The Sun Rises

The democratisation of solar energy might change everything

In my primary school days in the 1970s, solar energy was just a thing in books: arrays powering interplanetary outposts and Telecom repeater towers in the Australian outback. My mother, Shirley, bought me the documentary comic Ecology for Beginners and I learned that solar panels were ‘soft’ or ‘alternative’ technology.¹ The lesson: that unlike big, profitable corporate systems such as coal and nuclear, which were environmentally damaging, solar was a small, gentle and democratic energy source.² It might be expensive and less powerful, but it was necessary to switch to alternative energy in order to conserve nature.

After reading Ecology for Beginners I graduated to my father’s library. Moss was Australia’s first minister for the environment and conservation, during the first Whitlam government of 1972–74, so I had plenty to read. I lapped up the photographs of the Tasmanian wilderness by Olegas Truchanas. I dug into texts by E.F. Schumacher, Barry Commoner, Paul Ehrlich, Ivan Illich and the Club of Rome. I wore the badges and aspired to live by the slogans of the ecological counterculture: Solar not nuclear; Live simply so others may simply live; Save the whales.

To a teenager in the 1980s, solar was an epic story, a futuristic dream of world-historical importance. It promised to be symbolically potent and socially transformative … if only it wasn’t so damn expensive. R&D by Exxon Corporation in the 1970s had cut the cost of solar from US$100 a watt to US$20 a watt, but this was still vastly more costly than conventional electricity.³ In 1975–76 the US Government bought 54 kW, which was ‘a massive quantity for the times’, according to Professor Martin Green from the University of New South Wales, one of the world’s leading solar scien-tists.⁴ To get a sense of how quickly solar has grown since the 1970s, the solar system on the roof of Melbourne’s Queen Victoria Markets, installed in 2003, totals 200 kW, four times the US government procurement 30 years earlier.

It was Fritjof Capra, an American physicist, who turned solar into a philosophy, drawing on the counterculture of the 1960s and the history of physics. Capra said that the next phase of human evolution was the ascent to the ‘Solar Age’. According to Capra, we are making a transition through a turning point, naturally evolving from the old, mechanistic paradigm of Newton and Descartes to the new relational paradigm of relativity, quantum mechanics and ecology.⁵ The unfolding story of solar power was not just about energy technology, but also the saga of civilisational progress, a planetary awakening.

This sun-centred cultural revolution may not have come, but something else has happened: solar power has become dirt cheap.

Solar suburbs

In Australia in 2016, the cost of solar is about $0.60–$1.00 per watt for quality panels, without subsidies. It was 100 times that a generation ago, which is the blink of an eye in the history of energy.

The low price of solar has not gone un-noticed in the suburbs and towns across this sunny continent. In the 1970s solar was an expensive hobby for those with an alternative lifestyle. It is now firmly in the mainstream, a consumer craze in the mortgage belt of the big cities and booming in the country. As late as 2007, Australia had only about 8000 solar systems in total.⁶ As of 1 June 2016, there were more than 1,548,345.⁷ For a number of years Australia had more solar systems on its rooftops than any other country. (In addition to those 1.5 million solar photovoltaic systems there are more than 980,000 solar thermal systems in Australia, either solar hot water or heat pumps.)

The homeowners and small business burghers leading the solar stampede are not deep greens. Mums and dads have invested several billion dollars of their own money, not to save the planet, but to save on their power bills.⁸ And it is not just the 3 million solar citizens living under their own power stations who like the technology. Opinion polling shows the breadth and depth of Australia’s love for renewables, with 63 per cent of people saying they support the country switching completely from fossil fuels to clean energy by 2030.⁹ Conservative voters and electorates love solar. This cannot be explained in terms of environmentalist fervour. It is a shift in political power around which the world could yet turn.

While I was studying planetary climatology and other sciences at the University of Melbourne in 1991, my part-time job was with the first climate NGO in Australia, Greenhouse Action Australia. Our chairperson was the former Liberal premier of Victoria, Sir Rupert Hamer. The United Nations Environment Programme funded us to host an international climate conference in Melbourne and it was well attended by industry, mining and agricultural interests. We all thought that UN action and a global carbon price were the best strategies for stopping ‘global warming’. There was not yet a culture war around climate science or renewables.

