Chris Ladd: Surprising hazards of the solar revolution

In 2014, for the second year in a row, solar power was the largest source of new energy in the US. Solar power delivered by utilities doubled last year and the growth is accelerating. This month, Tesla made an announcement that is likely to change the market for clean energy dramatically. Tesla’s Power Wall now makes it possible in practical terms for home users of solar energy to exit the power grid entirely at a price that is reasonably attainable for mass use.

We are approaching the tipping point beyond which our fossil fuel consumption in the US begins a rapid, permanent decline. Just as with cigarettes and sugar sodas, the oil and coal industries are likely to continue making serious money on the long tail of slowly declining developing world demand, but their reign at the center of the global economy is coming to an end.

This is exciting news that promises to solve some of the most frustrating and frightening policy challenges we have faced over the past generation. Achieving the best possible results from this technological revolution will require us to recognize some crucial realities. Every major change in our landscape creates new problems. For all its promise, the dawn of the renewable energy era could be a miserable mess if we fail to recognize and adapt to the new demands of this very different landscape.

Shedding our dependence on fossil fuels offers us a world of radically cheaper energy while solving stubborn challenges around climate change, air pollution, national security, and even the preservation of public land. In exchange we get a new set of problems to solve, every bit as complex and dangerous as those that came before. Mastering those challenges early means maximizing the template of benefits offered by this technology. The culture that accomplishes this feat first could enjoy a powerful leadership role in the world.

Mass adoption of solar energy spawns a range of fresh problems in terms of pollution (yes, pollution), social policy, and economics. We have no generally recognized solutions for any of these issues. In fact, we aren’t even discussing them at a policy level.

Solar energy is clean in the sense that it produces no waste product in the course of generating energy. However, the production of solar panels creates significant potential for pollution. Use of solar for utility-grade energy production creates land and water use issues. And most troubling of all, the batteries which are critical for mass-adoption of solar energy carry the potential to be an ecological nightmare.

It is that scenario of mass-adoption that offers the most exciting potential economic promise and the most frightening potential harm. The process of mining, refining, and disposing of the materials in these batteries has the potential to make fossil fuels look like mothers’ milk. On the positive side, Tesla is just one example of a company who is way out in front of those issues, addressing them with plans at every stage of the process. On the down side, as this technology spreads into true mass adoption you can bet that producers will emerge who are not as thorough as Tesla.

But that’s just the ecological picture. The challenges we face in politics and culture may be harder to address. Our power grid is a public service that we largely take for granted. For almost a hundred years energy has been delivered to almost every home in the developed world at low cost, with relatively few interruptions. Energy delivery is perhaps the most successful public/private partnerships in history.

Power delivery, especially in the US, operates like insurance. The economics behind our network of generating facilities, power lines, and support infrastructure depends on the idea that virtually everyone is connected and invested. Emerging solar technologies deliver two very significant disruptions to this system. For the first time ever a meaningful number of customers can potentially opt-out of the system entirely. And existing customers have the chance now to effectively reverse the deal, getting paid to pump electricity back into the grid in a manner that break the system.

Rising adoption of home solar units will inevitably undermine the logic behind the power grid. If history is any guide, we are likely to reach a crisis in the utility industry before we even recognize this dynamic. Utility companies are engineered to operate with massive fixed capital and massive fixed cost on miniscule profit margins. It is not clear at this point how many customers the utilities can lose without facing collapse. The entire concept is so new that we have done almost nothing to explore the matter.

Will we continue to need public utilities in their present form? Maybe, maybe not. What looms over us if home solar use develops as expected is a dangerous and all-too familiar gap-scenario. Wealthier households could shed their dependence on, and their political interest in, our network of utilities. Meanwhile the economics of centralized power generation becomes unsustainable – leaving the less affluent quite literally in the dark.

If we fail to recognize the contours of this changing landscape there is a very real prospect in the not-too distant future that we will face a miserable choice. Either allocate public money for massive public bailouts of the energy industry or tolerate mass blackouts that only affect the poor. It will not happen tomorrow, but you can be certain it will come sooner than we expect.

Emerging developments in solar energy are some of the best news for humanity in the modern era. Getting the best outcome from any innovation requires us to recognize and adapt to the disruption it inevitably brings. With solar, those disruptions are increasingly weird, with potential to wreak havoc on low income Americans.

None of the challenges we face from solar are as daunting as the ones we’ve conquered in previous generations, but they will hit us faster than we expect. If we fail to establish some policy guidelines at the state and federal level, the growth of solar power threatens to fracture the economic and political model that has made cheap power available to everyone. Honestly confronting the challenges of solar alongside its benefits – early – will be a key to a brighter American future.

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About the Author: Chris Ladd is a Texan who is now living in the Chicago area. He is the founder of Building a Better GOP and has served for several years as a Republican Precinct Committeeman in DuPage County, IL, and was active in state and local Republican campaigns in Texas for many years.