1 00:00:01,120 --> 00:00:20,440 Speaker 1: Welcome to zero. I'm Kshatrati this week booms bus and bargains. 2 00:00:21,600 --> 00:00:24,800 Speaker 1: Solar is the cheapest source of energy. You know. Within 3 00:00:24,840 --> 00:00:26,960 Speaker 1: the last two decades, it has gone from being a 4 00:00:27,000 --> 00:00:31,760 Speaker 1: cool technology that rich countries should fund to being mainstream. 5 00:00:32,080 --> 00:00:36,640 Speaker 1: You can see solar panels everywhere. It now contributes four 6 00:00:36,680 --> 00:00:39,879 Speaker 1: percent of the world's electricity, which sounds tiny, but the 7 00:00:39,920 --> 00:00:43,280 Speaker 1: extraordinary pace at which it has grown means that analysts 8 00:00:43,320 --> 00:00:46,760 Speaker 1: think it could contribute as much as fifty percent within decades. 9 00:00:47,400 --> 00:00:50,280 Speaker 1: This is partly thanks to how cheap the panels have become. 10 00:00:50,800 --> 00:00:53,320 Speaker 1: The technology was created in the US, but brought to 11 00:00:53,360 --> 00:00:57,320 Speaker 1: massive scale in factories in Japan, Germany, and then finally China, 12 00:00:57,800 --> 00:01:00,800 Speaker 1: which today is responsible for more than eighty percent of 13 00:01:00,840 --> 00:01:05,280 Speaker 1: global supply, and that dependence is bringing disruption to the industry. 14 00:01:05,680 --> 00:01:08,199 Speaker 1: Countries from India to the US want to make sure 15 00:01:08,280 --> 00:01:11,959 Speaker 1: that their supply chains aren't too dependent on China. That's 16 00:01:11,959 --> 00:01:15,640 Speaker 1: forcing governments to come up with policies that incentivize manufacturing 17 00:01:15,680 --> 00:01:16,720 Speaker 1: solar domestically. 18 00:01:17,360 --> 00:01:19,760 Speaker 2: Solar manufacturing is a horrible business. I don't know why 19 00:01:19,760 --> 00:01:22,400 Speaker 2: governments want to have it in their countries when they 20 00:01:22,440 --> 00:01:25,440 Speaker 2: could just buy really cheap modules on the global markets. 21 00:01:26,280 --> 00:01:29,600 Speaker 1: That is Jenny Chase, solar power analysts for Bloomberg NEF, 22 00:01:29,959 --> 00:01:32,920 Speaker 1: who I think is basically the world's best expert on 23 00:01:33,000 --> 00:01:36,200 Speaker 1: the business of solar. She's covered the industry for two 24 00:01:36,280 --> 00:01:40,280 Speaker 1: decades and seen lots and lots of disruption Despite the 25 00:01:40,319 --> 00:01:43,520 Speaker 1: massive growth, The technology cycle of solar is so rapid 26 00:01:43,640 --> 00:01:47,320 Speaker 1: that few investors are able to recoup their investments, and 27 00:01:47,400 --> 00:01:51,400 Speaker 1: yet the demand for solar keeps rising, which keeps motivating 28 00:01:51,560 --> 00:01:54,720 Speaker 1: new people to try. The latest attempt is thanks to 29 00:01:54,760 --> 00:01:57,840 Speaker 1: the US Climate Bill, which is going to heavily subsidize 30 00:01:57,840 --> 00:02:01,480 Speaker 1: the production of solar panels domestically. One of those companies 31 00:02:01,600 --> 00:02:04,360 Speaker 1: is Hanuak Q Cells, which is building a plant in 32 00:02:04,360 --> 00:02:05,520 Speaker 1: the state of Georgia. 33 00:02:05,680 --> 00:02:07,760 Speaker 3: We are doing it all here. We are doing it 34 00:02:07,880 --> 00:02:09,480 Speaker 3: vertically integrated. We're going big. 35 00:02:10,240 --> 00:02:13,440 Speaker 1: That's Lindsay Cherry from Q Cells, who we'll hear from 36 00:02:13,560 --> 00:02:17,200 Speaker 1: later in the episode. But first Jenny tells me all 37 00:02:17,240 --> 00:02:20,800 Speaker 1: about how solar panels are made, starting with sand, the 38 00:02:20,919 --> 00:02:24,120 Speaker 1: history of solar booms and bus and how scaling this 39 00:02:24,200 --> 00:02:28,079 Speaker 1: technology has needed successive governments from the US to Germany 40 00:02:28,120 --> 00:02:31,240 Speaker 1: to China to spend vast sums for the benefit of 41 00:02:31,360 --> 00:02:41,520 Speaker 1: all humanity. Jenny, Welcome to zero. 42 00:02:41,680 --> 00:02:43,320 Speaker 2: Good morning, Ashat. Nice to be here. 43 00:02:43,480 --> 00:02:46,560 Speaker 1: So I have a bookcoming. It's called Climate Capitalism, and 44 00:02:46,639 --> 00:02:49,240 Speaker 1: one of the chapters is focused on solar and when 45 00:02:49,280 --> 00:02:51,680 Speaker 1: I was doing the research on it, something shocked me. 46 00:02:52,000 --> 00:02:54,400 Speaker 1: You know, even as a science student, I didn't know 47 00:02:54,560 --> 00:02:57,760 Speaker 1: that the history of solo goes back to eighteen thirty nine, 48 00:02:58,360 --> 00:03:00,880 Speaker 1: all the way back to a French scientist who first 49 00:03:00,960 --> 00:03:04,399 Speaker 1: figured out that if you shone light on a combination 50 00:03:04,480 --> 00:03:07,919 Speaker 1: of metals you can get electricity. Now, if you take 51 00:03:07,960 --> 00:03:10,959 Speaker 1: that as the moment of invention of solar, from then 52 00:03:11,440 --> 00:03:14,280 Speaker 1: until twenty twenty two, it took about one hundred and 53 00:03:14,320 --> 00:03:18,240 Speaker 1: eighty three years to build one terrawat of solar. Now 54 00:03:18,240 --> 00:03:20,320 Speaker 1: we can figure out what one terrawat is, but it's 55 00:03:20,320 --> 00:03:24,720 Speaker 1: a big number. What shocked me is that, according to 56 00:03:24,720 --> 00:03:28,839 Speaker 1: Bloomberg and e f estimates, the next terawater solar will 57 00:03:28,880 --> 00:03:32,079 Speaker 1: be built in three years. Is that right? 58 00:03:32,600 --> 00:03:35,480 Speaker 2: That is right? The growth of solar has been phenomenal. 59 00:03:36,440 --> 00:03:39,480 Speaker 2: I started doing this in two thousand and four, and 60 00:03:39,520 --> 00:03:43,240 Speaker 2: if I'd given a completely accurate forecast of solar growth, 61 00:03:43,240 --> 00:03:45,480 Speaker 2: everyone would have thought I was crazy. They would not 62 00:03:45,520 --> 00:03:47,000 Speaker 2: have listened to me. That I would have got fired 63 00:03:47,040 --> 00:03:49,200 Speaker 2: and we would not have been a success. I thought 64 00:03:49,200 --> 00:03:52,040 Speaker 2: then that if solar was one day one percent of 65 00:03:52,080 --> 00:03:55,360 Speaker 2: world electricity supply, I would be astounded. But at the 66 00:03:55,360 --> 00:03:57,360 Speaker 2: time I was I thought, well one percent is not nothing. 67 00:03:57,520 --> 00:03:59,560 Speaker 2: I'm happy to work on this. Now I'm starting to 68 00:03:59,600 --> 00:04:01,920 Speaker 2: wonder will it hit fifty percent? Will it ever be 69 00:04:02,000 --> 00:04:03,760 Speaker 2: more than fifty percent? Well, electricity. 70 00:04:04,280 --> 00:04:06,560 Speaker 1: Now, before we get into the explosion of solar in 71 00:04:06,600 --> 00:04:09,680 Speaker 1: the business of solar, let's just understand what a silicon 72 00:04:09,760 --> 00:04:14,160 Speaker 1: photovol take cell is and maybe go from its absolute 73 00:04:14,480 --> 00:04:17,760 Speaker 1: starting point which is sand, all the way to putting 74 00:04:17,800 --> 00:04:20,320 Speaker 1: it on a roof or at the utility scale in 75 00:04:20,400 --> 00:04:22,600 Speaker 1: a farm. Just walk us through the steps. 76 00:04:23,120 --> 00:04:25,480 Speaker 2: So by weight, most of a solar module is glass 77 00:04:25,520 --> 00:04:30,240 Speaker 2: and aluminium, but the active ingredient is the actual cell, 78 00:04:30,279 --> 00:04:33,000 Speaker 2: and the active ingredient in that is a silicon wafer. 79 00:04:34,200 --> 00:04:39,240 Speaker 2: That silicon wafer is made of ultrapure refined polysilicon that 80 00:04:39,320 --> 00:04:42,159 Speaker 2: has been crystallized in a very particular structure and dope 81 00:04:42,200 --> 00:04:45,800 Speaker 2: in a particular way. To make polysilicon, you start with sand, 82 00:04:45,839 --> 00:04:49,279 Speaker 2: which is silicon dioxide, and you heat it up with carbon, 83 00:04:49,560 --> 00:04:52,760 Speaker 2: so a pretty clean coal or a charcoal You can 84 00:04:52,760 --> 00:04:55,240 Speaker 2: do that in your garage if you want. And then 85 00:04:55,279 --> 00:04:57,640 Speaker 2: what you have is metallurgical grade silicon, which is about 86 00:04:57,720 --> 00:04:59,360 Speaker 2: ninety eight percent silicon. 87 00:04:59,040 --> 00:05:00,520 Speaker 1: And what's the two percent there? 88 00:05:00,640 --> 00:05:03,280 Speaker 2: It's carbon bore on a bit of phosphorus stuff that 89 00:05:03,320 --> 00:05:05,840 Speaker 2: would mess up the electrical properties of a silicon wafer. 90 00:05:06,360 --> 00:05:09,000 Speaker 2: Most of that is actually used for smelting steel. It's 91 00:05:09,000 --> 00:05:11,480 Speaker 2: a traded commodity. It costs about two dollars a kilogram. 92 00:05:11,520 --> 00:05:15,640 Speaker 2: It's some dirty silicon. To make that into polysilicon that 93 00:05:15,720 --> 00:05:19,360 Speaker 2: is pure enough to be useful electrically in a solar cell, 94 00:05:19,800 --> 00:05:23,000 Speaker 2: you need to do a very capex and very expertise 95 00:05:23,040 --> 00:05:24,040 Speaker 2: intensive process. 96 00:05:24,160 --> 00:05:26,640 Speaker 1: Yeah, capex being just that the building of this plant 97 00:05:26,640 --> 00:05:28,480 Speaker 1: would be really exciting. Building of the factories. 