Elon Musk: Solar vs Fusion — Who Wins and Why?

When it comes to discussions about energy sources, partisanship is today part and parcel of the topic. Conservatives might prefer fossil fuels, liberals solar panels and EVs, and technologists are hoping for a nuclear renaissance (nuclear fission).

Meanwhile, scientists are using multi-billion-dollar budgets to try to unlock nuclear fusion, which could, in theory, be the ultimate power source that is both clean and unlimited. But not everybody agrees that this is likely to work anytime soon.

To start, skeptics are rather vindicated by the abysmal track record of predictions about nuclear fusion becoming useful and commercially viable—a point in time which always seems 20-30 years away, and has for the past 80 years.

Recently, tech leader, billionaire, and controversial figure Elon Musk has put his weight into the debate. He essentially said that nuclear fusion research projects are pointless, since the best and most useful nuclear reactor already exists: the Sun.

Source: Elon Musk / X

And indeed, the Sun’s energy output will likely permanently outshine mankind.

While Jupiter’s volume is ~1,300 times that of Earth, the Sun still dwarfs it. It contains 99.86% of all the mass in our solar system and is constantly burning through 600 million tons of hydrogen every second.

So, according to Musk, mankind should just double down on solar energy and forget about nuclear fusion.

But is he right?

Solar Power’s Big Advantage: Cost and Speed

In a previous article titled “The Solar Age – A Bright Future To Mankind“, we discussed how solar energy is quickly moving to become the primary energy source of our civilization.

In large part, this was driven by several decades of progress that saw the price of solar panels drop by a factor of 30.

Source: IEA

In parallel, EVs and battery parks large enough to feed the electric grid have increased the usefulness of electricity over fossil fuels.

Still, solar energy suffers from a few limitations:

• Production is much lower in winter, especially in northern latitudes.
• The rate of price decline has started to slow down.
• Production is intermittent and difficult to predict, resulting in less-than-ideal scenarios:
  • Either solar stays a small part of the whole energy mix, contributing seriously only on sunny days.
  • Or solar becomes a larger part of the energy mix, but with massive excess capacity for sunless days.
  • Or massive battery parks, hydrogen facilities, or other energy storage systems—costing trillions—must be built to supplement solar during cloudy days, evenings, and winters.

At the same time, solar energy is working now, while fusion reactors are still only a theory when it comes to commercially useful models.

Can Nuclear Fusion Become Commercial?

As we explained in our in-depth report about nuclear fusion, fusion is, in theory, the ideal energy source: it produces no pollution (output is helium), consumes the most abundant material in the Universe (hydrogen), and is orders of magnitude more powerful than even the largest nuclear fission power plants.

The problem is that it requires handling material safely and cheaply while it is compressed and heated to tens or hundreds of millions of degrees—and somehow extracting energy from it at the same time.

While we have known how to trigger nuclear fusion since the 1950s, making it useful for energy generation has been an elusive goal.

Still, the international ITER project is progressing. And private companies like Commonwealth Fusion Systems and Proxima Fusion are announcing their own commercial models to be released in the next few years.

So, to continue the comparison Elon Musk triggered: even if commercial fusion is developed, is it rendered obsolete by solar?

Solar Vs Fusion Comparison

Overview

The key arguments depend on the angle at which you view each energy source.

The argument for solar is that it is essentially “free,” in the sense that the energy has already been generated by the giant nuclear fusion reactor that is the Sun, and arrives on Earth every day, waiting to be collected.

Critics will say that while the total amount hitting Earth is enormous, it is too diffuse per square foot to be truly efficient and too vulnerable to environmental variation.

On the other hand, future nuclear fusion reactors would produce energy that is far more concentrated, generating power on demand. It is also completely independent of the weather, seasons, or the time of day.

In the end, the argument is not so much technical as it is conceptual and economic.

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How Can Solar Win?

The Economic Path

There are a few paths for solar to make sense, no matter how efficient nuclear fusion becomes.

One is to become so cheap and ubiquitous that energy generation becomes an afterthought. For example, if solar panels become cheap enough, it makes sense to cover every roof, every fence, and perhaps every exterior wall with them.

Bifacial panels, producing energy from both front and back, would be ideal for many such designs. Ultra-durable panels would also have great economic benefits if they could produce for 30 or 50 years with minimal losses.

Source: Next2Sun

In that context, that scenario also requires negligible costs for batteries, so that evenings and winter can be entirely supplemented by higher solar production during sunny days. Long-distance (thousands of kilometers or miles) connections between grids could help as well.

Then, no matter how efficient nuclear fusion gets, it would likely be relegated to niche applications, with the bulk of the grid supplied by solar panels, likely located in sunny locations like deserts or high mountains.