Fast-forward two decades and critical aspects of climate politics had soured. Liberal prime minister Tony Abbott’s business adviser, Maurice Newman, was not just a climate sceptic but a full-blown climate conspiracy theorist. Around 2009 it had become clear that conservative support for a carbon price was a bait and switch. The Liberal Party in Australia, the Tories in England and the Republican Party in America were no longer open to an economy-wide carbon price. Around the same time it also became clear that the UN was not empowered to execute global action on climate change. The 2015 Paris UN climate conference did not so much enforce progress as endorse the fact that it is happening anyway, driven by market forces shifting investment to renewable energy.

2015: When clean energy investment won

Danny Kennedy is an old friend and environmentalist colleague. He volunteered for Greenhouse Action Australia and we went to the Rio Earth Summit together in 1992, to campaign for a strong UN climate agreement. Kennedy moved from non-profit environmentalism to profitable solar in 2007, because he realised this would be more effective. We may hope that democracy will soon rein in the polluters and legislate to repair the planet, but for now money talks louder than climate science and it is dangerously naive to pretend otherwise. As the saying goes, hope is not a strategy.

Kennedy’s first solar company, Sungevity, is going public, valued at a reputed US$357 million.¹⁰ In his 2012 book Rooftop Revolution, Kennedy argues that small-scale, rooftop solar will not stay a small player for long and will become the dominant global energy source, in a relatively short time.¹¹ He says this will transform society because it will put power in the hands of billions of solar consumers, taking profits and power from the big energy utilities and fossil fuel industries. Kennedy’s revolution within capitalism is the successor to the ideas of deep green cultural revolution that I read about in the 1980s.

It is hard to imagine that little solar panels could change the world. But remember Thomas Watson, president of IBM, who famously said in 1943, ‘I think there is a world market for maybe five computers.’ Renewable energy is small but it is already smashing the profitability of conventional energy. In The Winning of the Carbon War, Jeremy Leggett, a British environmentalist turned solar entrepreneur, writes that clean energy has already cut half a trillion euros off the value of Europe’s conventional energy utilities.¹²

Solar is now what the finance analysts call a ‘bull market’. In a world of economic instability, solar is a stable and lucrative investment. The panels sit quietly generating energy for 20 years, unperturbed by the fluctuations in prices and potential scarcity of supply that burden oil, gas and coal. Risk is itself a cost, so the predictability of solar adds to its competitive advantage.

In 2015 the world built more renewable energy than all other energy technologies combined. Analysis by the Frankfurt School of Finance and Management shows that 2015 was the first year when new renewable energy installations—excluding large-scale hydro—accounted for the majority of generation capacity built (53.6% of generation, US$285.9 billion invested).¹³ Renewables have won the energy wars. We just need to accelerate that growth so that we win the climate war.

According to Citibank this shift is as inevitable and powerful as evolution. In its Energy Darwinism reports, solar plays the part of the clever new mammals, which evolve and outcompete against the big, old fossil fuel dinosaurs.¹⁴ Bloomberg New Energy Finance predicts that renewable energy will be worth 10 trillion dollars by 2040, without subsidies.¹⁵

This exponential pace of change will soon rise another degree of magnitude. Solar and other renewable energies will grow faster thanks to an enabler technology: the battery. The humble battery that powers your smartphone is being harnessed to provide backup to solar panels (and wind turbines). When the sun is shining on a household solar system the unused energy can be stored in a big battery pack and then when the sun sets the battery sends out the stored energy, to power the home. Four in five Australian solar consumers are already keen on storage.¹⁶

As with the quickening adoption of solar panels, the factor driving the storage revolution is not ideology but price. The cost of lithium-ion batteries used in solar backup systems dropped 93 per cent between 1995 and 2014. That is why the Economist recently went so far as to declare ‘the lithium-ion battery is the technology of our time’.¹⁷