98 00:05:28,520 --> 00:05:31,000 Speaker 2: Building a polysilicon factory is very expensive and it uses 99 00:05:31,120 --> 00:05:34,240 Speaker 2: a lot of electricity to run. And when I started 100 00:05:34,240 --> 00:05:36,240 Speaker 2: in this industry in two thousand and four, there were 101 00:05:36,279 --> 00:05:38,640 Speaker 2: really only five companies worldwide who knew how to do it, 102 00:05:38,680 --> 00:05:41,279 Speaker 2: and they were doing it for the semiconductive industry. So 103 00:05:41,320 --> 00:05:44,400 Speaker 2: you've got this metallogical grade silicon and you react it 104 00:05:44,440 --> 00:05:48,680 Speaker 2: with acid to make it into a gas, and then 105 00:05:48,720 --> 00:05:51,520 Speaker 2: you have to set a seed of really pure silicon, 106 00:05:52,080 --> 00:05:54,760 Speaker 2: and the gas swirls around the chamber, and you're heating 107 00:05:55,040 --> 00:05:57,040 Speaker 2: some parts of the chamber and cooling different parts of 108 00:05:57,080 --> 00:06:01,000 Speaker 2: the chamber, and this gas sort of dissociates and crystallizers 109 00:06:01,040 --> 00:06:04,560 Speaker 2: on the seed, and so you get a rod of 110 00:06:04,800 --> 00:06:07,960 Speaker 2: really pure silicon coming out, and you've got all kinds 111 00:06:07,960 --> 00:06:10,880 Speaker 2: of nasty gases you wel Silicon tetrichloride is a byproduct, 112 00:06:10,920 --> 00:06:14,480 Speaker 2: which if you're a good polysilicon manufacturer, you then recycle 113 00:06:14,720 --> 00:06:17,280 Speaker 2: and get that silicon back out, and also that hydrochloric 114 00:06:17,279 --> 00:06:21,120 Speaker 2: acid backout. Is hugely energy intensive because you're heating and 115 00:06:21,160 --> 00:06:23,919 Speaker 2: cooling different parts of the same reactor. It's called a 116 00:06:23,920 --> 00:06:27,760 Speaker 2: semens reactor, and sweet talking a semens reactor into making 117 00:06:27,839 --> 00:06:31,360 Speaker 2: polysilicon is actually really difficult, which is why it took 118 00:06:31,560 --> 00:06:33,520 Speaker 2: years for Chinese companies to get the hang of it. 119 00:06:33,600 --> 00:06:34,640 Speaker 2: After two thousand and four. 120 00:06:35,480 --> 00:06:40,520 Speaker 1: I had no idea that it was actually vapor deposition 121 00:06:41,120 --> 00:06:46,120 Speaker 1: that is extremely energy intensive, especially when we're talking metal. 122 00:06:46,560 --> 00:06:47,480 Speaker 1: What temperatures are. 123 00:06:47,360 --> 00:06:50,440 Speaker 2: We talking here, It's over a thousand degrees celsius one 124 00:06:50,480 --> 00:06:53,000 Speaker 2: hundred degrees celsius or so. So what you get out 125 00:06:53,000 --> 00:06:56,520 Speaker 2: of a Semens reactor is a long rod of what 126 00:06:56,560 --> 00:07:01,400 Speaker 2: we call polycrystalline silicon. It's not electric very useful because 127 00:07:01,440 --> 00:07:02,760 Speaker 2: it's a lot of little crystals. 128 00:07:03,600 --> 00:07:05,040 Speaker 1: Wait, so there's one more step. 129 00:07:05,120 --> 00:07:07,320 Speaker 2: There is. There is one more step. So you got 130 00:07:07,360 --> 00:07:10,680 Speaker 2: your rod of polycrystalline silicon and you smash it up 131 00:07:10,680 --> 00:07:13,320 Speaker 2: with a hammer, and you put it in little sacks 132 00:07:13,360 --> 00:07:15,640 Speaker 2: and you ship it to usually another company which makes 133 00:07:15,760 --> 00:07:18,640 Speaker 2: ingot sound okay to make an in goot. You melt 134 00:07:18,680 --> 00:07:23,360 Speaker 2: down that polycrystalline silicon into and then you're getting it 135 00:07:23,400 --> 00:07:26,920 Speaker 2: to crystallize into larger crystals that are more electrically useful. 136 00:07:27,680 --> 00:07:31,560 Speaker 2: Until twenty eighteen, the dominant technology was multi crystalline silicon, 137 00:07:31,600 --> 00:07:33,800 Speaker 2: so you let it crystallize from multiple points at once 138 00:07:34,240 --> 00:07:36,840 Speaker 2: and you got some fairly big crystals that you could 139 00:07:36,840 --> 00:07:40,840 Speaker 2: then use for solar And even then there was another 140 00:07:40,840 --> 00:07:45,360 Speaker 2: technology that existed, monocrystaline silicon, where the whole ingot was 141 00:07:45,440 --> 00:07:46,160 Speaker 2: one crystal. 142 00:07:46,600 --> 00:07:50,440 Speaker 1: Wow. So as a chemist, I actually grew crystals in 143 00:07:50,480 --> 00:07:52,800 Speaker 1: the lab, and I did many things as a chemist, 144 00:07:52,880 --> 00:07:56,160 Speaker 1: but the hardest thing I've done is crystallography. Trying to 145 00:07:56,200 --> 00:07:58,920 Speaker 1: grow a crystal the way you want is so hard. 146 00:07:59,120 --> 00:08:00,840 Speaker 1: It's sort of hard than science. 147 00:08:01,320 --> 00:08:03,680 Speaker 2: It's so hard, and you're trying to make something that's 148 00:08:03,800 --> 00:08:06,760 Speaker 2: twelve feet long and a foot wide into a single crystal. 149 00:08:07,080 --> 00:08:09,800 Speaker 2: When you're making a monocrystalline silicon in goot, you have 150 00:08:09,880 --> 00:08:13,240 Speaker 2: to be so careful, and it's taken companies quite a 151 00:08:13,240 --> 00:08:17,760 Speaker 2: long time to perfect it. And so monocrystallines silicon is 152 00:08:18,000 --> 00:08:20,920 Speaker 2: it makes a more efficient cell than multi but it 153 00:08:21,000 --> 00:08:22,960 Speaker 2: is much more expensive and much more difficult. 154 00:08:23,200 --> 00:08:26,560 Speaker 1: And the efficiency comes from the fact that a monocrystalline 155 00:08:26,600 --> 00:08:29,320 Speaker 1: cell will have sort of fewer defects, which is to say, 156 00:08:29,840 --> 00:08:33,880 Speaker 1: how electrons travel across the surface would be easier, simpler, 157 00:08:34,320 --> 00:08:36,720 Speaker 1: and that is why it becomes more efficient. 158 00:08:36,840 --> 00:08:39,720 Speaker 2: Precisely, the grain boundaries are less of a problem because 159 00:08:39,720 --> 00:08:42,560 Speaker 2: they want any grain boundaries and mono solar. But it 160 00:08:42,640 --> 00:08:45,079 Speaker 2: was much more expensive, so it took a long time 161 00:08:45,120 --> 00:08:46,280 Speaker 2: to become the dominant tech. 162 00:08:46,360 --> 00:08:48,680 Speaker 1: And then there's a fun step after this, which is 163 00:08:48,720 --> 00:08:51,760 Speaker 1: to cut it into wafers which are then made into 164 00:08:52,000 --> 00:08:56,080 Speaker 1: silicon PV cells. And the cutting of the wafers itself 165 00:08:56,200 --> 00:08:57,760 Speaker 1: is quite complex, right. 166 00:08:57,920 --> 00:09:01,600 Speaker 2: It's quite difficult because they are really really they are, 167 00:09:02,000 --> 00:09:04,640 Speaker 2: so we're talking today, it's about one hundred and eighty microns. 168 00:09:04,640 --> 00:09:10,280 Speaker 1: For a microns, that's roughly the width of human hair. 169 00:09:10,440 --> 00:09:12,120 Speaker 2: I think, twice the width of a human hair. But 170 00:09:12,720 --> 00:09:15,000 Speaker 2: it's they're very very thin. You have to be very 171 00:09:15,040 --> 00:09:16,840 Speaker 2: careful not to break them when you're working with them. 172 00:09:17,000 --> 00:09:19,160 Speaker 1: And what do you have to do to get that 173 00:09:19,240 --> 00:09:20,920 Speaker 1: kind of thickness. 174 00:09:21,160 --> 00:09:23,880 Speaker 2: Well, of course we've been working on this. In two 175 00:09:23,880 --> 00:09:26,720 Speaker 2: thousand and four, wafers were much thicker than they are today, 176 00:09:26,720 --> 00:09:29,439 Speaker 2: and back then you would be using about ten grams 177 00:09:29,440 --> 00:09:32,520 Speaker 2: of silicon per watt of modules. I know, we haven't 178 00:09:32,520 --> 00:09:35,680 Speaker 2: talked about what is but for comparison today, the average 179 00:09:35,679 --> 00:09:37,920 Speaker 2: is about two point six grams per what They were 180 00:09:38,000 --> 00:09:40,720 Speaker 2: much thicker in those days because it's really difficult to 181 00:09:40,760 --> 00:09:45,840 Speaker 2: slice up things that thinly. And originally the technology was 182 00:09:46,160 --> 00:09:49,640 Speaker 2: a slourwry based wire sauce, so literally it was like 183 00:09:49,840 --> 00:09:56,079 Speaker 2: an abrasive wire that you poured liquid sandpaper over and sword. 184 00:09:57,080 --> 00:09:58,040 Speaker 1: And what is it now? 185 00:09:58,200 --> 00:10:00,760 Speaker 2: So in twenty eighteen I went off to baby and 186 00:10:00,800 --> 00:10:03,640 Speaker 2: when I came back four months later, the whole market 187 00:10:03,679 --> 00:10:06,240 Speaker 2: had moved with diamond wire saws, where you don't use 188 00:10:06,280 --> 00:10:09,800 Speaker 2: this slurry based abrasive material at all. But you just 189 00:10:09,920 --> 00:10:12,080 Speaker 2: diamond diamond as a wire. 190 00:10:12,559 --> 00:10:13,280 Speaker 1: It's so cool. 191 00:10:13,400 --> 00:10:16,439 Speaker 2: Or it's a really thin wire with chips of diamond, 192 00:10:16,840 --> 00:10:20,320 Speaker 2: and you just literally saw through these wafers. Once those 193 00:10:20,360 --> 00:10:24,120 Speaker 2: had happened, diamond wire saw and monocrystalized silicon just swept 194 00:10:24,200 --> 00:10:26,360 Speaker 2: the market. And I mean, really, it felt like I 195 00:10:26,400 --> 00:10:28,120 Speaker 2: went left how a baby, and I came back and 196 00:10:28,160 --> 00:10:30,199 Speaker 2: the dominant technology was a little bit different. 