The Biden administration has actively advocated their intent to reduce carbon emissions. Earlier this year, the White House announced an initiative to have at least 50% of all cars on the road emission-free by 2030 as a part of the greater goal of reducing carbon emissions by 50% from 2005's levels.
And now, more pieces of the grand green-energy puzzle are slowly being released. On Sept. 8, 2021, the U.S. Department of Energy Solar Energy Technologies Office (SETO) and the National Renewable Energy Laboratory (NREL) released a Solar Futures Study stating that as much as 40% of the energy being produced in the U.S. could be supplied by solar energy by 2035.
Can solar really eclipse the energy market?
Thanks to lowered costs for producing solar panel technology, the once-challenging process of operating on clean energy at scale is now becoming a major possibility. But getting there won't be easy. To meet the 40% solar energy goal, our country would need to add 30 gigawatts between now and 2025 and then ramp up that number to 60 gigawatts every year from 2025 to 2030.
For those who aren't well versed in the world of gigawatts and solar energy, roughly 1 gigawatt can power around 300,000 homes. So, 30 gigawatts could power about 9 million homes. Right now, the U.S. produces around 15.4 gigawatts of solar. To reach 40% by 2035, we'd need to produce 4 times our current generation capacities. That's a lot of power. It's not an unreachable goal, but it will require a lot of effort and incentives to execute on a mass scale.
Solar is already No. 1 in new-energy-generation capacity, soaring above wind, natural gas, battery storage, and nuclear power. So, in many ways, it's already outshining other clean energy sources. The major hurdle here is ramping up production for national scale. In addition to the general solar energy production, the transmission of solar energy -- such as storage, microgrids, and forecasting -- would also need to be expanded and improved.
Money flows where the sun goes
It's estimated that by 2050, around 0.5% of the U.S.'s surface area would be needed to satisfy solar's ground area requirements. Currently, Texas (28%), Nevada (9%), California (9%), and North Carolina (7%) hold the greatest numbers of photovoltaic (PV) systems in operation. Southern states operating in the U.S.'s Sun Belt region hold the greatest opportunity for future developments because of their ideal conditions for solar power.
But that doesn't mean opportunities can't be found elsewhere. Additional land for solar generation could be found by adding PV systems on contaminated lands unsuitable for other development, on top of existing buildings through rooftop solar panels, as part of new developments -- like Elon Musk's solar subdivision -- or in addition to suitable lands in ideal solar areas. This means investors who currently own developed or undeveloped land could create an additional revenue stream by adding solar panels to the grid.
The administration hasn't outlined any specific tax incentives or programs promoting the creation of solar energy. Still, there's a good chance something will be devised to support the success of this initiative. Tax incentive programs like opportunity zones have been a proven way to funnel investor dollars into various markets or asset classes and would, undoubtedly, be beneficial here as well if they decide to create one.
The Millionacres bottom line
Decarbonization, the ultimate goal in this effort, is a worthwhile objective that would benefit not just our country but also the world. Reducing carbon emissions could help reverse some of the impacts from climate change, leading to less frequent or intense environmental disasters such as fires, hurricanes, flooding, or freezes.
If the plan goes to model, the increase in solar energy production could employ around 500,000 to 1.5 million people by 2035. That could result in net savings of $1.7 trillion compared to traditional fossil fuel-operated energy creation during that same period. Right now, this is something for investors to watch carefully.
Land use in highly sought areas for energy production and opportunities to add solar panels to existing projects could be profitable investment opportunities. But only time will tell how this will play out.