Batteries lay down a serious challenge to any conservative politician who continues to talk up coal and sneer at renewables. It was former Liberal prime minister John Howard who added the anti-renewables front to the culture wars in 2007. Howard said you can’t run power stations on variable solar and wind: ‘You either run them on the way they’re run now, it’s predominantly coal or gas or sometimes hydro, or you run them, in the future, with nuclear.’¹⁸ A subsequent Liberal prime minister, Tony Abbott, reiterated this variability talking point to radio broadcaster Alan Jones in 2013: ‘You’ve gotta have backups because when the wind doesn’t blow and the sun doesn’t shine, the power doesn’t flow.’¹⁹

Batteries answer this final objection to the rise of renewables. Solar and wind are now cheaper than fossil fuels on price alone, which was the other big objection, but that is already so 2014. With batteries providing continuity of supply, what are the rational arguments to defend coal? The ascent of solar has taken it from the countercultural kibbutz to Wall Street and deep into the US conservative heartland. Grassroots conservative activist Debbie Dooley leads a Green Tea Coalition, which sees solar as a libertarian imperative, giving householders energy independence from big government and big business. Dooley was a founder of the Tea Party movement in 2009 so she has conservative credentials.²⁰

Don’t hate the grid, be the grid

Solar homeowners are becoming known as ‘prosumers’, a word combining producer and consumer. When solar prosumers talk about their systems, there is plenty of pride there. One of the common themes is control. They have wrested control over their energy bills from the hands of the energy companies that keep charging more for electricity. Electricity in Australia is vastly overpriced thanks to crony capitalism: greedy corporations and state-owned energy enterprises, pro-coal ideology in governments and lazy laissez-faire thinking across the regulatory system. Coal and gas are coddled from vigorous competition.

But in energy as elsewhere the customer is always right. Eighty-one per cent of solar homeowners are considering adding batteries to their system. Seventy-four per cent of those who want batteries want to save money, while four in ten want to gain independence from energy companies and almost one-quarter (23%) are considering storage to disconnect from the grid entirely.²¹ This consumer hostility—plus technological progress—is driving a ‘death spiral’. Con-ven-tional utilities are losing profitability, so they put up prices, which drives more consumers to install solar, which drives profits down further.

Solar does something interesting to the prosumer. Most consumerism is designed to increase consumption. When the economic pie keeps growing, consumerism is the perfect drug. There is no need to ask the big questions about what it all means when there’s always more to buy. As psychoanalyst Adam Phillips writes, consumer desires make us addicted to the process of wanting itself: ‘Money gives people an appetite for appetite.’²²

Solar prosumers step into a different slipstream. They often start to husband their electricity carefully. They audit their own energy use. This psychological shift was documented in the early days of commercial solar in Europe a generation ago. Solar households start to shape the energy economy, doing the little things that save energy, such as plugging drafts and seeking energy-efficient appliances. Solar makes energy conservation mainstream and economically rational. Against an economics based on malignant growth, that is a radical proposition. It is also the reason that big energy fights so hard against solar, batteries and energy efficiency.

The strange thing about solar panels is they are still and silent. Unlike diesel, coal, gas, nuclear or hydro machines, they do not make any noise. And unlike a wind turbine, whose blades slowly rotate as the wind blows, nothing moves. Steam-belching cooling towers at a nuclear or coal plant depict the old industrial landscape of Dickens and Marx. Silent solar speaks to utopias of science fiction.

Look at Google Maps or other satellite images of an outer suburb in Brisbane or Adelaide, or a hamlet in northern Victoria such as Yackandandah or Barnawartha, and you will see solar parked all over the place. In some neighbourhoods one in three houses have solar systems, sitting there glinting up at the satellite, like visitors from another planet.

Solar cells are almost all made of the stuff of the computer revolution—silicon semiconductors. Like computer chips, once they reached production scale and the price dropped, they were lapped up. As the market expanded and production rose, prices dropped and the market grew, driving faster growth, in a virtuous cycle.

