LOGISTICS & TRANSPORTATION 6,999 views
Falling Solar Energy Costs Are Poised To Reshape The World's Economy
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Jeremy Rifkin recently published a book called The Zero Marginal Cost Society. As an industry analyst it is my job to stay on top of technologies that have the chance to transform industry. Indeed, when MHI went through a very throrough research project to identify megatrends that will reshape industry through 2025, all the trends they identified, but one, are things that my companyARC has been paying close attention to.
Mr. Rifkin discusses the Internet of Things (IoT), advances in automation and robotics, 3D Printers, and the fundamental changes to our economy these things will drive. I’ve linked to just the most recent articles we have written on the topics of IoT and robotics transforming supply chains. ARC is less convinced that 3D Printers are transformative.
But Mr. Rifkind has identified one transformative trend ARC has clearly not paid enough attention to: the exponential price decline in solar power! I was somewhat doubtful this could be true, but a search of the Internet brings up research by Ramaz Naam, who published an article in Scientific American in 2011 on this topic. In a recent blog Mr. Naam states “the price decline in solar cost per watt has, if anything, accelerated since then!”
Exponential curves matter. Humans have a hard time comprehending exponential growth. Would you rather have one million dollars or be given one dollar on day one, two dollars on day two, four dollars on day three and so on for a one month period? Almost everyone would instantly say “I’ll take the million bucks.” Do the math, you’ll be surprised!
It is another exponential curve that is at the heart of the computer revolution, Moore’s Law. Moore’s law is the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years. This explains why while computers get so much more powerful, costs continue to decline. This will give you a sense of my age, but I can remember the first time I saw a spreadsheet and being astounded by the power of it. And I have continued to be amazed by one computer advance after another.
Over the last few years, there has been much focus on shale oil technologies. And truly, shale oil is proving to be a boon for the U.S. But remember the power of exponential curves! If these results are correct, we are in for a green energyfuture every bit as dramatic as the computer revolution.
