For decades, solar power has been a bit player in the energy industry, overshadowed by fossil fuel giants. But today, solar is booming. The United Nations just announced that solar attracted more investment in 2017 than any other power source, clean or dirty. Solar jobs are also on the rise around the world; in the U.S., the industry employs over 250,000 people, and India is close behind. As a result, the global solar industry is not just an increasingly important economic sector — it also enjoys growing political clout.
Yet there are troubling early signs that the increasingly powerful solar energy industry and its coalition of allies might not push for the policies needed for solar and other clean power sources to dominate future electricity systems. This week, I published a Brookings Institution report that investigates how the industry and its allies are flexing their political muscle around the world. I found that factions in the solar industry are focused on policies that narrowly benefit firms in the near term, such as subsidies for deploying solar or trade barriers to prop up domestic manufacturing. And the industry’s political allies, such as environmental groups, often lobby against other clean sources of energy. But if the solar industry hopes to ensure that solar keeps growing — not just next year but for decades to come — it will need to shake up its advocacy and alliances and start supporting systemic policies to create a flexible and diverse energy system.
Historically, solar advocates have focused their political efforts on securing subsidies, incentives and mandates that directly boost the deployment of solar power. This strategy has been wildly successful. In Germany, environmental groups, trade unions, solar manufacturers and the Green Party joined forces to pass landmark legislation near the turn of the 21st century that provided generous incentives for solar and helped the global industry scale up. Today, solar is the cheapest, fastest-growing source of electricity on the planet, and its current boom owes a great deal to the political advocacy of the solar industry and its allies.
The problem is that solar no longer needs direct subsidies to keep rising. But such policies are what the industry is used to advocating for. In 2015, the U.S. solar industry lobbied furiously to extend the investment tax credit, which reduces the cost of solar installation. They were right to warn that a sudden end to the credit could upend the market, but they overreached in securing a long-term extension. Today solar is already cost-competitive in the U.S. without any subsidies, even though the tax credits won’t start phasing out until 2020. Not only are these tax credits unnecessary, they can actually slow the cost declines of solar by distorting market price signals and requiring complicated financing structures.
Even more worrying is some solar firms’ advocacy for trade barriers that would actually raise the cost of solar power and slow its deployment. In the U.S., two ailing solar manufacturers convinced the Trump administration to enact sweeping tariffs on imports of solar panels, which are mostly produced in China and Southeast Asia. The bulk of the U.S. solar industry — including both producers and installers — actually opposed these tariffs because they will slow solar deployment by roughly 10 percent over the next five years, but the two manufacturers prevailed. In India, the government is contemplating even higher tariffs on solar imports, goaded by the growing domestic solar manufacturing sector. That could decimate the second fastest-growing solar market in the world (China is first).
Even as the industry lobbies for direct subsidies and internally quarrels over trade barriers, solar’s current boom is at risk of sputtering out in coming decades. As more solar power is deployed around the world, electricity grids will struggle to handle the influx of intermittent renewable energy. Indeed, the power output from solar panels can gyrate wildly when clouds pass overhead, and solar power gets wiped out at nighttime. Countries must develop ways to store solar power or otherwise productively use the power no matter when it is produced or how much it fluctuates. Otherwise, the rise of solar could hit a ceiling when it becomes expensive and complicated to add any more.
The solar industry should marshal its growing political might to push governments to make their electric power systems far more flexible. This will require the industry to support policies that do not directly benefit solar firms in the immediate term, but the reward will improve solar’s long-term prospects.
For example, the solar industry should encourage the deployment of batteries and other energy storage technologies to help the grid shift solar power production to times of the day when customers most demand electricity. The industry should also urge governments to invest in a smarter grid that enables customers to shift their demand to when renewable energy is available. Larger grids also make it easier to ship excess solar energy to distant regions with greater demand, so the solar industry should advocate for building out long-distance transmission lines. Finally, the solar industry should support a diverse mix of power plants that can produce clean electricity when the sun isn’t shining — from wind turbines to nuclear reactors to fossil-fueled plants that capture carbon emissions.
This political agenda might require the solar industry to break with some longtime political allies in the environmental movement, whose advocacy could actually stunt the flexible systems that solar needs to thrive in the long run. For example, some environmental groups have stridently opposed new long-distance transmission lines in the U.S. and abroad that could enable the integration of more intermittent renewable energy. And across Europe and the U.S., some environmental groups have sought to shut down nuclear reactors. But in addition to representing the world’s second-largest source of clean power, nuclear reactors can also ramp their power output up and down to compensate for intermittent solar power and enable more of it to be deployed.
By midcentury, solar could be the star of a clean power revolution, rising to become the world’s largest source of electricity. But every star needs a supporting cast, and solar cannot power the planet alone. The global solar industry would do well to remember this and, rather than lobby for handouts, use its growing political clout to promote a flexible, diverse and clean power mix.
The WorldPost / The Washington Post. / https://www.washingtonpost.com/