Computers get inexorably faster and cheaper, according to Moore’s Law. This mathematical generalisation predicts that the number of transistors in a given circuit area doubles every two years. That exponential rate of improvement delivers exponential increases in performance and decreases in price (per unit performance). Solar races down its own cost curve, known as Swanson’s Law; this predicts that modules get cheaper by 20 per cent for every doubling of volume produced.

If solar consumerism does burn down the conventional-energy industry before fossil fuels burn down our civilisation, we should be proud that the sparks were lit by government. It was government-funded R&D that put solar on American satellites in the 1960s and on remote telephone repeater stations in the Australian desert in the 1970s. Those early market interventions brought down the cost and allowed solar to compete in ever wider markets.

Sunny money

Technological innovation is only half of this story. Solar also benefits from financial innovation. Our hollowed-out nation-states struggle to write the trillion-dollar cheques we need to build clean infrastructure and save the planet.²³ But if we can pay for solar assets through energy-bill savings then all those little regular payments become an income stream that can finance trillions of dollars worth of solar assets. Solar consumers can now buy a solar—and soon a solar and battery system—like a mobile phone contract, by getting the equipment for free upfront and paying it off over time.

One of the leaders of this financial innovation is Jigar Shah. He is an entrepreneur and investor, whose first solar company, SunEdison, grew to be the largest renewable energy company in the world.²⁴ In Creating Climate Wealth, Shah calls the climate crisis a 10 trillion dollar opportunity.²⁵ His argument is that since solar electricity is cheaper than conventional energy, we can build businesses that provide clean energy at a profit to the business and at a saving to the consumer, displacing fossil fuels at the same time.

The breakthrough that allows solar to do this is not technological, but economic. Financial products allow companies to buy solar systems and offer them to consumers on a pay-by-use basis. The consumer is effectively financing the capital, in the same way that you finance a smart phone when you buy it on a contract, avoiding the thousand-dollar cost for the device if you bought it upfront. Shah makes the case that this is essentially an infrastructure investment—that is, displacing coal plants—but made by individual consumers through clever financial instruments and new business models. He says that there is 10 trillion US dollars worth of climate infrastructure that we can build using this user-pays model.

If we accept the bleeding obvious fact that money makes the world go around, then we have to change how the money flows, to save the world. Bad investments are killing the planet and we need to think hard and work fast to make the money flow to cleaner energy. Nobel economics laureate Robert Shiller says, ‘At its broadest level, finance is the science of goal architecture.’²⁶ We must quickly redesign markets into an architecture where renewables and energy efficiency and battery storage grow at the expense of fossil fuels. This will make a real difference, while our governments dither and posture at the UN climate talks.

Financial innovation works not just in the mortgage belt of big cities in wealthy countries, but also in poor communities beyond the grid in rural Africa. Already in Kenya and Zambia companies such as Powerhive—backed by Silicon Valley IT companies and ambitious venture capital dollars—are trialling the user-pays model. So far it seems to be working; microgrids are built and the solar sold as a service, thanks to clever financing.

Bloomberg reports that there are about 100 developers doing off-grid solar, mostly in Africa and Asia.²⁷ Remote solar backed by batteries was technologically viable a generation ago, but only within the budget of specialist operators such as Australia’s Telecom and the US military. The secret sauce that enables off-grid to boom now is the new business model based around financial products. The global energy giant Engie (formerly known as GDF Suez) has funded the groovily named developer BBOXX from Britain, which allows customers to make regular payments equivalent to their usual kerosene and diesel bill to purchase a whole-home system: solar panels, batteries, remote monitoring computer, high-efficiency lights, computer monitor and smartphone charger.

