As the article notes, module technology and module costs are no longer the most significant barrier to solar adoption---so if you're in software, the greatest opportunities to have significant impact are probably in tearing down the numerous _other_ barriers to widespread adoption.
To use the situation I'm most familiar with: there are hundreds of millions of people in emerging economies who live off-grid and spend tens of billions of dollars annually on expensive fuel-based energy. They'll switch to solar tomorrow if we [1] can solve the problem of upfront financing [2]. It's the same problem that SolarCity, Sunrun, et al. are tackling in the US. This problem is the kind that gets solved by, among other things, developing the same kind of enterprise-targeted mobile/web/backend/data systems familiar to any developer at a modern SaaS company (but targeting a different, unusually interesting and important market, with some unique challenges).
I have a startup in solar software, and the big thing that I don't think people here realize is that 64% of the installed cost of solar in the U.S. is soft costs (i.e. not hardware)[1]. The industry is incredibly inefficient when it comes to customer acquisition, marketing, distribution, project development, permitting, monitoring, analytics. etc. There's a huge effort by the DOE[2] and the industry itself[3] to attack soft costs with software and process improvements. The vast majority of innovation in solar over the next decade will be in software.
However, strangely, much of the startup community remains uninvolved. Why? The solar industry is expected to grow by 100-200x over the next 30-40 years[4], even when it's already a $14 billion dollar industry[5]. And yet, this week in SF, there's a huge solar conference[6], and I personally know most of the software companies there (there's only a few dozen of us). Why isn't more of the startup community coming in an "disrupting" solar software along side us? We just got $100k in free money from the DOE. We closed a seed round in less than 6 weeks. Pretty much every solar software company we know (including us) is hiring. Yet when I go to normal bay area startup events, no one there has any any clue that solar is taking off like a rocket ship and their biggest pain points right now are completely solvable with software.
Come join us. In the last few years, the solar industry reached "grid parity", which means that the unsubsidized installed cost is now cheaper than buying power from the grid. That's why this industry is the fastest growing industry in the country. This isn't some subsidy-dependent industry anymore. We work hard and we make real money (while conveniently also saving the planet).
For solar, hardware prices have decreased so much that soft costs are now the significant majority (64%)[1] of installation costs. This means that in an industry that's growing exponentially[2], there's enormous opportunity in improving efficiency with software.
Why aren't there more software startups in solar? In my experience, it's for two reasons:
1. Most entrepreneurs associate the energy sector with hardware. Hopefully, the DOE's publicity of the soft cost problem[3] in solar will help change this perception.
2. The pain points are really only visible to energy industry insiders. For my startup (UtilityAPI), the pain point we're solving was only really visible after a year of working in the industry.
Can you give a quick summary of the non-hardware problems that need solving and can be solved by an outsider to the industry with no connections? Not having any knowledge of solar, it seems like the only thing to do is have something that monitors the panels and their energy output, which as far as I know already exists. IoT solutions (like a smart washer knowing when to run) are still largely hardware driven and not feasible for bootstrapping.
Working on stuff like smart grids, demand response, inventory tracking, security, etc seem like something the big companies who own the infrastructure need to be doing. Some random entrepreneur isn't exactly in a position to make solutions for these giant companies because there's no way to have access to the information needed. And even then, selling software to giant companies is hard as shit, and if you strike out there's not exactly a lot of other customers to sell to.
It just doesn't seem like an environment conducive to entrepreneurship.
1. 1 out of 78 jobs created in the U.S. last year were solar jobs[1].
2. There are more solar employees in California than utility employees[2].
3. Soft costs (non-hardware) are 64% of the installed cost of solar[3].
4. Solar is expected to reach a load defection point (i.e. cheaper to leave the grid) in most places in the next 10-15 years[4].
Like OP's article states, this industry's hardware has gotten so good, the software in the industry hasn't kept up. So much so, in fact, that an entire startup accelerator program in the bay area, Powerhouse[5], has been created to try and attract tech entrepreneurs into the solar industry to make the next generation of solar software. My startup recently went through the program, and being a part of this industry is one of the most empowering and rewarding things I've ever done. It's one of those extremely rare instances where you can have a solid business model and a positive impact on the world.
And we need all the help it can get. Solar expected to grow 100-200x over the next 25 years[6], but it won't happen if smart people don't join in. If you're a tech entrepreneur, and want to do something that matters, please please please consider doing a startup in solar.
Just adding my voice to "you're not alone!". I've been helping build a software solution to make the indeterminacy problem of solar a somewhat predicable one [0] by working to build an API that focuses on solar radiation and PV power production anywhere in the world updating every 10-15 minutes. Software will play a huge part in address these issues with the grid and clean electricity supply, and due to the recent economics of solar and wind, this is only going to accelerate. So I have also been surprised by the lack of competition in this space given the massive industry, real need of solutions, and the scale of money involved [1].
> Maybe it's the assumption that salaries aren't competitive? Maybe it's because most business models in energy tech aren't compatible with VC? Maybe it's because you have no idea what specific problems there are that need solving? Maybe the assumption is that energy is super slow and bureaucratic?