197 00:10:30,240 --> 00:10:33,280 Speaker 1: It kind of explains to you just how explosive the 198 00:10:33,320 --> 00:10:36,360 Speaker 1: industry is, both in the tech advancing as quickly as 199 00:10:36,360 --> 00:10:40,000 Speaker 1: it is now. After that, once you have the wafer, 200 00:10:40,760 --> 00:10:43,640 Speaker 1: you have to turn the veafer into a working solar panel. 201 00:10:43,880 --> 00:10:45,199 Speaker 1: What are the steps involved there? 202 00:10:45,559 --> 00:10:48,600 Speaker 2: They're complicated, and I have to admit that as an analyst, 203 00:10:48,600 --> 00:10:51,160 Speaker 2: I seldom have to understand them very well. But the 204 00:10:51,200 --> 00:10:54,839 Speaker 2: steps are. You dope the wafer with boron a phosphorus 205 00:10:55,480 --> 00:10:59,280 Speaker 2: so that it was set up an electric potential. When 206 00:10:59,320 --> 00:11:01,960 Speaker 2: sunlight falls off, and when the sunlight knocks the electrons free, 207 00:11:02,040 --> 00:11:05,760 Speaker 2: they will flow. Then you have to use a silver 208 00:11:05,920 --> 00:11:09,560 Speaker 2: paste to make electrical contacts to get the electrons off 209 00:11:09,600 --> 00:11:12,840 Speaker 2: the cell, and then you wio them up into modules. 210 00:11:12,960 --> 00:11:16,440 Speaker 2: And connect them to your invertero and feed it into 211 00:11:16,440 --> 00:11:16,760 Speaker 2: the grid. 212 00:11:17,400 --> 00:11:20,720 Speaker 1: So what you've described, obviously is a pretty sophisticated piece 213 00:11:20,800 --> 00:11:25,080 Speaker 1: of technology today, but in principle it's kind of the 214 00:11:25,120 --> 00:11:28,120 Speaker 1: same solar cell that was invented in Bell Labs in 215 00:11:28,200 --> 00:11:29,000 Speaker 1: nineteen fifty four. 216 00:11:29,080 --> 00:11:31,680 Speaker 2: Rate it absolutely is. It's probably three or four times 217 00:11:31,679 --> 00:11:36,000 Speaker 2: a sufficient but it is the same silicon based technology 218 00:11:36,000 --> 00:11:38,440 Speaker 2: as was invented by Bell Labs. We've just got better 219 00:11:38,480 --> 00:11:41,480 Speaker 2: at making it as we've made more and more of 220 00:11:41,520 --> 00:11:43,640 Speaker 2: these things. That's the great thing about humans. We get 221 00:11:43,679 --> 00:11:45,000 Speaker 2: better at things when we do more of it. 222 00:11:45,520 --> 00:11:48,120 Speaker 1: But why is it that the explosion in the industry 223 00:11:48,360 --> 00:11:52,000 Speaker 1: has only really happened in your period working as a 224 00:11:52,040 --> 00:11:54,200 Speaker 1: solar analyst sort of two thousand and four onward. 225 00:11:54,760 --> 00:11:56,400 Speaker 2: I think on some level it was an explosion that 226 00:11:56,440 --> 00:11:58,720 Speaker 2: was waiting to happen. But what has really driven it 227 00:11:58,800 --> 00:12:01,960 Speaker 2: over the years has been government policy to get companies 228 00:12:02,000 --> 00:12:04,960 Speaker 2: manufacturing these things and developing the technologies to do this 229 00:12:05,080 --> 00:12:10,200 Speaker 2: manufacturing at scale and cheaply and well. 230 00:12:09,160 --> 00:12:11,760 Speaker 1: And in green technologies. Solar is sort of the poster 231 00:12:11,880 --> 00:12:14,600 Speaker 1: child because invented in the US, there was a little 232 00:12:14,640 --> 00:12:17,160 Speaker 1: bit of an industry there when the US government was 233 00:12:17,280 --> 00:12:22,760 Speaker 1: funding solar development through installation of solar on satellites, but 234 00:12:22,880 --> 00:12:26,959 Speaker 1: really when it came to consumers, it was Japan first, 235 00:12:27,160 --> 00:12:30,360 Speaker 1: then Germany, then Spain. Right, these are the governments that 236 00:12:30,440 --> 00:12:32,400 Speaker 1: came in with support and what kind of support. 237 00:12:32,679 --> 00:12:34,600 Speaker 2: So the way the solar industry works is you tend 238 00:12:34,600 --> 00:12:37,160 Speaker 2: to get government policy in different places driving the global 239 00:12:37,160 --> 00:12:40,080 Speaker 2: market at different times. And it was definitely the US 240 00:12:40,120 --> 00:12:41,240 Speaker 2: that find out a lot of the R and D 241 00:12:41,320 --> 00:12:44,760 Speaker 2: in the seventies and eighties, and weirdly enough exceon Mobile, 242 00:12:45,320 --> 00:12:48,760 Speaker 2: which is not really famous for its environmental credentials. I 243 00:12:48,800 --> 00:12:51,319 Speaker 2: would say there's a lot of the early research into 244 00:12:51,600 --> 00:12:54,920 Speaker 2: photovoltaics and actually sold a panel quite early on. Japan 245 00:12:55,000 --> 00:12:58,440 Speaker 2: has a very long running program to build solar on roofs, 246 00:12:58,480 --> 00:13:03,679 Speaker 2: which supports companies like shar Admitsubishi, and that that certainly 247 00:13:03,960 --> 00:13:07,480 Speaker 2: developed the industry in that sense for Japan, given its 248 00:13:07,520 --> 00:13:11,880 Speaker 2: a resource poor country that has little access to fossil fuels. 249 00:13:12,080 --> 00:13:15,160 Speaker 1: So Japan one side built a lot of nuclear power plants, 250 00:13:15,480 --> 00:13:18,439 Speaker 1: but the other side also tried to develop solar as 251 00:13:18,480 --> 00:13:19,199 Speaker 1: a technology. 252 00:13:19,440 --> 00:13:22,880 Speaker 2: It did Japan invested strategically in developing a solar industry. 253 00:13:23,520 --> 00:13:25,680 Speaker 2: I'm not quite sure you can say it made sense 254 00:13:25,760 --> 00:13:29,040 Speaker 2: because even then it was wildly expensive electricity, and to 255 00:13:29,080 --> 00:13:31,480 Speaker 2: be honest, Japan doesn't have many companies anymore that are 256 00:13:31,520 --> 00:13:35,880 Speaker 2: big in solar. But it certainly contributed to the development 257 00:13:35,960 --> 00:13:37,160 Speaker 2: of a successful industry. 258 00:13:37,280 --> 00:13:39,600 Speaker 1: But does it make more sense that Germany was the 259 00:13:39,640 --> 00:13:41,640 Speaker 1: next country that came out with a no. 260 00:13:41,720 --> 00:13:45,720 Speaker 2: That makes no sense whatsoever. Germany is a really bad 261 00:13:45,760 --> 00:13:48,559 Speaker 2: country to do solar. It's not particularly sunny, it's it's 262 00:13:48,559 --> 00:13:52,160 Speaker 2: not particularly windy for wind either. But Germany did decide 263 00:13:52,240 --> 00:13:54,440 Speaker 2: in the year two thousand to do this energy vendor, 264 00:13:54,920 --> 00:13:58,240 Speaker 2: the energy turnaround. They were going to get off nuclear, 265 00:13:58,280 --> 00:14:01,040 Speaker 2: which was maybe the side of I agree with less 266 00:14:01,360 --> 00:14:04,800 Speaker 2: and replace it with renewables. So there were some early 267 00:14:05,080 --> 00:14:07,880 Speaker 2: programs to build more solar in Germany, and then in 268 00:14:07,880 --> 00:14:11,040 Speaker 2: two thousand and four Germany came crashing in with what 269 00:14:11,080 --> 00:14:13,839 Speaker 2: they called the feed and Tariff Freedom. TAFF is a 270 00:14:13,880 --> 00:14:18,000 Speaker 2: really weird word. It's a direct translation from the German Unschpeizerguchingen, 271 00:14:18,559 --> 00:14:21,280 Speaker 2: which is it doesn't sound better in German, but it 272 00:14:21,320 --> 00:14:23,400 Speaker 2: literally does just mean freed and tariff because you feed 273 00:14:23,400 --> 00:14:25,080 Speaker 2: your electricity into the grid and you got paid a 274 00:14:25,080 --> 00:14:26,920 Speaker 2: lot for it. You got paid over four hundred years 275 00:14:26,920 --> 00:14:27,400 Speaker 2: and mega. 276 00:14:27,400 --> 00:14:29,440 Speaker 1: Hour for it. Right, And if you compared to today 277 00:14:29,800 --> 00:14:32,360 Speaker 1: sort of record solar is, I would say. 278 00:14:32,280 --> 00:14:34,800 Speaker 2: That SOLO in Germany today costs about about eighty years 279 00:14:34,800 --> 00:14:35,520 Speaker 2: and mega what hour. 280 00:14:35,680 --> 00:14:35,840 Speaker 1: Right. 281 00:14:35,960 --> 00:14:38,560 Speaker 2: It has cost less in the past, but that's a 282 00:14:38,560 --> 00:14:41,080 Speaker 2: complication we shouldn't go into. So solo has cost as 283 00:14:41,080 --> 00:14:43,400 Speaker 2: little as fifty year as a megal hour in Germany. 284 00:14:43,440 --> 00:14:45,800 Speaker 1: But when we talk about solo today, it's mostly a 285 00:14:45,920 --> 00:14:48,800 Speaker 1: China story. So how does China come into this picture? 