Bill Gates Never Ran an Energy Company: Solar Is More Than Just ‘Cute’, It’s At Grid Parity In 20 States!

by Jigar Shah, via Huffington Post

Last year, Bill Gates noted in an interview with Alan Murray of the Wall Street Journal that technologies like solar photovoltaics and LED lights were “cute” but could never deal with the bigger issue of climate change and powering the developing world.

And, this week, writer Marc Gunther wrote in his post that “Germany, once the world’s leading market for solar power, is pulling back its subsidies. Q Cells, once the world’s largest solar company, just went bankrupt.’ This isn’t happy news.”

So, I am writing to point out three things:

1. The solar industry is growing and is significant, but is not going to solve all the ills of carbon;
2. Mistakes are a blessing; and
3. Theory is theory, not a solution

1. Solar Growth: First, let me make note that I, and others, have just spent the last decade in solar creating the solar services industry which, according to the 2011 National Solar Jobs Census published by the Solar Foundation, grew 6.8 percent between 2010 and 2011.

Plus, the solar industry installed $90 billion of equipment last year. That’s double the amount of equipment that was installed for the new coal industry.

And, GTM research and Solar Energy Industries Association (SEIA), issued a report that the showed that U.S. installed 1,855 MW (or 1.86 GW) of solar in 2011 and is expected to install a full gigawatt more than that in 2012: 2.8 GW.

GTM Research and SEIA estimate the U.S. solar market’s total value surpassed $8.4 billion in 2011.

So, solar is winning and growing. But, no one is saying it is the only solution — just a compelling piece of the puzzle.

In fact, there is no silver bullet. We must find efficiencies and new solutions in solving the carbon issue in several areas: transport, agriculture, energy, forestry, industry, buildings and waste.

However, when we think about carbon, most of us tend to think of two areas: transportation and electricity. While Bill Gates might label solar and LED lighting as “cute,” the numbers seem to suggest otherwise. Both are billion-dollar industries and together with hundreds of other solutions will help reach the $5+ trillion in new investments necessary to make an impact by 2020.

Remember, we did not get to this point with one major offender, and we will not solve our ills with one major solution.

Gates, however, suggested that we spend more money developing a new generation of energy technologies instead of investing in incremental improvements of today’s energy technologies. He said this at WIRED’s third annual conference, Disruptive by Design.

“Can we, by increasing efficiency [technologies], deal with our climate problem?” Gates asked. “The answer there is basically no, because the climate problem requires more than 90% reduction of CO2 emitted, and no amount of efficiency improvement is enough.”

Again, I disagree with Gates as, in this case, “perfect is the enemy of good.” In solving our CO2 problem, we actually have all of the cost-effective technology need to meet our 2020 goals and more to meet future goals. More R&D is always a good thing, but to suggest the current suite of technologies is not ready is just criminal. Gates certainly didn’t wait for the perfect solutions to Windows before he deployed his beta versions on the world. We are a more productive society because he didn’t wait

[JR:  Related Post — “Bill Gates still doesn’t know how he got rich.”]

2. Mistakes Matter: As noted, Marc Gunther believes that Germany pulling back its subsidies, and Q Cells bankruptcy “isn’t happy news.”

I could not disagree more. While I do not wish for things like the Internet bubble, we now have a robust Internet economy. Did it come at a heavy cost at the end of the 90s and early 2000s? Yes.

But, pioneers are the brave people who take the risk.

Germany, through its aggressive subsidies did contribute to a solar bubble. But, Germany made the seed investment for the world.

The US market is now growing exponentially after Germany paid for all of the “scaling” costs. In my own analysis of more than 1,200 electric utilities, we have reached grid parity for more than 200 utilities in 20 states representing 20% of all electricity becoming solar. More states are coming by 2016.

Grid parity means solar is now a cost-effective alternative for electricity consumers who hate paying their electric bill to the local utility company. It is getting cheaper to install a new megawatt of solar and in 2011, U.S. solar energy Installations soared by 109% in 2011 to 1,855 Megawatts according to SEIA. We are at a point where the companies that cannot manufacture cost competitively, like Q Cells, must go by the wayside.

There is a new generation of solar deployment coming that is a roadmap of profitability. It is one with no subsidies and profitable companies.

3. Theory is theory: Finally, while Gates is an entrepreneur, he never ran an energy company. And, while Gunther writes about energy, he has never run a company.

I respect both of them. But each is espousing his own beliefs. Certainly each is well researched, but it is still theory.

However, we are at a tipping point. The place where the theorists who blazed the awareness trail, must give way to the brave entrepreneurs who are willing to risk it all to drive us ahead with real solutions and real businesses.

So, I thank those who have really brought climate change and energy to the forefront of awareness including Al Gore, Bill Gates, and all the writers like Marc Gunther.

