Almost three years ago, SkyPower’s President and Chief Executive Officer, Kerry Adler, authored a blog post for the World Bank citing, through behavioral economics, the manner in which carbon pricing incentivizes clean energy innovation. He went on to state, in fact, that SkyPower “strongly supports any mechanism that encourages the generation or adoption of clean, renewable energy and dramatically reduces carbon emissions.”
Today, this statement still holds true and serves as a shining example that not only can financial taxes and penalties be helpful tools in the fight against climate change, but also that dramatic cost reductions of solar photovoltaic (PV) energy, which have been experienced globally, have given rise to its adoption based on a time-tested and proven incentive: increased profitability.
Carbon pricing is a critical mechanism that both incentivizes and mandates a shift to a cleaner economy. Whether operationalized using a direct price on carbon, a cap-and-trade system, or another form of economic incentive, carbon pricing is an essential component for global climate action. Not only does it work, it generates economic, social and environmental benefits along the way.
However, as critical as carbon pricing is to climate action, we also feel the world is witnessing a tremendous growth curve for solar energy – a trajectory so significant that it will dramatically reduce the requirement for fossil fuel energy sources in the next decade.
Using the most simplistic form of math: if solar energy continues to follow the same cost and efficiency curve that it has since the late 1970s, then by the early 2020s – when comparing the BTU generated through a barrel of oil versus the levelized cost of electricity (LCOE) for a kilowatt (kW) of solar energy on a kWh to kWh basis – you would be stunned to learn oil will be worth not more than $25-$27 per barrel. This paradigm shift will dramatically change the global energy generation mix. In fact, it is already happening before our eyes and is, in effect, putting the carrot before the stick and diminishing the need for carbon pricing.
Until this shift is complete, however, SkyPower continues to support carbon pricing both in principle and through our actions. In fact, SkyPower is a pioneering leader in this discussion. Over the past 14 years, we have actively supported Canada’s phasing-out of coal and have advocated for a viable and vibrant domestic renewable energy market. This first took place in Ontario through a campaign we dreamt up, designed, and spearheaded called ShineONtario, where, along with several other solar companies, we deployed over $1 million in public education and awareness to communicate the tremendous benefits of solar energy.
SkyPower also supports Canada on the global scene – evidenced by our advisory role to the Canadian delegation at COP21 in Paris, where the groundbreaking Paris Agreement was successfully negotiated. Most recently, we assisted Canada in formulating the recently-announced approach to carbon pricing by offering our voice and expertise during consultations. Finally, SkyPower continues to show global leadership as a signatory of the United Nations Global Compact, a Champion of Caring for Climate, and a partner of the Climate Bonds Initiative.
We are proud of the work we have done and the changes we have witnessed. We are also proud of other organizations that are mobilizing support and capital for a cleaner economy. Until the shift to a low-carbon world is complete, SkyPower will continue to advocate for mechanisms that help carbon emitters rethink alternatives or reduce their emissions, as well as programs and initiatives that incentivize clean energy. Together, this will help ensure a brighter future for the generations to come.
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[1] Kerry Adler, “Carbon pricing incentivizes clean energy innovation,” World Bank Blog. October 29, 2014
