In a recent article, I charted the way in which Sweden utilized the possibilities presented by the widespread adoption of electrical energy to transform its economy and itself as a country.  Indeed, such a relationship between energy consumption and economic growth has been observed in numerous countries over the course of the 20th century.

At the time of writing, much of Europe is gripped by gas shortages, with governments such as Spain and the United Kingdom introducing emergency measures in a bid to protect customers, while industrial facilities are facing temporary closure as a result of a shortage of energy. Indeed, in the UK, dozens of energy companies face bankruptcy as the long-term contracts they have signed with customers on low prices render their business model unviable in a world in which the price of liquefied natural gas rose by two-thirds in less than a month.

The green economy

While such a crisis is likely to be short-lived, the push towards decarbonizing the economy and the creation of green jobs is likely to be continuing apace.  Indeed, in the Jobs of the Future index created by the consultancy firm Cognizant, roles such as “solar engineer” and “solar panel installer” feature heavily, with solar engineer jobs up around 368% in the past year.

This growth has been driven by the tremendous technological strides made by solar power.  Indeed, data from the International Renewable Energy Agency (IRENA) published last year showed that the price of solar fell by an incredible 82% between 2010 and 2019, with these advances drastically improving the energy gained from each panel, with the energy cost now extremely competitive against all other forms of electricity production.

This is creating a number of interesting economic possibilities.  For instance, Hello World, one of the finalists in the recent MIT Solve competition aims to use solar power to build Wi-Fi education hubs in parts of the world that lack access to both energy and the internet.

Swedish company Alight have been working to help encourage larger companies to utilize solar energy to power their operations. The company, which was founded in 2013, currently has around 46 solar installations generating over 500 megawatts across Europe.

Solar as a service

The company aims to remove the capital expenditure required to establish a solar array on site and instead offer cheap, renewable energy as an operational expense for companies instead. One such company is the Japanese car giant Toyota, whose Material Handling division has set itself the ambitious target of producing zero emissions by 2050. They’re installing a solar array across their sites that will generate up to five MWh of energy per year.

“Corporate giants are responsible for 70% of global electricity
consumption. Primarily, this is because of the scale at which they operate and, ultimately, without the goods produced and services provided the global economy would falter,” Harald Overholm, CEO of Alight says.

“That is why the transition to renewable energy sources across the business world must be as seamless as possible. Keeping disruption to a minimum is key to a successful shift away from the dangerous and damaging continued use of fossil fuels to a global economy based on renewable energy sources.”

The value of “small”

Industrial applications of solar power are made that bit more attractive by the growth in battery storage solutions to sit alongside the generation side of each installation.  It’s estimated that around 3.5 gigawatts of capacity will be present by the end of 2021, which is a doubling of battery deployments over the previous year.

What’s more, these projects are often achievable at scale because their smaller nature means they don’t get bogged down in either the political wrangling that is linked with fossil fuel projects or the enormous up front capital expenditure required to build such facilities.

Indeed, research published last year showed that granular options, which in addition to being smaller in size and lower in cost, also allow for easier scaling because of their modular nature are not only ideal for the kind of rapidly changing world we currently live in, but also most effective at delivering the transformation towards a low-carbon economy.

That they can be brought on stream quickly is also significant given the time pressure the world is under if it is to effectively respond to the climate emergency we face.  We can’t wait for the decades usually taken to build a nuclear power station, with the equivalent sized solar array possible in a few years a much more attractive option.  What’s more, because of the lower complexity of these projects, they are also far less liable to incur expensive overruns and delays, while this also generally means that technological improves in technological and cost efficiency tend to arrive much faster too.

Sharing the wealth

Solar power also has a number of advantages in terms of the distribution of its benefits.  Many nations across the developed world are striving to ensure the fruits of economic growth are spread more equitably across society.

For instance, the researchers found that smaller, more granular technologies were far more likely to be distributed across the population than those requiring huge, up front costs.  These technologies also tend to provide a greater return on investment for public authorities too.

Perhaps most pertinently of all, they also provide far more jobs than fossil-fuel based installations.  Indeed, the researchers found that for each unit of energy generated, solar power produces around ten times as many jobs as the equivalent nuclear power or fossil fuel facility.  It’s not for nothing that “solar installer” was the fastest-growing job in the United States before Covid.

Just as widespread electrification transformed the Swedish economy, it seems likely that solar power will transform not just the green economy but our economy more broadly.  It’s a future that promises to not only be greener, but also more equitable, which is perhaps something we should all support.