Editor's note: In the face of the monstrous challenge of global warming, a futility narrative has taken root: “For decades we’ve done nothing to address this problem, and there’s no way to stop it now.” We’ve gathered three sage strategists to convince you that both parts of that statement are dead wrong.
In 2008 Al Gore made a John F. Kennedy-style proclamation that it was possible to achieve 100 percent renewable energy in just 10 years—all we needed was the willpower. Since that speech, prices for wind and solar power have dropped by more than 50 percent. Big data has unlocked energy efficiency and made it possible to integrate various forms of renewable electricity without the predicted rolling blackouts. And numerous analyses of the feasibility of moving to clean energy have been undertaken by the National Renewable Energy Laboratory, the International Energy Agency, the United Nations, the Rocky Mountain Institute, Stanford University, the European Climate Foundation, the University of Delaware, Google, The Solutions Project, and others. Whether it’s U.S. government data, McKinsey data, or electric utility data—all confirm that a complete global transition to clean energy is both technically and economically feasible. The barriers to achieving that goal are social and political.
Many have criticized the United States for not being the de facto global leader on climate-change solutions and policies. Japan, Germany, even Costa Rica are held up as examples of nations that have done a better job. But the United States is a vast country with more than 310 million people and 3,000 electric utilities. Sure, we’ve let others lead the way, but we’ve been a fast follower on wind and solar energy. In fact, the United States has added more than 150 million kilowatt-hours of renewable energy since 2003, enough to meet almost all our incremental rise in power demand over that timespan. With more than 30 states having established renewable electricity goals, or mandates, that provide clear guidance to the marketplace, many are predicting that 100 percent of all net new electricity generation in the United States will come from zero-emissions fuel sources. U.N. Secretary General Ban Ki-moon insists that “zero emissions from new electricity needs to happen by the second half of the century.” We can now see that’s possible.
There’s certainly the capacity for tremendous expansion in renewables. Globally, solar has been deployed at a rate of $80 billion a year for the past few years—it’s scaling faster than cellphones—and it’s still the most underutilized proven technology to stave off the effects of climate change. How underutilized? Consider that Australia has deployed solar on two million homes in less than five years. That’s one solar system for every 12 people. In the United States, we have fewer than one million installed solar home systems. To match Australia, we would need to build almost 27 million new solar home systems in the next five years—a $400 billion investment.
Sounds like a daunting number, right? Not really. That’s because most of the innovation in the renewable electricity space has come not from new technologies but from the financing sector. In 2005 the company I founded, SunEdison, put together the first solar-only fund with Goldman Sachs and kicked off the “no money down” solar boom. In 2013 NRG Energy went a step further and put some of its gas, solar, and wind power plants into a public stock vehicle called a YieldCo. The goal was to attract institutional investors that wanted better returns than they could get from buying corporate bonds. It worked so well that SunEdison, NextEra Energy, and Pattern Energy have followed suit, and anyone can buy their stock and receive a stable dividend check from renewable energy. Institutional investors are now so sold on the stable returns of renewable energy that they have set aside large amounts of money for new projects and are finding that they are competing for the few that are not yet spoken for. There is more money chasing projects than there are projects to finance.
Scientists say that to stave off the worst impacts of climate change we need to reduce our emissions by 80 percent. We are now able to reach our climate-change goals with existing technologies because of the immense power of business model and financial innovation. Solar, wind, biomass, geothermal, energy efficiency, clean transportation fuels, local food, water-saving technologies, and many others are now cost effective for communities across the United States. What we need are passionate people with good local connections. To reach our 2030 goals, we need 100,000 people convincing their communities to buy at least $1 million worth of money-saving climate-change solutions every year. That’s easier than it sounds: A million-dollar project is the equivalent of one Wal-Mart going solar; an average school district installing heat pumps; a town like Peoria, Illinois, moving to LED streetlights; changing 50 gas-guzzling taxis to electric cars; or 100 homes becoming energy efficient.
Today almost every climate-change solution above can be sold using “pay as you save.” By now most folks have heard of “no money down” solar, but the same financing mechanism can be used for energy-efficiency projects. Customers pay absolutely nothing upfront, and start saving money from day one. Every month, the customer pays a portion of that savings back to the investor until the investor is repaid with interest. After that point, the savings are just kept by the customer.
So is switching to 100 percent renewable energy possible by 2030? If citizens in communities across the country talk to their mayors, neighbors, friends, local business owners, and anyone else who’ll listen about how to save money with climate-change solution technologies, it’s not just possible—it’s inevitable.
Jigar Shah is the author of Creating Climate Wealth: Unlocking the Impact Economy, and the founder of SunEdison, the world’s largest solar services company. He maintains that a business model built on solar can unlock a $10 trillion investment opportunity in resource efficiency solutions.