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Solar – the greatest market opportunity world has seen

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The head of one of the world’s leading solar PV manufacturers and developers, SunPower’s Tom Werner, predicts that solar will be a $US5 trillion industry within 20 years, and represents one of the greatest ever opportunities in the history of markets.

“We’ve just scratched the surface of this opportunity,” Werner told analysts at the company’s day-long annual briefing in San Jose overnight. “I’ve been doing this for eleven years, and I’ve realised we’re just beginning.”

Werner’s comments follow fast on the heals of the joint US-China pact on climate change. While the details of the agreement have been dismissed by Republicans in the US as a “war on coal”, and the Murdoch media globally as little more than talk, analysis shows otherwise.

China, for instance, is expected to install 1,000GW (that’s one million megawatts) of solar, wind and other renewables by 2030 to meet its part of the agreement, which could even be ratcheted higher by the time all parties get together in Paris next year.

scmp coalThat’s the equivalent of 1.3GW a week of clean energy installed in China for the next 15 years – the clean and emissions free equivalent of a large coal-fired power station a week.

Climate Progress reports on Fox News hyperventilating over the US-China deal – one of its leading commentators and claimed the day before there was no point US acting until it had signed such a deal, so it didn’t know what to say when it happened. It was interesting to note the former Murdoch publication, the South China Morning Post declaring an “end to the coal boom” in its coverage of the agreement. It is, after all, a media outlet a lot closer to the action than the remaining Murdoch stable.

Below are two key graphs from Werner’s presentation. The first is the where the solar industry is now and where it has come from.

It is barely a scratch of the surface of the global electricity industry, at less than one per cent of total electricity demand, but it’s impact is already clear – particularly in developed countries where it is displacing fossil fuels, and in developing countries, where it is offering a cheaper, unsubsidised alternative.

sunpower past

 

But this is where the industry is heading. It pretty much conforms with much of the mainstream predictions such as that from the International Energy Agency and IRENA.

sunpower future

This is pretty consistent also with the predictions of investment banks such as Alliance Bernstein, who in a report on the liquid fuels market noted how solar has appeared, like a lightning bolt from the sky (see graph below), to compete with diesel fuels everywhere, imported LNG in Asia, and gas in developed economies.

bernstein solar

That, Alliance Bernstein said, heralded the prospect of a period of “energy price deflation”, which would cause global investment flows to pause, hesitate, and then perhaps switch direction towards the cheaper, cleaner technologies – driven not just by price, but also the new emphasis on the environment.

SunPower’s predictions though, are largely focused on the “energy revolution” that will take place at household level. This next graph shows what Werner is talking about.

sunpower DG

 

Over the next 20 years, he expects a period of mass adoption that will extend solar to another 150 million homes, or a total of $US4.6 trillion. By that time, distributed solar – on homes and rooftops – will account for more than 10 per cent of total electricity supplied.

This is why SunPower intends to treble production capacity in the next 5 years. Werner says the key to exploiting this opportunity is a combination of upstream technology, downstream platforms and channels, and access to capital.

SunPower, Werner says, will not just be a manufacturer of panels and a builder of projects, it will become a provider of energy services to customers, which means a combination hardware, software, and services.

 

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  • johnnewton

    And Tone has locked us out. idiot.

    • michael

      strange sentiment, seeing as australia already has twice the final solar panels on homes per capita than the final tally of world wide predicted for 2035 by a bullish Solar PV company above…. but don’t let that stop the ‘australia is closed for solar’ story being pushed (1M+ homes with PV in population of ~25M vs 142M homes with PV in population 7.5B+), you really do assign him extraordinary powers to subvert your anlaysis of market dynamics based on repricing of the options as we march forward
      nothing he or anyone else can do will stop people taking up a lower cost option, so why get stressed about it?

      • Tony Pfitzner

        Fatuous comment.
        Abbott has already demonstrated enough power to stall large scale renewable energy investment, by chucking a spanner in the RET.

        It’s not just about the market either, government, business and individuals should all be proactive in pursuing aggressive energy goals and putting our economy on the front foot with low cost energy.

