The Year the Sun Powers the Planet

Yesterday, in my essay, “When Nuclear Energy Lights Every Home on Earth” I talked about nuclear fusion — the sun’s own way of creating heat.

Specifically, we talked about how a fusion plant could make clean, safe and abundant power on a commercial level by 2050. Obviously, that’s a long way off… so what energy source is closer to fruition?

Too many for one issue, that’s for sure!

That’s a good thing, mind you. The future of energy is a mixed bag. But making a beeline straight for the holy grail, i.e., nuclear fusion energy, would translate into too many opportunity costs.

Kurzweil’s prediction is by the year 2027, if we use 1/10,000th of the light that hits the Earth, we could satisfy all our current energy needs.

In short, too much ecological and economic value is at stake. We must diversify.

Today, we review from the year 2027, when solar power is set to hit prime time.

Solar has been the source of much debate. Government disasters like Solyndra are the first that come to mind. But that doesn’t mean investors and tech lovers should discount the great value of solar energy.

Some of the world’s biggest companies, including Big Oil, have already begun to diversify into solar. They see the writing on the wall, at least for the upcoming decades.

According to the Solar Means Business Report released earlier this month, Wal-Mart is America’s commercial solar leader for the second year in a row, with 89 megawatts (MW) installed at 215 locations.

Other companies on the top 25 list include:

Costco, Kohl’s, Apple, IKEA, Macy’s, Johnson & Johnson, McGraw Hill, Staples, Campbell’s Soup, U.S. Foods, Bed Bath & Beyond, Kaiser Permanente, Volkswagen, Walgreens, Target, Safeway, FedEx, Intel, L’OREAL, General Motors, Toys R Us, White Rose Foods, Toyota, and Dow Jones & Co.

Add up the math and you get a 40% increase in solar capacity since a little over a year ago.

Amazingly, that is right on target with one of solar’s biggest believers: inventor, author and businessman Ray Kurzweil.

Kurzweil is not into speculation by the way. He correctly predicted the year a computer would beat a human in chess. He also predicted that a worldwide communications network would emerge in the mid-1990s. Now, he’s got his first employment ever at Google, working with the founders. Up until recently, he’s only worked for himself, as business owner.

So what’s his thoughts on solar?

Kurzweil’s prediction is by the year 2027, if we use 1/10,000th of the light that hits the Earth, we could satisfy all our current energy needs. Yep.

“Now wait a minute,” you might be thinking.

“Solar makes up only 1% of the world’s energy use!” I can hear informed reviewers interjecting.

How on earth could 100% of our energy needs be met with solar in a mere 13-14 years?

Let’s take a closer look…

According to Kurzweil’s many interviews on the subject, the exponential trend of solar energy can be compared to the Human Genome Project.

The Human Genome Project took about 15 years to complete. When it was 7 ½ years through, the skeptics were calling it a failure. After all, it was only 1% complete.

“Information technology is really growing exponentially; that’s really my main thesis,” says Kurzweil. “Our intuition about the future is not exponential. It’s linear. People think things will go at the current pace — 1, 2, 3, 4, 5 and 30 steps later, you’re at 30. The reality of information tech… is it goes exponentially… At step 30, you’re at a billion.”

In other words, 1% completion halfway through the Human Genome Project was right on schedule. One percent turned into 2%, 4%, 16% and so on… and after 15 years, the Human Genome Project was complete.

Solar capacity is following the same, smooth exponential curve. It’s doubled every two years for the past 20 years. And while that may be a small doubling, it can turn into an avalanche. If solar continues to double every 2 years, 7 more times, it will meet 100 percent of the world’s energy needs. That’s 14 years from now… which is 2027.

To use an even more matured example, the same exponential trend has been observed with computer processing power, which has doubled every 2 years for almost 50 years. That’s why your smart phone handedly beats the building-sized “supercomputers” that first appeared in several campuses and labs across the country. That trend will continue to bolster computer-dependent technologies.

Come to think of it, the idea of size and space brings up something else about solar energy: The availability of space. In other words, many doubters will look to land availability as an issue.

First, there’s Kurzweil’s counterargument: Deserts.

By putting solar in only a fraction of the world’s deserts, we can have these panels out of the way, in unused, cheap real estate, where the heat of the sun is scalding hot.

Second, there’s the solar roadways project. This project’s mission is to replace expensive, petroleum-based asphalt in roadways with “intelligent” glass that absorbs sunlight and heat.

This glass has the strength of steel, pays for itself and acts as an electrical grid that runs from home to home, city to city… You can check out a four minute video of the project right here:

Might as well add this idea to the list of smart city capabilities.

In lieu of a lengthy analysis, I’ll simply give you what is by far my favorite stock in this space: SolarCity (SCTY). Although the company is young, with its one-year IPO anniversary this December, I’ve never seen a solar player with such a viable long-term business model.

Agree? Disagree? Write in with your opinion, right here: tomorrowinreview@agorafinancial.com

Tomorrow, we’re going show you a kind of solar power that nobody is talking about. And staying true to a Tomorrow in Review theme, this new form of solar mimics the wisdom that nature has already worked so hard to learn. We’ll see you then!

Best,

Josh Grasmick
for The Daily Reckoning

Ed. Note: In today’s email edition of Tomorrow in Review, Josh gave his readers another chance to profit from the next great tech boom of the 21st century. If you didn’t see it, there’s still time for you to get Josh’s next investment idea. Sign up for the free Tomorrow in Review email edition, right here, and make sure you never miss another opportunity at life-saving gains.