356 increase their demand at that time and then charge them 0:18:42.356 --> 0:18:43.596 more later when the sun's gone down. 0:18:44.196 --> 0:18:47.276 Huh. So let's talk about that in a little bit 0:18:47.356 --> 0:18:50.756 more detail. So there is this thing that is already 0:18:50.836 --> 0:18:53.556 true in California among other places, right, which is in 0:18:53.596 --> 0:18:55.276 the middle of the day, because of the growth of 0:18:55.356 --> 0:19:03.916 solar there is more electricity being generated than people are using, right, great, amazing, 0:19:04.396 --> 0:19:08.316 And so one option is you could just essentially not 0:19:08.596 --> 0:19:11.676 take that electricity, right, you could just not use it. 0:19:12.276 --> 0:19:14.356 But you're saying that's not what's going to happen. Tell 0:19:14.436 --> 0:19:14.996 me more about that. 0:19:15.156 --> 0:19:16.796 Like, some of that will definitely happen. I mean, we 0:19:16.876 --> 0:19:20.076 call it curtailment when you literally turn off the solar 0:19:20.116 --> 0:19:23.156 panels to stop them doing any damage to your grid. 0:19:23.356 --> 0:19:25.276 And you can do that. It's super easy. It's actually 0:19:25.316 --> 0:19:28.076 way easier than it is for fossil fuel plants. What 0:19:28.276 --> 0:19:32.396 makes most sense is to offer three your extremely cheap 0:19:33.476 --> 0:19:35.836 power to people in the hope that they'll actually use it. 0:19:35.956 --> 0:19:38.676 You know, if as an individual you might turn your 0:19:38.716 --> 0:19:41.316 air conditioner on to make your house really nice and cool, 0:19:41.436 --> 0:19:42.836 so you can turn it off in the evening and 0:19:43.396 --> 0:19:45.916 your house will stay comfortable into the night. You might 0:19:45.996 --> 0:19:51.716 do your laundry, and if you're in an industrial company, 0:19:51.796 --> 0:19:53.716 you can do a lot more. So. If you have 0:19:53.836 --> 0:19:55.796 a meat freezer, you can chill it to minus twenty 0:19:55.916 --> 0:19:58.956 seven degrees celsius and then let it warm up to 0:19:59.556 --> 0:20:03.676 minus nineteen. When power is expensive, you can charge your 0:20:03.676 --> 0:20:06.276 electric car, I mean especially if you can charge at work. 0:20:07.716 --> 0:20:10.876 You can heat your water for a shower later. There 0:20:11.236 --> 0:20:12.956 were all kinds of things that we can do to 0:20:13.076 --> 0:20:15.716 shift when we use power into the daytime. And of course, 0:20:15.716 --> 0:20:18.356 if you've got batteries, you can charge your batteries. 0:20:19.036 --> 0:20:25.196 Yes, So what's happening with storage, right, that's the sort 0:20:25.196 --> 0:20:27.836 of complementary piece of this that everybody always talks about 0:20:28.316 --> 0:20:29.396 what's happening with storage. 0:20:29.876 --> 0:20:34.516 So storage is definitely growing. I just looked at the 0:20:35.076 --> 0:20:38.956 new energy storage market outlook from my colleagues, and a 0:20:39.036 --> 0:20:43.316 new build energy storage grew seventy six percent. They estimate 0:20:43.356 --> 0:20:45.876 that it's grown about over seventy percent from twenty twenty 0:20:45.916 --> 0:20:46.876 three to twenty twenty four. 0:20:47.076 --> 0:20:50.636 So it's growing. That's good, and it's basically lithium ion 0:20:50.716 --> 0:20:53.836 batteries and kind of batteries that are in electric vehicles. 0:20:54.116 --> 0:20:56.556 It's mostly just lithium ion batteries, you know, because electric 0:20:56.636 --> 0:20:59.036 vehicles have driven them down the experienced curve as well. 0:20:59.876 --> 0:21:06.756 And electric vehicles, laptops, phones, these are actually quite They're 0:21:06.756 --> 0:21:10.276 getting more and more affordable, and so I think we 0:21:10.396 --> 0:21:15.396 can probably assume that by twenty thirty you have batteries 0:21:15.516 --> 0:21:18.076 charging and discharging every day to absorb some of that 0:21:18.516 --> 0:21:20.316 daytime solar power. 0:21:21.316 --> 0:21:22.596 And the question is how much? 0:21:23.396 --> 0:21:26.036 Question is how much are yeah? 0:21:26.556 --> 0:21:29.836 And what does that turn on? I mean, is it 0:21:30.156 --> 0:21:33.756 just how fast do lithium ion batteries get cheap? Is 0:21:33.836 --> 0:21:35.476 that the key unknown question? 0:21:36.036 --> 0:21:38.436 It does. But I think what people don't realize when 0:21:38.436 --> 0:21:41.276 they talk about solar and batteries being the answer to everything, 0:21:41.956 --> 0:21:44.036 But first of all, they may be write in climates 0:21:44.076 --> 0:21:47.636 that are not very seasonal. So if every day you 0:21:47.836 --> 0:21:50.996 have a long day and then a similar length night, 0:21:51.596 --> 0:21:55.436 then it may actually be fairly feasible to run your 0:21:55.476 --> 0:21:59.236 civilization on solar and batteries in places like northern Europe 0:21:59.276 --> 0:22:02.156 where I am, then you're going to hit the problem 0:22:02.636 --> 0:22:07.636 that the biggest battery you can imagine will not hold 0:22:07.796 --> 0:22:11.116 power from summer to winter, and the economics of that 0:22:11.156 --> 0:22:14.476 would be terrible because the first bunch of batteries you 0:22:14.836 --> 0:22:18.636 put in that charge and discharge every day, their cost 0:22:18.716 --> 0:22:20.396 per cycle is whether to be low because they have 0:22:20.396 --> 0:22:26.156 a lot of cycles. However, your next wave of batteries 0:22:26.396 --> 0:22:31.196 isn't necessarily needed every day, and if they're cycling every 0:22:31.316 --> 0:22:33.716 two days, for example, that it actually doubles the cost 0:22:33.796 --> 0:22:34.316 per cycle. 0:22:34.636 --> 0:22:36.636 The less you use it, the more expensive it is, 0:22:36.756 --> 0:22:39.876 sort of per unit of service is providing you. 0:22:40.156 --> 0:22:42.836 The economics are building a battery, the cycles once a 0:22:42.956 --> 0:22:47.716 year are almost impossible. I mean, you might be able 0:22:47.756 --> 0:22:49.556 to do something like feel a huge tank with the 0:22:49.636 --> 0:22:54.676 chemical fuel, or feel a huge big tank hot of salt, 0:22:55.116 --> 0:22:56.436 like you could. What you could do is make a 0:22:56.756 --> 0:23:00.036 big tank of salt molten and then use that heat 0:23:00.196 --> 0:23:03.476 in the winter, because salt is relatively cheap, so you 0:23:03.556 --> 0:23:04.796 could have a lot of it to make hot. 0:23:04.956 --> 0:23:08.556 So you could build essentially like a giant salt cavern 0:23:08.716 --> 0:23:11.796 under the earth, spend all summer heating it up, and 0:23:11.916 --> 0:23:16.236 all winter using the heat to whatever makes demon spin 0:23:16.276 --> 0:23:17.556