The High-Tech Path

Another option for solar panels to alleviate their limitations—mostly linked to the day-night cycle and the weather—is to move where both issues are gone: into space.

Space-based solar power, which we explained in a dedicated article, relies on putting solar farms into orbit, where the Sun shines 24/7, and at a much higher intensity than on the Earth’s surface. Power is then relayed back to Earth using microwave beams and dedicated reception stations.

For that matter, such solar stations could, in the long run, be located in orbit around Venus, Mercury, or even closer to the Sun, increasing their production even further.

While unexplained in Musk’s argument, this could be the reasoning behind it. While ground-based solar is still not perfect, collapsing launch costs with rockets like Musk’s Starship could make space-based solar so cheap that it can directly compete with all other energy sources.

How Can Fusion Win?

Of course, the first step for nuclear fusion to win the race to become humanity’s primary energy source is to manage to produce more energy than it consumes for ignition.

If this happens, then the question will mostly be one of economics, with a few key questions needing answers:

• What is the cost to build a nuclear fusion plant? (Capital costs)
• How much does it cost to generate a kWh once it is built, all expenses considered—not just fuel but also human resources, maintenance, repairs, downtime, insurance, etc.? (Operating costs)
• How long can one operate before needing to be retired (amortization timeframe)?

We know this could be tricky, as nuclear fission, while a marvel of technology, is also very expensive to build and operate.

While some of these costs are linked to the inherent risks of nuclear fission (which are absent for fusion), a tech it took us almost a century to master will likely not come cheap, requiring giant superconducting magnets, advanced electronics, supercomputers, new super-materials, and specialists in plasma and quantum physics.

Fusion will, however, win in any application that requires a lot of power in one location, on demand. So no matter what, if nuclear fusion becomes a reality, it will likely become the energy source of choice for large military ships, spacecraft, and certain heavy industries.

This is also going to be the favored energy source for any deep space exploration, as sunlight declines exponentially as we go further from the Sun. For example, Jupiter receives just 4% of the sunlight Earth does.

Three Scenarios for the Energy Mix: Solar, Storage, Fusion

Overall, the future energy mix of humankind will depend on a few variables, some of which Elon Musk is personally working hard to change.

Scenario 1: Solar’s Limitations Wall

If neither cheaper solar panels nor ultra-cheap energy storage materialize, the technology will start to progress more and more slowly.

In this case, solar becomes unable to manage the entirety of the energy grid demand, and baseload & winter consumption must be covered by fossil fuels or a form of nuclear energy—with nuclear fusion being the ideal option if possible, thanks to being both low carbon and low risk.

Considering solar energy’s current popularity, this will likely happen if the technology of both solar panels and batteries hits fundamental physics-based limitations that hinder further progress.

Scenario 2: Solar Energy Ubiquity

In this option, solar energy turns so cheap that it becomes barely worth measuring its costs. Production is so abundant that sunny days see a massive “useless” surplus, while darker days are still covered by the massive omnipresent park of solar panels covering most buildings, roads, etc.

Such energy abundance allows for solving many of our era’s issues:

• Desalination allows for greening deserts and an abundance of freshwater.
• Carbon capture can be done on a massive scale, solving any concern about carbon emissions.
• Unlimited cheap energy allows us to mine for metals from low-grade ore, creating virtually unlimited supplies of raw materials.
• The cost of artificial lighting becomes negligible, making vertical farms our primary food source, allowing us to re-wild large segments of the environment.

Source: One Earth

The same outcome is produced by the successful deployment of orbital solar farms. The massive energy supply cannot only supply Earth, but also space colonies and asteroid mining operations, leading to similar abundance in metals, resources, and energy.

Scenario 3: Fusion Dominates

Most technologies start slowly, enter a phase of exponential improvements, and then start to stagnate due to the inherent limitations of the concept. It is something we have seen with almost every new technology in the past 200 years.

What makes fusion so exciting is that the technology is barely emerging from the conceptual phase into the commercial stage.

Costs and efficiency should improve drastically when more experimental understanding, economies of scale, and new discoveries kick in, much the way early combustion engines have little in common with today’s car engines.

So while solar has a chance to become “too-cheap-to-measure”, nuclear fusion has an even greater shot at such a lofty goal.

What could tip the scale is if nuclear fusion is developed quickly enough. If an alternative to fossil fuels emerged that would fit directly into our centralized power grids and energy system, it could outcompete solar before it has time to become ubiquitous. And of course, fusion’s advantage for space and military applications might also tip the scales in its favor.