And, I thank the Q Cells of the world and Germany for putting a stake in the ground to blaze the trail.

But, now, with time running out, and much learning behind us, we must implement with speed — and implement wisely.

Electricity production using solar technology is proven. Now we need to deploy it as fast as we can to build the next economy. There are thousands of other proven technologies to be implemented in other sectors as well to make an impact and make the next economy. For example, the shipping industry could save $50 billion per year on fuel and reduce carbon and other pollutants by 30 percent using existing technologies.

And, while we attempt incremental improvements, let’s also spend more money developing a new generation of energy technologies. It is not either/or, it is both.

We will continue to implement thousands of proven ways to reduce carbon and improve energy efficiency. And, we will continue to make mistakes.

Let’s leverage what is proven, and learn from our mistakes as we go. It is in fact, the only way forward.

In the meantime, I do admit I am not qualified to run a software company.

Jigar Shah is an entrepreneur and visionary committed to leveraging the next economy by solving the challenging issues of our time. His first foray in realizing his vision was the founding of SunEdison in 2003. Today, he is CEO of Jigar Shah Consulting and a board member of the Carbon War Room.

This piece was originally published at the Huffington Post and was reprinted with permission.

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38 Responses to Bill Gates Never Ran an Energy Company: Solar Is More Than Just ‘Cute’, It’s At Grid Parity In 20 States!

  1. Mike Roddy says:

    Thanks, but this was predictable, and Gates is actually a soft target. He was, after all, talking to someone from Murdoch’s Wall Street Journal, and Gates himself is heavily invested in fossil fuels.

    People have the impression that Gates is some kind of progressive, but that was never really the case.

    As for Gates’ “more research” meme, this comes from reactionary sources like The Breakthrough Institute, which opposes carbon taxes and wants taxpayers to pay for all of this research. Research is a good way to stall deployment and serious action. God forbid that the 1% (or .0000001%, in Bill’s case) should pay for it.

  2. Tim says:

    People have the impression that Gates is some kind of progressive, but that was never really the case.

    No kidding. The guy contributed to the reelection of G W Bush.

  3. Tim says:

    Bill Gates might label solar and LED lighting as “cute,”…

    When I was in graduate school in 1980, one of my fellow graduate students had an IMSL-8080 CPU in a home-built personal computer into which he put the operating system from a paper tape! Now, that was “cute”.

  4. Tim says:

    32 years later, IBM has long since quit making PCs, Digital Equipment (DEC – their biggest competitor) is long since defunct, and the “cute” little company that put out the Lisa is the world’s largest corporation, by market-cap.

  5. fj says:

    It’s unfortunate that Gates is not onboard as we’ve run out of time to allow this type of misinformation.

  6. squidboy6 says:

    Bill Gates doesn’t really impress anybody, he probably doesn’t even know that News Corp has been carbon neutral for years.

    One of his early partners brought his mega-yacht into Santa Barbara one Summer and the fires on the hillside kept covering his boat with ashes, enough ashes that his crew couldn’t keep up with it so they tried to hire extras to come out and work on the boat. When the local crews heard he was paying $10 an hour they laughed at him. They needed $40 an hour to live in Santa Barbara and work on boats. So they got some of the drunks to come out and work. These guys mainly went to see a yacht with a helicopter, 40′ sailboat, and several speed boats attached to it.

    The point is these guys don’t really understand anything, they think their wealth makes them experts when they really sold cheap and dirty. Now thirty years later Apple is eating their lunch. Gates isn’t just misinformed and arrogant, he’s a moron who thinks he can throw money at malaria and other major diseases and cure them. There never will be a cure for these diseases but they can be managed. A megalomaniac cannot understand a concept like that! He’s tilting at windmills and he doesn’t have the sense of fairness that Don Quixote had.

  7. Tom King says:

    At 13:20 Gates explains he has invested in nuclear technology. So I would expect him to try to downplay other alternatives. Besides the Solar/Nuclear struggle looks a lot like the Linux/Windows struggle.

  8. Tom King says:

    We can help things along by refusing to purchase from States/Regions/Countries that are not carbon neutral. This forces a very clear signal into the economy.

  9. fj says:

    This seems to be a good article but it might be more effective using scales more closely aligned to what has to happen.

    We want to replace a fossil fuel industry that has about one-half trillion dollars in annual subsidies, 10-15 trillion dollars infrastructure, and 1.5 trillion dollar s annual maintenance (according — I believe — estimated in a recent Grist article).

    How fast must the build out be to get us there? I do believe Ken Caldeira discusses this in a recent paper.

    Pardon my broad strokes but it seems that scale must be an important part of the conversation; and it seems that quite soon the build out rate must be explosive; and how can this be achieved?

    And, eliminating the one-half trillion dollars in fossil fuel subsidies and applying them to high efficiency gains such as net zero transportation, net zero building and retrofits, solar, and wind would be a great first step.

