Think Solar

There is only one renewable energy source capable of providing the power this planet needs on a scale that will meaningfully reduce CO2 emissions over the coming century: Solar power.

To many, this statement may seem a bit out-of-step with current market trends. The current rage is of course wind power. Companies across the globe have proven that wind turbines can deliver energy at a cost competitive to fossil fuels, providing a nice supplement of green energy to the power grid.

But here’s the problem with wind power: Current global energy consumption is about 15 terawatts (TW) annually and growing. But scientists estimate that the maximum practical electrical generation potential of wind for the entire planet is just 2-4 TW. Moreover—at 1.5 megawatts per windmill—you would need a whole lot of windmills to get anywhere close to that amount of capacity.

To put it in perspective, to meet just one fifth of our current global energy demand, we would literally need to have turbines covering 27% of the planet’s land area. If you think about that for a second, it’s actually quite a frightening concept. No matter where you went, you would see windmills, transforming them into a serious eye sore. So, windmills are great, but they will always be a secondary source of our planet’s energy needs.

All other renewables—hydroelectric, geothermal, ocean (tides), biomass—suffer similar constraints, with the exception of solar. Our planet receives 1.2×105 TW of solar energy annually (an astronomical figure). Practically, we can only use about 600 TW of it, but that is still 40 times global energy consumption—plenty. Moreover, we wouldn’t have to cover the entire planet with solar panels to get it.

The staggering amount solar energy the earth receives makes it too compelling an opportunity to ignore; over the next century someone is going to tap into solar in a big way, it’s just a matter of who and when.

Spotting this trend, the geniuses at Goldman Sachs have started buying up as much of sunny Southern California as they can get their hands on.

But while the value of California desert real-estate has already skyrocketed from USD 500 per acre to upwards of USD 10,000 per acre, the Tibetan Plateau—which combines high altitude and sunny skies—is a relatively untapped wilderness for solar prospectors.

Moreover, China is already an epicenter for solar technology. It is the largest consumer of solar power, with solar water heaters common across the country, and it is home to some of the largest global solar players, including famed Suntech. Because the industry is relatively immature, there will be many technological developments, new patents and acquisitions over the coming decade, and much of that activity will probably occur in China.

Goldman isn’t sitting back in China either; yesterday it was reported that Goldman has taken a major position in Himin Solar Energy Group, one of China’s largest solar players. Clearly the investment bank is betting on solar, but with so much sustainable energy out there, other people should take note and start getting a piece of the multi-trillion dollar pie.

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