Conclusion

Since the immense majority of our primary energy consumption still comes from fossil fuels (coal, oil, and gas), it might seem a little odd to debate the pertinence of solar against nuclear fusion.

Right now, either of them is direly needed to upgrade our energy systems to sustainable, low-carbon sources.

Source: EIA

But in practice, Musk’s comment makes sense if you view fusion research budgets as delaying the acceptance of solar energy—especially if ultimately planetary-scale or space-based solar makes more sense anyway.

This is not to say that he is necessarily right, as solar (and energy storage) have yet to prove they can provide 100% of our energy needs—not just grid demand, but also all the energy required for transportation, chemical production, and heavy industries.

So it might also make sense not to put all our eggs in one basket, but rather to simultaneously work on many low-carbon energy sources: solar, geothermal, wind, 4^th generation fission, and fusion.

And in any case, we could also say that the potential of nuclear fusion for space exploration and colonization might be in itself enough to justify working on mastering this energy source.

Fusion Companies to Watch (Mostly Private—for Now)

Currently, none of the companies dedicated to making nuclear fusion commercially viable are publicly listed. This includes Helion, General Fusion, Commonwealth Fusion, TAE Technologies, ZAP Energy, and NEO Fusion.

You can find an extensive list of startups in the nuclear fusion space on the dedicated page of Dealroom.

An exception is Lockheed Martin. The aerospace defense contractor has been working since the early 2010s on Compact Fusion, a nuclear fusion reactor that it expected to be ready by the 2020s.

However, it has since been announced that work on the project was stopped in 2021.

The company has been very discreet about this project after an initial very public announcement. To this day, it is unclear exactly what prompted the company to abandon the idea.

At the same time, it seems that it did not fully abandon the concept, notably with investments in 2024 in Helicity, a startup developing a fusion engine.

The idea would be to propel spacecraft with short bursts of fusion. Helicity is planning to use a plasma gun, the same approach taken by General Fusion.

Potentially, Lockheed’s own internal results have shown that their design could not sustain fusion in a way that is compatible with energy production.

But perhaps short bursts are enough for propulsion in space, and much closer to becoming an actual product? It would also be a better fit with the overall aerospace and defense-focused profile of the company.

Public Solar Stocks Mentioned (Risks Included)

1. Daqo New Energy Corp.

This Chinese company is one of the world’s leaders in polysilicon production, the central component for solar panel manufacturing. This also makes Daqo one of the founding pillars of China’s domination over the solar manufacturing sector.

The company has been growing its production capacity very quickly, increasing it more than 8x since 2019.

Source: Daqo

Daqo’s position at the center of the solar panel supply chain has enabled it to benefit greatly from the sector’s growth, with revenues growing from $0.68B in 2020 to $4.6B in 2022. After a surge in 2022, polysilicon prices have cooled down, causing the stock price to fall from its 2021 peak.

The company’s communication and website are a little lackluster, but not out of character for an industrial B2B company more focused on its image inside the industry than with the larger public or foreign investors.

The stock trades at a very low valuation relative to its P/E and cash flow. This is partially due to controversies linking the company to the use of forced labor in Xinjiang and talks in Washington, DC of additional sanctions against companies operating in the region.

So investors should be aware that Daqo stock carries a very real geopolitical risk, alongside large financial upside potential due to its low valuation multiples.

2. JinkoSolar Holding Co., Ltd.

Jinko is one of the largest solar panel manufacturers in the world, and it is based mostly in China. To avoid tariffs, the company is diversifying its manufacturing base, with silicon wafer manufacturing in Vietnam and solar cell manufacturing in Malaysia and the US.

Source: Jinko Solar

In any case, the company is not overly exposed to Western markets, with China, Asia Pacific (APAC), and emerging markets making up the bulk of the company’s business.

Source: Jinko Solar

Jinko delivered 85-100 GW of solar cells in 2025 alone, compared to just 14.5 GW two years prior. This makes Jinko the #1 in the photovoltaic industry.

Jinko’s most advanced solar cell, the N-type, achieves a remarkably high 27.2 energy efficiency. It also offers bifacial panels.

Looking to improve the environmental profile of its products, Jinko Solar also released NeoGreen, the first N-type solar panel produced entirely with renewable energy (instead of the coal commonly used in China).

Since 2023, the N-type panels have taken over most of Jinko’s sales, representing 80% of total shipments, with more capacity from a 56 GW production facility newly opened. Total production capacity is expected to reach 130 GW in 2025, or almost half of the company’s cumulative production in its entire history.

Jinko’s ultra-aggressive growth in production capacity reflects the company’s confidence in its N-type technology and its ambition to seize the export markets of Asia, Africa, and South America—and the overall prospect of solar power taking over the world’s energy systems.