Welcome to zero. I'm Kshatrati this week booms bus and bargains. Solar is the cheapest source of energy. You know. Within the last two decades, it has gone from being a cool technology that rich countries should fund to being mainstream. You can see solar panels everywhere. It now contributes four percent of the world's electricity, which sounds tiny, but the extraordinary pace at which it has grown means that analysts think it could contribute as much as fifty percent within decades.
This is partly thanks to how cheap the panels have become. The technology was created in the US, but brought to massive scale in factories in Japan, Germany, and then finally China, which today is responsible for more than eighty percent of global supply, and that dependence is bringing disruption to the industry. Countries from India to the US want to make sure
that their supply chains aren't too dependent on China. That's forcing governments to come up with policies that incentivize manufacturing solar domestically.
Solar manufacturing is a horrible business. I don't know why governments want to have it in their countries when they could just buy really cheap modules on the global markets.
That is Jenny Chase, solar power analysts for Bloomberg NEF, who I think is basically the world's best expert on the business of solar. She's covered the industry for two decades and seen lots and lots of disruption Despite the massive growth, The technology cycle of solar is so rapid that few investors are able to recoup their investments, and yet the demand for solar keeps rising, which keeps motivating
new people to try. The latest attempt is thanks to the US Climate Bill, which is going to heavily subsidize the production of solar panels domestically. One of those companies is Hanuak Q Cells, which is building a plant in the state of Georgia.
We are doing it all here. We are doing it vertically integrated. We're going big.
That's Lindsay Cherry from Q Cells, who we'll hear from later in the episode. But first Jenny tells me all about how solar panels are made, starting with sand, the history of solar booms and bus and how scaling this technology has needed successive governments from the US to Germany to China to spend vast sums for the benefit of all humanity. Jenny, Welcome to zero.
Good morning, Ashat. Nice to be here.
So I have a bookcoming. It's called Climate Capitalism, and one of the chapters is focused on solar and when I was doing the research on it, something shocked me. You know, even as a science student, I didn't know that the history of solo goes back to eighteen thirty nine, all the way back to a French scientist who first figured out that if you shone light on a combination
of metals you can get electricity. Now, if you take that as the moment of invention of solar, from then until twenty twenty two, it took about one hundred and eighty three years to build one terrawat of solar. Now we can figure out what one terrawat is, but it's a big number. What shocked me is that, according to Bloomberg and e f estimates, the next terawater solar will be built in three years. Is that right?
That is right? The growth of solar has been phenomenal. I started doing this in two thousand and four, and if I'd given a completely accurate forecast of solar growth, everyone would have thought I was crazy. They would not have listened to me. That I would have got fired and we would not have been a success. I thought then that if solar was one day one percent of world electricity supply, I would be astounded. But at the time I was I thought, well one percent is not nothing.
I'm happy to work on this. Now I'm starting to wonder will it hit fifty percent? Will it ever be more than fifty percent? Well, electricity.
Now, before we get into the explosion of solar in the business of solar, let's just understand what a silicon photovol take cell is and maybe go from its absolute starting point which is sand, all the way to putting it on a roof or at the utility scale in a farm. Just walk us through the steps.
So by weight, most of a solar module is glass and aluminium, but the active ingredient is the actual cell, and the active ingredient in that is a silicon wafer. That silicon wafer is made of ultrapure refined polysilicon that has been crystallized in a very particular structure and dope in a particular way. To make polysilicon, you start with sand, which is silicon dioxide, and you heat it up with carbon, so a pretty clean coal or a charcoal You can
do that in your garage if you want. And then what you have is metallurgical grade silicon, which is about ninety eight percent silicon.
And what's the two percent there?
It's carbon bore on a bit of phosphorus stuff that would mess up the electrical properties of a silicon wafer. Most of that is actually used for smelting steel. It's a traded commodity. It costs about two dollars a kilogram. It's some dirty silicon. To make that into polysilicon that is pure enough to be useful electrically in a solar cell, you need to do a very capex and very expertise intensive process.
