Around a million years ago, our ancestors learned how to burn wood and plants that grew using the sun’s energy. Around 200 years ago, they learned how to power ships and trains using the energy from fossils of ancient plants and animals once fuelled by the sun. Then 30 years ago, we learned how to harness solar energy directly with high-tech photovoltaic (PV) cells.
In a few billion years, the sun will begin turning into a red giant, which will make Earth uninhabitable, but in the meantime, solar technology is getting cheaper and more efficient every year and bringing more and more jobs along with it.
Here are eight reasons why solar is a great long-term investment.
1. It’s an essential climate solution for the new industrial age
Unlike oil, solar power doesn’t create smog, devastating spills and war. In fact, the Ukraine war and bans on Russian fossil fuels are propelling the world toward greater use of solar and other renewables, according to a new report from the International Energy Agency (IEA). The greenhouse gas (GHG) emissions associated with the production of a solar energy system are 25 to 100 times less than they are for fracked gas, which produces 325 grams of GHGs per kilowatt-hour (kWh) from burning the gas, plus all the methane emissions that escape during fracking. The energy return on investment of a solar power system is such that over its life it will produce nine to 10 times more energy than is needed to make it.
2. It’s on a roll
In 2020, the global production of solar PV energy increased by 22%, mostly in China, Europe and North America. If this acceleration continues, by mid-century it could provide a quarter of the world’s electricity, becoming the second largest source after wind. That acceleration is driven by the falling price, increasing efficiency and a better return on investment. In 2010, the levelized cost of utility-scale solar PV was 38 cents/kWh. Natural gas, by contrast, currently costs 27 cents/kWh due to Russia’s invasion of Ukraine. In Australia, where solar costs 3.2 cents/kWh, the Renewable Energy Agency wants to lower it to 1.5 cents by 2030.
3. It’s a safe investment
If you live in Ontario, a 4-kW rooftop system will cost you $2.50 a watt, or $10,000, and generate 4,664 kWh a year, about half of the average household use. (In New York, a similar 4 kW system will cost you US$3.21/watt, or $9,500 after the federal tax credit.) Over 30 years, your system will lose efficiency at 1% a year, so it will generate 120,000 kWh, costing you an average 8.3 cents/kWh (all numbers are for Ontario). Compared to grid electricity at 14 cents/kWh, rising by perhaps 2% a year, each solar kilowatt-hour will save you six cents now, rising to 17 cents in 30 years, or an average of 11.5 cents/kWh, totalling an average of $460 a year, earning an average 4.6% on your investment, if you did not need to borrow the capital. With PACE financing (property-assessed clean energy), you can borrow the money for a solar system with no down payment. The loan will be attached to your property title, and if you sell your home, it will be transferred to the new owner. Ottawa has a PACE financing program, but the rest of Canada is dragging its heels. American studies show that a home with a 6-kW system costing $15,000 will have an increased value at sale of between $22,000 and $30,000.
4. Community solar is an even better investment
A solar installation on top of a factory in Ontario will cost less per kilowatt-hour . A utility-scale solar plant in Ontario, costing $1.60/watt and generating power for 4.6 cents/kWh, will bring a 6.8% return on investment. Ordinary people can share the bounty and help solve the climate crisis by pooling their funds to invest in community-owned solar, including renters and people who live in high-rises, such as Solshare in B.C. and the Métis village of Green Lake, in Saskatchewan. In Germany, 100,000 people are buying power from a community solar co-operative such as Elektrizitätswerke Schönau, while similar initiatives are happening in Switzerland, Italy and France. In Brazil, where it’s known as “solar by subscription,” an investment of US$10,000 to $16,000 will generate solar energy to supply a family of four and take four to six years to pay for itself from savings on the electricity bill.
5. There are creative places to install it
In India, solar power is being used to cover canals. The panels are more efficient due to the cooling effect of water, and they reduce evaporation from the canals. In various countries, “floating solar” is being installed on hydro reservoirs, with production estimated to reach 10 gigawatts (GW) by 2025.
In France, the government is requiring all larger parking lots to be covered with solar systems within five years, and farmers are installing them suspended on cables above their crops. The panels follow the path of the sun to maximize solar gain. They can shift vertically to let the rain pass through and move horizontally to limit damage from a hailstorm, or to make the soil temperature rise or fall. In Turkey, the soccer club Galatasaray installed a 4.2-megawatt (MW) system with 10,400 panels on the roof of its stadium. It saved around €385,000 between January and August 2022, when grid electricity costs rose due to the war in Ukraine. Plans to build solar farms on land devastated by Turkey’s open-cast coal mines could generate power for seven million people.
Solar panels are coming to cars, too. Putting solar on the roof of an EV can generate around 10% of the power it uses. The American company Aptera is taking orders for a two-seater solar EV with a 1,000-mile range that can do 40 miles a day on sunlight. Students in Holland have built a solar-powered camper van that does 700 kilometres a day on sunlight.
6. It provides more jobs for women
The IEA recently declared that the world was entering the “dawn of a new industrial age” and estimated that jobs in clean-energy manufacturing will grow to 14 million (from six million) by 2030.
Globally, the solar industry employs 4.3 million people, 40% of whom are women. While this still isn’t enough, only 22% of workers employed in oil and gas are women, and only 21% in wind energy. The solar workforce breaks down to 47% women in manufacturing, 39% in service provision, 37% in development, but only 12% in installation, where men from the construction industry still rule the solar roost. The Florida company Women in Solar, the American organization Solwomen, and Solar Energy International’s Women in Solar Power program are working to build a more diverse, equitable and inclusive solar workforce.
7. It works well in remote communities
In Inuvik, the Indigenous-owned and operated Nihtat Energy is developing a 1 MW solar farm that will generate 1,435 MWh a year while reducing the risks from ocean-shipped diesel, and the GHGs and air pollution caused by burning it. In Fort Severn, Ontario – 850 kilometres north of Thunder Bay – the Cree First Nation has built a 300 kW solar farm, permitting a 20% reduction in their use of flown-in diesel, saving up to $360,000 a year. As a bonus, when sunlight is reflected off adjacent snow, the yield from a solar panel can increase by as much as 50%, as measured in winter on a solar system in the District of Highlands in B.C., near Victoria.
8. We can regulate our way to solar success
The European Union once bought as much as 40% of its gas from Russia, at a cost of more than US$110 million a day. In response to the invasion of Ukraine, the EU is speeding up its energy transition, requiring that solar panels be installed on all new buildings by 2029 – commercial, public and residential. Its goal is to install 20 GW of solar PV by 2025 and 60 GW by 2030, making it the largest electricity source in Europe, with more than half coming from rooftops.
Given the urgency of the climate crisis, every province that generates coal- or gas-fired electricity should make PACE financing available to everyone and require solar rooftops on every new building, and on every large car park, starting in 2024. Governments could create a 100% solar tax rebate in those provinces to encourage owners. The price is right, the need is great, the time is now to regulate.