286 00:14:49,080 --> 00:14:51,760 Speaker 2: When Germany started buying solar panels to put them on 287 00:14:51,840 --> 00:14:55,640 Speaker 2: German fields and German roofs, Chinese company said, you know what, 288 00:14:55,800 --> 00:14:58,200 Speaker 2: we can make these things. You know, it's maybe we 289 00:14:58,240 --> 00:15:00,880 Speaker 2: can't make the polysilicon immediately, but we can slice stuff 290 00:15:00,880 --> 00:15:02,840 Speaker 2: into wafers, we can make them into cells, we can 291 00:15:02,840 --> 00:15:05,400 Speaker 2: make him into modules. And so the Chinese government did 292 00:15:05,440 --> 00:15:10,240 Speaker 2: provide some strategic support, and technology came in from Australia, 293 00:15:10,320 --> 00:15:12,680 Speaker 2: from the US, A lot of R and D from 294 00:15:12,680 --> 00:15:16,240 Speaker 2: other places came to China to do the manufacturing. And 295 00:15:16,280 --> 00:15:19,160 Speaker 2: so you've got companies like Suntech and solar Fun and 296 00:15:19,600 --> 00:15:22,760 Speaker 2: Yingli and Trina and what is called Canadian solar but 297 00:15:22,920 --> 00:15:27,160 Speaker 2: is also significantly associated with China. And so the companies 298 00:15:27,600 --> 00:15:31,520 Speaker 2: came and deployed the technologies developed elsewhere in large factories 299 00:15:31,560 --> 00:15:34,120 Speaker 2: in China, larger factories that had ever been seen before, 300 00:15:34,360 --> 00:15:35,680 Speaker 2: and they brought the costs down. 301 00:15:36,080 --> 00:15:38,840 Speaker 1: In each of these transitions from country to country, there 302 00:15:38,880 --> 00:15:42,560 Speaker 1: were sort of national champions companies that were formed that 303 00:15:42,640 --> 00:15:46,480 Speaker 1: were supportive of a domestic industry. So Japan had q 304 00:15:46,680 --> 00:15:50,720 Speaker 1: Serra for example, Germany had q Cells. Then China got 305 00:15:50,760 --> 00:15:53,600 Speaker 1: all these companies, but most of the time those companies 306 00:15:53,600 --> 00:15:56,840 Speaker 1: were first reaching out for a domestic market because the 307 00:15:56,880 --> 00:16:00,200 Speaker 1: country was supporting some sort of policy. But China i 308 00:16:00,280 --> 00:16:03,760 Speaker 1: was the first to only focus on exports, right. 309 00:16:03,760 --> 00:16:06,320 Speaker 2: Absolutely, I mean from China's point of view, the Germans 310 00:16:06,360 --> 00:16:08,880 Speaker 2: wanted to buy solar modules, so China would sell them. 311 00:16:09,000 --> 00:16:13,200 Speaker 1: And yet today China is the largest installer of solar. 312 00:16:13,320 --> 00:16:15,920 Speaker 1: So what happened for it to go from being so 313 00:16:16,080 --> 00:16:19,840 Speaker 1: export focused to installing so much renewables domestically. 314 00:16:19,920 --> 00:16:21,560 Speaker 2: Well, first of all, what you have to understand is 315 00:16:21,600 --> 00:16:24,400 Speaker 2: that solar is not expensive anymore. Now it's probably the 316 00:16:24,520 --> 00:16:28,920 Speaker 2: cheapest source of bulk electricity and most sunny countries in 317 00:16:28,960 --> 00:16:32,920 Speaker 2: the world. I'm carefully saying of bulk electricity because solar 318 00:16:33,120 --> 00:16:35,720 Speaker 2: does not generate at night, and we know this. But 319 00:16:36,040 --> 00:16:38,760 Speaker 2: one major reason China has started building solar is that 320 00:16:39,000 --> 00:16:43,480 Speaker 2: China likes cheap electricity. But the point when China started 321 00:16:43,520 --> 00:16:47,440 Speaker 2: supporting its domestic installation industry was the point when the 322 00:16:47,480 --> 00:16:52,280 Speaker 2: European market went into a bust situation. So Germany had 323 00:16:52,280 --> 00:16:54,560 Speaker 2: its speed and tariffs that started in two thousand and four. 324 00:16:55,080 --> 00:16:58,640 Speaker 2: They were wildly successful from my deployment perspective, because they 325 00:16:58,640 --> 00:17:01,920 Speaker 2: were a licensed to print money. Spain decided this is 326 00:17:01,960 --> 00:17:04,920 Speaker 2: a great idea and launched a similar feed. 327 00:17:04,680 --> 00:17:08,000 Speaker 1: In tariff and what are you talking? 328 00:17:08,240 --> 00:17:10,640 Speaker 2: After a couple of years after two thousand and four, 329 00:17:10,840 --> 00:17:14,040 Speaker 2: Spain launched its own feed in tariff, which was a 330 00:17:14,080 --> 00:17:16,400 Speaker 2: little bit like the German one, but probably even more 331 00:17:16,400 --> 00:17:19,359 Speaker 2: generous because Spain's sunnier than Germany, so they set the 332 00:17:19,440 --> 00:17:22,159 Speaker 2: level similarly. But a solar panel that you put in 333 00:17:22,200 --> 00:17:25,960 Speaker 2: Spain generates a lot more electricity, and Spain intended to 334 00:17:25,960 --> 00:17:28,840 Speaker 2: get about four hundred megawatts of solar through that program, 335 00:17:29,119 --> 00:17:32,280 Speaker 2: which was a lot at the time. The rule was 336 00:17:32,920 --> 00:17:34,960 Speaker 2: when the Spanish market had got most of the way 337 00:17:35,000 --> 00:17:39,320 Speaker 2: to its four hundred megawats solar installation target. The government 338 00:17:39,359 --> 00:17:42,520 Speaker 2: would give the companies a grace period of twelve months 339 00:17:42,560 --> 00:17:45,560 Speaker 2: to finish up really, and that would be how they'd 340 00:17:45,560 --> 00:17:47,920 Speaker 2: get about four hundred megawats. It turns out you can 341 00:17:47,920 --> 00:17:51,080 Speaker 2: build a lot of solar in twelve months, an unbelievable 342 00:17:51,119 --> 00:17:54,360 Speaker 2: amount of solar at the time, and so the country 343 00:17:54,440 --> 00:17:56,720 Speaker 2: ended up with about two point seven gigawatts or so 344 00:17:56,920 --> 00:17:59,560 Speaker 2: like two thy seven hundred megawatts of solar from that 345 00:17:59,560 --> 00:18:02,800 Speaker 2: program was meant to build four hundred megawats, and then 346 00:18:02,840 --> 00:18:05,200 Speaker 2: they had to pay for all that to get subsidies. 347 00:18:05,600 --> 00:18:08,600 Speaker 1: And this is the period when the financial crisis was 348 00:18:08,640 --> 00:18:09,640 Speaker 1: about to yes. 349 00:18:09,720 --> 00:18:11,280 Speaker 2: And then at the same time, it was actually the 350 00:18:11,320 --> 00:18:13,439 Speaker 2: last day of September two thousand and eight was the 351 00:18:13,560 --> 00:18:15,480 Speaker 2: end of the solar boom. And that was more or 352 00:18:15,560 --> 00:18:17,920 Speaker 2: less when the financial crisis kicked off. 353 00:18:18,200 --> 00:18:20,600 Speaker 1: And so you get a bunch of bankruptcies in the 354 00:18:20,640 --> 00:18:24,760 Speaker 1: solar industry following that period in Europe, and that's when 355 00:18:24,920 --> 00:18:29,639 Speaker 1: the Chinese companies go, oh, but we've invested all this 356 00:18:29,800 --> 00:18:32,080 Speaker 1: to try an export solar, what do we do now? 357 00:18:32,720 --> 00:18:36,199 Speaker 2: Exactly? So, basically, when the sunset on the last day 358 00:18:36,240 --> 00:18:39,200 Speaker 2: of September two thousand and eight. The solar market flipped 359 00:18:39,359 --> 00:18:42,080 Speaker 2: from under supply and all the modules in the world 360 00:18:42,160 --> 00:18:44,480 Speaker 2: going to Spain and Germany with this big sucking sound, 361 00:18:44,920 --> 00:18:48,480 Speaker 2: to oversupply. There were new factories built, there were loads 362 00:18:48,480 --> 00:18:52,440 Speaker 2: of polosilicon to make more modules. Now the price started crashing, 363 00:18:52,840 --> 00:18:55,600 Speaker 2: and of course that meant that the solar manufacturers went bankrupt, 364 00:18:56,119 --> 00:18:59,000 Speaker 2: and the first to go bankrupt were the German manufacturers. 365 00:18:59,320 --> 00:19:02,359 Speaker 2: They had generally the oldest factories to make cells in modules, 366 00:19:02,520 --> 00:19:06,000 Speaker 2: and they were often locked into polysilicon contracts at eighteen 367 00:19:06,080 --> 00:19:08,280 Speaker 2: ninety one hundred dollars a kilogram, when the price of 368 00:19:08,359 --> 00:19:13,240 Speaker 2: polysilicon was crashing towards forty thirty twenty dollars a kilogram. 369 00:19:13,359 --> 00:19:15,200 Speaker 2: They say that when the tide goes out, you see 370 00:19:15,240 --> 00:19:19,200 Speaker 2: who's swimming naked, and the Germans were swimming naked, whereas 371 00:19:19,240 --> 00:19:23,240 Speaker 2: the Chinese new factories, more efficient, not generally locked into 372 00:19:23,280 --> 00:19:25,719 Speaker 2: polysilicon contract some of them were. They went bankrupt and 373 00:19:26,359 --> 00:19:32,120 Speaker 2: so the Chinese companies survived better. So the fallout from 374 00:19:32,160 --> 00:19:35,320 Speaker 2: the European market not growing as fast and in fact contracting, 375 00:19:35,840 --> 00:19:39,960 Speaker 2: was that solar models were much much cheaper, and the 376 00:19:40,119 --> 00:19:43,200 Speaker 2: companies were having a hard time. So the Chinese government 377 00:19:43,280 --> 00:19:46,080 Speaker 2: came in and said, we want to provide strategic support 378 00:19:46,119 --> 00:19:49,639 Speaker 2: for our domestic industry. Plus we're not uninterested in this 379 00:19:49,680 --> 00:19:53,280 Speaker 2: whole cly energy thing ourselves, and China started building massive 380 00:19:53,280 --> 00:19:56,480 Speaker 2: amounts of solar, and China has been the largest market 381 00:19:56,600 --> 00:19:58,880 Speaker 2: for solar panels since about twenty ten, and. 382 00:19:58,880 --> 00:20:03,200 Speaker 1: The numbers in China are stunning. This year, Blomogin f 383 00:20:03,359 --> 00:20:06,720 Speaker 1: estimates that one hundred and fifty gigawarts of solar is 384 00:20:06,720 --> 00:20:08,800 Speaker 1: going to be built in China now, just to put 385 00:20:08,800 --> 00:20:12,520 Speaker 1: that in perspective. Europe, which was on sort of steroids 386 00:20:12,520 --> 00:20:15,639 Speaker 1: to try and build renewables last year after Russia attacked 387 00:20:15,720 --> 00:20:19,600 Speaker 1: Ukraine and in Europe wanted to free itself off Russian 388 00:20:19,720 --> 00:20:24,080 Speaker 1: energy imports, it built about forty gigawards of solar and 389 00:20:24,200 --> 00:20:26,960 Speaker 1: China just as usual as building about one hundred and 390 00:20:26,960 --> 00:20:27,800 Speaker 1: fifty gigabots. 