Yeah, capex being just that the building of this plant would be really exciting. Building of the factories.
Building a polysilicon factory is very expensive and it uses a lot of electricity to run. And when I started in this industry in two thousand and four, there were really only five companies worldwide who knew how to do it,
and they were doing it for the semiconductive industry. So you've got this metallogical grade silicon and you react it with acid to make it into a gas, and then you have to set a seed of really pure silicon, and the gas swirls around the chamber, and you're heating some parts of the chamber and cooling different parts of the chamber, and this gas sort of dissociates and crystallizers on the seed, and so you get a rod of really pure silicon coming out, and you've got all kinds
of nasty gases you wel Silicon tetrichloride is a byproduct, which if you're a good polysilicon manufacturer, you then recycle and get that silicon back out, and also that hydrochloric acid backout. Is hugely energy intensive because you're heating and cooling different parts of the same reactor. It's called a semens reactor, and sweet talking a semens reactor into making polysilicon is actually really difficult, which is why it took years for Chinese companies to get the hang of it.
After two thousand and four.
I had no idea that it was actually vapor deposition that is extremely energy intensive, especially when we're talking metal. What temperatures are.
We talking here, It's over a thousand degrees celsius one hundred degrees celsius or so. So what you get out of a Semens reactor is a long rod of what we call polycrystalline silicon. It's not electric very useful because it's a lot of little crystals.
Wait, so there's one more step.
There is. There is one more step. So you got your rod of polycrystalline silicon and you smash it up with a hammer, and you put it in little sacks and you ship it to usually another company which makes ingot sound okay to make an in goot. You melt down that polycrystalline silicon into and then you're getting it to crystallize into larger crystals that are more electrically useful.
Until twenty eighteen, the dominant technology was multi crystalline silicon, so you let it crystallize from multiple points at once and you got some fairly big crystals that you could then use for solar And even then there was another technology that existed, monocrystaline silicon, where the whole ingot was one crystal.
Wow. So as a chemist, I actually grew crystals in the lab, and I did many things as a chemist, but the hardest thing I've done is crystallography. Trying to grow a crystal the way you want is so hard. It's sort of hard than science.
It's so hard, and you're trying to make something that's twelve feet long and a foot wide into a single crystal. When you're making a monocrystalline silicon in goot, you have to be so careful, and it's taken companies quite a long time to perfect it. And so monocrystallines silicon is it makes a more efficient cell than multi but it is much more expensive and much more difficult.
And the efficiency comes from the fact that a monocrystalline cell will have sort of fewer defects, which is to say, how electrons travel across the surface would be easier, simpler, and that is why it becomes more efficient.
Precisely, the grain boundaries are less of a problem because they want any grain boundaries and mono solar. But it was much more expensive, so it took a long time to become the dominant tech.
And then there's a fun step after this, which is to cut it into wafers which are then made into silicon PV cells. And the cutting of the wafers itself is quite complex, right.
It's quite difficult because they are really really they are, so we're talking today, it's about one hundred and eighty microns.
For a microns, that's roughly the width of human hair.
I think, twice the width of a human hair. But it's they're very very thin. You have to be very careful not to break them when you're working with them.
And what do you have to do to get that kind of thickness.
Well, of course we've been working on this. In two thousand and four, wafers were much thicker than they are today, and back then you would be using about ten grams of silicon per watt of modules. I know, we haven't talked about what is but for comparison today, the average is about two point six grams per what They were much thicker in those days because it's really difficult to
slice up things that thinly. And originally the technology was a slourwry based wire sauce, so literally it was like an abrasive wire that you poured liquid sandpaper over and sword.
And what is it now?
So in twenty eighteen I went off to baby and when I came back four months later, the whole market had moved with diamond wire saws, where you don't use this slurry based abrasive material at all. But you just diamond diamond as a wire.
It's so cool.