I was convinced that this is where I wanted to take my career from reading Bret Victor's piece on a technologists role in address climate change [2], originally thinking that this will never be a huge industry but more and more after reading this piece, realizing how large the opportunity is for software and technologists. The domain is so large there are so many angles, however, I think why VCs might be largely passing on based on your last point "the assumption is that energy is super slow and bureaucratic" as it is somewhat true but there seems to be a growing appetite to 'get things done' but I think this is more recent(?).
Something else that might be seen as a risk (certainly occurred to me) is that targeting an industry with so much money, one of them might just solve this problem themselves and they are already an insider to the industry. As much money as VCs have, it's pretty hard to outspend energy giants trying who really want problem X solved.
> Because it really is too late.
This scares me as well, from what looks like a start of a biodiversity crash [3], islands starting to disappear [4] and projecting out what all this means in over the next 50-100 years, it is "too late", however, I'm always reminded how things that look bad can always get worse so it's worth trying to do what we can now.
It's funny (in a sick way) how the joke that VCs always use the tag line of "to change the world", yet these problems are staring us in the face and that same drive seems to be largely missing, maybe cause "playing a small part to make things less horrible in the future" doesn't have the same ring to it..
I work in solar, and here's my favorite climate change joke:
"They say we won't act until it's too late... Luckily, it's too late!"
Solar is no longer an experimental thing, and the industry is now focused on scaling. How can we deploy more solar faster? It's ridiculous how cheap panels have gotten, but a significant amount of the cost savings in the past few years is coming from soft cost (logistics, overhead, engineering, etc.) and balance of system (wires, fasteners, inverters, etc.) price reduction. And there's still a ton more to improve, and we really need the help of the tech community (y'all are good at scaling, after all).
Unfortunately, I always get the sense here on HN that the tech community still thinks of solar as a novelty or experimental. Why? Is it because you're still reeling from the 2008 cleantech bust? Is it because the bay area has good climate and you don't have to pay $400/mo for air conditioning in the summer?
I'd love to hear some feedback on why you're not interested in getting involved in the solar industry. What would convince you to work as a software engineer for a cleantech company? What would convince you to start a cleantech software (i.e. cleanweb) startup?
It's different. If a business has the option to do something themselves and doing so would cost them less in the long run and give them more flexibility, then doing it themselves is a competitive advantage.
If having solar panels becomes consistently cheaper than buying electricity from the grid (per megawatt), then individuals and businesses will all switch to solar panels... Especially if the business uses a lot of electricity.
The main reason that PaaS solution are popular now is because of advertising and hype. It's a bubble.
1. 1 out of 78 jobs created in the U.S. last year were solar jobs[1].
2. There are more solar employees in California than utility employees[2].
3. Soft costs (non-hardware) were recently 64% of the installed cost of solar[3].
4. Solar is expected to reach a load defection point (i.e. cheaper to leave the grid) in most places in the next 10-15 years[4].
5. Energy over the next 25 years is a potential $200 trillion opportunity[5].
Like OP's article states, this industry's hardware has gotten really cheap, but the software in the industry hasn't kept up in places. So much so, in fact, that an entire startup accelerator program in the bay area, Powerhouse[6], has been created to try and attract tech entrepreneurs into the solar industry to make the next generation of solar software. My startup recently went through the program, and being a part of this industry is one of the most empowering and rewarding things I've ever done. It's one of those extremely rare instances where you can have a solid business model and a positive impact on the world.
And we need all the help it can get. Solar expected to grow 100-200x over the next 25 years[7], but it won't happen if smart people don't join in. Smart grid, machine learning, energy storage, demand response, customer acquisition, logistics, energy efficiency, inventory tracking, IoT, security, and many more software areas are currently in the dark ages in energy. Solar, wind, nuclear, geothermal, storage, and other clean energy sources have to replace 87% of the worlds energy in the next 32 years[8]. PLEASE HELP US!
If you're a tech entrepreneur, and want to do something that matters, please please please consider doing a startup in solar or other clean energy industry. To start, if you're in the bay area, there's a hackathon next weekend around solar software[9]. I encourage you to come and learn more about solar and software in the clean energy sector.
I think the biggest impediment to widescale solar adoption is legeslative.
If you follow hackernews, you'll regularly see articles about places like Florida (and possibly Nevada if memory serves) where solar could easily power homes, but disingenuous legislative instruments and manipulativly worded ballot initiatives are housed to effectively block solar adoption.
The barrier to this isn't economics, it's the regulatory process for utilities, which are often regulated to be monopolies.
And for that matter, this sort of building of solar projects by small players has been going on for years, very successfully, under a PPA model.
In places where it's allowed for startups to build new generation resources and get compensated on the market, such as Texas' ERCOT, solar is a dominant force. The challenge is not the tech, the challenge is that too many people are doing it, draining the supply chain:
I have a solar startup that specifically focuses on automating interaction with utilities, and the excitement and ambition in the solar industry right now is off the charts. There is an unbelievable amount of momentum in favor of solar, and most solar companies see these problems as totally solvable. Hawaii is seen as a microcosm for the way the rest of the U.S. will be in 10 years or less.
