Solar energy has been one of those technologies that is perpetually “30 years away” from commercial viability, but a recent article in the Financial Times argues that the green energy source’s day has finally arrived. More efficient panels, along with a crash in panel prices, the FT argues, has made solar price-competitive with fossil fuels in Europe:
When the solar panels that convert sunlight into electricity first came on to the market in the 1970s they sold for more than $70 a watt in 2012 prices. Today they cost less than 80c a watt, with prices plummeting by 80 per cent in the past five years alone, according to Bloomberg New Energy Finance. “I’ve never seen a crash in prices like this,” says Eddie O’Connor, industry veteran and founder of Ireland’s Mainstream Renewable Power.Part of the price fall has been driven by a glut in supply that grew as solar power manufacturers around the world ramped up production to meet the demand created by the EU subsidies. More recently, a flood of low-cost Chinese solar panels, fuelled by government support, has driven prices down further.The market’s growth has also accelerated an industry learning curve driving overall solar plant costs down and efficiency up that some compare with Moore’s law, the 1965 prediction by Intel co-founder Gordon Moore that the electronics industry could double the number of transistors on a chip roughly every two years.
The piece skips lightly over the fact that everyone in Germany is up in arms over skyrocketing consumer energy costs in large part caused by subsidies to green energy and other restrictions. The people quoted in the story all have vested interests in solar power or else in making the case that utilities need subsidies because of the effects of solar party; there are no real skeptics or questioners interviewed. The price-drop in Europe’s solar industry may not mean that solar is about to sweep the Earth. It may just mean that a rare combination of subsidies in Germany that create an artificial market and subsidies for solar panel plants in China have created both a supply glut and unusually high demand.Nobody has ever thought that you couldn’t get people to install solar panels right left and center if you threw enough money at the problem for long enough. The questions here are things like what happens to the price of solar panels when the supply glut disappears? How long will German voters put up with prices that drive their electricity bills to artificially high levels? How much will the coming bailout and subsidies to electricity utilities (which can’t be allowed to fail as the country has to have enough energy to run on cloudy winter days) cost and how willing will German and other European governments be to pay it?Remember, this isn’t making “green jobs” in Europe. It’s making more factory jobs in China, and the price crash that makes this important would not be happening unless China had moved aggressively to shift all the panel manufacturing jobs away from Europe. Via Meadia would be happy to see solar panels work without being propped up by government subsidies (either in feed-in tariffs, as Europe has employed, or loans to panel manufacturers, as in China), but that day still looks to be a good thirty years away.[Solar array image courtesy of Wikimedia]