Although there have undoubtedly been many great leaps of innovation in green technology (just take a look at the low-cost White Roof Project), it’s been tough for the ‘newest’ of energies to gain a foothold on a global level. The answer to why this is, might surprise you.
We’ve been waiting for something (or someone) to help us reduce our dependence on fossil fuels. The initial costs for renewable, green energy have been in a freefall, which has now made wind power and solar power a viable alternative to fossil fuels. There’s never been a better time to lower your impact on the environment, along with the number on your energy bill.
But what’s to thank for this drop in the renewable energy price? Of course, our technology is getting more efficient and innovative by the day, but there’s another aspect that is often overlooked: the low cost of intellectual property. The patents needed to manufacture and build on the technological ideas established decades ago are off-patent now, and this opens up a world of possibilities.
“The basic approaches to solving the specific [clean energy] technological problems have long been off-patent. What are usually patented are specific improvements or features. [Competition between sellers brings the price of these components] down to a point at which royalties and the price increases available with a monopoly are reduced.” -The International Center of Trade and Sustainable Development (ICTSD)
To wrap our minds around the current situation, think of the energy markets like computers. You can get the case, fans and accessories anywhere, and for reasonable prices. But the metaphorical cherries on top of this metaphorical computer are, of course, the graphic cards. Imagine you can only buy an NVIDIA graphic card from an Intel shop and can only buy a RADEON graphic card from an AMD shop.
Both these shops have a monopoly on these graphic cards, but because there’s a choice in what graphic card to put in your computer, these two shops must still compete with each other when it comes to price. And that keeps those graphic card prices at a reasonable level.
Now, that’s not how the pharmaceutical sector does business. A drug company which owns the patent to a unique (and life-saving) drug, can charge whatever they’d like for the medicine. If there is only a monopoly because patents constrict competition and innovation, that’s bad for everyone but the drug company’s bottom line. Perhaps, with these ancient renewable energy patents going off-patent, we can finally see the kind of innovation and competition that will drive costs down and give fossil fuels a run for its money.
“Today, renewable energy is competing directly with coal, nuclear, natural gas and other sources. That’s true even in emerging markets like India. The upshot is that developing countries can now afford to share in the wealth of clean energy technology.” -Jigar Shah, president and co-founder of Generate Capital
Because the patents for renewable energy technology were all drafted in the 1970s, they’ve now expired and become off-patent. If India, for example, wants to manufacture solar panels in India, they can. And if India chooses to expand their solar energy production, they will be able to both produce and sell the solar panels in their own country.
Does that mean the role of the Western countries is played out? Manufacturing the means for renewable energy creation is simply cheaper in developing countries. But these developing countries still import the technology for renewable energy from wealthy countries, so there will always be a level of dependence on the West. For better or worse.
Despite the air pollution plaguing the country, it’s China who’s leading the way in solar panel production. At the end of 2015, China had become home to almost a quarter of the planet’s new energy capacity from solar panels. But no matter where the sustainable and renewable energy market expands, the results will be falling costs, innovation, and growth in the solar markets. Needless to say, not only will solar panel developers worldwide profit, but a large scale switch to solar power can drastically reduce our negative environmental impact. It’s a win-win situation that does away with most of our fossil fuel dependence.
What is stopping solar panels from becoming the wave of the future of energy worldwide? A lack of governmental policies that level the energy market playing field. With so many vested interests in fossil fuels, there’s sure to be constant pushback. While the politics behind the energy market and climate change are often problematic, hopefully the policymakers understand the potential and need for affordable, clean, renewable energy.
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