Drill, baby, drill: Birchy’s thoughts on Trump and power

Posted 23 January 2025

On the 1st of July 2007 the UK government banned smoking in pubs. This was after the proportion of adults smoking had fallen from a majority to just 20%. There is no way the government would have banned smoking in pubs in Britain in the 70s! Today EU and UK governments require EV sales mix to ramp over the next 15-20 years, after the cost of EVs has fallen to where they are now the lowest cost and best driving option and are on track to grow to become the majority of the market globally. I give Musk credit for kick-starting that, back when he was sane.

UK drives forward as biggest European electric vehicle market

The liberal bent of UK European politics pleases most in solar and the environmental movement. And so most in my industry and friend groups are feeling a world of hurt right now as Trump risks killing our planet and our industry.

But do governments really drive the results and outcomes?

There’s a role for government, an important one, mostly about making a level playing field for all, but my argument is this: Ultimately, it is the market – by which I mean private individuals doing and buying what they want from private companies that deliver innovative, better solutions – that drives the big outcomes, not the usually-retroactive visions of government.

Trump signs executive order directing US withdrawal from the Paris climate agreement - again

So amidst the executive orders leaning towards big tech and fossil fuels, let’s remember a few numerical truths on the state of the global energy market.

Solar is now the lowest cost energy on the planet. And the most abundant. When a president of 4% of the world’s population and 15% of our energy consumption has a point of view that’s worth taking note, but the majority of all new electricity generation capacity is solar and then wind, because they are the lowest cost. You can open up Alaska and try and buy Greenland, but the world’s transportation fleet is now rapidly electrifying. On current global trends (remember USA is a small % of solar and a relatively small % of energy) solar is on track to delivering over half of global energy supply this decade to 2035. Trump can’t stop that even if he banned all solar installs in this one country for 4 years in some weird attempt to create a Victorian-era petro-state. The global private energy market will decide the direction of energy mix, based on the best technology, not Trump.

And might the self-interest even serve US clean tech? The US distributed solar market fell 25% under the Democrats thanks to:

  1. DOE’s inability to fix the red-tape issue in Washington (choosing instead to throw billions at its own VC investments – under the eternal arrogance yet again from my former BP Solar alumni Jigar Shah)
  2. Newsom in Sacramento (CA used to be half the US solar market and collapsed) kneeling to the utilities and their $1bn political ‘contributions‘ and union control, that killed net metering and taxed solar installs, without solving the red-tape locally (although he CA did pass legislation to automate permitting, which will counter this when enforced).

So this isn’t a Democrat-only market.

Remember solar costs $3.40 per W in the US vs $70c to $1.50 everywhere else. There’s an above zero chance that the old ‘DOGEY’ Musk sees the opportunity to halve the cost of solar to all Americans by automating permitting. For the first time in my solar lifetime, we have Federal and Presidential power (and a tech-bro) that could, with congress, pass an act that removes the need for permitting for domestic distributed energy technology. The signs aren’t good given that solar and wind were specifically excluded in the first executive order on energy. But will greed prevail when Musk and big tech stands to win big? Back when congress worked, the FCC Communications Act of 1996 gave the right to all individuals to install satellite dishes, because the country realized the strategic importance of data (and TV). Could we see the FERC Act 2025 ensuring all customers have the right to install solar and a battery and EV charger without a local city permit? Evidence from every other country on earth says this would more than halve the cost of energy for US consumers from the most abundant source of US energy: the sun. What the hell, call that an executive order too and we’re done in January.

And on tariffs, America pays the highest price for solar panels (and installs) in the world due to import tariffs and red tape. The Biden theory was that America needs to manufacture her solar panels for jobs and economic and energy security reasons. And so Biden-Kamala continued Trump’s more politically motivated tariffs and then gave 40% tax credits to try jump start US manufacturing.

I have written in the past that having 90% of global manufacturing of solar and batteries in China is not the healthiest mix – and we should all work to diversify supply chains. Most rational Americans would agree with Biden on economic and energy security as paramount for this important new technology. But here’s why I think Bidenomics and protectionist tariffs in US clean tech is bad for America.

  1. Scale: Firstly here’s the scale today: US capacity grew an impressive 3x to 30GW with the IRA support (at billions of tax payer expense). China meanwhile doubled again to 1,000GW. That’s right the US is at 3% of Chinese panel capacity after all of Bidenomics, probably less as China is now way over 1TW. It’s mathematically not possible to get to China’s capacity in time, so being a global manufacturing superpower was and is still totally unrealistic. Peak solar installs will be around 2035 when we hit 50% of energy from solar (if our current growth rate continues), so by the time you could possibly make a dent, its all over anyway.
  2. Jobs. Only 10% of the jobs in solar are in manufacturing. Chinese robots (leveraging Australian and German technology) make the panels: 90% of the jobs in solar are domestic, not manufacturing. They are in local in-community installation first and foremost, and all the supporting industries from logistics and finance to sales and marketing. They are well paid, exciting and value-creative.
  3. Economics: The energy that solar produces is the lowest cost in the world (don’t believe me, ask the IEA and/or look at the market prices), so all that low-cost energy can power high value-add industries like AI, high-tech, med-tech, advanced manufacturing, agriculture, cities and towns where service industries thrive…that’s where the economic rent lives, not trying to replace Chinese robots making solar panels. Some quick maths tells the story. At 90% of the estimated 594GW of solar panels sold in 2024, at the current 10c/W panel price and 5% margin (China Inc is losing money due to oversupply so this is very generous), China Inc make just $2.7bn in annual profit for all its globally leading manufacturing efforts – IF the market and margins find balance. By comparison that same 535 GW of panels will generate 800TWh of electricity with a value of $120bn per year (at the global average 15c per kWh price), with $6bn of profits per year at the same 5% margin. At a 5% escalator and discount rate those panels are worth $115bn in NPV today, 50x more value in the energy produced than the power manufactured. The value is in services not manufacturing – doh.
  4. Energy security. Before the Ukraine war the EU got 26% of its primary energy from Russia (I think Germany was around 40%), importing gas to heat its homes and power industry (it’s now around 4%). The risk was that Russia can switch off that gas. And the argument is that China could switch off the supply of solar panels (and batteries and EVs). Putting aside the mutual self interest (in EU the gas never stopped flowing as Putin needed the euros as much as Europe needed the gas), solar is totally different. You cannot switch off the sun – there is no security risk. When you have the panels, you have the flow of energy. And in addition you have an inventory right now of around 100GW of solar panels sitting in warehouses around the country (high now due to oversupply, but that could easily be a policy that could work to maintain it at 3 or more years of supply, to ensure leverage in any competitive threat from China – stockpiling a couple years panels would be way more efficient than paying for 40% of every panel manufactured and another 30% for the install cost!). You can see why the republicans see the Democrat / Jigar Shah profligacy and weep. So you can control your current domestic energy supply AND you control your future installs for a few years without owning manufacturing. No energy security problem.

So could a republican administration focus on votes and lower energy costs and solve the real underlying problem in US energy?

Elon Musk

Lastly, there’s the maths of democracy and human power. Trump won 49.8% of the popular vote, 1.5% more than Kamala’s 48.3% and not the majority of Americans. That’s not a landslide, that’s democracy with mostly rational people on all sides seeing the world through their own eyes – all with the right to elect their leader. 2% of the world voted for Trump, 100% vote every day for how they get their energy. Musk with all his wealth and power owns just 0.1% of global net worth.

We, the people, still have the power.

Andrew Birch (“Birchy”)
Chief Executive Officer, OpenSolar Executive Team