Why the shrinking cost of solar power may be enough to change our planet’s outlook-especially if it’s introduced first in the developing world.
“Just because something doesn’t do what you planned it to do, doesn’t mean it’s useless.” -Thomas Edison
In this second piece on identifying those green technologies that will make our civilization more sustainable, and separating them from those that won’t, the focus is on electric power generation, and the importance not only of reducing the impact of what is being generated today, but also on reducing the impact of what will need to be generated tomorrow.
Whether or not you read the last piece, it is likely apparent to you that stores, websites, advertisements, and perhaps your own home, are becoming crowded with so-called green products, and, moreover, few of those green products are doing much to save our beleaguered planet. Products and services that are a bit greener, a little more efficient, or have a cool, new, Earth-friendly feature, may do a little less harm than their un-green antecedents, and they may sell a few more units for the company that made them, but they are not truly sustainable. We must replace our most environmentally damaging industries and products, not only because our own use of them is doing irreversible, epic damage to our only planet, but because several billion other people who don’t have these things today are striving for their chance to use them too. When they are in a position to get them-the cars, refrigerators, televisions, computers, lawnmowers, hair driers, air conditioners, and alarm clock espresso makers-if those of us who use them today haven’t found environmentally benign replacements for them, we will be in a world of trouble.
We need disruptive technologies to replace these tools of our modern consumer society. Disruptive technologies, a term coined by Clay Christensen,a Harvard professor and best-selling author on business innovation, are those technologies that succeed at supplanting established, profitable businesses by competing with the established offering on new terms. For example, a laptop computer competes with a desktop not on processor speed, but on portability. Laptops have eroded the market share of the more established and powerful desktops to the point that laptops have become the standard and desktops are mainly purchased for niche applications like gaming and 3D design.
One way of making many of the products mentioned above more benign is by getting the copious amounts of electricity they consume from a more benign source, like the sun. The most common form of solar electricity generation is photovoltaic (PV) panels and films. PV has been around for decades, mostly in the United States and other developed countries, but recent advances in its various technologies, demand created by government subsidies, and the threat of global warming have driven the price of PV down to a fraction of what it was even five years ago. This is good news for PV’s initial customers-Americans and affluent individuals looking for cleaner ways to power their appliances and gadgets-but it is great news for people in parts of the world with few appliances or gadgets to power because there has never been power there before. These are two very different applications of the same green technology. The question is if either will disrupt established forms of power generation and thereby move us towards a more sustainable future.
Much fossil-fuel power generation is used for powering American homes, so this seems like the right place to apply a disruptive alternative technology. However, though PV is powerful enough to do many of the things you need to do in a typical American home, it is not yet powerful enough to run a full size refrigerator, the AC, and a hairdryer, and therefore not a real alternative to grid power in any but the most efficient residences. Residential applications of PV in the United States are mainly luxury additions to big, grid-powered homes, marginally improving the sustainability of an unsustainable type of dwelling and lifestyle, and unlikely to result in the decommissioning of many coal-fired power plants.
Outside of the United States and other well-electrified countries, many people are not served by traditional power grids and are willing to pay for PV’s low power because that is all that is available. In these poor, largely rural areas, PV can mean simply having light at night or the ability to charge a mobile phone. As households and communities expand their PV generating capacity, they can acquire more of the efficient alternatives to standard grid-connected products: LED lights and TVs instead of florescents, mobile phones instead of land lines, netbooks instead of PCs, new kinds of refrigeration, and, if desired, even efficient, battery-powered lawn care tools. Many of these technologies are not yet cheap enough for the rural poor or are not yet the equivalent in performance of their grid-powered relatives, but the market for them (known recently as the “base of the pyramid”) is bigger than all of North America, Europe, and Japan combined, and entrepreneurs and multinationals are rising to the opportunity.
Unlike power-hungry Americans, the rural poor don’t already own legacy appliances that require grid power, and so, counter-intuitively, they are actually a better market, in the long term, for PV. Their hunger is often not metaphorical, but when it is, it might be a hunger for a life with a bit more of the convenience, security, and comfort enjoyed by someone reading this article. Whether they achieve that with PV or with the kind of coal-heavy electricity mix used in the United States remains an open and very important question. Developing countries continue to take on crippling international debt to build out their power grids. Once there is reliable grid power, PV may become a luxury, as it is for most Americans, and thereby not a threat to unsustainable power sources like coal.
Bringing PV to the rural poor, like other leap-frog technologies that allow people and countries to skip rungs on the economic development ladder, is a classic disruptive innovation, where a new technology is playing what looks like the same game (providing power to homes) but on a completely different field, because the incumbent technology can’t play there.
Knowing this, what should we do differently? As noted previously, this is not an academic question. The biggest market in the world for PV is Germany, a highly environmentally conscious, but cloudy, northern, grid-powered country. Though Germany’s aggressive subsidies for solar power have spurred growth in the industry, the installation of PV generating capacity in Germany is an inefficient use of what is today a scarce and valuable technology. Germany could achieve the same environmental benefits (if not all of the attendant electricity price hedging and job creation perks) by subsidizing installations in countries that both have high potential for solar power and an acute need for electricity of any kind. The sunny, equatorial parts of our planet are among its poorest, least electrified parts. Further, they will suffer more from climate change, a global crisis largely not of their making, than will rich parts of the world like Germany. Technology transfers that can head-off a climate-transforming multiplication of the use of coal power in the developing world, can help alleviate poverty, and can begin to make up for the damage rich countries are doing to poor ones through greenhouse gas emissions is the ultimate win-win-win. Pressing your political representatives to bring this approach to the talks in Copenhagen is one of the most important things you can do for your planet. (To find out how to actually do that, read The GOOD Guide to COP15.)
Michael Keating is an environmentalist and entrepreneur living in Brooklyn, NY.
