As a solar developer, Wendy De Wolf ’18 often has to weigh project costs and benefits verging on the complicated, opaque, and even contradictory.
After finishing her undergraduate degree, De Wolf took a job with Energy Management Inc., where she helped build the firm’s solar group with her colleague Jamie Fordyce. In 2016, De Wolf and Fordyce spun out the company’s solar arm to co-found their own solar project development business, East Light Partners (ELP). That year, De Wolf also started her graduate studies at Columbia Business School. (In 2023, De Wolf and Fordyce sold ELP to Vitol, a global energy and commodities company, and joined its renewables team.)
Like others in the field, ELP developed early-stage solar projects and then sold them to long-term operators. Such work typically involves finding a site for a new renewable project, securing financing, building relationships with landowners, and determining how to connect to the grid, among other problem-solving puzzles.
In 2019, De Wolf evaluated a new community solar project on vacant land in Hudson, New York — a project that aptly illustrates many of the challenges and competing needs solar development can present. For one thing, New York state had recently introduced a complex, multilayered equation to calculate the government’s energy compensation rate. For another, the project’s projected revenue was uncertain because of a fluctuating (and falling) energy price. And there was the question of whether to use expensive and potentially hazardous batteries for energy storage.
De Wolf and ELP moved ahead with the project, though the slowness of deliberations and the number of roadblocks were frustrating, especially given the pressing need to scale up solar rapidly to avoid the worst effects of climate change.
“Sourcing these renewable projects is easier said than done,” according to De Wolf. “There’s always a push-pull in which choices we make.”
The environmental and social benefits of scaling up solar are straightforward. Solar is among the lowest carbon option of all energy sources; a decarbonized world will rely heavily on it. To achieve net zero by 2050, solar photovoltaic (PV) technology will have to grow 15- to 18-fold compared to that in 2022, according to estimates by BloombergNEF and the International Energy Agency (IEA), respectively. In the renewable energy scenarios presented by the IEA, solar PV is poised to be the largest source of new renewable energy capacity — by far.

Solar PV comes with many clear and practical selling points. For one, the technology converts sunlight directly into electricity using semiconductors, a far more efficient and cleaner process than extracting energy from nonrenewable fossil fuels. Also, solar PV panels can be easily installed in many different places and require little maintenance once installed. And as even more efficient cell designs are being developed and tested, solar PV use cases could expand to floating solar and agrivoltaics, cohabitation of animal husbandry, and crops with solar, among others.

However, solar expansion faces challenges that make the necessary scale-up far from guaranteed, De Wolf says. As her Hudson project showed, the economics of achieving profitability for developers are complex, unpredictable, and often narrow; battery storage is helpful but expensive; and community projects require navigating the many complexities introduced by working with, well, communities.
The following are four key points about the state of solar today and where it must go from here:
1. Solar energy is cheap and getting even cheaper.
Solar PV prices have dropped a whopping 99.6 percent since 1975, down to as little as 11 cents per kilowatt-hour in 2023 for residential uses, as little as 2.5 cents or lower for utility-scale installations.
In the past decade in particular, plummeting prices have fueled a virtuous circle in the economics of solar energy, in large part because as production of solar panels increases, the cost of their production falls even more. This drives demand in new markets, which increases solar PV deployment, pushing prices down further still.

This is especially good news for the economics of solar because, unlike oil and gas — commodities whose prices will always fluctuate — the price of solar PV energy depends largely on the costs of technology. (Solar power itself, of course, comes from the earth’s free and plentiful sunshine.) In many ways, the economics of solar power are now unbeatable.
Learn more about Columbia Business School’s Climate Knowledge Initiative: Solar
2. Counterintuitively, the low price of solar may present hurdles to its growth.
There’s no denying that solar PV is far cheaper than fossil fuels such as coal, oil, and gas, even when ignoring fossil fuels’ environmental and social costs. Its low levelized cost of energy, which considers both CapEx and OpEx, makes it the “cheapest source of electricity in history,” as the IEA confirmed as early as 2000.
Still, solar comes with a more subtle economic downside: While solar’s CapEx and OpEx combined is cheaper than any other source of electricity, its ratio of CapEx to OpEx is more skewed toward the former. In short, coal- and gas-fired plants are relatively inexpensive to build and costly to run, but solar panels are the opposite — they are relatively expensive to install and inexpensive to operate. That puts pressure on solar developers to find ways to secure the initial financing, and low solar energy prices tighten that ratio into a vice grip: They find themselves having to pay off installation loans even as they’re expected to sell the resulting energy for pennies per kilowatt-hour. These financing challenges are partially why solar PV capacity isn’t being deployed more quickly today.