Meanwhile in Australia, Engie owns Hazelwood. According to WWF, this coal-fired plant, which was completed in 1971, is the worst power station in the OECD from a climate emissions perspective.²⁸ Solar and batteries allow the poorest rural communities in the world to leap-frog the twentieth century’s fossil fuel grids and go straight to cost-effective, sustainable, democratic energy. Poor nation-states can also adopt clever financial architecture to turn renewable energy from a daunting asset purchase to a well-financed service. In 2010 I went to the Maldives to work with Danny Kennedy’s Sungevity to install a solar system on then president Mohamed Nasheed’s official residence and then promote this through 350.org, the global climate campaign started by Bill McKibben.

At the launch function I talked to the finance minister. I asked him how the Maldives would fund Nasheed’s ambitious plans for the country to go 100 per cent renewable. He said they were not begging for handouts from wealthy countries or the UN but looking to structure the finance so it was a cost saver. They were talking to international banks about saving money, by shunning fossil fuels. Renewable energy is cheaper than the diesel used to generate electricity in the Maldives and in island states around the world. If the investment is structured well, the savings can finance the clean energy infrastructure.

Welcome to the Terrordome

Ask an energy nerd about solar’s price competitiveness and she is likely to get excited and show you the ‘Terrordome’ graph. This notorious chart was published by financial analysts Alliance Bernstein in 2014. It depicts the price of solar power cutting an almost vertical line down over the slowly shifting horizontal price lines of coal, oil and gas. When you look at the graph you see why Citibank used the Darwinian metaphor to explain the growth of clean energy. Fossil fuel prices are chugging along at the same level, like a herd of dinosaurs, while little solar comes out of nowhere. Game over.

Old coal and gas were shielded from any serious competition from solar for many years because solar electricity came with a big upfront cost. You had to shell out for the asset cost upfront and then reap cheaper electricity over the long term. New financial products—power purchase agreements and leases—mean that solar consumers or nations can rely on debt finance to switch from fossil fuels to solar. According to the leading financial analysts, such as Bloomberg New Energy Finance and Lazard, it is cheaper to build new renewable energy than new fossil fuels.

The problem is that old coal plants like Hazelwood have been paid off and are not weighed down with debt repayments. Their only ongoing costs are the coal and operations and maintenance, which is cheaper than clean energy. This is one of the reasons that dirty, inefficient old coal stays embedded in our energy system, like a parasite. But Bloomberg’s latest projections forecast that even this may soon change. And the owner of the Hazelwood plant, Engie, has announced that the plant will close in March 2017.

By around 2027 it may be cheaper to build new renewable energy assets than prolong the life of old coal.²⁹ That will only happen if renewable energy and batteries are truly allowed to compete fairly in energy markets. That means that energy market reform will probably be a far more important political battle than the one we thought we were fighting at the UN, or for national carbon prices.

However, it is not clear that conservative parties will let their free market principles loose on energy markets. Conservatives have waged war on wind in Australia, Britain, the United States and Canada, putting political protection around fossil fuels. Despite their ‘econobabble’, as my colleague Richard Denniss calls economic-sounding spin, governments are saving coal and gas from competition from solar and batteries in Australia. State and federal governments protect the polluters that are poisoning our climate. Solar, and increasingly, batteries are attracting big money but are held back by energy markets that favour coal and gas. The next few years will be a critical test of the economic integrity of conservative parties.

The best news is that there is another climate saver as important as solar: ‘nega-watts’. Amory Lovins—another US physicist—realised that energy waste is so great that our biggest and cheapest resource is conservation. The energy we save—negawatts—is cheaper than any energy megawatts we could generate.

The reason we don’t exploit this multibillion-dollar negawatt saving is simple. Energy markets are designed to maximise energy obesity. In Australia the public would be shocked if they knew that state-owned energy utilities spend a lot of time and our taxes working to minimise competition from energy conservation. The more energy we waste, the more the energy industry profits and the hotter the planet gets. If Josh Frydenberg, Australia’s minister for the environment and energy, wants to make a big impact on both the environment and energy sides of his portfolio, his first step should be to reform the energy market to unleash competition in the form of negawatts, solar and batteries.

