The Peter Zeihan Podcast Series - The Solar Power Problem(s)

Episode Date: February 6, 2023

For solar power to make sense, there's one non-negotiable component...and yes, it's that bright, shiny thing in the sky - the sun. But just because your planet has a sun doesn't mean you should use solar power...Full Newsletter: https://mailchi.mp/zeihan/the-solar-power-problems

Hey, everybody. Hello from Colorado. Peter Zion here. Today I wanted to talk about solar since it's a sunny day. I am green, but I'm a green who can do math, so I don't get invited to really any of the green parties. Solar is great if you have one of those, a sun, not just you have to have one for your planet. You have to be able to see it regularly. Solar intensity around the world varies by an order of magnitude based on where you are. And if your goal is to both generate on a meaningful amount of electricity and reduce your carbon footprint, there are only a handful of places where today's solar technology really work well. Now, I live in one of them. Denver is the sunniest city in the United States.

And people like, oh, shouldn't that be Phoenix or Dallas? No, because there's more things that go in there than temperature, humidity, air density, wind patterns, weathering patterns. Denver sits on the lee side of the Rocky Mountains, so it's in the rain shadow of the largest mountain range on the continent, and it gets its weather in two phases, either storms that blow in from the mountains or storms that blow off the Great Plains. In both cases, the storms tend to be cold fronts, so they whip through fast, they drop a lot of rain or snow, and then they move on leaving clear air behind. If you're in Phoenix, you're going to be dealing with a lot of particulate matter because of the dry desert nature of the place and a lot of smog. If you're in Dallas

Fort Worth, you're dealing with humidity. There just aren't very many places in the world that have a really good solar quotient. And in the United States, you're pretty much talking about the California coastline into Southern California and then into the desert southwest. And there's this little hook up the east side of the front range, which is where I live. In fact, I'm one up on Denver because I'm at 7,500 feet. So we regularly get snow in our valley. and fog in our valleys and Denver will get fogged in, but I am a half a vertical mile above Denver. And so it is very rare for my neighborhood to be fully cloudy for a whole day. It only happens about 20 or 30 days a year, as opposed to when you have an atmospheric haze,

which in most populated parts of the world last pretty much entire seasons. That means that my panels, if you were to put them in New York, only generate about a quarter of the power that they generate for me. You put that in Toronto, you're down to one-fifth, you put it in Berlin down to one-sixth. As a rule, most of humans' population, most notably in Southeast China, or excuse me, on the East-Chinese coast,

northern Europe and northeast United States, if you put up solar panels, you are most likely generating more carbon from the creation of the panel and transmission system than you will ever pay down from the electricity that you generate. So you're actually contributing to the problem rather than solving it. Which brings us to a second problem.

I live in a rural area. So I've got a big roof line and I have an 11.5 kilowatt solar system, which is about the maximum that Colorado allows when you're going to do a feed-in tariff, which is a fancy way of saying that you pay into the grid with electricity the same rate that they charge you to get it out. It's a great system we've got here in rural Colorado. Most cities don't have that option.

Number one, you're going to have a more profit, driven electrical system. I work with a co-op, which means they're not going to give you as generous of feed-in rates. And second, cities, by their very definition, are densely populated. Solar, by its very nature, has to be distributed. So, yes, if you live in a traditional single-family neighborhood with homes with sizable roof lines and a lot of south-facing frontage, you may, may be able to have a decent solar quotient for your system, especially if you live in the American Southwest or California. But if you live in a mid-rise, much less a high-rise, much less in a cany-naded city like Chicago or New York, there's nowhere to put the panels in the first place. You're going to have to put them

outside of the city. And now you're talking about transmission costs. And if you're in New York, you're not going to put it outside of the city of New York because that's equally cloudy. You're going to have to go down to like Central Virginia, and then there's a half a dozen major cities between you and where you're going to be pulling your power from. It's not that solar can't be part of the solution. It can, but it really only works in some very specific geographies, like where I live, where it works really well. For us to fix this, three things need to change.

Number one, we need panels that capture more of the sun and translate more of its energy and electricity. The rate of recovery for that has been incrementally going up for a while now. there's now panels on the drawing board, not a production on the drawing board, that can capture as much as half. That's great, huge step in the right direction. But you also then need transmission to get it from where places that are sunny and you put up your solar panels to where people actually live. And to do that at scale, we're not just talking about high voltage lines that cross state lines. We're talking about relatively room

temperature semiconductors. And for those of you've been following some of my other energy work, you know the same thing is basically necessary for a diffusion power, as well. Single large facilities that you want nowhere near a city that can transport the power over hundreds of miles of necessary. But the third thing that's probably going to be the most problematic in the near term, and that's capital. When you put up a solar farm or wind farm or any sort of green tech, you have to pay for it up front, which means you have to finance it. If you're putting up a coal and your natural gas plant, most of the cost of operating that plant over

its lifespan is in fuel, so you pay for that as you go. The financing needs are not nearly as much. And with the baby boomers moving into mass retirement and liquidating all of their high-velocity capital, all their stocks, all their bonds, everything's going into T-bills and cash. And the volume of capital that is available to finance Green Tech projects just isn't going to be there at the scale we've become used to. And that's not just for Green Tech, that's for everything from car loans to borrowing, to pay for super carriers. Everything is going to get more expensive to finance. And since green tech must be financed up front,

it is going to be the economic subsector that's probably going to suffer most dramatically over the next few years unless the technology changes. You change the technology on me, I reserve the right to change my mind. All right, that's it for me. Until next time.