Or it's a really thin wire with chips of diamond, and you just literally saw through these wafers. Once those had happened, diamond wire saw and monocrystalized silicon just swept the market. And I mean, really, it felt like I went left how a baby, and I came back and the dominant technology was a little bit different.
It kind of explains to you just how explosive the industry is, both in the tech advancing as quickly as it is now. After that, once you have the wafer, you have to turn the veafer into a working solar panel. What are the steps involved there?
They're complicated, and I have to admit that as an analyst, I seldom have to understand them very well. But the steps are. You dope the wafer with boron a phosphorus so that it was set up an electric potential. When sunlight falls off, and when the sunlight knocks the electrons free, they will flow. Then you have to use a silver paste to make electrical contacts to get the electrons off the cell, and then you wio them up into modules.
And connect them to your invertero and feed it into the grid.
So what you've described, obviously is a pretty sophisticated piece of technology today, but in principle it's kind of the same solar cell that was invented in Bell Labs in nineteen fifty four.
Rate it absolutely is. It's probably three or four times a sufficient but it is the same silicon based technology as was invented by Bell Labs. We've just got better at making it as we've made more and more of these things. That's the great thing about humans. We get better at things when we do more of it.
But why is it that the explosion in the industry has only really happened in your period working as a solar analyst sort of two thousand and four onward.
I think on some level it was an explosion that was waiting to happen. But what has really driven it over the years has been government policy to get companies manufacturing these things and developing the technologies to do this manufacturing at scale and cheaply and well.
And in green technologies. Solar is sort of the poster child because invented in the US, there was a little bit of an industry there when the US government was funding solar development through installation of solar on satellites, but really when it came to consumers, it was Japan first, then Germany, then Spain. Right, these are the governments that came in with support and what kind of support.
So the way the solar industry works is you tend to get government policy in different places driving the global market at different times. And it was definitely the US that find out a lot of the R and D in the seventies and eighties, and weirdly enough exceon Mobile, which is not really famous for its environmental credentials. I would say there's a lot of the early research into
photovoltaics and actually sold a panel quite early on. Japan has a very long running program to build solar on roofs, which supports companies like shar Admitsubishi, and that that certainly developed the industry in that sense for Japan, given its a resource poor country that has little access to fossil fuels.
So Japan one side built a lot of nuclear power plants, but the other side also tried to develop solar as a technology.
It did Japan invested strategically in developing a solar industry. I'm not quite sure you can say it made sense because even then it was wildly expensive electricity, and to be honest, Japan doesn't have many companies anymore that are big in solar. But it certainly contributed to the development of a successful industry.
But does it make more sense that Germany was the next country that came out with a no.
That makes no sense whatsoever. Germany is a really bad country to do solar. It's not particularly sunny, it's it's not particularly windy for wind either. But Germany did decide in the year two thousand to do this energy vendor, the energy turnaround. They were going to get off nuclear, which was maybe the side of I agree with less
and replace it with renewables. So there were some early programs to build more solar in Germany, and then in two thousand and four Germany came crashing in with what they called the feed and Tariff Freedom. TAFF is a really weird word. It's a direct translation from the German Unschpeizerguchingen, which is it doesn't sound better in German, but it literally does just mean freed and tariff because you feed your electricity into the grid and you got paid a
lot for it. You got paid over four hundred years and mega.
Hour for it. Right, And if you compared to today sort of record solar is, I would say.
That SOLO in Germany today costs about about eighty years and mega what hour.
Right.
It has cost less in the past, but that's a complication we shouldn't go into. So solo has cost as little as fifty year as a megal hour in Germany.
But when we talk about solo today, it's mostly a China story. So how does China come into this picture?