From energy comes power

This rise of solar and batteries, energy conservation and smart grids is obviously a challenge to energy utilities and sympathetic political conservatives. But is also a challenge to environmentalism. For too long the environmental and climate movements have been under the spell of carbon markets. For two decades we have tried to avoid the jobs versus environment stalemate by appearing to be capitalist kosher, thus reducing the whole complexity of the global climate challenge to the simple lack of a ‘price signal’. This carbon market fetish has blinded us to simpler policies, such as simply regulating the dirtiest brown coal out of the market.³⁰ Politics has its own wisdom and the public has voted convincingly in favour of renewables, not carbon markets. It is time for the green movement to catch up.

Building green energy may give environmentalism the political power to save the planet. Imagine for a moment that the United States had turned from centralised, dirty energy to clean, decentralised renewables in the 1970s. It is conceivable that the political hegemony enjoyed by the fossil fuel lobby would have been well and truly diluted, if not broken, by the time the world’s climate scientists united to sound the alarm in 1990 (in the First Assessment Report of the Intergovernmental Panel on Climate Change).

In this alternative history, the White House and the world would not have been so controlled by the polluters and the politicians could have taken action. Instead we have had 25 years of culture wars that defame (climate) science and environmentalists. The carbon capture of conservative parties in the United States, Britain, Canada and Australia means we are already seeing natural systems spin out of control in 2017.

This is another reason why the solar ascent holds such promise. If it happens soon enough it will smash the fossil fuel industries and the conventional utilities that have held back climate action for more than two decades. The climate-denier complex is funded not by capitalism in general but almost entirely by the fossil fuel sector. We do not need to overthrow the whole thing to take democracy out from under the heel of big coal, oil and gas. Once that happens, rational climate policy is possible.

In Dark money, journalist Jane Mayer documents how the rise of the radical right in the United States was organised and funded by two of the richest people in the world: Charles and David Koch.³¹ The two brothers are the equal ninth-richest people in the world, worth almost US$40 billion each. They control Koch Industries, which has annual sales of US$115 billion.

Fred Koch, their father, formed the family’s fortunes helping the Soviet Union build 15 oil refineries under Joseph Stalin’s first five-year plan. Then in 1934 the Kochs turned towards Germany. Fred Koch built Hitler’s third-largest refinery and one of the only ones capable of producing the high-octane fuel required by the Luftwaffe. Koch admired totalitarianism deeply, writing, ‘I am of the opinion that the only sound countries in the world are Germany, Italy, and Japan …’³² According to Mayer, in 1940 Charles and David Koch’s German governess left their home in the United States and returned to Germany because ‘she was so overcome with joy when Hitler invaded France’.³³

Since the Second World War the Kochs have massively expanded their fossil fuel empire and used its profits to turbocharge American conservatism. For decades they have diligently funded dozens of think tanks, media commentators and grassroots activist organisations. Not content with being armchair philanthropists, the Kochs are pollution activists. They have convened a network of billionaires—and a thuggish media cheer squad—who meet in secret to formulate and execute political strategies. Along with the big publicly listed climate deniers such as Exxon Mobil,³⁴ they carbon-captured Washington and with that, held the whole world and its climate to ransom. They sowed the ground for the climate denial and broader rage of post-reality politics harvested by Donald Trump in the US presidential election.

The opposite politics to the Koch empire is energy equity. When I read my father’s ecological volumes in the 1980s, I was influenced by Ivan Illich’s Energy and Equity, which argued that energy and the services it brings, such as transport and electricity, had to be fairly redistributed across society. The old ecological view I held was that we were headed for an era of profound scarcity. In this future, governments will have to constrain the use of all natural resources including energy, to keep the human impact on the planet within ecologically sustainable limits. (I call this threat of an unbounded economy on a finite planet the ‘most inconvenient truth’, because it makes climate change look like an easy mark.)

It now seems that solar, batteries and negawatts allow a high standard of energy services, within ecological limits. We must waste less energy of course. Amory Lovins, who formulated the whole ‘soft energy’ strategy in a seminal paper in Foreign Affairs journal in 1976, says we waste up to 90 per cent of the energy we generate.³⁵ We still need to face the most inconvenient truth, that the material economy must fit within ecological limits. But there may be enough ecological room for us to have the energy comforts we desire: warmth in winter, coolness in summer, locomotion and light, power for our information-age devices. If that is right, then why not see profit as the engine for the energy transformation that we need to save the climate?

