The technology exists to "green" America's electricity grid to fight climate change — and together, the country's richest people have enough money to pay for it. In fact, they could even make a profit on the investment.
That's according to a 2019 research paper on solar energy led by Joshua Pearce, a professor of materials science and engineering at Michigan Technological University.
Burning coal, oil or gas to produce electricity creates a lot of carbon dioxide, which contributes to climate change. Solar energy, meanwhile, is better for the environment and slows climate change. Replacing all carbon dioxide-generating fossil-fuel electricity with sustainable solar electricity in the U.S. would cost $1.59 trillion, a price that it would take just 79 of America's wealthiest billionaires to cover, according to Pearce's study.
Pearce, who heads Michigan Tech's Open Sustainability Technology Lab, says if a few dozen of the richest Americans (whom he identifies in his study) invested the $1.59 trillion, they could not only solve the problem but even make their money back and then some.
"With current solar technology, a remarkably small number of investors could effectively 'green' the U.S. electric grid," Pearce tells CNBC Make It. "The bottom line is: Solar costs have dropped so radically and wealth is now concentrated to such a degree, that only a few wealthy Americans could green the U.S. electric grid by making targeted investments in solar energy."
Each billionaire would, in Pearce's hypothetical calculation, invest all of their wealth except $1 billion, which they would keep to live on, Pearce says. Pearce's list of multibillionaires include a slew of technology inventors and executives such as Jeff Bezos, Bill Gates, Warren Buffett, Mark Zuckerberg, Larry Ellison, Michael Bloomberg, Larry Page, Sergey Brin, Jim Walton, Elon Musk, Laurene Powell Jobs, Ray Dalio and Eric Schmidt.
"To be clear, we analyzed the potential investment, not charity," Pearce says in a written statement from Michigan Tech.
The 79 billionaires would get a return on their investment because the electricity generated by the solar panels would be sold to a consumer or electricity reseller, Pearce tells CNBC Make It. "Sun shines, electricity is produced, buyer pays for it and the investors gets their money back with a handsome profit," Pearce tells CNBC Make It.
It's hard to predict when the investors would be paid back, though.
"It will be highly location dependent," Pearce tells CNBC Make It. "Here in Michigan it would vary between only a few years to about a dozen years for a payback period."
That said, Pearce says it would be better for solar investors to think more long term.
"It is better to think of it as a normal investment — e.g., investors make the most money if they hold onto the asset ... over the entire lifetime of 20 years and to get the full return on investment," Pearce tells CNBC Make It. Solar "is currently pretty attractive financially, even if you ignore all the side benefits," including reduced pollution and improved health of Americans.
To come up with the estimate that 79 billionaires would be able to "green" the U.S. electric system, Pearce first calculated all the electricity being used in the United States. Then he figured out how much it would cost to generate that much energy with solar energy. Specifically, Pearce calculated the expense with solar photovoltaic panels, or devices that generate electricity from sunlight using semiconductors.
Pearce then tallied the fortunes of the richest Americans (using Forbes' 2018 real-time ranking of the wealthiest people in the world on Oct. 12, 2018) until he hit $1.59 trillion.
However, Pearce's inquiry may be leaving out some logistical hurdles, according to Chris Namovicz, the team leader for renewable electricity analysis at the U.S. Energy Information Administration, a federally funded organization that provides data and information on energy issues to advise policymaking, public markets and public understanding.
For the electric grid to continue to deliver the same experience to customers, a solar-powered system would need more than just solar panels, Namovicz tells CNBC Make It. There would need to be things such as energy storage facilities (like batteries) so that customers could get the electricity they need when the sun is not shining and an infrastructure to move solar energy from where it is generated to where it is used, he says.
However, the plan is ambitious, not impossible, Namovicz tells CNBC Make It. He says he has not replicated Pearce's work to be able to comment on the price tag, which he thinks would depend on many things, like governmental policy. But "money makes a lot of things possible, and I don't think there are any insurmountable technical challenges, but the costs would certainly not be negligible," Namovicz says.
Many utility companies have already started to transition to solar energy, Pearce tells CNBC Make It. "Solar is now normally the least costly form of power available — so many utilities are already doing it incrementally."
Con Edison started installing solar power in 2006 (at that time just enough to power 165 homes), and by 2018, there was enough solar installed to power 32,190 homes per year. And in New York City, renters and homeowners who live in a building that either does not yet have or cannot have solar panels on the roof can opt into a community solar group, The New York Times reports.
Many of the billionaires listed in the hypothetical are already investing in efforts to "green" the grid, Michigan Tech says in a written statement about the study. For example, Bezos, Gates and Bloomberg are all investors in the billion-dollar Breakthrough Energy Ventures fund, which aims to make energy "affordable and reliable" and also reduce global gas emissions to "near-zero."
Bezos, Gates and Bloomberg did not respond to CNBC Make It's request for comment.
See also:
Jeff Bezos: I spend my billions on space because we're destroying Earth
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