391 00:20:28,520 --> 00:20:31,320 Speaker 2: That's right. China is a big country, and when the 392 00:20:31,400 --> 00:20:33,760 Speaker 2: Chinese government decides to do something, it does it. 393 00:20:34,400 --> 00:20:37,719 Speaker 1: But the discussion now in the solar industry, especially here 394 00:20:37,840 --> 00:20:41,080 Speaker 1: in Europe and in America, is to try and build 395 00:20:41,119 --> 00:20:44,400 Speaker 1: a domestic market, which is to try and free itself 396 00:20:44,520 --> 00:20:47,840 Speaker 1: off the Chinese supply chain, give what had happened with Russia, 397 00:20:47,880 --> 00:20:51,600 Speaker 1: and trying not to depend on other countries for crucial 398 00:20:51,800 --> 00:20:56,359 Speaker 1: energy technologies. And that brings us to the Inflation Reduction Act. 399 00:20:57,080 --> 00:21:01,240 Speaker 1: As a climate build it has some really big solar incentives. 400 00:21:01,800 --> 00:21:03,879 Speaker 1: What are they and would they work? 401 00:21:04,520 --> 00:21:07,120 Speaker 2: So I've seen a lot of solar booms and busts, 402 00:21:07,840 --> 00:21:09,800 Speaker 2: and the IRA looks to me like something that's going 403 00:21:09,840 --> 00:21:13,600 Speaker 2: to kick off a massive boom which will inevitably be 404 00:21:13,640 --> 00:21:17,200 Speaker 2: followed by a bust and will probably result in some 405 00:21:17,200 --> 00:21:22,560 Speaker 2: somewhat counterintuitive behavior. I feel like China's strategic support for 406 00:21:22,600 --> 00:21:24,760 Speaker 2: its solar industry is the reason the solar industry is 407 00:21:24,800 --> 00:21:27,680 Speaker 2: not a cottage industry anymore. It's the entire reason why 408 00:21:27,720 --> 00:21:30,440 Speaker 2: solar is now the largest source of new installed capacity 409 00:21:30,480 --> 00:21:30,960 Speaker 2: every year. 410 00:21:31,040 --> 00:21:34,080 Speaker 1: And when we are talking strategic support, it's really subsidies, 411 00:21:34,359 --> 00:21:38,720 Speaker 1: tags benefits, creation of demand. Domestically, it's a. 412 00:21:38,720 --> 00:21:43,040 Speaker 2: Little less transparent in China, but it's mandates from above. 413 00:21:43,160 --> 00:21:48,040 Speaker 2: It's support for domestic installation. It's telling the local utilities 414 00:21:48,240 --> 00:21:51,000 Speaker 2: and companies what to do. It's sometimes free land, it's 415 00:21:51,080 --> 00:21:54,959 Speaker 2: sometimes debt support for expansion. Now the IRA you can 416 00:21:55,000 --> 00:21:58,439 Speaker 2: actually read, unlike the Chinese policies, which were never in 417 00:21:58,480 --> 00:22:01,240 Speaker 2: a single document or even a single set of legislation. 418 00:22:01,960 --> 00:22:06,800 Speaker 2: But the IRA offers makers of wafers, cells and modules 419 00:22:06,840 --> 00:22:10,240 Speaker 2: about sixteen cents per what in tax crest. 420 00:22:10,320 --> 00:22:11,920 Speaker 1: And just put that in context of the cry. 421 00:22:12,000 --> 00:22:14,440 Speaker 2: Now you can buy a module for seventeen point eight 422 00:22:14,480 --> 00:22:18,520 Speaker 2: cents to what. So it's essentially paying for a price 423 00:22:18,880 --> 00:22:21,720 Speaker 2: almost all the price of a module made in Chia, 424 00:22:21,800 --> 00:22:23,760 Speaker 2: best in class company in China. Of course, if you 425 00:22:23,800 --> 00:22:25,760 Speaker 2: make it in America, it's going to be more expensive, 426 00:22:25,920 --> 00:22:27,879 Speaker 2: is going to be more expensive because America is a 427 00:22:27,960 --> 00:22:31,200 Speaker 2: very difficult business environment. Why is that, Well, for one thing, 428 00:22:31,240 --> 00:22:32,880 Speaker 2: these are all tax credits, so you have to hire 429 00:22:32,920 --> 00:22:37,359 Speaker 2: an army of tax lawyers to get them. Secondly, it's 430 00:22:37,640 --> 00:22:41,920 Speaker 2: pretty difficult to negotiate locations for factories. Electricity is often 431 00:22:42,000 --> 00:22:46,320 Speaker 2: relatively expensive compared with China. There's not necessarily a trained 432 00:22:46,320 --> 00:22:48,879 Speaker 2: workforce the way there is in Jiangsu. In Jiangsu, you 433 00:22:48,880 --> 00:22:51,320 Speaker 2: have a lot of high tech in manufacturing industries next 434 00:22:51,359 --> 00:22:53,760 Speaker 2: to each other, so you have a workforce of people 435 00:22:53,760 --> 00:22:55,440 Speaker 2: who can come and work at the new factory and 436 00:22:55,480 --> 00:22:59,080 Speaker 2: have done this sort of thing before. So there's competition 437 00:22:59,119 --> 00:23:01,880 Speaker 2: for workers in Jiangsu too, but they're there. The US 438 00:23:01,880 --> 00:23:05,119 Speaker 2: doesn't really have any of that. And also China has 439 00:23:05,160 --> 00:23:07,760 Speaker 2: the manufacturing for all the supporting industries, so they make 440 00:23:07,760 --> 00:23:10,280 Speaker 2: that silver paste there, they make the glass there, they 441 00:23:10,320 --> 00:23:14,080 Speaker 2: make the encapsulent which holds the back of the module together, 442 00:23:14,880 --> 00:23:17,760 Speaker 2: and it is just much more convenient to get all 443 00:23:17,760 --> 00:23:20,000 Speaker 2: the components in one region. 444 00:23:20,720 --> 00:23:24,199 Speaker 1: So when there is a boom in solar manufacturing in 445 00:23:24,240 --> 00:23:28,520 Speaker 1: the US, it will still rely on supply for certain 446 00:23:28,560 --> 00:23:31,760 Speaker 1: steps from other countries. Right, what are those steps in 447 00:23:31,800 --> 00:23:33,320 Speaker 1: which countries will they rely on? 448 00:23:34,040 --> 00:23:37,440 Speaker 2: So it's I'm not really that interested in the US. 449 00:23:37,480 --> 00:23:39,760 Speaker 2: So I haven't looked at their manufacturing capacity for junction 450 00:23:39,840 --> 00:23:42,199 Speaker 2: boxes and glass, et cetera. 451 00:23:42,560 --> 00:23:45,520 Speaker 1: And you're not interested because the US is a small market. 452 00:23:45,680 --> 00:23:48,879 Speaker 2: Well, the US is about thirty thirty five gigawatts of 453 00:23:48,920 --> 00:23:49,680 Speaker 2: installation a. 454 00:23:49,680 --> 00:23:51,919 Speaker 1: Year, which is about ten percent of demand today. 455 00:23:52,160 --> 00:23:56,120 Speaker 2: It's actually less than that, to be honest, I'm more 456 00:23:56,160 --> 00:24:00,320 Speaker 2: interested in the Polish solar market than the US solar market. Obviously, 457 00:24:00,320 --> 00:24:03,040 Speaker 2: the US is very interesting to Americans, and from a 458 00:24:03,040 --> 00:24:06,600 Speaker 2: climate perspective, we'd all like Americans to sort their carbon 459 00:24:06,600 --> 00:24:10,359 Speaker 2: emissions out. That is very important, and the Inflation Reduction 460 00:24:10,400 --> 00:24:14,000 Speaker 2: Act is probably for that reason, the most important piece 461 00:24:14,040 --> 00:24:16,520 Speaker 2: of climate legislation globally for the last ten years. 462 00:24:16,720 --> 00:24:18,359 Speaker 1: So because of the IRA, there are going to be 463 00:24:18,400 --> 00:24:21,160 Speaker 1: a lot of people trying to manufacture solar in the US. 464 00:24:21,720 --> 00:24:25,120 Speaker 1: One of the companies is q Cells. Why is hanwak 465 00:24:25,160 --> 00:24:26,280 Speaker 1: q Cells interesting? 466 00:24:26,600 --> 00:24:28,119 Speaker 2: As you say, there are a lot of companies that 467 00:24:28,160 --> 00:24:30,680 Speaker 2: are planning to set up factories in the US, including 468 00:24:30,680 --> 00:24:34,399 Speaker 2: a lot of Chinese companies considering it, but most of 469 00:24:34,440 --> 00:24:36,960 Speaker 2: them are only planning to do the last step the 470 00:24:37,000 --> 00:24:41,080 Speaker 2: module assembly. In the US, or at most modules and cells, 471 00:24:41,359 --> 00:24:44,760 Speaker 2: their module assembly is relatively low tech. You can assemble 472 00:24:44,760 --> 00:24:47,560 Speaker 2: modules in your garage. They wouldn't be very good modules 473 00:24:47,560 --> 00:24:50,359 Speaker 2: because you're probably not very good at it, but you 474 00:24:50,400 --> 00:24:53,119 Speaker 2: could do it. So what that is is dipping a 475 00:24:53,119 --> 00:24:56,080 Speaker 2: toe tentatively in the water of investing in the US, 476 00:24:56,520 --> 00:24:59,800 Speaker 2: whereas what hanwak q Cells has done is come crashing in. 477 00:25:00,320 --> 00:25:02,600 Speaker 2: We're going to build a factory in Georgia which makes 478 00:25:02,600 --> 00:25:05,119 Speaker 2: angles and wafers and cells and modules, and that is 479 00:25:05,119 --> 00:25:07,480 Speaker 2: a big investment. It's a big chunk of the value chain. 480 00:25:08,080 --> 00:25:10,600 Speaker 2: It's betting that they can do this whole thing well 481 00:25:10,720 --> 00:25:13,119 Speaker 2: enough to make you pay with the Inflation Reduction Act. 482 00:25:14,680 --> 00:25:17,880 Speaker 1: Q Cells as a brand has existed for decades and 483 00:25:18,000 --> 00:25:20,920 Speaker 1: has been present during every one of those solar Eras 484 00:25:21,040 --> 00:25:24,480 Speaker 1: Jenny described, it went public in the German Boom, bankrupt 485 00:25:24,560 --> 00:25:27,600 Speaker 1: following the two thousand and eight financial crisis, and after 486 00:25:27,600 --> 00:25:30,719 Speaker 1: an acquisition from a South Korean company, is now building 487 00:25:30,760 --> 00:25:34,600 Speaker 1: an American supply chain, the entire supply chain, and that's 488 00:25:34,640 --> 00:25:38,639 Speaker 1: going further than any other US solar manufacturer. I wanted 489 00:25:38,680 --> 00:25:41,600 Speaker 1: to hear more about this big bet directly from the source. 