When I was a boy my father Moss told the story of a ministerial visit in Europe, when a German official invited him to see the ‘new relics’ in his country, by which he meant the nuclear power plants. The official said that nobody knew how to dismantle nukes and that when the reactors reached the end of their life the waste disposal solution would be to put up a fence, for centuries or more.

In 2016 the nuclear industry is still promising cheap energy, if not quite ‘too cheap to meter’ any more, but almost nobody is buying. It’s not the fear of nuclear conflagration holding back the markets, nor even a principled concern with the legacy of nuclear waste, but the simple fact that nuclear power is catastrophically expensive. Britain’s new reactor at Hinkley may cost £37 billion.³⁶ While nuclear got more expensive every year, solar raced down the Swanson curve and became dirt cheap. As we used to joke in the green movement, nuclear is the world’s most expensive way to burn toast.

We hoped that the solar revolution would be an altruistic choice to spend more on energy, for the sake of the planet and a peaceful society. In fact the solar revolution is capitalism as usual. Consumers are rushing to a new technology that saves them money. Capital is flowing to the next big thing. Conservative critics of clean energy can’t quite admit it yet, but the rise of solar and the collapse of the old-energy utilities is ‘creative destruction’. It is the Kodak moment for big energy.

Venture capitalists have moved into solar energy, accelerating the pace of technological, financial and business-model innovation. New York is experimenting with a new ‘dark market’ trading system that allows solar owners and energy consumers to buy and sell solar power directly with each other, using the technology behind the Bitcoin ‘virtual’ currency.³⁷

The great American state of California is embarking on ambitious plans to back up high levels of renewable energy using battery and other storage technologies. Silicon Valley software will provide new systems that can anticipate energy usage in individual buildings and regulate the flow of energy in and out of batteries, many times a second.

PG&E, the operator of California’s Diablo Canyon nuclear power station, has agreed to close the reactor. In a world first, it will be replaced with a portfolio of clean energy and negawatts. The agreement was brokered with environmental groups and unions. The cost of using batteries, solar and other proven technologies will be cheaper than the expected US$17 billion it would cost to extend the lifetime of the nuclear plant.³⁸

Techno-economic progress, not hippy philosophy, is driving the flight of hundreds and thousands of billions of dollars away from coal, oil and gas and towards clean technology. Solar will be the biggest segment of this new clean energy market and the other big players will be wind turbines, batteries and electric cars. It is a strange turn that sees solar winning the energy wars thanks not to enlightened government action but the logic of the market. Solar is cheaper on price and when paired with battery storage is likely to prove better than baseload at delivering reliable energy security. What could stand in its way?

