Greg Smyth

Look at the explosive growth and falling costs of batteries, solar and wind in the chart below…the numbers are really impressive. This is why I think we will have a near zero marginal cost of energy by 2030. The incremental cost of generating power will approach ~$0.005/kWh in this time frame - essentially making power free and abundant. The big issue will be the realized cost of this energy and will demonstrate, especially in the US, the decrepit and costly delivery infrastructure from the incumbent utilities. All of this translates into higher prices which makes no sense (see image). My bet has, and will continue to be, that more and more of power will be generated by individuals using solar PV + battery packs in their home. The pull through from EVs will also help accelerate this trend. So whether you want a Tesla and end up with solar and battery or you simply want lower energy costs and break away from your utility, many Americans will end up in the same place: they will become a mini utility that makes power from the sun and uses it to power their lives. Now, one thing we will save for later is the tipping point of insolvency for utilities as this trend really accelerates: how do they pay for their debt when enough people generate their own power and quit the utilities? This is a multi $T default in the offing…likely in the 2030-2040 timeframe.