Another challenge low solar energy prices are highlighting is China’s dominance in the solar panel production game — and the difficulties other countries face in catching up. Today, China’s manufacturing sector has at least 75 percent market share at every step in the panel production process. This is largely due to a series of concerted industrial policies from government-funded research grants that aim to improve solar cell efficiency as well as develop talent to direct subsidies and ensure accommodative regulations for enterprises, all of which has given China an enormous lead in solar PV manufacturing.

Still, energy dependence created by China’s dominance in the solar PV market is fundamentally different from dependence on oil or gas imports, for example. Even if the flow of solar panels from China to the United States were halted overnight, the flow of solar electricity would not stop. The nature of solar as a renewable source of electricity allows for much greater independence than does the nature of fossil fuels sourced from abroad — and for this reason, such distinct types of energy dependence can’t be equated.
3. Solar is an intermittent energy source, which presents the need for sometimes clunky adaptations.
For all the stability and abundance offered by the sun as an energy source, it presents an obvious drawback: It disappears at night and when it’s behind clouds. Solar’s characteristic intermittency, particularly in certain environments, raises the need for energy storage using batteries or other technologies — or relying on the grid for backup using fossil fuels or other power sources.
But the costs of storage, financial and otherwise, present their own set of difficulties when it comes to solar. Most often, solar PV power is stored as chemical energy in lithium-ion batteries. Li-ion batteries are more expensive than lower quality batteries, but their prices have fallen significantly over the years, even as their storage capacity has increased. At the same time, these batteries pose safety concerns, especially related to their flammability. They are also large and noisy, and require heating, ventilation, and air-conditioning. De Wolf puts it this way: “It’s like having an 18-wheeler that is just sitting on your site.”

A solution to daily power fluctuations can take the form of demand response programs, which incentivize users to time and synchronize their consumption based on energy availability. Consumers would receive financial benefits for reducing their energy consumption at key times, or demand can be more generally managed through peaking and falling prices. New York state already has demand response programs in place that offer payments to consumers who reduce consumption when demand is high — usually on the summer’s hottest days.
4. Solar development often requires more local and community engagement than fossil fuel use.
In her career as a solar developer, De Wolf has had to develop a range strategies to engage with, understand, and weigh communities’ responses to new solar projects as they sprout up in their collective backyards.
She points to the example of a solar project ELP worked to get permitted in New York’s Adirondack Park. De Wolf and ELP engaged in an ongoing discussion with the park’s agency about how to balance the various needs and desires for the project, including protecting the park’s gorgeous views and minimizing disturbance to ecosystems and park resources, all while finding a site with an adequate grid connection.
“The goal is to end up with the best project you can design,” De Wolf says. “You’re not going to please everyone, but the best possible project takes into account these issues, along with climate change goals — and obviously you still need to have a business, too.”

Besides working with community members’ preferences and protests, solar development is a highly local, case-by-case business when it comes to grid connection. Unfortunately, the process can be so locally idiosyncratic that delays caused by difficulties connecting to the grid are now one of the biggest obstacles preventing new solar PV capacity additions in both the United States and the European Union.
The United States and EU countries have initiated reforms to reduce delays, but more will be required to clear the bottlenecks. In the United States, for example, new rules from the Federal Energy Regulatory Commission require grid operators to study new projects in batches rather than individually, in an effort to reduce interconnection times.
Permitting issues can force similar delays, and the United States and EU are acting to remove some of these barriers, too. The Biden administration proposed the Bipartisan Permitting Reform Implementation Rule in the summer of 2023, aiming to significantly speed up environmental assessments for renewable energy projects. Similarly, the EU is working to make applying for such projects easier and appealing them more difficult.
The overarching idea: Pull down unnecessary hindrances to solar’s very necessary growth.