1. Stephen Croall and William Ranking, Ecology for Beginners, Pantheon, London, 1982.
2. When discussing technologies, I use the term ‘solar’ in this essay to refer to photovoltaics. The other forms of solar power are thermal technologies, including residential hot water panels and utility-scale concentrating solar thermal ‘power towers’.
3. US Department of Energy, The History of Solar, US Department of Energy, Washington, n.d., p. 5.
4. Martin Green, ‘Silicon Photovoltaic Modules: A Brief History of the First 50 Years’, Progress in Photovoltaics: Research and Applications, vol. 13, no. 5 (2005), p. 448.
5. Fritjof Capra, The Turning Point: Science, Society, and the Rising Culture, Bantam, New York, 1983.
6. Tim Flannery and Veena Sahajwalla, The Critical Decade: Australia’s Future—Solar Energy, Climate Commission, Canberra, 2013, p. 14.
7. Clean Energy Regulator, ‘Postcode data for small-scale installations’ (accessed 7 July 2016).
8. Reece Turner, The State of Solar: Australia’s Solar Rooftop Boom, Solar Citizens, Sydney, 2016, p. 7.
9. Dan Cass, Securing Renewables: How Batteries Solve the Problem of Clean Electricity, Australia Institute, Canberra, 2016, p. 14.
10. Nichola Groom and Mike Stone, ‘Solar company Sungevity to go public in reverse merger’, Reuters (accessed 29 July 2016).
11. Stephen Roulac, ‘Rooftop Revolution: How Solar Power Can Save Our Economy—and Our Planet—from Dirty Energy’, New York Journal of Books (accessed 29 July 2016).
12. Jeremy Leggett. The Winning of the Carbon War, Solar Aid, London, 2016, p. 23.
13. Frankfurt School-UNEP Centre/Bloomberg New Energy Finance, Global Trends in Renewable Energy Investment 2016, Frankfurt School of Finance and Management, Frankfurt am Main, 2016, p. 11.
14. Jason Channell et al., Energy Darwinism II: Why a Low Carbon Future Doesn’t Have to Cost the Earth, Citigroup, New York, 2015.
15. US$7.8 trillion, which equates to about A$10.4 trillion: Bloomberg New Energy Finance, New Energy Outlook 2015 (accessed 13 May 2016).
16. Cass, Securing Renewables, p. 11.
17. ‘A plug for the battery’, Economist, 16 January 2016 (accessed 19 January 2016).
18. ‘Howard on global warming, water, Hicks’, Lateline, Australian Broadcasting Corporation ABC1, presenter Tony Jones (accessed 2 February 2016).
19. Leigh Ewbank, ‘Tony Abbott gets it wrong on wind farms and renewables’, Renew Economy, 12 November 2013 (accessed 2 February 2016).
20. Carolyn Kormann, ‘Greening the Tea Party’, New Yorker, 17 February 2015 (accessed 1 September 2016).
21. Cass, Securing Renewables, pp. 11–12.
22. Adam Phillips, Going Sane, Penguin, London, 2006, p. 194.
23. Dan Cass and Andrew Bray, ‘Neoliberalism poisoned climate action and renewables are the antidote’, New Matilda, 2 August 2016 (accessed 1 September 2016).
24. Shah sold SunEdison in 2008 and the company filed for bankruptcy in 2016, but this was not due to clean energy nor the underlying solar lease product that is successful internationally. See Katie Fehrenbacher, ‘SunEdison’s epic failure had little to do with clean energy’, Fortune, 21 April 2016 (accessed 11 July 2016).
25. Jigar Shar, Creating Climate Wealth, ICOSA Publishing, Denver, Colo., 2013.
26. Robert J. Shiller, Finance and the Good Society, Princeton University Press, Princeton, NJ, 2013, p. 6
27. Anna Hirtenstein, ‘Engie, Green Climate Fund invest in off-grid solar developer’, Bloomberg, 30 August 2016 (accessed 1 September 2016).
28. ‘Hazelwood tops international list of dirty power stations’, WWF, 12 July 2005 (accessed 1 September 2016).
29. Bloomberg New Energy Finance, Executive Summary: New Energy Outlook 2016, Bloomberg New Energy Finance, London, 2016, p. 2.
30. Dan Cass and Christopher Wright, ‘Beyond the Market Fetish: Using Renewables to Build Political Momentum for Climate Action’, RenewEconomy, 17 March 2016 (accessed 21 March 2016).
31. Jane Mayer, Dark money: The hidden history of the billionaires behind the rise of the radical right, Random House, New York, 2016.
32. Mayer, Dark money, p. 45.
33. Mayer, Dark money, p. 49.
34.  John Schwartz, ‘Exxon Mobil climate change inquiry in New York gains allies’, New York Times, 29 March 2016 (accessed 1 September 2016).
35. Amory B. Lovins, ‘Energy Strategy: The Road not Taken’, Foreign Affairs, vol. 55, no. 1 (1976), pp. 65–96.
36. Terry Macalister, ‘Estimated cost of Hinkley Point C nuclear plant rises to £37bn’, Guardian, 8 July 2016 (accessed 10 July 2016).