Unknown unknowns

In the long history of solar power, there are a few advancements which changed the game.

There was the first solar panel in 1954, then a few years later NASA applied the technology to its spacecraft.

More recently, bifacial solar panels have massively increased the electricity yield from a certain land, as each panel can collect photoelectric energy from both sides of the panel. That, among other things has helped the price of solar to fall dramatically over the last few decades.

No one could have fathomed solar on the scale we have it today, or the price reductions seen above. Every prediction about solar installations until now has been wrong. Solar has outpaced even the most optimistic forecasters.

In 1970, no one could have predicted that solar would become the cheapest form of electricity ever, as it did at an auction in Brazil only months ago.

What happened? Well believe it or not, an oil and gas-sponsored scientist changed the game.

Dr. Elliot Berman, backed by Exxon Corp of all people, designed a revolutionary solar cell. It brought the cost of solar pv (photovoltaics) from $100 per watt to $20 per watt.

The new cells first uses were somewhat surprisingly limited to navigation and warning systems on oil rigs and lighthouses.

The cells, built using a lower grade of silicon, and packaged into panels using cheaper materials, were a much cheaper alternative for powering remote installations (ie, on oil rigs) than the toxic, cumbersome and time-limited batteries that were used before. The solar panels were cheaper, more flexible, and wouldn’t “run out”. A win-win-win.

It wasn’t until later that they would become a threat to big oil, rather than an asset.

There are known unknowns

But I think we’re in a state of unknown unknowns.

Everyone’s making predictions about the end of oil. Someone will probably end up being right with their prediction, but I reckon that’ll be nothing but luck.

At no point has any of this been predictable.

It’s the old story of monkeys with typewriters, or being “fooled by randomness”. Everyone’s making predictions, so chance alone dictates that someone will be right, it’s not necessarily genius, or prescience.

What lies ahead now is another decade or two of unknown unknowns of technological development in the renewable energy space. Just because you can’t see the incredible things being worked on, or the next brilliant innovation, doesn’t mean that they’re not happening.

They say that as soon as you’ve thought of the next major technological advancement, then you’ve just invented the next major technological advancement.

That’s why you can’t predict them, because to predict them is to invent them.

The end of oil will come when some unforeseeable technological innovation changes the game.

My old man thinks it’ll be in hydroelectric power. I think he could be right. Just stand in some powerful waves next time you’re at the beach and tell me there’s no future in hydroelectric power.

The point is there’s no point predicting this stuff, the technological advancements are happening too fast.

Look at the falling cost of solar, or the rising size of wind turbines…

Anyway, back to solar power’s development, there’s a few big ideas floating around of where solar might go. Solar-roofed cars and homes, organic photovoltaics (glass that can absorb solar energy and generate power), various forms of solar panel fields (on land or sea), and more. One of those might sound the death knell for oil, or perhaps it’ll be something as yet unimagined.

Something will, at some point, though.  

For now, solar power is beginning to power more and more homes. It’s providing light to villages in poverty-stricken parts of the world, allowing parents to work and children to study at night-time – a truly revolutionary effect that will have dramatic consequences down the line.

It’s also boosting grid reliability and capability across the developing world. Emerging markets building out their infrastructure are finding that solar, amongst other renewables, provides a more flexible, cheaper and cleaner alternative to the high-investment, dirty and cumbersome coal-powered grids that developed countries set up centuries ago.

Solar is gathering momentum. And it’s not alone, good news is coming out of nearly every corner of the renewable energy market.

Luckily, my colleague James Allen is here to guide you through the transition. His newsletter Power & Profits helps you to negotiate the tumultuous waves of the contemporary energy markets, while Exponential Energy Fortunes is picking out the small companies that will be the big winners that will emerge in the 2020s. Already one of them is up over 100%, with a remarkable technology that is benefitting the EV market hugely.

Be sure to check it out.

Best wishes,

Kit Winder
Investment Research Analyst, Southbank Investment Research

Category: Energy

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