By David Pomerantz
Solar power is here, and it isn’t just environmentalists saying it anymore. A research division of Citigroup, the massive multinational bank that probably doesn’t share Greenpeace’s worldview on many issues, does agree with us on one point: solar energy is poised to explode in the U.S.
Photo courtesy of Shutterstock
Citi Research published the report,“Rising Sun: Implications for U.S. Utilities,” in August (hat tip to Marc Gunther, who referenced it in a great piece for Yale Environment 360.) It slipped under the media radar, which is unfortunate because the analysis is phenomenal and offers great hope for the clean energy revolution here in the U.S. The report isn’t available online, but here are a few of the key points it makes:
- Solar is growing extremely fast in the U.S.
- That growth is driven almost entirely by pure economics, not environmental concerns.
- The big utilities can’t seem to get either of the above two points through their skulls yet.
- Solar financing is the next political frontier to watch in the U.S.
Here’s each point in greater depth:
Solar is growing like gangbusters.
Citi’s analysts don’t mince words:
Our viewpoint is that Solar is here to stay and very early in the growth cycle in the U.S.
They note that solar panels costed an average of $75/watt in 1972. In 2012, that number was down to less than $1/watt (the number is even lower now, closer to $.65/watt in some places.)
The report compares that rapid decrease in cost to Moore’s Law, the famous theory which postulated in 1965 that computer chips could double in performance every two years. That prediction turned out to be uncannily accurate, which is the basic reason for why you’re reading this on a laptop, tablet or smartphone right now. A similar phenomenon is happening now with solar costs, which have shrunk reliably and quickly.
As a result, two thirds of all the solar power in the world has been installed since 2011, and that number will double again by 2015, Greentechmedia reported. Citi’s analysts noted that this solar growth has exceeded almost everyone’s expectation:
The biggest surprise in recent years has been the speed at which the cost of solar panels has reduced, resulting in cost parity being achieved in certain areas much more quickly than was ever expected.
The biggest driver of solar growth will be economics, not environmental concerns.
The most exciting thing about this solar boom is probably the hope that it provides for everyone who depends on a healthy planet (AKA, everyone.) Solar growth means less burning of coal, gas and eventually oil, the main causes of the climate change that is already causing extreme weather here in the U.S. and around the world, and portends much uglier effects like increased conflict, rising sea levels, ocean acidification and fresh water scarcity down the road.
However, the report notes that those environmental concerns aren’t driving solar growth–and that’s actually a good thing. For solar to go mainstream, it has to become a money saver for more people and businesses, which is exactly that’s happening.
What is clear to us is that the perception of solar as being inefficient and requiring material subsidies is no longer accurate–a concept that is not being fully appreciated by the utility sector, in our view. As we clearly display in the below sections, Solar is already cheaper than electricity at the plug in many countries, with others very close behind including the U.S. with several states already displaying “socket” or retail parity (i.e. Georgia, Arizona and New Mexico).
In other words, in many parts of the country, especially the Southeast and Southwest, it’s cheaper to install your own solar panels, and then generate most of your electricity for free, than it is to keep paying a utility for all of your power every month.
The report notes that the most promising trend for expanding the pool of people who could go solar is the growth of new ways to finance their solar installations. While the panels are getting cheaper every year, many people still don’t have the cash on hand to afford them upfront–even though it will be cheaper over time. But new financing models are making them more affordable. The analysts write:
Distributed (DG) or off grid generation at the residential and commercial scale level could be set to take on a greater piece of the solar generation pie. Much of this we attribute to the emergence and expansion of third party financing…
Meanwhile, solar is getting cheaper in all of those ways against a backdrop of rising fossil fuel prices that are destined to keep rising:
At the same time, the alternatives of conventional fossil fuels are likely to gradually become more expensive (assuming that the "lowest hanging fruit" in terms of reserves are exploited first).
Sunshine is free though, and the cost of the panels needed to harness it are getting cheaper every quarter.
