The Revolution Will Not Be Centralized
Distributed solar power is rewiring the way countries think about the grid
Once we hit the scorching, muggy days of mid-to-late summer, I find myself repeating a line from the song Trains by the band Porcupine Tree. “Always the summers are slipping away…” sings front man Steven Wilson as he hammers the main guitar riff and carries the listener through the bridge to the next portion of the song.
In recent years, however, I’ve begun wondering whether the summer is slipping away or whether the interminable heat and humidity of summer has simply melted my clock à la Salvador Dali and brought the passing of summer to a sluggish crawl.
Surging Solar: The Market’s Meteoric Rise
As much as we might like to curse the sun as it brings lengthy periods of 104 degree Fahrenheit heat to India or blisteringly hot and muggy days to the U.S. Mid-Atlantic, it has become an increasingly important source of electricity for people around the world. As the Economist writes:
Over the course of 2023 the world’s solar cells, their panels currently covering less than 10,000 square kilometers, produced about 1,600 terawatt-hours of energy (a terawatt, or 1tw, is a trillion watts). That represented about 6% of the electricity generated world wide, and just over 1% of the world’s primary-energy use.
While 6% of electricity generated and 1% of primary-energy use may seem insignificant in the grand scheme of things, the exponential growth of the solar industry, solar installations, and electricity produced by solar power is astounding. The Economist continues:
Michael Liebreich, a veteran analyst of clean-energy technology and economics, puts it this way: in 2004, it took the world a whole year to install a gigawatt of solar-power capacity (1gw is a billion watts, or a thousandth of a terawatt); in 2010, it took a month; in 2016, a week. In 2023 there were single days which saw a gigawatt of installation worldwide.
This rapid, exponential build out of residential and commercial solar installations around the world is incredible no matter how you slice it. For renewable energy advocates, this is welcome news, heralding a new era where clean electricity produced from renewable resources is cheap, abundant, and accessible. For those more interested in economic growth, while China’s dominance of the solar market is worrying for global leaders, producing, selling, and building large solar installations represents a powerful economic opportunity.
As in any time of disruption, however, new products and processes introduce new challenges. What’s interesting is how these challenges have taken on different shapes depending on the country and the state of its grid.
Solar Struggles
Countries with well-developed infrastructure and electricity grid systems enjoy consistent and reliable electricity that have emerged from decades of concentrated investment and planning. That being said, as the size and complexity of the grid has grown, it has become challenging to continue adding new power generating sources to the existing grid system.
In the United States, for example, the Department of Energy’s Lawrence Berkeley National Laboratory found that there were over 2.6 terawatts of new power and storage projects trying to connect to the grid at the end of 2023. This is a huge problem for governments who are looking to hit renewable energy goals as well as renewable energy companies and investors who are trying to build more capacity to connect to the grid.

This is a complicated issue, but, as the International Energy Agency has found, there are a number of factors driving these long wait times including:
Record levels of investment in solar energy technology and generating capacity
Comparative lack of investment in the required transmission and distribution infrastructure
Overall policy uncertainty and delayed policy responses
Policy makers are aware of these issues and, rather than letting the summer slip away, are releasing rules such as FERC Order 2023 - a rule that seeks to simplify the approval process for evaluating and adding new generating capacity to the grid.
Wide Open Spaces
While countries with expansive, well-developed utility grids are grappling with the need to connect an ever-growing list of new solar plants to their existing grid, places with less developed grid systems have their own unique set of challenges with which to contend.
South Africa, for example, is a country that has struggled with blackouts in recent years, with the state-run utility Eskom often having to shut off electricity to residents and industrial sites to handle repairs or other unforeseen issues. In places where residents and business cannot rely on the utility to consistently provide electricity, consumers have been turning to distributed renewable energy (otherwise known as DRE - think solar and wind power) to provide electricity. Whether it be a full roof top array that can power a home or a smaller panel capable of charging a single smart phone, distributed renewable energy sources provide the local solution when large scale grids aren’t up to the task.
India too has realized the benefits that low cost distributed solar can bring to residents, industry, and agriculture. In India’s case, distributed solar will help support its various distribution companies - many of which are struggling as rising power procurement costs must continually be matched by generous public subsidies provided by provincial authorities. DRE will help lower costs for rate payers, subsidy providers, and distribution companies, thereby freeing up additional funds to apply to grid expansion and modernization efforts.
No Single Path
As the above indicates, the rapid speed at which solar panels are being produced and installed around the world is having a dramatic impact on the greenhouse gases we emit while also disrupting the energy status quo that has existed for decades. What strikes me are the differing opportunities and challenges that lie ahead for countries around the globe.
For developed countries such as the U.S., the model of having a robust, integrated set of grid operators capable of delivering electricity has provided enormous economic benefits while assuring that people and businesses alike have easy, affordable, and reliable access to electricity. Nevertheless, that model (which includes issues such as permitting, siting, and building) was created when the main options for electricity were coal, gas, or hydropower. The need to transition to renewables as well as the unique characteristics of renewable energy (intermittency being paramount) means that certain elements such as reforming the permitting process are critical for continued carbon mitigation.
In countries such as India, Nigeria, and Kenya where there is significantly less centralization and build out of electricity grid infrastructure, the challenge is first and foremost in ensuring that all people have access to electricity - whether through DRE or a grid connection. The spread of DRE may threaten existing utility operators, but there is an enormous opportunity to explore new, decentralized modes of electricity generation. As more people are given access to reliable electricity, these countries will likely need to find unique ways to blend distributed energy resources with grid-provided electricity to ensure reliability.
Key Takeaways
The Road Less Traveled
As I wrote in June of last year, there is not necessarily one single playbook for a successful energy transition. At that time, I was discussing the electrification and de-carbonization of transportation, but this concept can just as easily apply to the booming solar industry and the challenges it brings for grid operators.
Over the coming months and years, countries with well-developed grid systems must continue to streamline the permitting and approval process to ensure that the rapidly-proliferating new renewable energy generation plants are able to hook up to the grid. In countries with less grid infrastructure, DRE represents a unique path forward that may obviate the need for large-scale country-wide grid systems. In both cases, solar power represents a disruptive, modernizing force that is compelling people, businesses, and governments to react.
Electrifying Earnings
It’s easy to take reliable electricity for granted when you grow up in a place where light switches, outlets, and appliances are always on, always connected, and always working as intended. Obviously, not having working lights or air conditioning is tough when it’s night time or extremely hot (as the Northern Hemisphere is now), but the gross economic impact of unreliable electricity should not be underestimated.
In Africa, for example, 43% of the continent’s people cannot readily access electricity. More than 3/4 of African firms experience electricity outages, with 2/5 saying that intermittent electricity is the main constraint on growth and operations. One academic paper even found that, if sub-Saharan African countries had power as reliable as South Africa’s from 1995 - 2007, then the continent’s rate of real GDP growth per person would have been more than double.
This type of evidence goes to show that electricity is much more than a nice-to-have. It can save lives by providing air conditioning as weather gets increasingly hot and humid and it can also drive real economic growth and benefits for individuals, communities, countries, and continents when delivered reliably.