Is the answer to solar profitability mainly better capital and operational efficiency?

I was surprised reading McKinsey’s, How solar energy can (finally) create value, that their view is the next critical step for the solar industry is not so much technical as economic. I agree with their points on the economics and there is some hard work to do there to make the solar industry reliably profitable, but I think the areas that will have most impact are technological ones.

Just as in many other areas of renewable energy, we are on the cusp of some significant technology advances in utility-scale solar. Energy storage is one that will fundamentally change the economics of solar projects. Some of these technologies may not be ready in the next year or two, but I would be surprised if in three to five years we don’t see solar and storage at utility-scale as the norm.

Solar cell efficiency records are regularly being broken and these new technologies will soon flow into mass production. There is also the co-location of solar with wind that is happening here that is a very good use of the grid connection and the resources already used in project development.

Whilst I think it is always a good idea to not become too optimistic on technological advances, I think there is enough evidence now that we are in for a significant shift in utility-scale solar – and I look forward to those exciting times.

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