Utilities still don’t get it.
The Citi analysts write:
While we expect the same trend in the U.S. [of declining solar costs and rapid growth], we find that many utilities have had issues trying to grapple with this concept.
Duke Energy, the country’s largest utility, provides a great example of a company that is at best grappling with how to respond to these changes, and at worst failing to appreciate them altogether. Greenpeace has been campaigning alongside Duke’s ratepayers to convince the company to switch from fossil fuels to solar energy. But Duke’s own plans in North Carolina show that it plans to keep its head firmly in the sand. The company predicts that by 2032, the share of the electricity it generates from wind and solar energy in the Carolinas will be… wait for it… 3 percent! That estimate seems almost laughable in the context of Citi’s estimates.
The next frontier to watch: third-party solar financing
Citi reports that the big factor that will determine where solar gets cheapest, fastest, in the U.S. is the maturity of third-party solar financing markets. Third-party financiers could be banks, solar leasing companies, or innovative new crowdsourcing efforts like the one at Mosaic–any business that can help people better spread out the investment in solar panels over the lifetime of the system.
Third-party financing availability is a grab bag in the U.S. It’s legal in 22 states, illegal in six states where utilities have pushed state governments to ban it in order to protect their own monopolies, and on hazy legal grounds in the other 22 states. Here’s a map giving the lay of the land.
This is the next frontier to watch, and new battles are cropping up already in places like Iowa and Wisconsin. The electricity buying public is getting angrier, as evidenced by growing ratepayer protests in places like North Carolina against Duke. Utilities are taking more out of people’s pocket every day for electricity created by coal and gas plants that are making their kids sick and causing global warming. As more people see that they could have the option to stop giving all their money to a company like Duke, and start financing solar panels, the political pressure on states to open up their borders to solar financing companies could grow almost as quickly as solar installations have been.
When Citigroup, one of the largest banks in the world, is saying that the clean energy revolution is reaching full speed, it’s time the utilities start to listen. They can’t stop the solar growth, but they can choose whether they’ll try to slow it down or try to embrace it. It will be better for their customers, their businesses and certainly for the planet if they choose the latter.
Visit EcoWatch’s RENEWABLES page for more related news on this topic.
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By Bob Jacobs
Hanako, a female Asian elephant, lived in a tiny concrete enclosure at Japan's Inokashira Park Zoo for more than 60 years, often in chains, with no stimulation. In the wild, elephants live in herds, with close family ties. Hanako was solitary for the last decade of her life.
Hanako, an Asian elephant kept at Japan's Inokashira Park Zoo; and Kiska, an orca that lives at Marineland Canada. One image depicts Kiska's damaged teeth. Elephants in Japan (left image), Ontario Captive Animal Watch (right image), CC BY-ND
Affecting Health and Altering Behavior<p>It is easy to observe the overall health and psychological consequences of life in captivity for these animals. Many captive elephants suffer from arthritis, obesity or skin problems. Both <a href="https://doi.org/10.11609/JoTT.o2620.1826-36" target="_blank">elephants</a> and orcas often have severe dental problems. Captive orcas are plagued by <a href="https://doi.org/10.1016/j.jveb.2019.05.005" target="_blank">pneumonia, kidney disease, gastrointestinal illnesses and infections</a>.</p><p>Many animals <a href="https://doi.org/10.1016/j.neubiorev.2017.09.010" target="_blank">try to cope</a> with captivity by adopting abnormal behaviors. Some develop "<a href="https://doi.org/10.1016/j.applanim.2017.05.003" target="_blank" rel="noopener noreferrer">stereotypies</a>," which are repetitive, purposeless habits such as constantly bobbing their heads, swaying incessantly or chewing on the bars of their cages. Others, especially big cats, pace their enclosures. Elephants rub or break their tusks.</p>
