The solar industry finds itself at an interesting crossroads. Over-capacity has driven prices down, while government struggle to justify strong incentives to continue to drive investment in this industry.
The economics of smaller projects remain intact, yet investment banks are refusing to go into extremely large projects given the risks of the fluctuating marketplace. Such is the lot of a young industry. Wait a minute….young industry? This industry has been evolving since the 1960s and yet still remains in a very narrow percentile of total power generated. And if you look at the efficiencies of solar panels, in over 40 years, all they have done is doubled. Would we accept a doubling of computer chip speed over 40 years? At that rate, the iPad might have been launched in 2050!
It is said that if 0.3% of the Sahara desert was covered with solar panels, all of Europe would have its power. So perhaps the question is not why governments struggle to justify incentives, but rather why they don’t multiply them far beyond where they are now?
The answer probably lies somewhere in the mixed up geo-political world of energy economics. Its safe to say that nuclear will be held back for a while. Oil is just riding the crest of past investments and doesn’t look to need to make any more investments in research. Coal is no long favoured. Natural Gas is being seen as a potential replacement for heating oil. And on the consumption side, billions are now being invested in the EV revolution and smart appliances, and that seems to be gathering the most “steam”.
The solar industry needs some kind of technological breakthrough for mass adoption. The costs remain higher than other forms of energy, yet the gap has closed. The question is not whether or not we should incentivize the use of solar, but really how much more. I would say that far more investment in research and deployment technologies should be made with a goal towards evolving solar cell efficiencies to the 30 percent range by 2020. While I see such goals being announced for other industries, why is it that the solar industry is retiscent to do so?
With a conference set in San Francisco next month that this solar blog writer is set to attend, I do hope to hear about what the “futurists” have to say about the next 10 years. There are still tons of roofs that can house solar panels, so the question is not that there is a shortage of opportunity, it is simply a question of the political will to invest in solar in the same way that oil and nuclear have benefited, if we want to see leaps in efficiency and competitiveness.
Sass