When Germany started buying solar panels to put them on German fields and German roofs, Chinese company said, you know what, we can make these things. You know, it's maybe we can't make the polysilicon immediately, but we can slice stuff into wafers, we can make them into cells, we can make him into modules. And so the Chinese government did provide some strategic support, and technology came in from Australia, from the US, A lot of R and D from
other places came to China to do the manufacturing. And so you've got companies like Suntech and solar Fun and Yingli and Trina and what is called Canadian solar but is also significantly associated with China. And so the companies came and deployed the technologies developed elsewhere in large factories in China, larger factories that had ever been seen before, and they brought the costs down.
In each of these transitions from country to country, there were sort of national champions companies that were formed that were supportive of a domestic industry. So Japan had q Serra for example, Germany had q Cells. Then China got all these companies, but most of the time those companies were first reaching out for a domestic market because the country was supporting some sort of policy. But China i was the first to only focus on exports, right.
Absolutely, I mean from China's point of view, the Germans wanted to buy solar modules, so China would sell them.
And yet today China is the largest installer of solar. So what happened for it to go from being so export focused to installing so much renewables domestically.
Well, first of all, what you have to understand is that solar is not expensive anymore. Now it's probably the cheapest source of bulk electricity and most sunny countries in the world. I'm carefully saying of bulk electricity because solar does not generate at night, and we know this. But one major reason China has started building solar is that China likes cheap electricity. But the point when China started supporting its domestic installation industry was the point when the
European market went into a bust situation. So Germany had its speed and tariffs that started in two thousand and four. They were wildly successful from my deployment perspective, because they were a licensed to print money. Spain decided this is a great idea and launched a similar feed.
In tariff and what are you talking?
After a couple of years after two thousand and four, Spain launched its own feed in tariff, which was a little bit like the German one, but probably even more generous because Spain's sunnier than Germany, so they set the level similarly. But a solar panel that you put in Spain generates a lot more electricity, and Spain intended to get about four hundred megawatts of solar through that program, which was a lot at the time. The rule was when the Spanish market had got most of the way
to its four hundred megawats solar installation target. The government would give the companies a grace period of twelve months to finish up really, and that would be how they'd
get about four hundred megawats. It turns out you can build a lot of solar in twelve months, an unbelievable amount of solar at the time, and so the country ended up with about two point seven gigawatts or so like two thy seven hundred megawatts of solar from that program was meant to build four hundred megawats, and then they had to pay for all that to get subsidies.
And this is the period when the financial crisis was about to yes.
And then at the same time, it was actually the last day of September two thousand and eight was the end of the solar boom. And that was more or less when the financial crisis kicked off.
And so you get a bunch of bankruptcies in the solar industry following that period in Europe, and that's when the Chinese companies go, oh, but we've invested all this to try an export solar, what do we do now?
Exactly? So, basically, when the sunset on the last day of September two thousand and eight. The solar market flipped from under supply and all the modules in the world going to Spain and Germany with this big sucking sound, to oversupply. There were new factories built, there were loads of polosilicon to make more modules. Now the price started crashing, and of course that meant that the solar manufacturers went bankrupt, and the first to go bankrupt were the German manufacturers.
They had generally the oldest factories to make cells in modules, and they were often locked into polysilicon contracts at eighteen ninety one hundred dollars a kilogram, when the price of polysilicon was crashing towards forty thirty twenty dollars a kilogram. They say that when the tide goes out, you see who's swimming naked, and the Germans were swimming naked, whereas the Chinese new factories, more efficient, not generally locked into
polysilicon contract some of them were. They went bankrupt and so the Chinese companies survived better. So the fallout from the European market not growing as fast and in fact contracting, was that solar models were much much cheaper, and the companies were having a hard time. So the Chinese government came in and said, we want to provide strategic support
for our domestic industry. Plus we're not uninterested in this whole cly energy thing ourselves, and China started building massive amounts of solar, and China has been the largest market for solar panels since about twenty ten, and.
The numbers in China are stunning. This year, Blomogin f estimates that one hundred and fifty gigawarts of solar is going to be built in China now, just to put that in perspective. Europe, which was on sort of steroids to try and build renewables last year after Russia attacked Ukraine and in Europe wanted to free itself off Russian energy imports, it built about forty gigawards of solar and China just as usual as building about one hundred and fifty gigabots.