Changing Brain Structure<p>Neuroscientific research indicates that living in an impoverished, stressful captive environment <a href="https://doi.org/10.1016/j.jveb.2019.05.005" target="_blank" rel="noopener noreferrer">physically damages the brain</a>. These changes have been documented in many <a href="https://doi.org/10.1002/cne.903270108" target="_blank" rel="noopener noreferrer">species</a>, including rodents, rabbits, cats and <a href="https://doi.org/10.1006/nimg.2001.0917" target="_blank" rel="noopener noreferrer">humans</a>.</p><p>Although researchers have directly studied some animal brains, most of what we know comes from observing animal behavior, analyzing stress hormone levels in the blood and applying knowledge gained from a half-century of neuroscience research. Laboratory research also suggests that mammals in a zoo or aquarium have compromised brain function.</p>
This illustration shows differences in the brain's cerebral cortex in animals held in impoverished (captive) and enriched (natural) environments. Impoverishment results in thinning of the cortex, a decreased blood supply, less support for neurons and decreased connectivity among neurons. Arnold B. Scheibel, CC BY-ND<p>Subsisting in confined, barren quarters that lack intellectual stimulation or appropriate social contact seems to <a href="https://doi.org/10.1590/S0001-37652001000200006" target="_blank" rel="noopener noreferrer">thin the cerebral cortex</a> – the part of the brain involved in voluntary movement and higher cognitive function, including memory, planning and decision-making.</p><p>There are other consequences. Capillaries shrink, depriving the brain of the oxygen-rich blood it needs to survive. Neurons become smaller, and their dendrites – the branches that form connections with other neurons – become less complex, impairing communication within the brain. As a result, the cortical neurons in captive animals <a href="https://doi.org/10.1002/cne.901230110" target="_blank">process information less efficiently</a> than those living in <a href="https://doi.org/10.1002/dev.420020208" target="_blank">enriched, more natural environments</a>.</p>
An actual cortical neuron in a wild African elephant living in its natural habitat compared with a hypothesized cortical neuron from a captive elephant. Bob Jacobs, CC BY-ND<p>Brain health is also affected by living in small quarters that <a href="https://doi.org/10.3233/BPL-160040" target="_blank">don't allow for needed exercise</a>. Physical activity increases the flow of blood to the brain, which requires large amounts of oxygen. Exercise increases the production of new connections and <a href="http://dx.doi.org/10.1126/science.aaw2622" target="_blank">enhances cognitive abilities</a>.</p><p>In their native habits these animals must move to survive, covering great distances to forage or find a mate. Elephants typically travel anywhere from <a href="https://www.elephantsforafrica.org/elephant-facts/#:%7E:text=How%20far%20do%20elephants%20walk,km%20on%20a%20daily%20basis." target="_blank">15 to 120 miles per day</a>. In a zoo, they average <a href="https://doi.org/10.1371/journal.pone.0150331" target="_blank" rel="noopener noreferrer">three miles daily</a>, often walking back and forth in small enclosures. One free orca studied in Canada swam <a href="https://doi.org/10.1007/s00300-010-0958-x" target="_blank" rel="noopener noreferrer">up to 156 miles a day</a>; meanwhile, an average orca tank is about 10,000 times smaller than its <a href="https://www.cascadiaresearch.org/projects/killer-whales/using-dtags-study-acoustics-and-behavior-southern" target="_blank" rel="noopener noreferrer">natural home range</a>.</p>
