Okay, maybe you did, but most of the major analysts didn’t. Not even a year ago, according to the numbers they released. But the new annual report by Bloomberg New Energy Finance, New Energy Outlook, thinks they finally have it right. You guessed it: the new report predicts that renewable energy sources are on their way to claiming the majority of global power generation by 2040. (And just in case you’re a numbers person, they’ll also capture 72% of the $10.2 trillion spent on new power generation in the same number of years.)
If you’re reading carefully, you noticed that was a global average. In some areas, renewable energy penetration will be much higher. Let’s put the spotlight on sunlight for a minute: solar and wind alone will produce more than 50% of all energy generation in Australia, Germany, Mexico, and the United Kingdom. It goes without saying that this is unprecedented… and welcome.
A big part of this acceleration is the dropping prices of solar panels, especially on a larger scale. Simply put, in most places, solar will be cheaper to install than new coal plants. Solar already makes a ton of sense, but it’s about to become an economic no-brainer.
Seb Henbest, the lead author of the report, said that “The cost declines that we are seeing with these technologies are so steep that it becomes a matter of time as to when they start crossing over and becoming competitive in different ways. These things are getting cheaper faster than we thought even a year ago.” He’s talking about solar, and energy storage in the form of lithium-ion batteries.
Battery costs have been dropping way faster than anyone expected them to. Last year, batteries came out around $350 per kilowatt-hour, but in the last year, they’ve already dropped to $273. What will 2040 bring? Henbest says lithium-ion battery costs will probably be sitting around $70 per kilowatt-hour. No wonder they’re about to completely take over the scene. It’s not hard to imagine home batteries becoming completely commonplace, with solar panels (or a solar roof tiles) on every rooftop. Right now, the draw to energy security and freedom from the power grid is enough to draw people into residential battery storage, but it looks like it’s about to be the cheapest way to generate and store power before long. That’s probably why corporations are starting to pay attention.
You know when banks and food producers jump on the renewable energy wagon, it just makes economic sense. Google and Apple might have been looking for a reputation boost (or, you know, genuinely value environmental health), but they are no longer alone in the pursuit of corporate clean energy.
Just recently, Goldman Sachs signed up for a big clean energy deal with NextEra Energy, as did General Mills. The dropping cost of solar and wind has caught the attention of many other corporations as well, looking to secure clean, reliable power sources without breaking the bank (especially when they own one.) How do companies choose between wind and solar? A lot of it has to do with where they are located around the country, and which source is more available and cost-effective. This used to be wind in most places (according to the Rocky Mountain Institute), but it looks like the tides are about to turn.
If you’ve been tracking with The Swell, you know that 2016 was a huge year for solar, with 76.6 GW installed. That brings solar up to a grand, worldwide total of 300 GW. This means that 2016 was a big turning point for solar on the renewable energy Top Ten list: last year, solar exceeded wind energy’s annual installation rates. Many developers and manufacturers diversified their production because of the falling cost of solar systems. Solar panels also happen to have… er… a considerably lower profile than wind turbines. We’re hoping that all renewable energy resources will keep up their steady rise to the top, but let’s just say we see the solar appeal.
So, what does the future of energy look like with solar in charge? Pretty great, actually.
For some, taking control out of the hands of the failing, unreliable power grid is a future that can’t come soon enough. Nationwide, power outages have become six times more frequent than they have in previous decades. Some homeowners have read about the growing vulnerabilities of the power grid, and decided to do something about it. Home batteries offer energy security in the face of a vulnerable power grid. If the grid cuts out for a few hours, home battery owners don’t have to worry. Their home can still be powered by the energy stored by their home battery. For those who depend on electricity to power life-essential medical machinery, or for households that use electricity to heat or cool their homes during extreme weather, this sort of energy security can be a big deal.
Households equipped with solar panels and energy storage in the form of home batteries are protected from any utility company mishap, whether it be on a large or small scale. Home batteries allow households to power their own essential appliances like refrigerators, water pumps, and heating/cooling devices with stored electricity collected from their rooftop solar panels. The grid may be vulnerable, but individual households don’t have to be. In fact, residential energy storage enables a new way of living that retailers and buyers are both latching on to.
High-profile companies, like Tesla, are leading a revolution that centers around a new lifestyle for energy consumers--one that stands for innovation, conviction, and audacity. This is why Tesla has developed a product line that extends beyond electric vehicles. CEO’s Elon Musk has envisioned a future in which there’s a Tesla in every garage, and solar on every roof… not to mention a Powerwall 2 to store generated solar, tying the package together. This is the kind of home, and lifestyle, Elon Musk wants for himself… and he’s confident that he’s not the only one. Musks’ ambition has driven him to push the envelope in almost every respect, from electric cars that you can summon to pick you up at your door, to high-capacity low-cost lithium batteries, to rooftop solar that actually is a rooftop. The lifestyle Tesla offers its customers mirrors Musk’s own innovative drive. Going all-in to the Tesla brand means breaking through traditional methods of using power, and hosting an energy revolution in your own home.
Some of Tesla’s customers are passionate about securing their own energy source. Some are passionate about moving forward into a smarter, more efficient energy future. Some are passionate about the environment. All are convicted that a change to the energy status quo is necessary, and imminent.
As for us here at Swell, we ready to go all-in on solar’s world domination. We’re pretty much already there. If you want to talk to some energy nerds about why we’re excited about the new movements in the energy world, feel free to hit us up anytime. Talking solar is basically our favorite thing to do.