A recent report (September 2016) showed that carbon dioxide (CO2) levels have crossed the 400 parts per million (ppm) threshold, and it may be impossible to go below this in our lifetimes. Moreover, this year is the hottest ever recorded, with temperatures increasing as much as .5°F over last year as compared across the world.
Lets remember that during the Paris Climate Agreement Conference, which concluded almost a year ago, it was established that a temperature-threshold increase of 2.8°F may be bearable, with a maximum of 3.1°F. Beyond that point, the consequences of climate change would be, perhaps, catastrophic. At the current rates of increase in temperature, it may not be long until we reach the limits.
With these thoughts in mind, it is imperative to increase efforts to reduce greenhouse gas emissions. We have written extensively about solar energy — both supportively and skeptically — in past columns. But we have not approached solar from the same statistically oriented approach that we do here.
Solar energy could well be a game changer in coming years. According to the International Energy Agency, solar energy alone could be the world’s main source of energy by 2050, surpassing fossil fuels, wind and nuclear sources.
In addition, solar sources could be the cheapest way to produce electricity within the next decade, depending on what happens with the price of oil. For countries that have enough access to direct sunlight, it will be the main source of power by 2030, according to Bloomberg's New Energy Outlook 2016. Moreover, the number of solar panels needed to power the entire planet only requires total surface space approximately the size of Spain, according to TechInsider.
A question one might ask is, in the U.S., where the solar market is a bit less driven by government intervention, what has growth been like? It turns out, according to the Energy Information Agency, electric generating facilities expect to add more than 26 gigawatts (GW) of utility-scale generating capacity to the power grid during 2016. Most of these additions come from three resources: solar (9.5 GW), natural gas (8.0 GW), and wind (6.8 GW), which together make up 93 percent of total additions. If actual additions ultimately reflect these plans, 2016 will be the first year in which utility-scale solar additions exceed additions from any other single energy source.
Moreover, looking forward, the solar energy market is expected to grow 119 percent during 2016 in America. Additionally, it is expected that, during the next 25 years, renewable sources will provide up to 50 percent of additional capacity in the U.S., and solar is probably the best cost-to-benefit alternative, according to Chemical & Engineering News.
Currently, China is the biggest solar-energy producer; it surpassed Germany in 2015 and, as of 2016, it produces more than 50 gigawatts (GW) from solar, according to CleanTechnica. Moreover, by 2020, China plans to produce up to 143 GW from solar power, according to Bloomberg. To achieve this goal, China needs to add from 15 to 20 GW every year, which implies enormous business opportunities.
India is another market that is expected to grow immensely. Currently, it has less than 10 GW capacity, but it expects to expand it to 100 GW by 2022.
It is not too late to counter the influence of greenhouse gases. But coordinated action is needed between governments, companies and the populace. In the end, all of our actions today will echo in our children’s future. Therefore, especially given that we do not know what obstacles will appear, we would be better served to continue to develop solar energy as a means to power the future.
John Hoffmire is director of the Impact Bond Fund at Saïd Business School at Oxford University and directs the Center on Business and Poverty at the Wisconsin School of Business at UW-Madison. He runs Progress Through Business, a nonprofit group promoting economic development. Mario Alejandro Mercado Mendoza, Hoffmire’s colleague at Progress Through Business, did the research for this article.