        The laissez faire ‘market’ strategy you are advocating means that some of the most efficient generation options are left by the wayside, and, of course, Abbott’s subsidy of polluters is also hardly ‘market’ economics.

        • michael

          Low cost or almost low cost? Why would business choose higher cost options? You seem to suggest business prefers high cost power to spite renewable providers, which doesn’t contain much logic
          If these options are so efficient why are they by the wayside?

          • Steve Fuller

            There are plenty of weapons in Abbott’s armoury left to inhibit renewables. Tariffs, levies, taxes, regulations etc. If PUP implodes and the deniers in the coalition have their way you ain’t seen nothing yet.

          • michael

            yeah fairenough. can you give a theoretical example?
            are you suggesting he would impose tariffs on imported solar panels to the extent they wouldn’t be economically viable? place a tax on non-GHG generation?
            I just can’t come up with a logical scenario to meet those “weapons” being deployed.
            Giving assistance to the coal industry, say in the manner of our former car industry perhaps… but that seems highly unlikely. the NSW government can’t even manage to get sustaining projects through planning panels let alone funnel them straight up cash

          • Vic

            “Why would business choose higher cost options?”

            To produce a higher quality product.
            An energy source that doesn’t kill people, for example.

  • Doug Cutler

    “China, for instance, is expected to install 1,000GW of solar, wind and other renewables by 2030”

    Just some perspective: peak electrical demand of industrialized province Ontario Canada is just under 30GW.

  • Chris Marshalk

    Who cares what the Born Stupid Abbott thinks, Consumers “are largely focused on the “Energy Revolution” that will take place at household level” – We the people Drive Change – Not this Dumb Government.

    Australia should be surrounded by Wind Turbines.
    http://online.wsj.com/articles/offshore-wind-turbines-could-tame-hurricanes-1411937788

  • Miles Harding

    Tony’s making sure Australia isn’t a ‘Leaner’ ! :)

    • Steve Fuller

      Well we already know that he’s a liar.

  • philipsclassic

    a few empty ford and holden factories around. lets get manufacturing Solar PV !!!

    • Miles Harding

      Not to mention all those workers.

  • Christopher Smith

    Optimistic forward looking predictions, though I think that the 10% figure in 20 years will turn out to be very conservative, considering the rate at which solar energy has grown in the past 20 years. Werner probably wanted to be careful about making statements that might seem too outlandish. Back in the early 1990s solar was barely a blip, comprising an infinitesimal amount of total energy production. It still produces less than 1% total electricity production worldwide, though on an exponential scale that’s halfway to 100%; like computing, solar is an exponential technology. I see no reason that solar adoption would slow down so much and tend think that Elon Musk’s prediction of solar contributing of 50% total energy (including transportation) by the 2030s is plausible, and this pales in comparison to the famed inventor and futurist Ray Kurzweil’s claim that solar will provide nearly 100% of all global energy needs by 2030. Needless to say, there’s a lot of room to grow.

    • Raahul Kumar

      I’m dubious about 50% by 2030. That’s a high build rate that hasn’t been achieved by anyone yet. Solar thermal, hot water heaters, on the other hand might very well have achieved 100% coverage on a global basis by that point.

  • https://www.facebook.com/carey.campbell.33?fref=browse_search Carey Campbell

    The Green Party Green New Deal eco jobs for the economy advocates for more solar jobs, wind jobs, geothermal energy jobs.

    Independent Green Party

    https://www.facebook.com/IndyGreenPartyVirginia

  • Rob

    Tony Abbott and the COALition have chosen to not only ignore what was happening in this area in Australia but to actively fight against it. Consequently Australia will miss the boat that is ” the greatest ever opportunity in the history of markets”. This stance that the COALition has adopted contradicts their claims that we need economic growth in Australia and the rest of the world. How can they say they want growth but actively try to undermine Australia’s part of a worldwide industry potentially worth “$5 trillion in twenty years”? The folly of this decision and the missed economic opportunities not realised for Australia will become more apparent in the years to come. Austrlia has never been further from being a clever country than it is now.

  • Mishy Mishy

    I don’t know anything. The predictions are probably spot on. But it’s a bit sneaky changing the y axis tween graph 1 and 2.

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