That's right. China is a big country, and when the Chinese government decides to do something, it does it.
But the discussion now in the solar industry, especially here in Europe and in America, is to try and build a domestic market, which is to try and free itself off the Chinese supply chain, give what had happened with Russia, and trying not to depend on other countries for crucial energy technologies. And that brings us to the Inflation Reduction Act. As a climate build it has some really big solar incentives. What are they and would they work?
So I've seen a lot of solar booms and busts, and the IRA looks to me like something that's going to kick off a massive boom which will inevitably be followed by a bust and will probably result in some somewhat counterintuitive behavior. I feel like China's strategic support for its solar industry is the reason the solar industry is not a cottage industry anymore. It's the entire reason why solar is now the largest source of new installed capacity every year.
And when we are talking strategic support, it's really subsidies, tags benefits, creation of demand. Domestically, it's a.
Little less transparent in China, but it's mandates from above. It's support for domestic installation. It's telling the local utilities and companies what to do. It's sometimes free land, it's sometimes debt support for expansion. Now the IRA you can actually read, unlike the Chinese policies, which were never in a single document or even a single set of legislation. But the IRA offers makers of wafers, cells and modules about sixteen cents per what in tax crest.
And just put that in context of the cry.
Now you can buy a module for seventeen point eight cents to what. So it's essentially paying for a price almost all the price of a module made in Chia, best in class company in China. Of course, if you make it in America, it's going to be more expensive, is going to be more expensive because America is a very difficult business environment. Why is that, Well, for one thing, these are all tax credits, so you have to hire an army of tax lawyers to get them. Secondly, it's
pretty difficult to negotiate locations for factories. Electricity is often relatively expensive compared with China. There's not necessarily a trained workforce the way there is in Jiangsu. In Jiangsu, you have a lot of high tech in manufacturing industries next to each other, so you have a workforce of people who can come and work at the new factory and have done this sort of thing before. So there's competition for workers in Jiangsu too, but they're there. The US
doesn't really have any of that. And also China has the manufacturing for all the supporting industries, so they make that silver paste there, they make the glass there, they make the encapsulent which holds the back of the module together, and it is just much more convenient to get all the components in one region.
So when there is a boom in solar manufacturing in the US, it will still rely on supply for certain steps from other countries. Right, what are those steps in which countries will they rely on?
So it's I'm not really that interested in the US. So I haven't looked at their manufacturing capacity for junction boxes and glass, et cetera.
And you're not interested because the US is a small market.
Well, the US is about thirty thirty five gigawatts of installation a.
Year, which is about ten percent of demand today.
It's actually less than that, to be honest, I'm more interested in the Polish solar market than the US solar market. Obviously, the US is very interesting to Americans, and from a climate perspective, we'd all like Americans to sort their carbon emissions out. That is very important, and the Inflation Reduction Act is probably for that reason, the most important piece of climate legislation globally for the last ten years.
So because of the IRA, there are going to be a lot of people trying to manufacture solar in the US. One of the companies is q Cells. Why is hanwak q Cells interesting?
As you say, there are a lot of companies that are planning to set up factories in the US, including a lot of Chinese companies considering it, but most of them are only planning to do the last step the module assembly. In the US, or at most modules and cells, their module assembly is relatively low tech. You can assemble modules in your garage. They wouldn't be very good modules because you're probably not very good at it, but you
could do it. So what that is is dipping a toe tentatively in the water of investing in the US, whereas what hanwak q Cells has done is come crashing in. We're going to build a factory in Georgia which makes angles and wafers and cells and modules, and that is a big investment. It's a big chunk of the value chain. It's betting that they can do this whole thing well enough to make you pay with the Inflation Reduction Act.