  10. jaywfitz says:

    Well, maybe it can appropriately be said that “adding alternative streams of energy production” without “definitively capping allowable personal consumption” is not even cute, but at best a distraction and at worst a step in an even worse direction.

    Fair? I understand that’s the taboo elephant in the room. . .

  11. One more factoid to add: total fossil fuel revenues in 2010 were about $5 trillion, with $4T to oil/gas and $1T to coal. For comparison, the tobacco industry revenues were about 1/10 as much. See appendices C and D of my book Cold Cash, Cool Climate for details.

  12. Joan Savage says:

    Even Gates’ money couldn’t self-insure his pet project of a next generation of nuclear power plants.* Might he be playing to Wall Street to help him line up public financing?

    *”..government panel has estimated that cleaning up the Fukushima disaster and compensating its victims could cost as much as 20 trillion yen ($257 billion)”

  13. fj says:

    Jonathan Koomey, And, a good one at that, thx.

  14. David B. Benson says:

    There is no ‘struggle’ twxt solar PV and nuclear. Each has a complementary role to play.

  15. David B. Benson says:

    I’m pleased, most pleased, to read of grid parity in many states. This is a small bit of actual climate progress.

  16. Tom King says:

    If that were so, I don’t think Germany would be shutting down their entire fleet of nuclear reactors. They aren’t walking, they are running towards a completely green energy future. And whoever gets their first gets all my business.

  17. ““Can we, by increasing efficiency [technologies], deal with our climate problem?” Gates asked. “The answer there is basically no, because the climate problem requires more than 90% reduction of CO2 emitted, and no amount of efficiency improvement is enough.”

    To respond in terms that Gates might understand, imagine if I said “Can I write my book using Microsoft Word? No! My book has graphs that Word cannot generate.

    Of course, I can actually write most of my book using Microsoft Word and fill in the gaps by importing graphs generated using Microsoft Excel.

    Likewise, we can do much of the co2 reduction by increasing energy efficiency, and fill in the gaps by generating clean energy.

  18. David B. Benson says:

    Tom King — I suppose I should have qualified it by adding ‘in rational countries’. In Germany what will happen is importing more electricity from nuclear power plants (NPPs) from beyond their borders. The Czech now plan to build an extra NPP for that purpose with the Poles doing much the same. Even the Russians in Kaliningrad are talking about building a HVDC underwater transmission line to Germany in order to wheel electricity from the Rosatom NPP currently under construction.

    In any case, Germany hopes to construct a large number of offshore wind turbines. The problem is that the electricity will be needed in the south and there are serious difficulties in siting and constructing transmission lines. Germans now pay either the highest or second highest electricity rates in Europe and the rate schedule will have to go way up to pay for all that construction.

    And, oh yes, Germany is going to build several brand new coal burners as well. Somehow this seems anti-progress to me…

  19. Spike says:

    As a Brit I regret solar is never going to be as effective in the UK as in sunny climes, though still capable of useful production. It astonishes me that people in the western USA and southern USA haven’t become leaders in this given your abundant solar resource. I guess you have your leaders to thank for that.

  20. quokka says:

    ‘greenness’ is in the eye of the beholder. When Germany manages to get it’s per capita CO2 emissions and carbon intenity of it’s economy down to the levels of nuclear powered France, then it can lay claim to real environmental achievements. We are in for quite a wait.

  21. Mike Roddy says:

    You’re right, Tom. Governments, including our own, are afraid to take this step, and so are the “Green” NGO’s. A bottom up boycott campaign is needed, targeting countries that refuse to slash their emissions.

    This would be doing those countries a favor. If they don’t change, the rage they will face further into the future will be much worse.

  22. Mike Roddy says:

    Solar in the Mojave has been sabotaged by fake green groups, who file endless land use appeals and manipulate public opinion. The fossil fuel companies are behind it, and I observed it first hand.

    The government of California supported solar development, and so does Chu, but concerted disinformation and industrial sabotage have added enormous development costs to already strapped startups.

    The fossil fuel companies are no better than gangsters. That’s something you will never read or hear in the mainstream media.

  23. ToddIn Norway says:

    New solar roof solutions are now coming to market from very large suppliers after years of intense field testing. The solar shingles are the sealing surface of the roof for this product, not simply mounted on top of the sealing surface. Anyone who plans to replace the roof shingles in the near future can choose a slightly more expensive shingle(with balance of system components) that generates PV electricity on the order of 1-3 kW for the whole roof, depending on roof size, direction and angle.

  24. I am a little disappointed to hear such pessimism coming from Bill Gates. I agree with you that “perfect is the enemy of good,” and we should focus on changing what we have done wrong to push forward towards a better future. I feel that solar and wind technologies are more than enough to power the developing world. They are actually great opportunities to instill clean and efficient energy solution before any more harm is done to their environments.