490 00:25:41,880 --> 00:25:44,840 Speaker 1: I spoke to Lindsay Jerry, policy manager at q Cells 491 00:25:45,040 --> 00:25:47,360 Speaker 1: about how much they stand to get from the Inflation 492 00:25:47,440 --> 00:25:52,440 Speaker 1: Reduction Act. Lindsay, welcome to zero. 493 00:25:52,560 --> 00:25:54,760 Speaker 4: Thank you so much for having me. I really appreciate it. 494 00:25:54,920 --> 00:25:57,359 Speaker 1: Q Cells is not the only company that's going to 495 00:25:57,400 --> 00:26:01,800 Speaker 1: manufacture solar panels in the US. There's First, NL, Cubic, PV. 496 00:26:03,040 --> 00:26:05,520 Speaker 1: All of them have announced plans. So what is different 497 00:26:05,520 --> 00:26:06,760 Speaker 1: about q cell splan. 498 00:26:07,160 --> 00:26:10,560 Speaker 3: Yeah, so we are the only vertically integrated solar panel 499 00:26:10,560 --> 00:26:13,879 Speaker 3: manufacturer that will be operating in the US. We have 500 00:26:13,960 --> 00:26:16,720 Speaker 3: been very intentional that we want to do it all here. 501 00:26:17,320 --> 00:26:20,240 Speaker 3: So we you know, of course, have announced that we 502 00:26:20,280 --> 00:26:23,000 Speaker 3: are doing our vertically integrated factory. 503 00:26:22,600 --> 00:26:23,960 Speaker 4: In Cartersville, Georgia. 504 00:26:24,080 --> 00:26:27,480 Speaker 3: That will be three point three gigawatts of fully vertically 505 00:26:27,520 --> 00:26:32,159 Speaker 3: integrated panel. So that is what makes us different. We 506 00:26:32,200 --> 00:26:35,080 Speaker 3: are doing it all here. We are doing it vertically integrated. 507 00:26:35,119 --> 00:26:35,800 Speaker 4: We're going big. 508 00:26:36,240 --> 00:26:39,600 Speaker 3: Of the five primary manufacturing steps for a solar panel 509 00:26:39,800 --> 00:26:44,480 Speaker 3: that is polysilicon, inga wafer, sell in module. The US 510 00:26:44,560 --> 00:26:48,280 Speaker 3: is really only home to polysilicon and module production, so 511 00:26:48,640 --> 00:26:52,360 Speaker 3: inga wafer and cell manufacturing have been entirely missing from 512 00:26:52,520 --> 00:26:55,600 Speaker 3: the US supply chain for quite some time now, and 513 00:26:55,640 --> 00:26:58,520 Speaker 3: they are heavily concentrated in China and Southeast Asia. 514 00:26:59,400 --> 00:27:00,560 Speaker 4: So this is really. 515 00:27:00,440 --> 00:27:05,439 Speaker 3: Exciting because you know, this heavy concentration of manufacturing creates 516 00:27:05,440 --> 00:27:07,480 Speaker 3: issues within the supply chain, and so having a more 517 00:27:07,480 --> 00:27:12,720 Speaker 3: diversified supply chain creates a more stable solar industry. And 518 00:27:12,760 --> 00:27:15,240 Speaker 3: that is something that we didn't think was possible. Just 519 00:27:15,240 --> 00:27:17,520 Speaker 3: a couple of years ago. People you know, thought we 520 00:27:17,760 --> 00:27:20,000 Speaker 3: had a pipe dree and then never thought it would 521 00:27:20,040 --> 00:27:20,680 Speaker 3: come to fruition. 522 00:27:20,800 --> 00:27:23,920 Speaker 4: But we're really starting to see these investments come through, and. 523 00:27:23,920 --> 00:27:28,280 Speaker 1: So what specific policies are enabling this boom to happen, 524 00:27:28,359 --> 00:27:30,720 Speaker 1: and let's just break them down absolutely. 525 00:27:31,240 --> 00:27:34,760 Speaker 3: The primary policy that we point to is a production 526 00:27:34,920 --> 00:27:38,320 Speaker 3: based tax credit. So for the Solar Energy Manufacturing for 527 00:27:38,359 --> 00:27:43,560 Speaker 3: America Act, this bill creates a production based tax credit 528 00:27:43,600 --> 00:27:47,680 Speaker 3: so that manufacturers will receive credit for producing polysilicon inga 529 00:27:47,760 --> 00:27:51,840 Speaker 3: wa for sell module and backsheet. So this is the 530 00:27:51,880 --> 00:27:55,320 Speaker 3: type of long term incentive that we need to confidently 531 00:27:55,359 --> 00:27:57,720 Speaker 3: be able to say, yes, we can operate in the US, 532 00:27:57,760 --> 00:28:01,040 Speaker 3: and we can do so efficiently in cost effectly. 533 00:28:00,840 --> 00:28:03,760 Speaker 1: And what does it mean in dollar and how many years? 534 00:28:04,040 --> 00:28:08,760 Speaker 3: So if you do so vertically integrated, this tax credit 535 00:28:08,840 --> 00:28:12,640 Speaker 3: will be about seventeen or eighteen cents in dollars per 536 00:28:12,680 --> 00:28:16,520 Speaker 3: walk and that's against you know, a forty cent panel. 537 00:28:16,280 --> 00:28:20,000 Speaker 4: So it's a very lucrative tax credit. We are very excited. 538 00:28:20,080 --> 00:28:23,919 Speaker 1: Yeah, almost fifty percent of the price of the panel. 539 00:28:24,160 --> 00:28:26,440 Speaker 3: And you know, when we're trying to compete and stand 540 00:28:26,480 --> 00:28:29,919 Speaker 3: up an industry, every little bit of policy support helps, 541 00:28:30,040 --> 00:28:32,320 Speaker 3: and so we think this is the right policy solution 542 00:28:32,440 --> 00:28:36,680 Speaker 3: to really provide that long term certainty for manufacturers such 543 00:28:36,680 --> 00:28:38,320 Speaker 3: as Q sells to invest. 544 00:28:38,600 --> 00:28:40,920 Speaker 1: It's not just about how you make it, but also 545 00:28:41,040 --> 00:28:45,720 Speaker 1: what happens after panels are useless, which you know, for 546 00:28:45,800 --> 00:28:48,320 Speaker 1: what they are, they last twenty five years, which is fantastic, 547 00:28:48,720 --> 00:28:50,920 Speaker 1: But what are you doing to deal with the end 548 00:28:50,920 --> 00:28:51,560 Speaker 1: of life? 549 00:28:52,240 --> 00:28:54,320 Speaker 3: This is a really important topic that I think the 550 00:28:54,400 --> 00:28:57,600 Speaker 3: industry is kind of starting to wake up on. Panels 551 00:28:57,640 --> 00:29:00,680 Speaker 3: have a life span of about twenty five to years, 552 00:29:01,360 --> 00:29:04,080 Speaker 3: so solar really started to pick up in the mid offs. 553 00:29:04,880 --> 00:29:07,920 Speaker 3: So hypothetically we have another like ten to fifteen years 554 00:29:07,960 --> 00:29:10,600 Speaker 3: before we start seeing solar farms reach the end of 555 00:29:10,640 --> 00:29:12,760 Speaker 3: their useful life, So we need to start kind of 556 00:29:12,760 --> 00:29:16,720 Speaker 3: figuring recycling out sooner rather than later. So the main 557 00:29:16,880 --> 00:29:20,240 Speaker 3: issue that we currently see right now is that panels 558 00:29:20,320 --> 00:29:24,440 Speaker 3: are really expensive to recycle. There isn't federal legislation that 559 00:29:24,520 --> 00:29:28,360 Speaker 3: mandates solar panel recycling, and because of this, there isn't 560 00:29:28,360 --> 00:29:30,720 Speaker 3: a lot of existing infrastructure, which means. 561 00:29:30,480 --> 00:29:31,560 Speaker 4: It's very expensive. 562 00:29:32,320 --> 00:29:37,320 Speaker 3: In the US, we see panel recycling cost about eighteen 563 00:29:37,400 --> 00:29:41,440 Speaker 3: to forty five dollars per panel, compared to land filling 564 00:29:41,480 --> 00:29:44,120 Speaker 3: a panel, which is about one dollar per panel, which 565 00:29:44,160 --> 00:29:47,400 Speaker 3: is really expensive. So if it's eighteen dollars, I think 566 00:29:47,800 --> 00:29:49,680 Speaker 3: I think that would probably be about like twenty percent 567 00:29:49,720 --> 00:29:52,160 Speaker 3: of the price of the panel. You know, I don't 568 00:29:52,160 --> 00:29:55,120 Speaker 3: want to create like a doomsday scenario where we're going 569 00:29:55,200 --> 00:29:57,440 Speaker 3: to just be like drowning in solar waste. 570 00:29:57,600 --> 00:29:58,880 Speaker 4: That is not going to be the case. 571 00:29:59,280 --> 00:30:02,840 Speaker 3: So the e you has mandated panel recycling for the 572 00:30:02,920 --> 00:30:07,440 Speaker 3: last ten plus years. As a result, panel recycling in 573 00:30:07,480 --> 00:30:10,160 Speaker 3: the U is as low as seventy cents per panel, 574 00:30:10,600 --> 00:30:13,880 Speaker 3: so that I think is an optimistic outlook for us. 575 00:30:14,960 --> 00:30:16,200 Speaker 1: Thank you for coming on the show. 576 00:30:16,360 --> 00:30:17,080 Speaker 4: Thank you so much. 577 00:30:17,120 --> 00:30:23,000 Speaker 1: Action after the break, we hear more from Jenny Cheese 578 00:30:23,040 --> 00:30:34,560 Speaker 1: about why solar is a horrible business. So you're famous 579 00:30:34,560 --> 00:30:37,560 Speaker 1: for many things, including a book which is Solar power 580 00:30:37,600 --> 00:30:40,480 Speaker 1: Finance without the jargon. And I understand a second edition is. 581 00:30:40,440 --> 00:30:42,640 Speaker 2: Second edition coming out this autumn, so don't buy the 582 00:30:42,640 --> 00:30:43,000 Speaker 2: old one. 583 00:30:43,400 --> 00:30:47,000 Speaker 1: And while Twitter was a thing, is a thing, depends 584 00:30:47,080 --> 00:30:50,200 Speaker 1: where we stand on it. You also dated the annual 585 00:30:50,280 --> 00:30:53,480 Speaker 1: thread of all the opinions you had about the solar industry. 