Q Cells as a brand has existed for decades and has been present during every one of those solar Eras Jenny described, it went public in the German Boom, bankrupt following the two thousand and eight financial crisis, and after an acquisition from a South Korean company, is now building an American supply chain, the entire supply chain, and that's going further than any other US solar manufacturer. I wanted to hear more about this big bet directly from the source.
I spoke to Lindsay Jerry, policy manager at q Cells about how much they stand to get from the Inflation Reduction Act. Lindsay, welcome to zero.
Thank you so much for having me. I really appreciate it.
Q Cells is not the only company that's going to manufacture solar panels in the US. There's First, NL, Cubic, PV. All of them have announced plans. So what is different about q cell splan.
Yeah, so we are the only vertically integrated solar panel manufacturer that will be operating in the US. We have been very intentional that we want to do it all here. So we you know, of course, have announced that we are doing our vertically integrated factory.
In Cartersville, Georgia.
That will be three point three gigawatts of fully vertically integrated panel. So that is what makes us different. We are doing it all here. We are doing it vertically integrated.
We're going big.
Of the five primary manufacturing steps for a solar panel that is polysilicon, inga wafer, sell in module. The US is really only home to polysilicon and module production, so inga wafer and cell manufacturing have been entirely missing from the US supply chain for quite some time now, and they are heavily concentrated in China and Southeast Asia.
So this is really.
Exciting because you know, this heavy concentration of manufacturing creates issues within the supply chain, and so having a more diversified supply chain creates a more stable solar industry. And that is something that we didn't think was possible. Just a couple of years ago. People you know, thought we had a pipe dree and then never thought it would come to fruition.
But we're really starting to see these investments come through, and.
So what specific policies are enabling this boom to happen, and let's just break them down absolutely.
The primary policy that we point to is a production based tax credit. So for the Solar Energy Manufacturing for America Act, this bill creates a production based tax credit so that manufacturers will receive credit for producing polysilicon inga wa for sell module and backsheet. So this is the type of long term incentive that we need to confidently be able to say, yes, we can operate in the US, and we can do so efficiently in cost effectly.
And what does it mean in dollar and how many years?
So if you do so vertically integrated, this tax credit will be about seventeen or eighteen cents in dollars per walk and that's against you know, a forty cent panel.
So it's a very lucrative tax credit. We are very excited.
Yeah, almost fifty percent of the price of the panel.
And you know, when we're trying to compete and stand up an industry, every little bit of policy support helps, and so we think this is the right policy solution to really provide that long term certainty for manufacturers such as Q sells to invest.
It's not just about how you make it, but also what happens after panels are useless, which you know, for what they are, they last twenty five years, which is fantastic, But what are you doing to deal with the end of life?
This is a really important topic that I think the industry is kind of starting to wake up on. Panels have a life span of about twenty five to years, so solar really started to pick up in the mid offs. So hypothetically we have another like ten to fifteen years before we start seeing solar farms reach the end of their useful life, So we need to start kind of figuring recycling out sooner rather than later. So the main issue that we currently see right now is that panels
are really expensive to recycle. There isn't federal legislation that mandates solar panel recycling, and because of this, there isn't a lot of existing infrastructure, which means.
It's very expensive.
In the US, we see panel recycling cost about eighteen to forty five dollars per panel, compared to land filling a panel, which is about one dollar per panel, which is really expensive. So if it's eighteen dollars, I think I think that would probably be about like twenty percent of the price of the panel. You know, I don't want to create like a doomsday scenario where we're going to just be like drowning in solar waste.
That is not going to be the case.
So the e you has mandated panel recycling for the last ten plus years. As a result, panel recycling in the U is as low as seventy cents per panel, so that I think is an optimistic outlook for us.
Thank you for coming on the show.
Thank you so much.
Action after the break, we hear more from Jenny Cheese about why solar is a horrible business. So you're famous for many things, including a book which is Solar power Finance without the jargon. And I understand a second edition is.
Second edition coming out this autumn, so don't buy the old one.
