INNOBLOG

Environmentalists, high-tech entrepreneurs, and political opponents of oil-rich nations have long dreamed of the disruptive potential of renewable, clean, and abundant solar power. Impelled by rising global energy prices, an increasing understanding of the geopolitical instability wrought by petrodollars, the initial effects of climate change initiatives such as the Kyoto Protocol, and advances in photovoltaic technology, the solar market is finally taking off. Venture capitalists are pouring money in, Wall St. has sent shares of solar stocks skyward (see SunTech Power, SunPower, Evergreen Solar, Energy Conversion Devices) and governments (Germany, California and more) are committing billions of dollars of public money to solar projects. This trend is observable as far north as grey, chilly Boston, where my local supermarket has installed solar panels on its roof. This is certainly a recipe for significant market growth, but is it a disruptive threat to the global energy industry? Despite massive growth, the fact remains that solar is still expensive and inconvenient. It costs 5-10x as much as standard electricity in the US and requires special installation of delicate, clunky, and often-ugly modules on rooftops or in open spaces. The most optimistic forecasts foresee a minor slice of the world?s energy coming from photovoltaics over the next few decades, up from the current figure of .01%. And at the end of the day, solar power is competing against some of the richest and most powerful companies in the world. That said, solar does meet certain disruptive criteria: the technology has developed in niche markets that value unconventional performance metrics (spaceships, remote villages, highway signs, eco-conscious architecture, hand-held calculators, and, lately, countries looking to minimize their carbon tax bill); in its largest potential market ? remote unelectrified regions ? solar power will compete against nonconsumption; and incumbent energy companies have long dismissed solar as too small of an opportunity for their consideration. So keep faith, environmentalists, high-tech entrepreneurs, and political opponents of oil-rich nations; disrupting the world?s biggest market takes time. Even if solar is not an imminent threat to the oil companies and power plants, it may well be on the verge of disrupting specific niches like roofing tiles, window glass, and batteries in which it can provide "good enough" performance. Next-generation thin-film photovoltaics integrated into building materials will enable structures to automatically and passively generate energy, and building photovoltaic capability into portable electronics (or rechargers of portable electronics) and textiles such as computer cases, clothes, and military tents will obviate the most expensive form of electricity generation in the world ? conventional batteries. This is the classic Disruptive Innovation pattern described in The Innovators? Dilemma: as disruptive technologies gain footholds in more and more niche markets, opportunities for innovation multiply. The ensuing tide of sustaining innovations will make solar power increasingly competitive with incumbent forms of energy generation in the years to come. Solar is marching upmarket, promising widespread disruption.