Current Oxford MBA student Laurent Nahmias-Leonard gives his perspective on the Skoll World Forum seminar session ‘How Fast Can Small Grow? The Case for Solar Power’.
The energy was palpable at the Skoll World Forum’s session on solar power. Led by Aimée Christensen, Founder and CEO of Christensen Global Strategies, panelists shared their enthusiasm for solar power’s immense potential.
Danny Kennedy, Co-Founder and Senior Vice President of Sungevity, kicked off with a few impressive slides from Bloomberg’s 2030 Energy Outlook. Solar power is expected to grow at a phenomenal rate and could represent up to 18% of our new electricity generation within the next 15 years. A significant portion of that growth is expected to come from China, the global leader of renewable energy installations, according to Qi Ye, Director of the Brookings-Tsinghua Center for Public Policy. Further, the fact that solar power costs have recently plummeted to less than one dollar per Watt is only the beginning. Consumers are demanding more clean power. As a result, trend-setting retailers, such as Apple, Google and Wal-Mart are starting to commit 100% renewable energy.
The discussion has certainly evolved over the last few years. Whereas solar power use to be niche, it’s now taken much more seriously. Stuart Rolland, Managing Director of British Gas Business, commented that solar power is actually very close to grid parity. This is especially true for grid-connected users who now compete with retail prices instead of wholesale prices.
To be cost-effective is already an impressive accomplishment. But the dream doesn’t stop there. Xavier Helgesen, CEO of Off.Grid.Electric and former Skoll Scholar, went on to explain that his company is ambitiously working towards providing electricity to the 1.5 billion people who live off the grid. Launched in Tanzania, where the rate of electrification is actually negative due to higher population growth, his company plans to steer customers away from kerosene (and all of its nasty health effects) towards high quality, affordable solar power.
But be careful! If we’re going to do it, we have to do it right. Harish Hande, CEO of SELCO Foundation, reminded us of an unfortunate chapter of solar’s failed past. In India, too many wannabe solar providers left the business once the subsidies ran out, leaving behind broken panels and indebted locals. “When dealing with the poor, until you create an asset for them, don’t make them customers!” Hande clamored to a round of applause.
On its way, solar will need a boost from the financing community. Enter Dipender Saluja and his firm Capricorn Investment Group. Saluja justly reminded us of the unique predicament of renewables: free fuel is a great thing, until you realise that you essentially have to pay for 20 years of energy up front as a capital expenditure. It might not seem convenient at first, but the practicality of it becomes apparent once you start thinking of it not as a one-time payment, but as a hedge against fluctuating energy prices and independence from the forces behind those prices. Going forward, innovative financing structures will be key to unlocking solar power’s potential.
The session ended with high hopes and a powerful sense of opportunity. How fast can small grow? The question is outdated. Small is already big.