586 00:30:53,960 --> 00:30:55,000 Speaker 1: When's the next one coming? 587 00:30:55,200 --> 00:30:58,720 Speaker 2: Probably when my book comes out, so probably October. I 588 00:30:58,840 --> 00:30:59,920 Speaker 2: try and do it about October. 589 00:31:00,520 --> 00:31:03,320 Speaker 1: Now, one opinion that's stuck with me, which you make 590 00:31:03,440 --> 00:31:08,360 Speaker 1: every year, is that solar manufacturing is bad business. Can 591 00:31:08,360 --> 00:31:09,120 Speaker 1: you see why. 592 00:31:09,040 --> 00:31:11,400 Speaker 2: Solar manufacturing is a horrible business. I don't know why 593 00:31:11,440 --> 00:31:14,080 Speaker 2: governments want to have it in their countries when they 594 00:31:14,080 --> 00:31:17,120 Speaker 2: could just buy really cheap modules on the global markets. 595 00:31:17,560 --> 00:31:20,360 Speaker 2: So the reason is that although the basic module technology 596 00:31:20,400 --> 00:31:23,960 Speaker 2: has not changed since nineteen fifty four, there's this continual 597 00:31:24,040 --> 00:31:28,120 Speaker 2: grind to make it better and cheaper, and that requires 598 00:31:28,120 --> 00:31:30,960 Speaker 2: investment in new factories that can do it slightly better. 599 00:31:31,560 --> 00:31:35,800 Speaker 2: It involves changes of technology generations. So we briefly discussed 600 00:31:35,840 --> 00:31:39,440 Speaker 2: the change from multi crystalline to monocrystalline. What that meant 601 00:31:39,480 --> 00:31:42,320 Speaker 2: was that a lot of the multi crystalline silicon factories 602 00:31:42,320 --> 00:31:44,520 Speaker 2: were basically obsolete, and some of those were only a 603 00:31:44,520 --> 00:31:47,280 Speaker 2: few years old. The company is still owned debt on those. 604 00:31:47,920 --> 00:31:51,880 Speaker 2: This constant grind of getting better at making a commodity 605 00:31:51,920 --> 00:31:55,600 Speaker 2: product means that it's very, very hard to make money. 606 00:31:55,880 --> 00:31:58,160 Speaker 2: You have a factory that hasn't paid off its debt 607 00:31:58,200 --> 00:32:00,680 Speaker 2: and already the products from it are slete and its 608 00:32:00,680 --> 00:32:05,080 Speaker 2: operating costs above prices, and that's why the solar manufacturers 609 00:32:05,160 --> 00:32:06,320 Speaker 2: keep going bust. 610 00:32:06,600 --> 00:32:09,760 Speaker 1: But if you want to scale solar and re expect 611 00:32:09,840 --> 00:32:12,880 Speaker 1: solar to grow, right, one terraw whatt in three years. 612 00:32:13,600 --> 00:32:16,840 Speaker 1: It has to be a sustainable business. The manufacturing also 613 00:32:16,920 --> 00:32:20,720 Speaker 1: has to be profitable. If that's not the case, why 614 00:32:20,760 --> 00:32:23,840 Speaker 1: do we think solar will continue to scale beyond the 615 00:32:23,840 --> 00:32:24,440 Speaker 1: one terror what? 616 00:32:25,840 --> 00:32:28,440 Speaker 2: Well, it's a bit of a self fulfilling prophecy. If 617 00:32:28,640 --> 00:32:31,640 Speaker 2: companies stopped investing in new solar factories, the ones that 618 00:32:31,720 --> 00:32:34,920 Speaker 2: exist would probably make money more reliably. But I've been 619 00:32:34,920 --> 00:32:39,000 Speaker 2: doing this seventeen years now, and there's always investors who 620 00:32:39,080 --> 00:32:41,400 Speaker 2: want to get into this new great thing. Have you 621 00:32:41,440 --> 00:32:46,280 Speaker 2: tried making solar panels? They mostly lose their money. But 622 00:32:46,760 --> 00:32:49,320 Speaker 2: if they did stop, then we would probably have a 623 00:32:49,320 --> 00:32:54,840 Speaker 2: period of relatively stable module prices and the market would 624 00:32:54,880 --> 00:32:57,840 Speaker 2: just continue to grow because solar is so cheap. Now 625 00:32:57,960 --> 00:33:00,360 Speaker 2: you can buy a Chinese solar model for seventeen point 626 00:33:00,440 --> 00:33:03,840 Speaker 2: a US sense per what And when I started it 627 00:33:03,920 --> 00:33:05,120 Speaker 2: was over four dollars a what. 628 00:33:05,760 --> 00:33:08,560 Speaker 1: And in a capitalistic system, that shouldn't exist. If you 629 00:33:08,680 --> 00:33:12,760 Speaker 1: know year after year that something is bad business, eventually 630 00:33:13,080 --> 00:33:15,800 Speaker 1: people will stop investing in it. But that's not happening 631 00:33:15,800 --> 00:33:18,240 Speaker 1: with sort of just because there's so much demand for it. 632 00:33:18,640 --> 00:33:20,720 Speaker 2: I think you think capitalism is smarter than I do. 633 00:33:22,080 --> 00:33:24,560 Speaker 2: The thing about capitalists is you only need a small 634 00:33:24,640 --> 00:33:26,440 Speaker 2: number of them to get really excited about what they 635 00:33:26,440 --> 00:33:29,040 Speaker 2: think is the next big thing. And this is actually, 636 00:33:29,400 --> 00:33:33,320 Speaker 2: in this case a positive thing, since investors losing their 637 00:33:33,320 --> 00:33:36,160 Speaker 2: shirts is one of the things that powers the drive 638 00:33:36,240 --> 00:33:40,840 Speaker 2: towards better and cheaper solar modules. And now solar models 639 00:33:40,840 --> 00:33:45,080 Speaker 2: are actually really great, but there is still competition between companies, 640 00:33:45,080 --> 00:33:48,960 Speaker 2: between investors to have better ones, a sustainable business, a 641 00:33:49,000 --> 00:33:51,240 Speaker 2: more efficient, cheaper module to make. 642 00:33:51,840 --> 00:33:54,880 Speaker 1: And increasingly a nationalistic tone to it to have it 643 00:33:55,040 --> 00:33:56,720 Speaker 1: in your country, making. 644 00:33:56,440 --> 00:34:00,440 Speaker 2: It personally, I think that's just ridiculous. I think if 645 00:34:00,440 --> 00:34:03,360 Speaker 2: our goal is to decarbonize human civilization, which that is 646 00:34:03,400 --> 00:34:06,560 Speaker 2: actually my goal, it's not a race, it's a fitness program. 647 00:34:06,960 --> 00:34:09,520 Speaker 2: We all want to get a fit. There's no advantage 648 00:34:09,520 --> 00:34:11,239 Speaker 2: to being the first to decarbonized, but there is a 649 00:34:11,280 --> 00:34:15,479 Speaker 2: huge advantage if we all managed to decarbonize. But hey, 650 00:34:15,600 --> 00:34:18,759 Speaker 2: people like being nationalistic and if that makes them go 651 00:34:18,840 --> 00:34:21,799 Speaker 2: and investing clean energy, I don't have a problem with that. 652 00:34:22,280 --> 00:34:24,240 Speaker 1: And so, just going back to the start of your career, 653 00:34:24,600 --> 00:34:27,440 Speaker 1: you'd sort of predicted that if solar contributed one percent 654 00:34:27,440 --> 00:34:30,560 Speaker 1: of global electricity, that would be a huge achievement. And 655 00:34:30,600 --> 00:34:33,440 Speaker 1: now you think we may not even stop at fifty percent. 656 00:34:34,200 --> 00:34:37,040 Speaker 1: So what is it between now where solar is about 657 00:34:37,080 --> 00:34:41,680 Speaker 1: four percent of global electricity supply to fifty percent that 658 00:34:41,760 --> 00:34:44,360 Speaker 1: needs to happen for us to reach that kind of level. 659 00:34:44,480 --> 00:34:47,360 Speaker 2: So, first of all, what's holding back solar at the moment. 660 00:34:47,400 --> 00:34:50,799 Speaker 2: It's clearly not supply. The module prices are crashing, There 661 00:34:50,840 --> 00:34:54,759 Speaker 2: is loads of supply on the market, it's cheap, It's 662 00:34:54,800 --> 00:34:57,480 Speaker 2: probably the cheapest source of bulk electricity in so many places. 663 00:34:57,880 --> 00:35:00,920 Speaker 2: What's holding it back from just building a terror What 664 00:35:01,000 --> 00:35:06,239 Speaker 2: are here today is grid connections. Historically, solar has kind 665 00:35:06,239 --> 00:35:09,160 Speaker 2: of been free riding on the existing grid, putting plants 666 00:35:09,160 --> 00:35:11,919 Speaker 2: in where there is a grid connection already, and we're 667 00:35:11,960 --> 00:35:14,360 Speaker 2: starting to run out of those easy sites. And also 668 00:35:14,920 --> 00:35:16,839 Speaker 2: we need some really good grid planning in a lot 669 00:35:16,840 --> 00:35:19,160 Speaker 2: of country to determine where we could still put solar 670 00:35:19,160 --> 00:35:22,400 Speaker 2: farms and feed power into the grid. There's also site permitting. 671 00:35:23,200 --> 00:35:25,600 Speaker 2: There is not an infinite number of very suitable sites, 672 00:35:25,800 --> 00:35:31,160 Speaker 2: and European countries generally have the reasonable feeling that we 673 00:35:31,200 --> 00:35:34,680 Speaker 2: probably shouldn't be putting solar on prime agricultural land, so 674 00:35:35,000 --> 00:35:37,200 Speaker 2: put it on roofs is the obvious answer, but it 675 00:35:37,239 --> 00:35:40,000 Speaker 2: does cost more to put it on roofs. You have 676 00:35:40,080 --> 00:35:42,640 Speaker 2: to arrange different smaller plants. If you put it on 677 00:35:42,640 --> 00:35:44,279 Speaker 2: car parks, you've got to put them on great, big 678 00:35:44,320 --> 00:35:48,040 Speaker 2: poles to hold them off the ground. It's generally slower 679 00:35:48,040 --> 00:35:50,200 Speaker 2: and more complicated to put solar on roofs, and there 680 00:35:50,239 --> 00:35:53,640 Speaker 2: is a shortage of installation labor. So the bottlenecks to 681 00:35:53,680 --> 00:35:57,640 Speaker 2: solar growth at the moment are grid, land and labor 682 00:35:58,200 --> 00:36:01,880 Speaker 2: and organization. I'm hoping that some of those can be 683 00:36:01,920 --> 00:36:06,560 Speaker 2: solved in the next ten years with organization, with competition, 684 00:36:07,040 --> 00:36:10,160 Speaker 2: with government action. After that, the problem is going to 685 00:36:10,200 --> 00:36:11,800 Speaker 2: be that solar eats itself. 