3 reasons to transition to sustainable technology

The vast majority of new energy capacity installed in the United States this year will be sustainable, primarily solar and storage. This is not a surprise given the low cost of installing new equipment relative to non-sustainable sources—as well as the environmental imperative that sometimes results in climate policy favorable to renewables.

The twin economic and environmental motivations to switch to sustainable energy are powerful on their own. But there are three other less discussed benefits to sustainable energy which further the argument to expedite the transition.

#1 Technical debt

With or without state intervention, sustainable technologies like batteries, solar, heat pumps, and electric motors will be dominant within two decades. The reason is tautological: Sustainable technology is less wasteful.

Let’s compare gas and electric cars. Gasoline is energy intensive to drill, refine, and transport to a station before it can be pumped into a vehicle. In fact, more than 20% of a car’s carbon cost can be attributed to “well-to-tank” emissions. Once it’s in your car, upwards of 70% of energy released from the fuel is lost to heat. All in all, more than 85% of the energy it takes to power an internal combustion engine does not propel the vehicle forward.

Compare the well-to-tank emissions of gasoline to “line loss” (the amount of electric energy lost in transit from a generation facility to its point of use), which averages about 5% in the United States. Once charged, an EV’s battery propels the car forward with 87% efficiency.

In other words, electric cars can go 550% further with the same amount of energy as a gas car. These dramatic improvements are common in the new generation of sustainable technologies.

A country doing nothing to hasten adoption of advanced technologies will eventually be laden with obsolete infrastructure while its competitors bound ahead. It’s is easier to evolve proven technologies, to do so right before a step change creates a massive liability.

#2 Decentralization

Sustainable energy sources are “distributed,” meaning that they are less dependent on centralized nodes like large power plants. Small wind and solar farms that generate power close to where it is consumed increase economic resilience compared to legacy power generation.

A centralized system is more unwieldy and expensive. It requires miles of electrical line that are vulnerable to damage.

With notable exceptions, wealthy countries can manage this risk. But globally, power outages from centralized systems are chronic, and worsen with higher and more volatile peak demand due to climate change.

In my work financing solar projects across the Global South via Renewables.org, this is doubly important. In regions where we support solar construction, the power grids are so unstable that blackouts are a near daily occurrence, making it difficult for industrial economies there to form efficiently. Modest commercial solar installations not only save money, they allow business to continue when blackouts occur.

By decentralizing energy production, distributed generation reduces risk of outages, costs, and complexity inherent to a massive regional gird. This creates stability for existing systems and reduces the capital intensity of new ones in emerging markets. Both in economically developed countries, and in regions like the ones we address at Renewables.org, distributed energy has reverberating positive effects.

#3 Supply chain stability

Anti-solar advocates have a mantra that solar is “intermittent”—it only creates energy in the daytime, and with seasonal and weather variations. Conversely, they say nuclear, coal, and gas power plants provide “base load,” meaning that they can generate the same amount of power in all conditions.

This is supposedly the Achilles heel of sustainable power since society couldn’t endure a turbulent power grid. Does this rhetoric match reality?

Building and maintaining non-renewable power stations rely on the handful of multinational engineering conglomerates capable of designing, financing, and operating them. This concentration creates a silent risk that can cause shocks to international energy systems with a foundation of supposedly base load energy.

For example, improperly engineered concrete used in most of France’s nuclear reactors forced them to close 32 of their 56 facilities for most of 2022. Prices jumped as France went from a net energy exporter to an importer.

In this context, it is easy to see how empty the promise of base load really is. The large energy generation facilities’ complexity, plus volatility in commodities markets, mean the predictable intermittency of solar is replaced by macro risks that can send entire economies into a tailspin.

Solar requires only one input, sunlight, which is free and abundant. Solar generation facilities are built by an ecosystem of module manufacturers, operators, construction companies, and other suppliers. Systemic issues like supply chain or engineering flaws are unlikely—which accounts for its success among institutional investors and policy circles.

As economies acclimate to the constraints of solar and renewables, the idea of base load will become less relevant. Demand for electricity will orient around peak solar production hours, while batteries will ease supply strain in off-peak hours. This system will be cheaper than one dependent on so-called polluting base load energy, and it will eliminate the supply risks that centralized systems create.

Don’t delay the inevitable

Transitioning from an incumbent system is often ill advised and cost prohibitive. But at a certain point the advantages of a new paradigm hits a critical mass where its advantages become so great that delay is certain to cause competitive disadvantages that are difficult to recover from.

Countries and organizations that adopt sustainable technology will experience a virtuous cycle—efficiency, stability, reduced geopolitical risks, and a more predictable energy supply. Conversely, those who forestall the transition by appeasing advocates legacy energy infrastructure will find themselves saddled with a more fragile, more expensive, and riskier system.

Lassor Feasley is CEO of Renewables.org