solar panel
Image by Marufish

Solar power has been getting a lot of attention lately as policymakers turn to new sources of energy. For several years, the federal, state, and local levels of government have all used subsidies and tax credits to try to grow the solar power industry. Recently, however, a new trend has emerged. The solar panel industry is continuing to add jobs and grow, while old energy industries like coal have begun to shrink. There are several reasons for this, not all having to do with the rise of solar, but it is a notable change because it could indicate a permanent shift in the power balance of the energy sector.

The first thing to know is that solar power generation and research needs a lot of different skillsets. At its most basic, this industry needs people who can install solar power in homes and businesses and engineers who can operate solar panel arrays to generate electricity. That alone includes a wide variety of skills in excess of what, for example, the coal industry requires, because there is no need to install equipment onsite for a customer to use coal power. On top of that, though, solar power also needs innovation and development. There are many aspects of solar power generation that can improve, from the storage capacity of batteries to the generation efficiency of the panels themselves. That research requires top minds at work to advance.

At the same time, for multiple reasons energy production in older industries is tailing off. Coal is the most obvious example. On the one hand, more and more customers are considering solar to take advantage of tax credits and other incentives. On the other hand, coal itself is under attack from multiple other fronts. First of all, regulators are passing stricter anti-pollution requirements every year, which puts pressure on coal mines to lower their production or shut down to be in compliance. Not all coal is created equal: coal from some regions of the nation burns cleaner than from other regions, so mines in the areas that make dirtier coal are more likely to close. In addition to that, natural gas is undergoing a boom that cuts into coal’s profits. Many power plants and other consumers are choosing the cheaper and more plentiful natural gas over coal, such as with the natural gas company Direct Energy in Alberta. These factors combined means that supply for coal is drying up just as demand is falling, putting a squeeze on the industry.

Right now, it’s too early to tell if solar can completely replace coal, but that is certainly the direction that things are moving. Solar has some technological advantages in that it is renewable and uses a generation technique that has a higher potential due to future increases in efficiency. However, solar hasn’t arrived yet. It still has problems with storage when the sun is not strong, such as at night and during prolonged cloud cover. In addition, transmission technology is very inefficient. This is a problem because there are a few parts of the country, like the desert of the Southwest, that are perfect for solar power generation, but it is essentially impossible to transport that energy to other parts of the nation.

It remains to be seen how hard it will be to overcome these challenges. In the meantime, solar continues to grow and coal shrinks, so the balance of power is in solar’s favor. Don’t be surprised if the trend continues and coal shrinks until it is steadily less relevant for power.