Wednesday, October 19, 2011

Top Electric CEO Says Solar Is As Big As Shale

Sometimes it is the message.  Sometimes it is the messenger.  Solar boosters say  that solar will soon destroy the central station electricity business model but are largely ignored.

No solar activist or booster, David Crane, the CEO of NRG,  gave yesterday a stunning talk at the Virginia Governor's Energy Conference in Richmond.  This top electricity executive said that distributed solar will soon  make central station power plants a declining business.  Crane becomes the first top electricity executive to my knowledge to say the solar revolution is here and now.

NRG is a big electricity generator that owns a nuclear plant and recently wrote off over $300 million when it cancelled development of another nuclear unit in Texas. Crane said that he personally loves nuclear and wished that the cost of new nuclear were not prohibitive.  He is not a solar activist.

Instead Crane is a chief executive who has seen solar power prices plummet to a point where 3 months ago he realized that distributed solar was going to creatively destroy the old central station electricity industry. Crane has his hands personally on the fast-moving solar industry, because NRG is building utility scale solar power facilities in California.

Yet Crane knows that solar's power to transform is that it can be built at homes and businesses and the prices to do so are plummeting. Crane agreed that solar on rooftops or at the business site is going to turn the electric industry on its head and very soon. 

After his talk, I told Crane that solar was going to be as big as shale, and he quickly agreed.  See the very first posting on this blog when I expressed this view.  In terms of the electric industry, solar is indeed the more disruptive technology, since it ends the dominance of the central station power plant.

Just when the Solyndra bankruptcy is being used as a political football to attack solar and green jobs, the truth of solar technology's enormous progress is dawning in the top corporate boardrooms.  Electricity companies without a solar business strategy are doomed to falling sales and revenues.  NRG, however, is a company that sees the opportunity and is transforming itself to profit from the industry transformation ahead.


  1. John: I see the Solyndra issue differently (I am not a politician). Legitimate questions are being raised about the process by which this loan guarantee was established and about government's role in advancing these types of technologies. This "investment" was significant and was made at a time when there were enough questions about whether Solyndra could continue as a going-concern. I see those questions as fundamentally different than questioning the importance of renewable energy technologies to our economy.

  2. You make a fair point. All government spending should be accountable. The Solyndra loan guarantees were part of a portfolio of guarantees made under the 2006 program. Most of the loans made in the portfolio are performing well. That point has been totally lost.

    A discussion of loan guarantees can be had without turning it into a broad attack on renewables or nuclear plants, none of which are possible without federal loan guarantees. But politics pushes the conversation toward political scoring.

    Crane spoke about Solyndra yesterday. He pointed out that PV Manufacturing is now "Darwinian" or intensely competitive. He said NRG and others building solar benefit from that competition, because pricing to them has fallen a gret deal and is falling every month.