686 00:36:12,360 --> 00:36:13,359 Speaker 1: What do you mean by that? 687 00:36:13,680 --> 00:36:15,799 Speaker 2: The thing about solar panels is they all generate at 688 00:36:15,840 --> 00:36:18,880 Speaker 2: much the same time, are you when it's sunny, and 689 00:36:18,880 --> 00:36:22,040 Speaker 2: then they don't generate at night or even when the 690 00:36:22,040 --> 00:36:23,760 Speaker 2: sun starts to get lower, they generate less. 691 00:36:23,600 --> 00:36:25,960 Speaker 1: Right, So you need a solution to store that electricity 692 00:36:27,200 --> 00:36:28,320 Speaker 1: energy storage. 693 00:36:27,960 --> 00:36:30,520 Speaker 2: But that costs money and you need to be cycling 694 00:36:30,520 --> 00:36:33,239 Speaker 2: that energy storage very frequently to make that make any 695 00:36:33,320 --> 00:36:36,600 Speaker 2: kind of economic sense. So we are going to have 696 00:36:36,800 --> 00:36:38,759 Speaker 2: the problem that solar is going to crash the power 697 00:36:38,800 --> 00:36:41,000 Speaker 2: price in the middle of the day every day, every 698 00:36:41,040 --> 00:36:43,960 Speaker 2: sunny day, solar is going to be free between the 699 00:36:44,040 --> 00:36:45,399 Speaker 2: hours of ten and three. 700 00:36:45,719 --> 00:36:49,400 Speaker 1: And it's happened already in California, Germany, Spain, where there 701 00:36:49,400 --> 00:36:53,040 Speaker 1: are what we call negative prices, essentially the grid paying 702 00:36:53,080 --> 00:36:55,919 Speaker 1: you to use electricity because there is so much of it. 703 00:36:55,960 --> 00:36:59,799 Speaker 2: Absolutely invested a toaster, But that I mean in ten 704 00:37:00,200 --> 00:37:04,720 Speaker 2: is we will probably be looking at our app and going, ah, 705 00:37:05,239 --> 00:37:07,120 Speaker 2: power is free right now. I think I should do 706 00:37:07,160 --> 00:37:09,560 Speaker 2: some washing. I think I should charge my battery. I 707 00:37:09,560 --> 00:37:13,640 Speaker 2: should The battery is probably automatic because electricity is going 708 00:37:13,719 --> 00:37:16,279 Speaker 2: to be worth almost nothing when the sun's out. But 709 00:37:16,360 --> 00:37:19,719 Speaker 2: then later in the day, hopefully we'll have decommissioned some 710 00:37:19,760 --> 00:37:22,520 Speaker 2: of the gas capacity and all the cold capacity, and 711 00:37:22,600 --> 00:37:24,600 Speaker 2: later in the day, when the sun's gone down, that 712 00:37:24,680 --> 00:37:28,719 Speaker 2: power will be expensive and that's going to fundamentally change 713 00:37:28,719 --> 00:37:29,920 Speaker 2: the way we operate things. 714 00:37:30,320 --> 00:37:33,560 Speaker 1: So three years for the next tier award, what happens afterwards? 715 00:37:33,880 --> 00:37:38,160 Speaker 2: And that's a very big question. And I get asked 716 00:37:38,200 --> 00:37:42,239 Speaker 2: a lot why my team doesn't produce more optimistic forecasts 717 00:37:42,239 --> 00:37:46,200 Speaker 2: for solar. You know, we basically get asked, why don't 718 00:37:46,200 --> 00:37:49,279 Speaker 2: we just put a formula and to exceled to have 719 00:37:49,400 --> 00:37:51,640 Speaker 2: it grow the new bill grow at forty percent forever. 720 00:37:52,280 --> 00:37:54,239 Speaker 2: And the reason is, first of all, that you cover 721 00:37:54,280 --> 00:37:57,760 Speaker 2: the entire world with solar panels pretty quickly at that rate. Secondly, 722 00:37:57,800 --> 00:37:59,640 Speaker 2: that you do start to run into issues with a 723 00:37:59,680 --> 00:38:03,000 Speaker 2: solar mostly generating when it's completely valueless because it's the 724 00:38:03,040 --> 00:38:07,160 Speaker 2: middle of the day. And also because what my team 725 00:38:07,200 --> 00:38:10,200 Speaker 2: is doing is putting forecast in four hundred and forty 726 00:38:10,239 --> 00:38:13,760 Speaker 2: six different countries and I need to get the analysts 727 00:38:13,760 --> 00:38:16,520 Speaker 2: who cover those countries to sign off on forecasts. And 728 00:38:16,560 --> 00:38:20,319 Speaker 2: people are very, very bad at forecasting revolution. I'm sorry 729 00:38:20,360 --> 00:38:22,960 Speaker 2: we call it transition now because revolution is too scary. 730 00:38:23,360 --> 00:38:27,399 Speaker 2: But the energy transition is genuinely a completely new way 731 00:38:27,440 --> 00:38:29,759 Speaker 2: of doing things, and it's very hard to model things 732 00:38:29,760 --> 00:38:34,640 Speaker 2: that have never happened before. So analysts are cowards. They 733 00:38:34,640 --> 00:38:36,719 Speaker 2: do not want to forecast that their country will get 734 00:38:36,719 --> 00:38:39,000 Speaker 2: to fifty percent in the atity mixture. 735 00:38:39,000 --> 00:38:40,560 Speaker 1: So when your boss comes to you, that's the answer 736 00:38:40,640 --> 00:38:40,920 Speaker 1: you give. 737 00:38:41,400 --> 00:38:44,279 Speaker 2: Yeah, they're cowards. My analyst are cowards, and I think 738 00:38:44,320 --> 00:38:49,239 Speaker 2: all analysts are cowards because envisioning a totally different way 739 00:38:49,280 --> 00:38:51,719 Speaker 2: of doing things is not so much an analytical process. 740 00:38:51,800 --> 00:38:53,439 Speaker 2: It's something where you have to have a vague idea 741 00:38:53,480 --> 00:38:55,640 Speaker 2: where you're going, and you had a set off, and 742 00:38:55,960 --> 00:38:58,480 Speaker 2: keep looking at the sat NAV which is modeling, and 743 00:38:59,239 --> 00:39:03,280 Speaker 2: current situation and what the bottom necks are and hope 744 00:39:03,280 --> 00:39:04,520 Speaker 2: to keep steering in the right direction. 745 00:39:04,800 --> 00:39:06,680 Speaker 1: But I'm still going to ask you, So one Terror 746 00:39:06,680 --> 00:39:10,879 Speaker 1: award built, two terror ort by twenty twenty five, when 747 00:39:10,960 --> 00:39:12,400 Speaker 1: will three Terror award happen? 748 00:39:12,600 --> 00:39:15,719 Speaker 2: I think our technical forecast is twenty twenty six or 749 00:39:15,760 --> 00:39:16,600 Speaker 2: twenty twenty seven. 750 00:39:17,320 --> 00:39:22,040 Speaker 1: Wow, so fifteen months eighteen months period after that another shrinking. 751 00:39:22,360 --> 00:39:25,480 Speaker 2: But again we are going to come up to limits 752 00:39:25,520 --> 00:39:28,200 Speaker 2: in terms of when of high priced cannibalization, in terms 753 00:39:28,239 --> 00:39:31,040 Speaker 2: of not covering the entire world with solar panels, and 754 00:39:31,120 --> 00:39:32,560 Speaker 2: it's difficult to forecast that. 755 00:39:33,080 --> 00:39:35,520 Speaker 1: Now, as a solar analyst, you'll probably hate this question, 756 00:39:35,600 --> 00:39:38,560 Speaker 1: but it would be useful for listeners. What would be 757 00:39:38,640 --> 00:39:40,880 Speaker 1: your advice to people who want to put solar on 758 00:39:40,880 --> 00:39:41,480 Speaker 1: their rooftop? 759 00:39:41,800 --> 00:39:44,080 Speaker 2: So I love this question. People ask it to me 760 00:39:44,080 --> 00:39:46,440 Speaker 2: at parties all the time. I'm a lot of finite parties. 761 00:39:47,200 --> 00:39:49,759 Speaker 2: A big part of the cost of putting solar on 762 00:39:49,800 --> 00:39:52,560 Speaker 2: the roof is scaffolding. So if you've got a reason 763 00:39:52,600 --> 00:39:55,360 Speaker 2: to put scaffolding on your roof, look into getting solar 764 00:39:55,360 --> 00:39:58,520 Speaker 2: panels put up while they're up there. And secondly, a 765 00:39:58,520 --> 00:40:02,920 Speaker 2: lot of solar installers are a cowboys, so don't believe 766 00:40:02,960 --> 00:40:07,920 Speaker 2: everything they tell you, and don't necessarily rush to build 767 00:40:08,000 --> 00:40:14,360 Speaker 2: solar from somebody you're getting bad vibes from. 768 00:40:14,440 --> 00:40:17,120 Speaker 1: That was a lot of fun. Thank you, Jenny, Thank 769 00:40:17,160 --> 00:40:28,879 Speaker 1: you Acshat. The growth story of solar is well known, 770 00:40:29,200 --> 00:40:34,640 Speaker 1: but what's underappreciated is what Jenny calls solar eating itself. Basically, 771 00:40:34,800 --> 00:40:38,280 Speaker 1: there being too much electricity when the sun shines, making 772 00:40:38,360 --> 00:40:42,879 Speaker 1: solar unprofitable to build. That's a problem worth fixing if 773 00:40:42,960 --> 00:40:47,360 Speaker 1: the growth story of solar is to continue. Thanks for 774 00:40:47,400 --> 00:40:49,919 Speaker 1: listening to Zero. If you like the show, please rate 775 00:40:49,960 --> 00:40:52,560 Speaker 1: and review, share it with a friend or someone who 776 00:40:52,680 --> 00:40:56,000 Speaker 1: is a lot of fun at parties. Zero's producer is 777 00:40:56,040 --> 00:40:59,960 Speaker 1: Oscar Boyd and senior producer is Christine Driskell. Our themes 778 00:41:00,280 --> 00:41:03,960 Speaker 1: is composed by wonderly Special Thanks this week to Curbin 779 00:41:04,040 --> 00:41:08,280 Speaker 1: rim Brian Echous, Nili Harameo Plata and a prayer Ruffin 780 00:41:08,920 --> 00:41:12,960 Speaker 1: i'm Akshatrati back next week.