Here's some of the things that solar has going for it:
1. The Governor of California recently set a mandate to reach 50% renewables by 2030[1]. We want to hit this target in ten years or less.
2. The Department of Energy's Sunshot initiative is funding solar technology and software development to drive the installed cost below $1 per watt by 2017[2]. So far, we are on track to hit these targets.
3. Batteries are getting super cheap, which will turn solar into a non-intermittent source and allow solar+storage to be just as cheap as grid prices[3]. In fact, there is actually quite a bit of worry about grid defection (we are starting to see this Hawaii)[4].
4. Wall Street is funding solar projects at a massive rate[5]. The bottleneck right now in solar is finding customers, not financiers.
5. The federal subsidy for solar is expiring in 2017, but the industry is on track to absorb the cost and continue to thrive without any subsidy[6]. This will make us much harder to kill off politically.
6. The advent of community solar will solve the renting problem, where renters be able to buy pieces of a remote solar farm since they don't own their roofs[7]. This opens up the solar market to serve the entire electricity-using population, not just the building owners.
What will be hard:
Stranded assets. Solar is growing so quickly that it will soon be able to replace the capacity of existing fossil-based generators that still have lifespan[8]. Investors in those assets will see them stranded. This will start with coal and natural gas plants over the next 10 years, but as batteries get cheaper and electric cars get more prevalent solar will start stranding oil assets[9].
This is where things get hard. Utilities are traditionally pretty bad competing (since they usually don't have to), but oil companies are another story. They are very used to ruthless competition and have a lot of experience bribing their way into governments. We are expecting very heavy push back from oil after 2025 because electric vehicles risk leaving already purchased oil in the ground.
I, for one, can't wait until we fight that fight. It is the fight that our generation will be remembered for.
P.S. The entire solar industry is hiring (including my startup).
For a small village with excess solar capacity, absolutely, a university in a nearby city could choose to negotiate a PPA with the village's solar entrepreneurs and build a datacentre there using the electricity. But if you want renewables to make a difference worldwide and go from 1% of electricity generation to say 30%, then you're going to need such applications on a global scale. Right now there simply aren't such applications, evidenced by the large differences in the price of electricity throughout the day which means there's no arbitrage opportunities available to smooth that out.
The most likely arbitrage factor will probably be the rise of electric cars which will provide a natural, decentralised, consumer-driven battery storage on a large scale. Cars are idle most of the day, e.g. when you're at work at noon and solar generates peak power, they can be programmed to charge when prices are low, and at peak times prices would be pushed down due to extra supply.
This is a huge problem that we're chipping away at.
I'm only starting to get involved in the energy group, but I know that we've had a project focused on providing off-grid solar energy (http://sharedsolar.org/), as well as some software to model the costs of grid rollout across countries such as Myanmar (http://networkplanner.modilabs.org/). The idea is that this research would later be used to back funding proposals from entities such as the World Bank.
The pitch for user adoption seems to be that it will be cheaper and eco-friendly. But I question that, for example if your solar panels break or malfunction. You will always be paying for energy outside of solar as a back up.
Could you expand on why you think SolarCity is a disappointment? To be sure, they're slow developing and rolling out their product in volume, but your last sentence points out the massive strategic disadvantage a lot of utilities might have in a few years.
To me, this seems very promising for a company developing tech that can be used, to a significant degree even through software/policy changes, to greatly reduce grid dependency. If utilities keep squeezing adopters of renewable energy by charging ridiculous connection fees, there's a significant risk they will have a nasty surprise once storage adoption is high enough.
We're remarkably close. Solar is already cheaper than oil and more geographically available. It's just not temporary as available -- that's the energy storage problem, and that's what we're working on.
It is very difficult in many respects however. The biggest problem is that public funds, bonds, and internet companies attract most of the financing. Our best strategy to avoid this is to work with group for whom it would be strategic, and also for people who are already rich (e.g. Bill Gates, Peter Thiel) and thus are able to weather the development period and take on more long term projects.
Ok I see, you're saying that hidden away in the various strata in that graph are, e.g., process inefficiencies which software can eat away. I was naively looking for something that would solve many categories at once, and being an outsider I think of solar as mostly hardware (like you said). Thanks for the answer.
To use the situation I'm most familiar with: there are hundreds of millions of people in emerging economies who live off-grid and spend tens of billions of dollars annually on expensive fuel-based energy. They'll switch to solar tomorrow if we [1] can solve the problem of upfront financing [2]. It's the same problem that SolarCity, Sunrun, et al. are tackling in the US. This problem is the kind that gets solved by, among other things, developing the same kind of enterprise-targeted mobile/web/backend/data systems familiar to any developer at a modern SaaS company (but targeting a different, unusually interesting and important market, with some unique challenges).
[1] https://careers.stackoverflow.com/company/angaza/
[2] http://www.theguardian.com/sustainable-business/selling-ener...
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