I’ve been covering the carbon divestment movement on and off for Grist since I started here nearly a year ago. Divestment makes unusual waves because it encourages moving money around for reasons of both morality and enlightened self-interest. It also raises a question: If investors are going to divest from the $5 trillion in energy stocks that they currently hold, what should they be investing in instead?

There are many, many ways to invest responsibly, including a new batch of fossil-free index funds, and that is a beautiful thing. Less beautiful, but maybe more interesting, is exploring what a totally cynical take on investing in renewable energy looks like.

For this reason, I’ve enjoyed nerding out over white papers on the subject, from Bloomberg’s guide to divestment (divesting from coal is easy; oil and gas, slightly more complicated) to the recent briefing paper released by UBS, the Swiss global financial services company whose assets of $1.5 trillion make it the largest private bank in the world.

The word “divestment” is never mentioned in the paper. Instead it salivates over companies like Toyota, BMW, Hitachi Chemical, Siemens, and Umicore, who have maneuvered themselves into a situation where they’ll profit if certain renewable technologies become widely adopted. When something like recycling is mentioned, it’s only because someone sees money in it.

Below, a few highlights.

Batteries and solar will get way cheaper

The main focus of the report is the way that batteries and solar, when joined together like Voltron, have the power to reshape our utility markets — or, as Grist’s Amelia Urry put it, “make today’s power plants as extinct as the dinosaurs.” This is something that people have been talking about for a while now (and it’s the reason Tesla Motors is starting to seem like more than just a maker of fancy hippie hot rods).

By 2020, the cost of high capacity batteries is expected to have dropped so much that the price difference between an electric car and one with a combustion engine will be negligible. If this happens, it will translate into a lot of electric cars sold, since (a) owners won’t have to pay for gas (or not much of it, if they buy a hybrid) and (b) an electric car can serve double-duty as the backup battery storage for a home solar system.

This will happen more quickly in Europe because gasoline is more expensive there — the paper says that, by conservative estimate, 10 percent of all new car registrations in Europe will be electric cars by 2025.

Think of big power plants as quaint old factory mills

I’ve been traveling around the east coast lately, which means passing through a lot of old mill towns. These were where the industrial revolution began in the U.S., and they were built on rivers, because that’s where the power was. The same way that the development of the electrical grid freed factories from the need for a river, solar can free it from the need for the hulking power plants that are now a feature of our landscape.

Writes the report:

Big, centralised power stations will not fit into the future European electricity system, because they are too large and too inflexible — or at least most of them are. Not all of them will have disappeared by 2025, but we would be bold enough to say that most of those plants retiring in the future will not be replaced.

It makes me wonder what might happen to the abandoned power plants of this hypothetical future. They’d make for some pretty strange apartments, that’s for sure.

Clever utilities will figure out how to maneuver into providing access to smart grids, backup power, and value-added services. “These positive drivers should more than offset the gradual extinction of large scale power plants,” writes the report, cheerily, adding that California-based Edison International, in its willingness to spend money building out its electrical grid to accommodate large-scale renewables, is an example of a good utility, and Con Ed in New York, which has done “next to nothing” on solar, will be in trouble.

The wild card here is politics, not technology

Fuel cells, batteries, solar, and smart grid technology keep getting less and less expensive to manufacture. As the theory goes, the lower the cost of batteries, the more people will buy electric cars, rather than the combustion engine variety. Selling so many batteries will make them even cheaper to manufacture, as companies develop economies of scale, and so the price will drop further — sort of like what happened with computer processors. Both Umicore and Tesla have said that they have the science behind batteries down — all that remains is making enough of them so that they can take advantage of economies of scale. Says the UBS paper (with some hubris):

By 2025, everybody will be able to produce and store power. And it will be green and cost competitive, i.e., not more expensive or even cheaper than buying power from utilities. It is also the most efficient way to produce power where it is consumed, because transmission losses will be minimized.

The drawback to all of this is that as people start pulling less electricity off the grid, it could mean lower revenues for utilities (and definitely for the companies that supply fuel to those utilities). Utilities are moving to protect their bottom lines by jacking up the basic flat fee that they charge to connect to the electrical grid and by lobbying for legislation that would make solar more difficult to install.

It’s hard to say how the solar blocking will go. Last year in Washington, fossil fuel interests spent about thirty times as much on political contributions as alternative energy. When it comes to rooftop solar, the rules around zoning and building codes are so complicated that just navigating them can add thousands of dollars to the cost of system. Yet there seems to be as much effort to streamline rules around solar in some places as there is to put up roadblocks in others.

It’s easier to predict that the rising flat fees are likely to stick around. Writes the paper: “We expect a gradual shift towards flat fee-based grid remuneration, similar to the development seen with broadband internet.” This will strike fear in the heart of any American who has tried to negotiate rates with an internet provider, but less so in the heart of the average European, who has more options when it comes to choosing providers.

Competition — in Europe at least — is going to be intense, since potentially anyone with a solar and battery system could do the things that a utility now handles, “including equipment providers and big data companies, such as Google.” These new utilities would likely be to manage, maintain, or even own their own solar and battery systems, provide ways to help households manage their own energy consumption, and buy cheap electricity in bulk from a variety of sources and set themselves up as “virtual power plants.”

European geopolitics are also making oil and gas look less attractive right about now

We would not see political tensions between fossil fuel producing and consuming countries as a main argument in favor of our projected 2025 electricity system, but clearly the latest developments in Ukraine and Russia are, if anything, intensifying the political support for renewables and a smart, efficient electricity system.

Is this the future? After I wrote an article about the bidding war over Tesla’s gigafactory, a friend sent me an email about how the fuss over the electric car, in particular, looked like its own bubble — a bid to extend the viability of the private automobile, when the young folks seem to be losing interest in them, entirely, in favor of such retro marvels as that driverless car that is also known as “the bus” or the post-electric green car that we like to call “the bicycle.”

Seen in that light, getting excited about the electric car is like investing in three-piece suits back in the 1960s, on the assumption that everyone in America was going to keep dressing like the cast of Mad Men. But even if it’s not the future, it’s a future, and worth thinking about.