And while Twitter was a thing, is a thing, depends where we stand on it. You also dated the annual thread of all the opinions you had about the solar industry. When's the next one coming?
Probably when my book comes out, so probably October. I try and do it about October.
Now, one opinion that's stuck with me, which you make every year, is that solar manufacturing is bad business. Can you see why.
Solar manufacturing is a horrible business. I don't know why governments want to have it in their countries when they could just buy really cheap modules on the global markets. So the reason is that although the basic module technology has not changed since nineteen fifty four, there's this continual grind to make it better and cheaper, and that requires investment in new factories that can do it slightly better. It involves changes of technology generations. So we briefly discussed
the change from multi crystalline to monocrystalline. What that meant was that a lot of the multi crystalline silicon factories were basically obsolete, and some of those were only a few years old. The company is still owned debt on those. This constant grind of getting better at making a commodity product means that it's very, very hard to make money.
You have a factory that hasn't paid off its debt and already the products from it are slete and its operating costs above prices, and that's why the solar manufacturers keep going bust.
But if you want to scale solar and re expect solar to grow, right, one terraw whatt in three years. It has to be a sustainable business. The manufacturing also has to be profitable. If that's not the case, why do we think solar will continue to scale beyond the one terror what?
Well, it's a bit of a self fulfilling prophecy. If companies stopped investing in new solar factories, the ones that exist would probably make money more reliably. But I've been doing this seventeen years now, and there's always investors who want to get into this new great thing. Have you tried making solar panels? They mostly lose their money. But if they did stop, then we would probably have a period of relatively stable module prices and the market would
just continue to grow because solar is so cheap. Now you can buy a Chinese solar model for seventeen point a US sense per what And when I started it was over four dollars a what.
And in a capitalistic system, that shouldn't exist. If you know year after year that something is bad business, eventually people will stop investing in it. But that's not happening with sort of just because there's so much demand for it.
I think you think capitalism is smarter than I do. The thing about capitalists is you only need a small number of them to get really excited about what they think is the next big thing. And this is actually, in this case a positive thing, since investors losing their shirts is one of the things that powers the drive
towards better and cheaper solar modules. And now solar models are actually really great, but there is still competition between companies, between investors to have better ones, a sustainable business, a more efficient, cheaper module to make.
And increasingly a nationalistic tone to it to have it in your country, making.
It personally, I think that's just ridiculous. I think if our goal is to decarbonize human civilization, which that is actually my goal, it's not a race, it's a fitness program. We all want to get a fit. There's no advantage to being the first to decarbonized, but there is a huge advantage if we all managed to decarbonize. But hey, people like being nationalistic and if that makes them go and investing clean energy, I don't have a problem with that.
And so, just going back to the start of your career, you'd sort of predicted that if solar contributed one percent of global electricity, that would be a huge achievement. And now you think we may not even stop at fifty percent. So what is it between now where solar is about four percent of global electricity supply to fifty percent that needs to happen for us to reach that kind of level.
So, first of all, what's holding back solar at the moment. It's clearly not supply. The module prices are crashing, There is loads of supply on the market, it's cheap, It's probably the cheapest source of bulk electricity in so many places. What's holding it back from just building a terror What are here today is grid connections. Historically, solar has kind of been free riding on the existing grid, putting plants in where there is a grid connection already, and we're
starting to run out of those easy sites. And also we need some really good grid planning in a lot of country to determine where we could still put solar farms and feed power into the grid. There's also site permitting. There is not an infinite number of very suitable sites, and European countries generally have the reasonable feeling that we probably shouldn't be putting solar on prime agricultural land, so put it on roofs is the obvious answer, but it does cost more to put it on roofs. You have
to arrange different smaller plants. If you put it on car parks, you've got to put them on great, big poles to hold them off the ground. It's generally slower and more complicated to put solar on roofs, and there is a shortage of installation labor. So the bottlenecks to solar growth at the moment are grid, land and labor and organization. I'm hoping that some of those can be solved in the next ten years with organization, with competition,
with government action. After that, the problem is going to be that solar eats itself.
