According to the Department of Energy’s Solar Futures Study, by 2035 solar energy has the “potential to power 40 percent of the nation’s electricity,” and 45 percent by 2050. The remainder of a carbon-free electricity grid in 2050 would be supplied by wind (36 percent), nuclear power (11 percent to 13 percent), hydroelectricity (5 percent to 6 percent) and biopower and geothermal (1 percent). The study assumes there are policies in effect to limit carbon dioxide emissions and mechanisms to incentivize renewable technologies. Without these policies, emissions would decline by only 60 percent. The study also assumes continued technological advances that lower the cost of solar energy. These assumptions allow for 95 percent of the grid to be decarbonized in 2035 without increasing electricity prices because the decarbonization and electrification costs are assumed to be offset by savings from technological improvements and enhanced demand flexibility.
The United States installed 15 gigawatts of solar in 2020 to reach 76 gigawatts of total capacity, representing 3 percent of the current electricity supply. In order to accomplish the above goals, the country would need to install an average of 30 gigawatts of solar capacity per year between now and 2025—twice the 2020 installations—and 60 gigawatts per year from 2025 to 2030—four times the 2020 installations. At issue would be ensuring grid reliability with limited dispatchable technologies, providing sufficient storage capacity to back up the intermittent renewables, and enhancing the U.S. power grid for the large volume of renewable power. The result of this transformation to the U.S. electric sector would be China’s dream come true since the Chinese manufacture most of the world’s solar panels and produce most of the polysilicon that solar PV needs.
The Solar Futures Study, prepared by DOE’s National Renewable Energy Laboratory, shows that, by 2035, the United States would need 1,000 gigawatts of solar power—about the total capacity the United states currently has—and by 2050, solar would need to provide 1,600 gigawatts of capacity for a decarbonized electric grid. Decarbonizing the entire energy system could result in as much as 3,000 gigawatts of solar by 2050 due to increased electrification in the transportation, buildings, and industrial sectors. Storage capacity would need to grow from 30 gigawatts to almost 400 gigawatts in 2035 and 1,700 gigawatts in 2050.
This DOE study did not meet President Biden’s policy for a 100 percent decarbonized grid by 2035, requiring a 95 percent decarbonized grid instead because the cost to decarbonize the last 5 percent of emissions is much higher than the cost to decarbonize the first 95 percent. The technologies needed to eliminate the last 5 percent of emissions are technologies that need to provide firm capacity, such as peaking capacity and carbon capture, but these non-carbon technologies are not commercially economic today.
Issues with Decarbonizing the Electric Grid
Building and installing enough solar panels to generate up to 45 percent of the country’s power needs will strain manufacturers and the energy industry, increasing demand for materials like aluminum, silicon, steel and glass. The industry will also need to find and train tens of thousands of workers quickly. U.S. businesses have had problems finding workers after the coronavirus lock downs. And, salaries of workers in the solar and wind industries are less than the salaries of coal, oil and natural gas workers they would be displacing. For example, the median wage for a solar installer is about $45,000 a year, according to the Bureau of Labor Statistics. That compares to a coal plant that employs a couple hundred workers, paying around $82,000 for a skilled operator.
The United States relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand. China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon. Nearly half of the global supply of polysilicon comes from Xinjiang; 35 percent from other regions in China. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.
The Biden administration has blocked imports connected with the Xinjiang region of China where cheap coal is used to produce polysilicon due to the use of forced labor of Uyghurs and other Muslim minorities. In addition, the Labor Department added Chinese polysilicon to a list of goods believed to be produced by child labor or forced labor. Due to China’s dominance of the global supply chain for the materials and parts needed for solar panels, the import ban could slow the construction and installation of solar projects in the United States. To reach Biden’s goals, a large increase in solar capacity is required very quickly and the supply chain constraints hinders that growth.
Further, China controls over 80 percent of the critical minerals used to create batteries. The Democratic Republic of the Congo where China owns eight of the 14 largest cobalt mines accounting for about half of the country’s output, produces 70 percent of the cobalt needed using slave and child labor.
Batteries to store energy generated by solar panels and wind turbines for use at night or when the wind is not blowing is also crucial to meeting Biden’s goals. While the cost of batteries has been declining, they remain far too high for a rapid shift to intermittent renewables. Also, safety is another factor. For example, on September 4, less than a year after it entered service, the Moss Landing Energy Storage Facility in California was forced offline when a number of batteries overheated, scorching battery racks and melting wires.
A rush to add renewable power has weakened the reliability of the electric grid as demonstrated by California and Texas when their grids could not handle weather related issues. Rather than investing in reliability, utilities in states with renewable portfolio standards have been forced into investing in renewable energy and retiring fully operable and reliable dispatchable units. Blackouts and rolling blackouts have occurred because of insufficient operable capacity. Many home owners in these states have turned to purchasing gasoline or diesel generators so that they have standby power if future failures to the electric grid should occur. These units emit carbon dioxide emissions, so Biden’s decarbonized electric sector goes out the window. Further, low-income consumers cannot afford generators or backup battery systems, which can cost $10,000 or more.
A Wisconsin-based company, Generac Power Systems, that produces home generators and other equipment, announced in July record sales of $920 million during the second quarter, a 68 percent increase over last year. Generac’s customers have a median household income of about $130,000, more than twice the U.S. median.
Biden’s decarbonization goals require careful planning, which his administration has shown limited capability in accomplishing. The Solar Futures Study is a modeling exercise which requires major policy assumptions and has limited relationship to reality. One can just look at Europe’s energy transition to renewable power to see how electricity prices have skyrocketed. Electricity prices recently broke records in Spain, Germany and France. UK electricity prices surged to 2,300 pounds ($3,180) a megawatt-hour as Ireland, which supplies wind power to the UK, warned of a power shortfall that could lead to blackouts. Europe is facing an energy crunch as supplies of natural gas remain below what is needed to satisfy demand and environmental regulation has increased the cost of carbon permits.
Law makers, regulators and energy consumers need to be careful in promoting President Biden’s energy goals without careful consideration to the pitfalls that are inherent to such a massive undertaking. By studying other nations’ experiences with energy transitions, law makers could spare Americans a lot of unnecessary expense and inconvenience. That is the least we should expect from our policymakers.