It is now more or less taken for granted that solar panels are getting cheaper and cheaper. But that didn't just happen - solar PV did not jump onto that trajectory on its own. After all, solar panels have been around for decades, but they didn't really start plunging down the cost curve until the mid- to late-2000s.
From article, (It is now more or less taken for granted that solar panels are getting cheaper and cheaper. But that didn’t just happen — solar PV did not jump onto that trajectory on its own. After all, solar panels have been around for decades, but they didn’t really start plunging down the cost curve until the mid- to late-2000s.
Germany deserves some credit for creating demand with its aggressive feed-in tariffs. President Barack Obama and the Democrats deserve some credit for creating demand with the 2009 stimulus bill. But the lion’s share of credit goes to China, which, rather than fiddling with tax breaks and credits and “market mechanisms,” invested a boatload of money into production subsidies, scaling the industry up by brute force.
China’s wild binge of solar manufacturing drove down the costs of panels, both by oversupplying the market and by hastening economies of scale. In effect, the country voluntarily took on the costs of pushing solar panels onto the “S-curve” of rapid growth, a strategy that will greatly benefit the Chinese — and the rest of humanity.
Now there’s evidence that China is in the midst of doing the same thing for another key clean-energy product: electric buses.
The rapidly growing megacity of Shenzhen, China, was choked with diesel pollution in the early 2010s. Though buses were just 0.5 percent of the city’s vehicles, they were responsible for 20 percent of the air pollution.
Shenzhen now has the worlds largest fleet of BEBs.
It got there through some cleverness — they planned out charging infrastructure and pushed manufacturers to offer lifetime warranties on batteries — but mainly through government subsidies, which covered up to half the upfront cost of the vehicles.
A similar story played out nationally over the same time frame.
In 2013, China was bopping along with 1,700 BEBs. Around then, it realized that its rapidly expanding urbanization could not continue to rely on diesel buses, lest it make an already crippling air-pollution problem even worse.
So it decided to make electric buses a thing. How? By dumping a giant pile of money on the problem, subsidizing the purchase of more than 350,000 BEBs in the following four years. Battery and hybrid electric buses went from 0.6 percent of annual bus sales in the country to 22 percent in 2017. They now constitute 17 percent of the nation’s total bus fleet.
Today, of the roughly 385,000 BEBs that BNEF estimates are operating in the world’s cities (13 percent of the global bus fleet), 99 percent — virtually all — are in China. The country has, in a few years, taken electric buses from a niche product to a decent-sized chunk of the global market. Costs are already falling.
BNEF runs the numbers — not only on upfront costs but on total cost of ownership (TCO), including operating and maintenance costs — on a range of buses with different sized batteries in different cities with different costs of diesel and electricity. I won’t go through all the details. Suffice it to say, in many cities, lifetime costs are already lower for BEBs than for diesel buses.
Basically, costs will decline, and upfront cost parity will get closer, the faster BEB demand rises. It seems to me that the shocking explosion of demand in China is good reason to believe that even BNEF’s optimistic demand forecasts are conservative — but we shall see.
Every forward-looking city that adds to BEB demand in the short-term, slipstreaming behind China’s lead, pushes demand up faster and thereby pushes costs down faster. And if early experiments prove a success, the hundreds of other growing cities in the world suffering from diesel pollution could follow suit, ahead of schedule. (India, a huge potential market for BEBs, is choking on diesel as we speak.)
I would not be at all surprised if we look back in 10 years and see clearly that China, almost single-handedly, forced BEBs onto the S-curve of accelerated development. Thanks, China!)
