Importance of solar energy underestimated three-fold
August 25, 2017
A study by La Follette School Associate and Nelson Institute Professor Greg Nemet and European colleagues shows that in 2050, the percentage of solar energy worldwide could be three times higher than previously projected. The study by the Mercator Research Institute on Global Commons and Climate Change (MCC) shows that costs have dropped and infrastructures expanded much faster than even the most optimistic models had assumed.
Nemet began working on the study during the 2015–16 academic year, when he conducted research at MCC and the German Institute for Economic Research. According to the study, published in the journal Nature Energy, the share of solar energy by 2050 will likely be 30 percent to 50 percent even if the global energy demand continues to rise. Previous studies estimated the share of solar energy by 2050 at 5 percent to 17 percent.
“The continued fall in the costs of solar continues to amaze — so much so that using data even a few years old leads to deeply erroneous conclusions about solar’s competitiveness today,” said Nemet, who recently received one of only 35 Andrew Carnegie fellowships. “Models of climate policy that look decades hence are even more prone to error if they mischaracterize solar’s dynamic costs. Our work shows that they have been far off the mark so far.”
As in previous studies, Nemet and scientists from the Fraunhofer Institute for Solar Energy Systems and the Potsdam Institute for Climate Impact Research (PIK) used the computer model REMIND (Regionalized Model of Investments and Development). However, the most recent study used new data, such as the existing extent of solar infrastructure and the technological learning curve.
The study’s findings pose both challenges and opportunities. Policymakers in industrial countries, including the United States and other G20 members, will need to modernize electricity-market regulations and promote technologies for new storage methods, said lead author Felix Creutzig, head of the MCC working group Land Use, Infrastructure and Transport.
In India, Chile and other parts of the world, the researchers found that solar energy already undercuts coal-fired power. However, many developing countries face high capital costs and other obstacles to climate-friendly power generation. Higher investment risks – due to political uncertainties, for example – are reflected in higher interest rates and thus higher costs for investors. New financing models and guarantees could promote solar energy notably, especially in African countries, Nemet and colleagues say.
Nemet, who joined the UW–Madison faculty in 2007, also serves on the faculty for the Nelson Institute for Environmental Studies. He received his master’s degree and doctorate in energy resources from the University of California, Berkeley.
The recipient of a 2015 H.I. Romnes Faculty Fellowship, Nemet has been a contributor to the Intergovernmental Panel on Climate Change and the Global Energy Assessment. He teaches courses in policy analysis, energy analysis, and environmental policy.