the renewable energy reality check

why my solar panels tell a different story than the headlines

04-Jul-25

the renewable energy reality check

or: why my solar panels tell a different story than the headlines

sitting with uncomfortable truths

here’s something that’s been gnawing at me. i spent years in renewable energy, worked on a 200mw solar project in egypt, have panels on my own roof, and genuinely believe in the energy transition. but lately, i’ve been watching the sector implode in ways that remind me of 2015 oil markets.

orsted down 70%. siemens energy crushed. offshore wind auctions with zero bids.

what the hell is happening?

the money problem nobody wants to discuss

let me paint you a picture from my private equity days. we’d model these beautiful renewable projects with 20-year ppas, decent irrs, everyone’s happy. fast forward to today:

the economics broke

remember when everyone said renewables would be cheaper than fossil fuels? technically true. operationally? different story. construction costs up 40%. interest rates making project finance brutal. supply chains still wonky.

i watched orsted write off billions and cancel projects. these aren’t rookie mistakes. these are industry leaders saying “the math doesn’t work anymore.”

uk’s latest offshore wind auction? crickets. nobody bid. when sophisticated investors walk away from subsidized projects, that’s your canary in the coal mine.

the demand curve nobody models correctly

during my time analyzing emerging markets, i stumbled onto something that still haunts me. when countries jump from emerging to lower-middle income status, energy consumption doesn’t just increase. it explodes. nearly triples.

here’s the kicker: all our net-zero models assume energy demand stays relatively flat or grows slowly. they’re wrong.

the middle class energy bomb

every family that moves into the middle class in india, indonesia, or nigeria starts consuming energy like americans. air conditioning. cars. appliances. it’s not greed. it’s human nature.

i ran the numbers once. if just half of india’s population reaches middle-class consumption levels, that’s more energy demand than all of europe. where’s that coming from?

the physics problem we keep ignoring

spent a weekend reading vaclav smil (yeah, i’m that guy). energy density matters more than people realize.

solar panels: 5-20 w/m² wind farms: 1-2 w/m² natural gas plant: 1000+ w/m²

this isn’t anti-renewable propaganda. it’s physics. to power toronto with solar would require covering an area larger than toronto. that’s before considering storage, transmission, winter.

why this matters (beyond my portfolio)

i’m energy-agnostic, remember? but being agnostic means being honest about trade-offs.

the renewable transition isn’t failing because people don’t care about climate change. it’s struggling because:

  1. we underestimated the economics - cheap capital masked structural issues
  2. we ignored developing world dynamics - energy demand curves aren’t negotiable
  3. we oversold the timeline - physics doesn’t care about political targets

the path forward (maybe)

here’s where it gets interesting. the solution isn’t abandoning renewables. but it’s also not pretending hydrocarbons disappear overnight.

what might actually work:

hybrid thinking - gas plants backing renewable grids (already happening) - nuclear for baseload (finally getting attention) - hydrocarbons for industrial heat (no alternative yet)

honest accounting - real costs including storage and transmission - actual land requirements - legitimate timeline expectations

innovation focus - better storage (please, someone crack this) - small modular reactors - carbon capture that actually scales

personal reflections

installing solar panels taught me something. they work great… when the sun shines. my roi spreadsheet has a lot of assumptions. grid connection matters. net metering policy matters. battery costs matter.

multiply my household experience by industrial scale. add emerging market growth. factor in physics constraints. suddenly, the challenge becomes clear.

the uncomfortable conclusion

we need renewables. full stop. climate change is real and urgent.

but the current approach? it’s like my failed cfa level 2 attempts. good intentions, poor execution, ignored fundamentals.

the energy transition will happen. just not the way current models predict. it’ll be messier, take longer, and require more pragmatism than ideology.

and yes, hydrocarbons will be part of the mix longer than anyone wants to admit.

currently modeling: what would a realistic energy transition look like if we started with physics constraints and worked backwards? spoiler: it includes a lot more natural gas than twitter would like.