What do you mean by that?
The thing about solar panels is they all generate at much the same time, are you when it's sunny, and then they don't generate at night or even when the sun starts to get lower, they generate less.
Right, So you need a solution to store that electricity energy storage.
But that costs money and you need to be cycling that energy storage very frequently to make that make any kind of economic sense. So we are going to have the problem that solar is going to crash the power price in the middle of the day every day, every sunny day, solar is going to be free between the hours of ten and three.
And it's happened already in California, Germany, Spain, where there are what we call negative prices, essentially the grid paying you to use electricity because there is so much of it.
Absolutely invested a toaster, But that I mean in ten is we will probably be looking at our app and going, ah, power is free right now. I think I should do some washing. I think I should charge my battery. I should The battery is probably automatic because electricity is going
to be worth almost nothing when the sun's out. But then later in the day, hopefully we'll have decommissioned some of the gas capacity and all the cold capacity, and later in the day, when the sun's gone down, that power will be expensive and that's going to fundamentally change the way we operate things.
So three years for the next tier award, what happens afterwards?
And that's a very big question. And I get asked a lot why my team doesn't produce more optimistic forecasts for solar. You know, we basically get asked, why don't we just put a formula and to exceled to have it grow the new bill grow at forty percent forever. And the reason is, first of all, that you cover the entire world with solar panels pretty quickly at that rate. Secondly, that you do start to run into issues with a solar mostly generating when it's completely valueless because it's the
middle of the day. And also because what my team is doing is putting forecast in four hundred and forty six different countries and I need to get the analysts who cover those countries to sign off on forecasts. And people are very, very bad at forecasting revolution. I'm sorry we call it transition now because revolution is too scary. But the energy transition is genuinely a completely new way of doing things, and it's very hard to model things
that have never happened before. So analysts are cowards. They do not want to forecast that their country will get to fifty percent in the atity mixture.
So when your boss comes to you, that's the answer you give.
Yeah, they're cowards. My analyst are cowards, and I think all analysts are cowards because envisioning a totally different way of doing things is not so much an analytical process. It's something where you have to have a vague idea where you're going, and you had a set off, and keep looking at the sat NAV which is modeling, and current situation and what the bottom necks are and hope to keep steering in the right direction.
But I'm still going to ask you, So one Terror award built, two terror ort by twenty twenty five, when will three Terror award happen?
I think our technical forecast is twenty twenty six or twenty twenty seven.
Wow, so fifteen months eighteen months period after that another shrinking.
But again we are going to come up to limits in terms of when of high priced cannibalization, in terms of not covering the entire world with solar panels, and it's difficult to forecast that.
Now, as a solar analyst, you'll probably hate this question, but it would be useful for listeners. What would be your advice to people who want to put solar on their rooftop?
So I love this question. People ask it to me at parties all the time. I'm a lot of finite parties. A big part of the cost of putting solar on the roof is scaffolding. So if you've got a reason to put scaffolding on your roof, look into getting solar panels put up while they're up there. And secondly, a lot of solar installers are a cowboys, so don't believe everything they tell you, and don't necessarily rush to build solar from somebody you're getting bad vibes from.
That was a lot of fun. Thank you, Jenny, Thank you Acshat. The growth story of solar is well known, but what's underappreciated is what Jenny calls solar eating itself. Basically, there being too much electricity when the sun shines, making solar unprofitable to build. That's a problem worth fixing if the growth story of solar is to continue. Thanks for listening to Zero. If you like the show, please rate and review, share it with a friend or someone who
is a lot of fun at parties. Zero's producer is Oscar Boyd and senior producer is Christine Driskell. Our themes is composed by wonderly Special Thanks this week to Curbin rim Brian Echous, Nili Harameo Plata and a prayer Ruffin i'm Akshatrati back next week.