“By the year 2020 solar electricity will be as cheap or cheaper than that produced by fossil fuels.”

There is no question that the world will either make an orderly transition to the use of renewable energy resources in the next few decades, or that essentially all economies will collapse. The question is how much time is there, how realistic is such a transition (that is, is it just pie-in-the-sky to think that the world could?), and how long must it be coddled through financial and other incentives before it takes off on its own market momentum. Analysts from Shell International Petroleum, for example, suggested as early as 1996 that the transition to renewables must start now, and reach at least 20% saturation in the energy market by 2020, in order to accomplish over 50% saturation by 2050. Furthermore, they concluded that this WILL happen, as they predicted that renewables will be fully market-competitive by then. The Union of Concerned Scientists has released a "Blueprint" for a transition of the U.S. to 20% renewable energy by 2020 which shows hundreds of billions of dollars of profit to the U.S. economy within that same period resulting from the early steps to the transition. A more narrow question is whether the solar-based technologies will keep up with this economically beneficial pace. While all renewable energy technologies, save geothermal, result directly or indirectly from solar energy, some of the ones that rely specifically on radiant solar energy (e.g. photovoltaic electric energy production, solar thermal electric energy production, solar energy water heating for commercial and industrial uses, and biomass production for energy and fuels) are presently still at higher costs than for wind-energy (which is, in some regions, economically competitive today) and geothermal energy. (I am not including hydropower, also a solar-driven technology, but one with limited future potential because of the ecological imperatives of protecting remaining rivers.) On the other hand, the direct use of solar energy for residential and commercial needs, such as solar heating of homes and buildings by passive architectural techniques, solar heating of domestic water and for swimming pools, and the use of daylight for commercial and retail businesses and schools, are fully cost-competitive today, yet they have not gained widespread market approval (although daylighting appears to be emerging into mainstream architecture as a result of the well-documented economic and health benefits of daylit buildings). For these, however, it is just a matter of time and further legislated "leveling of the playing field". So, to narrow this long bet, how will the production of electricity by direct radiant solar energy technologies (PV, thermal and biomass) fare in the future market? We expect with confidence that these will be fully market-competitive by 2020. This will result from a number of factors: • First, the world demand for oil will exceed supply probably during the present decade, leading to a dramatic and permanent increase in the price of oil and forever altering the economics of energy production, dragging other fossil energy resource costs along. • Second, the demand of the industrial nations for natural gas will also exceed supply and system capacity, leading to a dramatic and permanent increase in the cost of gas. • Third, international pressures on Climate Change will lead to an increase in costs for coal through carbon taxes and much more stringent emission reduction requirements. • Fourth, the value-added benefits from the use of the solar energy resources (e.g. reducing building cooling system size, first costs and operation and maintenance costs through shading and roof ventilation by PV systems, taking advantage of the economic benefits of "distributed generation" and increased system and building reliability by integrating on-site energy resources into the operation of the grid, and enhancing rural income by diversifying and stabilizing farm earnings with energy crops, just to give three examples) will become recognized market-stimuli. • And fifth, the costs of these direct solar energy technologies will continue to decline, while, as suggested above, costs for all competing energy systems will continue to increase. Accordingly, we are willing to make a long-bet that the solar energy technologies that make use of the solar energy directly will all have found their way into market acceptability and full competitiveness by 2020.