Will Apple’s Massive Buy-In Grow Companies’ Solar Commitments?

apple solarAccording to CEO Tim Cook, Apple’s “biggest, boldest and most ambitious project ever” is not the iWatch or the iCar, but a power-purchase agreement with First Solar worth a scorching $850 million. But is it a “market-making type of transaction,” as SunPower CEO Tom Werner predicted, shortly after the blockbuster deal was announced? Or is it simply more of the same investment in solar that has characterized corporate interest in renewable energy for years, which for all its forward-looking statements is still disproportionately small in the realm of solar commitments compared to the funding spent on increasing emissions?

“Corporate interest in solar and wind was already hot,” explained CleanTechnica director Zachary Shahan. “IKEA, Google, Facebook and many others have been putting a ton of money into clean energy projects in the past few years. I think most everyone knows that it’s about the financial rewards now, not so much about corporate solar responsibility.”

“The Apple-First Solar deal is certainly notable, in particular with relation to the size of the project and the rapid progress made by Apple in transitioning to renewables,” added Clean Edge director Ron Pernick. “But this is just the latest in a string of corporate and investor commitments to large-scale solar deployments. Google was really one of the first major tech companies to get behind solar, and in the past couple of years we’ve seen entities such as NRG, NextEra, SolarCity and SunEdison launch yieldcos or introduce securitized solar assets, bringing significant capital into deployment. So really, Apple’s announcement is just another indication of how far solar has come in the past few years.”

It definitely has been a lesson in economics. With the price of oil cratering in real-time and the costs for extraction way too high, the smart money, large and small, has had little choice but to gravitate toward the sun to save its skin. Indeed, the only real restraints on solar deployment have been economic cooperation and political will, as the people consistently poll in favor of renewable energy and against utilities that won’t clean up their acts. Reroute funding from fossil fuels, subsidize solar installations and you have a boom that was always waiting to happen, but just didn’t get the help the capital investment and capitol legislation it has deserved since before Jimmy Carter put panels on the White House.

“I think we’re seeing an inflection point primarily driven by hugely improved economics,” Green Alpha Advisors co-founder Garvin Jarbusch explained. “We have reached the point where it’s evident that solar is competitive with fossil fuels; last week, the Bank of Abu Dhabi said that the latest solar PPA tendered in Dubai is competitive with oil at $10 per barrel. Deutsche Bank said PV prices may fall another 40 percent, in just five years. So what we see is a world where early adopters have already seen the benefits of solar and are moving ahead.”

Apple and other corporate “entities” — as well as the homes and businesses they solarize — are buying into an overweight market past due in rebalancing. Annual global fossil fuel subsidies are teetering around $550 billion, which is a lot of money to burn — especially when it’s burning our planet too. CEO Tim Cook knows that for Apple’s technocratic utopia to succeed it must solarize, like yesterday, just like the rest of us.

Simultaneously, corporate solar’s mounting billions invested in the sunshine sector are compounded by accelerations in fossil fuel divestment — including from the Rockefellers themselves. But we’re still only at the cusp of exponential solarization.

“We’re approaching the tipping point with solar, as well as electric vehicles,” said CleanTechnica director Zachary Shahan. “When it hits, anyone invested in fossil fuels is going to have a rough time, and that includes entire societies and countries. We’ve lived through many technological transformations — cassettes to CDs to MP3s, landlines to cellphones to smartphones, typewriters to desktops to laptops,” he added. It always looks like drops in a pond at the early stage, no matter how big the transformation, but then all of a sudden it bursts over the hill and there’s no stopping it.”

“Economists usually take it as axiomatic that a new entrant in a sector reaches 10-20 percent market share to leverage scale, get cheaper and expand faster,” added Jarbusch. “If solar is cost-competitive with fossils now, at approximately 1 percent of the U.S. energy mix, what happens as it grows?”

The answer is a solar rush, with little analogue in the extractive booms (and existential busts) of precious metals like gold or doomed fossil fuels like oil, coal and gas, natural and otherwise. Whether you are talking solar panels, batteries and microgrids or electric vehicles and perhaps even planes (happy flying, Solar Impulse!), the photovoltaic rush is going to go light-speed. Heavy hitters like Apple, Google and more are legitimizing solar as not just an investment but a technology that can change the world, for their customers and other heavy hitters.

“It’s no surprise,” said Solar Energy Industry Association spokesman Ken Johnson. “Solar helps American companies to reduce their utility bills, while providing cost certainty for the foreseeable future. It helps protect our environment and fight climate change, a win-win in anyone’s book. When market leaders like Apple and Google make significant investments in solar, other Fortune 500 companies sit up and take notice; the list of companies moving to clean, affordable solar reads like a Who’s Who of the most successful corporations in America. Apple’s massive solar farm is fuel cell facility North Carolina is now providing clean energy for a $1 billion, 500,000 square-foot data center. This is one of the largest non-utility owned systems in the world.”

“The days of new coal and nuclear power plants in the U.S. are numbered,” said Pernick. “As costs for renewables decline, climate issues become more prominent, and the need for greater resiliency increases. The question is how long will it take for solar to see higher rates of penetration. We are really at the very early stages of solar’s mass adoption.”

Jarbusch noted that Deutsche Bank predicted solar’s cost curve and raw efficiency of solar will make it the largest overall source of energy by 2030. Meanwhile, the International Energy Agency — “notoriously dovish on fossil fuels,” he added — has scheduled solarization’s takeover for 2050. One thing few, if any, are arguing is whether solarization’s takeover of the global energy game will happen at all.

“Solar is a technology, with a price curve to match. The more demand, the cheaper,” Jarbusch explained. “Fossil fuels are commodities. Demand makes them more expensive. Plus, the cheap ones to extract are running out.”

Photo courtesy of Apple.

Author: Scott Thill

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