Tag Archives: batteries

Warren Buffett goes Solar

The world is on the tipping point of switching to 100% solar.

This will be another huge disruption, on a similar scale to electric cars replacing gas cars. Warren Buffett is not going to miss this party.

“Warren Buffett Has Started The Biggest Energy Revolution”

Solar is now CHEAPER than fossil fuel energy.

“In most parts of the world today, solar is the cheapest source of new power generation. So why hasn’t the world switched the plug to solar just yet?”

The only thing holding back the world from going 100% solar is the battery.  “MIT researchers estimated battery costs must sink to $20 per megawatt hour if we ever want to switch 100% to solar power.”

Buffett is investing in a solar farm that will store electricity in batteries for $13 per megawatt hour (MWh). That’s $7 less than MIT’s threshold. Combined with generation, the solar farm’s electricity will cost $33 per MWh. That’s $37 less than the $70 for natural gas.

Massive change is coming.

People all over the world are going to switch to solar, not just to make the world greener, but to make their wallets greener.

“The best news for investors, we are still in the early innings of this energy revolution. While the Invesco Solar ETF rallied 51% last year, it’s still down 88% from its highs…In the grand scheme of things, it has barely budged. With so much room for growth, solar stocks could easily double, triple, quadruple, or better in the coming years.”

There are many ways to invest in solar. There are many panel manufacturers, installation companies, financiers of solar installations, solar farm companies such as Warren Buffett’s, etc. But there are mainly just two inverter manufacturers: Enphase (which I own) and SolarEdge. This is similar to smartphones where there are mainly just two smartphone makers, Apple and Samsung. Another way to play solar is with Tesla, which is making batteries for utility companies and solar roofs.

Future of Transportation

A couple of years ago, I watched a video of Tony Seba. He explained the coming disruption of Energy and Transportation. It was one of the best videos I’ve seen in one to two decades.

There is an update to this. He recently gave the presentation again:

This is a must-watch, as it explains huge disruptions that are happening. According Tony Seba, people will buy solar and electric cars, not to be green for the environment, but to get more green into their wallets, because solar will soon be cheaper than the grid and electric cars are already cheaper than gas cars (it’s just that most people don’t know this yet).

This is a technology, not green, disruption. Many companies related to gas cars and oil are doing to be destroyed. On the other side, millions of people will benefit greatly. According to Tony Seba, there will be:

  • 1.2 million fewer deaths from car accidents around the world
  • 20-40 million fewer injuries or hospitalizations
  • Millions of hours freed up from commuting
  • $1 trillion of savings for U.S. households
  • $1 trillion of increased productivity
  • Less pollution

Cities will free up huge amounts of land, which can increase the number of parks and homes, which can reduce the cost of housing. There will be increased mobility for elderly, disabled, young and poor. New businesses, enabled by autonomous electric vehicles, will be spawned.

He explained that the cost of batteries and solar have been dropping for many years.  If they keep dropping, there are going to be major disruptions.  Tesla Energy can possibly disrupt the entire grid.  They are starting with possibly replacing “peaker power plants”.  Tesla showed that they can replace Australia’s utility company’s peaker power plant.  It is not a success because it is green.  It is a success because it will save the utility company a lot of money.

One benefit that Tony Seba did not mention is the reduced demand for Middle East oil, which has geo-political implications. This means fewer wars. It also means that Saudi Arabia will have less money to fund and push their ideology to the rest of the world, which they have done for many years.

From an investment perspective, it also means that you should be cautious about investing in any country that makes a significant percentage of their revenue from oil. This includes Canada, Norway and to a lessor degree, the U.S.