For nearly 4 months, people in Chile powered their homes for free. Here's what happened.
Chile is amazing at producing and implementing solar energy.
The coastal South American country recently breezed past its competition by becoming the first in Latin America to surpass a full gigawatt of installed solar energy, which can power around 750,000 homes.
The country also has plans to use 70% renewable energy by 2050, with solar at the forefront.
Which is good. Really good. As a matter of fact, it might be ... too good.
Chile's solar industry has expanded so quickly that for 113 days this year, solar energy in many parts of the country was free.
Chile is generating so much solar energy, for 113 days they literally had to give it away for free.
It's a huge win for consumers who, for nearly four months, got to rake in some free clean energy.
However, it's also a potential problem for business owners in Chile who are struggling with the fall of one industry and the blazing-fast rise of another.
If you go way back, the story all starts with copper. Yes, copper.
Chile is a huge exporter of copper, which contributes to the country's 6% annual economic growth. But lately, there's been a worldwide slowdown in the copper trade, and Chilean copper producers have been feeling the impact.
Copper mining in Chile has ground to a near-halt, and copper mines everywhere are shutting down. As these mines shut down, the country as a whole requires less power than it did before. But all the solar farms are still producing, resulting in a solar surplus.
Energy companies can't just give away energy forever, though.
If they do, the companies will have to fold, and then Chileans won't have solar energy at all.
“Investors are losing money,” said Rafael Mateo, whose energy firm is investing $343 million in Chilean solar energy projects. "Growth was disordered. You can’t have so many developers in the same place.”
Even when they're not giving it away for free, from a business standpoint, Chile's solar energy is still problematically cheap.
The Atacama region, for example, clocked about $60 per megawatt-hour for most of March, according to Bloomberg. That's $10 less than the minimums set by the companies that won bids to sell their solar energy there.
So while Chilean energy consumers are probably pretty happy about their tiny and/or nonexistent electric bills, energy companies aren't as thrilled .
Let's look at the bright side here, though. (That's where the sun is, after all.)
Realistically, Chile is demonstrating how successful a clean energy product can be if you truly commit to investing in it.
In fact, we've seen things like this happen before in other countries: Portugal managed to go 107 hours without using fossil fuels by investing serious cash-money into multiple clean energy projects, and Germany managed to bump up clean energy production so much that it had to pay its citizens to use it for seven hours.
All over the world, people are investing in renewable energy and finding out just how wildly successful it can be.
We may still need to recalibrate the settings so energy companies can stay alive while consumers get fair energy prices. But we'll get there.
For now, let's keep building.