We’ve been underestimating the solar industry’s momentum. That could be a big problem.

Source: By Chelsea Harvey, Washington Post • Posted: Monday, August 28, 2017

A view of solar panels used to produce renewable energy at the photovoltaic park in Cestas, southwestern France, in 2015.  (Regis Duvignau/Reuters)

Analysts have been underestimating the expansion of solar energy for nearly two decades, scientists report in a new study released Friday. And that could be a serious problem for the industry and, maybe, the planet.

If policymakers believe solar is growing more slowly than it actually is, they may be less likely to prioritize the kinds of research and development that will help better integrate renewables onto the grid, such as improving battery storage technology. This could lead us to continue relying on more carbon-intensive energy sources.

“I think the most important risk is that the regulatory environment does not adapt in time to a rising share in solar energy,” said lead study author Felix Creutzig, a professor at the Mercator Research Institute on Global Commons and Climate Change, based in Germany.

The paper comes just a day after the release of a much-anticipated study on the electric grid, ordered by Energy Secretary Rick Perry back in April. At the time the study was launched, environmentalists feared the report might be used to bash renewables and were quick to point out that multiple previous studies have concluded that wind and solar can continue to expand significantly without posing a threat to the grid’s reliability. (The final report is somewhat more moderate than some renewable energy advocates had feared, although still favorable to coal and nuclear power.)

The new paper, published Friday in the journal Nature Energy, points out that the deployment of solar energy has consistently outperformed the predictions made by so-called “integrated assessment models,” which are commonly used to evaluate the ways different social, economic and technological factors might mitigate climate change, since at least 1998. For instance, the authors point out, the International Energy Agency has repeatedly predicted growth rates for solar deployment that are anywhere from 16 to 30 percent lower than their actual rates end up being.

The researchers outline a number of reasons for the discrepancy. For one thing, models have often failed to account for the policies different nations have put in place to speed the expansion of renewable energy. In the United States, an investment tax credit supports new solar installations, while other nations around the world have enacted feed-in tariffs, which compensate consumers for any renewable energy they generate (for instance, through their own rooftop solar panels) and provide to the grid.

Additionally, the study notes, the costs of solar panels have been falling faster than expected. And the models may have also been overly optimistic in their assumptions about the expansion of other low-carbon technologies, such as nuclear power or carbon capture and storage technology. These low-carbon alternatives have actually been slower to develop, but modeling studies frequently assume they will be widely deployed in the future, creating less space for solar to fill.

David Victor, an energy policy expert at the University of California who was not involved with the new research, suggested that solar’s relatively small share of the global electricity market also plays a significant role.

“When market share is small, big shifts in policy or technology can have a huge effect on growth,” he pointed out in an email to The Post. These types of sudden changes, and their aftermath, may be difficult for models to account for.

Victor also expressed caution about some of the researchers’ concerns.

For instance, he noted that the plummeting costs of solar equipment are all well and good — but other industry costs, such as the price of installing and maintaining solar systems, are not falling as rapidly. This is important to keep in mind when considering the industry’s overall performance.

In general, though, the paper “strikes me as basically right,” Victor noted.

While it may seem like good news that solar is performing better than expected, underestimating its potential could pose some serious problems in the future, the researchers suggest — namely, that “decision-makers might treat [photovoltaics] too reluctantly,” they write in the paper. If policymakers are dismissive of solar’s future potential, they might fail to adequately prepare the grid for its continued expansion.

And there are, indeed, preparations that must be made for solar energy to successfully integrate onto the grid. Because solar is what’s known as an “intermittent” energy source — meaning it can only generate electricity at certain times, while the sun is shining — significant improvements must still be made in the realm of energy storage technology to accommodate higher shares of solar in the existing power system. Either that, or grids must adapt in other ways, such as by adding fast-ramping assets, like natural gas plants, that can kick in quickly whenever solar fades.

So accurate forecasts of the industry’s future could make a big difference in what’s prioritized now. And according to Creutzig, scientists are beginning to discuss ways to improve the models.

“It was a very long time that these models ignored the issue, but it has changed, and I think the next generation of models will look differently,” he told The Washington Post.

In the meantime, he and his colleagues created an updated version of a commonly used integrated assessment model as an example of how addressing some of the faulty assumptions can make a difference. Updates include more accurate cost assumptions and a better representation of the options available for addressing grid integration challenges. Like most of its predecessors, the updated model assumes a global price on carbon will be established in the future to help reduce reliance on fossil fuels.

The updated model produces much more optimistic projections for the future of solar energy. Depending on how quickly costs continue to fall, it suggested that solar could reach a 30 percent share of global electricity generation some time between the years 2035 and 2050. Solar accounts for just over 1 percent of global power generation.

The establishment of a global carbon price — nonexistent — is a pretty big assumption in this case. But Creutzig is optimistic that solar will continue to perform well even without one.

“I would say that [solar] will rise anyway further, and it will have increasing market shares, whatever happens with the carbon price,” he said. But he added that without a global carbon price, reliance on fossil fuels will be slower to fade out and “climate mitigation won’t be achieved.”

In either case, the future of solar energy may depend more heavily on our assumptions about its potential than has previously been suggested. And this means getting the models right should be a new priority.

“We conclude that reaching a solar economy would require policymakers and society to overcome organizational and financial challenges in the next decades but would then offer the most-affordable clean energy solution for many,” the authors write. “Continuing to underestimate the role of solar risks squandering this opportunity.”