  25. Richard Lee Dechert says:

    Has Mr. Shah or any of the commenters carefully reviewed the Bill and Melinda Gates Foundation website? Apparently not. It should be carefully reviewed, including the LEED Platinum Certification (LEED’s highest) for the new Seattle campus. That is more than “cute.” Like so many other articles on global warming and climate change, Mr. Shah and his commenters dwell on mitigation and virtually ignore adaptation—even though we’re only five years from the International Energy Agency’s irreversible tipping points and we won’t achieve a “90% reduction of CO2 emitted.” A review of the Foundation’s worldwide grant programs shows they are massively invested in skills and resources that enable adaptation to climate change. That is much more than “cute.” As has apparently been alleged, the Foundation is not invested in fossil fuel or nuclear fuel technology. However, as a co-chair and trustee of the Foundation, Mr. Gates has publicly supported “a modest financial transaction tax, increased tobacco taxes, and a carbon tax to support aid commitments.” Disclosure: I have a family association to the Foundation and have visited the campus.

    [JR: I actually have carefully reviewed what the Foundation is doing — and it is quite lacking. See my posts “Gates Foundation strategy raises key question: Can the problems of the developing world be solved by ignoring global warming?.”

  26. fj says:

    This kind of takes the wind of out the sails (pun kind of intended) of highly concentrated energy sources like nuclear.

    Geostellar Plans Solar Power Map of Every Rooftop in the U.S.
    (A similar thing done in New York City recently)

    And, especially since the military sees smart microgrid infrastructure as much more secure, resilient, and agile.

    As does NYC, where distributed solar can provide for much more resilient power systems than a large single downed and drowned system after severe storms like hurricane Irene.

    And as the saying goes regarding monopolies of power and extreme power; the major problem these days:

    Power corrupts and absolute power corrupts absolutely.

  27. Anne van der Bom says:

    “could never deal with the bigger issue of climate change and powering the developing world.”

    In a sense he is right. PV can not power the world alone. But that is the pitfall of many people: thinking an energy source is only viable if in theory it could power the world all by itself. But it doesn’t have to. It will be combined with wind, hydro, geothermal, solar thermal with storage, biomass, wave, tidal, etc. It is just a part of the bigger picture

  28. fj says:

    Regarding solar photovoltaic this report from McKinsey & Company seems so wildly optimistic confirmation of authenticity would be greatly appreciated.

    Just downloaded and started reading

    Solar power’s next shining

    April 2012, Krister Aanesen, Stefan Heck, and Dickon Pinner

  29. fj says:

    (oops didn’t mean this as a reply)
    This McKinsey report seems so wildly optimistic, would greatly appreciate corroboration of authenticity.

    Just downloaded and started reading:

    Solar power’s next shining

  30. fj says:

    This report also indicates solar pv as a source of growth for the financial industry and an area where they can actually provide very useful service:

    “As the solar investment pool swells, financial institutions, professional investors, and asset managers are likely to be drawn to the sector, since solar projects that are capital-heavy up front but rely on stable contracts will become attractive in comparison with traditional financial products. New types of downstream developers and investment products will emerge to aggregate low-cost equity and debt and to structure financial products with risk-return profiles aligned with the specific needs of institutional investors.”

  31. Mark Shapiro says:


    This is terrific. BIPV is THE way to reduce PV below grid parity.

    If these PV roofing panels work, they should become the default roofing material, first in sunny climes, then everywhere.

    Now if electronics makers and LED manufacturers would just allow us to use some of that low-cost PV directly in our DC devices with a DC standard . . .

  32. Mark Shapiro says:

    Astonishing. Hopeful. And probably correct.

    PV should — and probably will — keep growing rapidly as more and more parties recognize and exploit its utility.

  33. David B. Benson says:

    David MacKay, FRS, recently gave a TEDx talk entitled “People, Power, Area — how the laws of Physics constrain our sustainable energy options”. The video and slides are available on his Sustainable Energy website.

    I don’t do video but the slides alone were illuminating and entertaining.

  34. Bill Woods says:

    “Germany Building 17 New Coal, 29 New Gas-Fired Power Stations”

    Coal: 16 GW
    Gas: 8 GW
    Wind: 7 GW

  35. Chris Winter says:

    Bill Gates calling solar power “cute” reminds me of Alberto Gonzalez referring to the Geneva Conventions as “quaint.”

  36. Chris Winter says:

    I remember those Microsoft e-mails demonizing Linux. I’m pretty sure you do too.

  37. Chris Winter says:

    We must be careful to distinguish between existing nuclear plants and the various “Gen IV” designs on the drawing boards. Those have the potential to make a genuine contribution to solving the CO2 problem.