Disrupting Brain Chemistry and Killing Cells<p>Living in enclosures that restrict or prevent normal behavior creates chronic frustration and boredom. In the wild, an animal's stress-response system helps it escape from danger. But captivity traps animals with <a href="https://doi.org/10.1073/pnas.1215502109" target="_blank">almost no control</a> over their environment.</p><p>These situations foster <a href="https://doi.org/10.1037/rev0000033" target="_blank">learned helplessness</a>, negatively impacting the <a href="https://doi.org/10.1155/2016/6391686" target="_blank" rel="noopener noreferrer">hippocampus</a>, which handles memory functions, and the <a href="https://doi.org/10.1016/j.neuropharm.2011.02.024" target="_blank" rel="noopener noreferrer">amygdala</a>, which processes emotions. Prolonged stress <a href="https://doi.org/10.3109/10253899609001092" target="_blank" rel="noopener noreferrer">elevates stress hormones</a> and <a href="https://doi.org/10.1523/JNEUROSCI.10-09-02897.1990" target="_blank" rel="noopener noreferrer">damages or even kills neurons</a> in both brain regions. It also disrupts the <a href="https://doi.org/10.1016/j.neubiorev.2005.03.021" target="_blank" rel="noopener noreferrer">delicate balance of serotonin</a>, a neurotransmitter that stabilizes mood, among other functions.</p><p>In humans, <a href="https://doi.org/10.1006/nimg.2001.0917" target="_blank" rel="noopener noreferrer">deprivation</a> can trigger <a href="https://doi.org/10.3389/fnins.2018.00367" target="_blank" rel="noopener noreferrer">psychiatric issues</a>, including depression, anxiety, <a href="https://doi.org/10.3389/fnins.2018.00367" target="_blank" rel="noopener noreferrer">mood disorders</a> or <a href="https://doi.org/10.1177/1073858409333072" target="_blank" rel="noopener noreferrer">post-traumatic stress disorder</a>. <a href="https://doi.org/10.1007/s00429-010-0288-3" target="_blank" rel="noopener noreferrer">Elephants</a>, <a href="https://doi.org/10.1371/journal.pbio.0050139" target="_blank" rel="noopener noreferrer">orcas</a> and other animals with large brains are likely to react in similar ways to life in a severely stressful environment.</p>
Damaged Wiring<p>Captivity can damage the brain's complex circuitry, including the basal ganglia. This group of neurons communicates with the cerebral cortex along two networks: a direct pathway that enhances movement and behavior, and an indirect pathway that inhibits them.</p><p>The repetitive, <a href="http://dx.doi.org/10.1016/j.bbr.2014.05.057" target="_blank">stereotypic behaviors</a> that many animals adopt in captivity are caused by an imbalance of two neurotransmitters, dopamine and <a href="https://doi.org/10.1016/j.neubiorev.2010.02.004" target="_blank" rel="noopener noreferrer">serotonin</a>. This impairs the indirect pathway's ability to modulate movement, a condition documented in species from chickens, cows, sheep and horses to primates and big cats.</p>
The cerebral cortex, hippocampus and amygdala are physically altered by captivity, along with brain circuitry that involves the basal ganglia. Bob Jacobs, CC BY-ND<p>Evolution has constructed animal brains to be exquisitely responsive to their environment. Those reactions can affect neural function by <a href="https://www.penguinrandomhouse.com/books/311787/behave-by-robert-m-sapolsky/" target="_blank">turning different genes on or off</a>. Living in inappropriate or abusive circumstance alters biochemical processes: It disrupts the synthesis of proteins that build connections between brain cells and the neurotransmitters that facilitate communication among them.</p><p>There is strong evidence that <a href="https://doi.org/10.1523/JNEUROSCI.0577-11.2011" target="_blank">enrichment</a>, social contact and appropriate space in more natural habitats are <a href="https://doi.org/10.1111/j.1748-1090.2003.tb02071.x" target="_blank" rel="noopener noreferrer">necessary</a> for long-lived animals with large brains such as <a href="https://doi.org/10.1371/journal.pone.0152490" target="_blank" rel="noopener noreferrer">elephants</a> and <a href="https://doi.org/10.1080/13880292.2017.1309858" target="_blank" rel="noopener noreferrer">cetaceans</a>. Better conditions <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5543669/" target="_blank" rel="noopener noreferrer">reduce disturbing sterotypical behaviors</a>, improve connections in the brain, and <a href="https://doi.org/10.1038/cdd.2009.193" target="_blank" rel="noopener noreferrer">trigger neurochemical changes</a> that enhance learning and memory.</p>