The exponential growth of solar energy will change the world

It’s been 70 years since AT&T’s Bell Labs unveiled new technology for converting sunlight into power. The telephone company hoped it could replace the batteries that run equipment in remote locations. It also realized that powering devices with light alone demonstrated how science could make the future seem wonderful — hence a press event where sunlight turned a toy Ferris wheel.

Today, solar power is little more than a toy. The panels cover an area roughly half the size of Wales and will provide the world with about 6% of its electricity this year – nearly three times the amount of electricity the United States consumed in 1954. But this historic growth is only the second most remarkable aspect of the solar boom. What is even more remarkable is that it is not over yet.

To say that solar energy’s growth is exponential is not hyperbole, but a statement of fact. Installed solar capacity doubles roughly every three years, and thus increases tenfold every decade. Sustained growth of this kind is rarely seen in anything that matters, making it difficult for people to understand what is happening. When it was one-tenth its current size ten years ago, solar energy was still considered marginal even by experts who knew how fast it had grown. The next tenfold increase will be equivalent to increasing the world’s entire fleet of nuclear reactors eightfold in less time than it normally takes to build just one.

Solar cells are very likely to be the largest source of electrical energy on the planet by the mid-2030s. By the 2040s, they may be the largest source not just of electricity, but of all energy. On current trends, the total cost of the electricity they produce promises to be less than half of what the cheapest electricity available costs today. This won’t stop climate change, but it could slow it down much faster. Much of the world, including Africa, where 600 million people still can’t light their homes, will begin to feel energy-rich. That feeling will be new and transformative for humanity.

To understand that this is not an environmentalist pipe dream, just think of the solar economy. As the cumulative production of a manufactured good increases, costs fall. As costs fall, demand rises. As demand rises, production increases and costs fall even further. This cannot go on forever; production, demand, or both are always constrained. In previous energy transitions (from wood to coal, from coal to oil, or from oil to gas), the efficiency of extraction increased, but was eventually offset by the cost of finding ever more fuel.

As our essay this week explains, solar energy faces no such limitation. The resources needed to produce solar cells and place them in solar parks are silicon-rich sand, sunny locations, and human ingenuity—three elements that are in abundance. Making cells also requires energy, but solar energy is also rapidly making it abundant. As for demand, it is huge and elastic: if you make electricity cheaper, people will find uses for it. The result is that, unlike previous energy sources, solar energy has become systematically cheaper and will continue to do so.

There are other limitations. Given people’s tendency to live outside daylight hours, solar power must be supplemented by storage and other technologies. Heavy industry, aviation and freight transport have proven difficult to electrify. Fortunately, these problems may be solved as batteries and fuels created by electrolysis gradually become cheaper.

Another concern is that the vast majority of the world’s solar panels, and almost all of the purified silicon they’re made from, come from China. Its solar industry is highly competitive, heavily subsidized, and outpacing current demand — quite an achievement considering all the solar capacity China is installing within its own borders. This means that Chinese capacity is large enough to keep expansion going for years, even if some of the companies involved go bankrupt and some investment dries up.

In the long term, a world in which more energy is generated without oil and gas coming from unstable or hostile parts of the world will be more reliable. However, while the Chinese Communist Party cannot manipulate the price of sunlight the way OPEC tries to manipulate the price of oil, the fact that a vital industry resides in a single hostile country is worrying.

It’s a concern the US feels deeply, which is why it has imposed tariffs on Chinese solar equipment. But since almost all demand for solar panels still lies in the future, the rest of the world will have plenty of room to enter the market. US adoption of solar could be thwarted by a pro-fossil fuel Trump presidency, but only temporarily and painfully. It could also be bolstered if the US were to unleash pent-up demand, making it easier to install panels on homes and connect to the grid (the country has a terawatt of new solar capacity waiting to come online). Carbon prices would help, just as they did in the European Union’s shift from coal to gas.

The goal should be to get the virtuous circle of solar power production turning as quickly as possible, because it offers the prize of cheaper energy. The benefits start with increased productivity: Everything people do with energy today will cost less, and that includes just about everything. Then come the things that cheap energy will make possible: People who could never afford it will start lighting their homes or driving a car. Cheap energy can purify water and even desalinate it. It can run AI-hungry machinery. It can make billions of homes and offices more bearable in summers that will, for decades, get hotter and hotter.

But what will have the greatest consequences will be the things that no one has thought of yet. In its radical abundance, cheaper energy will free the imagination and set the little Ferris wheels of the mind spinning with excitement and new possibilities.

This week marks the summer solstice in the Northern Hemisphere. The Sun, rising to its highest point in the sky, will shine for decades to come on a world where no one has to go without the blessings of electricity and where access to energy invigorates all who touch it.

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