... Scale, Subsidies, Caps — All May Be Needed to Make Solar Economical

Separately, photo-voltaic (PV) cells have been developed that convert the sun's energy directly into electricity. These are commonly made from the same material as semiconductors, and so the demand for that product, ultra-high quality silicon, is growing rapidly, as are its costs. Researchers all over the world are working on solving this growth constraint. Examples of possible solutions are: a) slicing the silicon thinner to get more yield, b) using arrays of mirrors, like the thermal arrays mentioned earlier, to reduce the area of silicon needed, c) substituting other materials altogether, like copper-indium-gallium-selenium (CIGS), and d) finding affordable ways to convert low quality silicon (essentially beach sand) into the high quality form that is needed. There are many other ingenious plans afoot. No one knows for sure what method will solve this problem, but it seems likely that at least one good solution, if not several, will be found.

Electricity generated in the USA is priced at about 8-10 cents per kilowatt-hour. Solar-generated electricity costs run between 20 and 30 cents per KWH. So, unless the government subsidizes solar, or the cost of conventional methods increases, or the cost of solar declines, there is a significant gap. Fortunately, all three eventualities seem to be in the cards. A growing number of states (notably California and New Jersey) subsidize solar energy. If there is a carbon tax, or better yet, a "carbon cap" with trading of carbon credits, the cost of power from conventional power plants, the cheapest source, will rise. And last, the technical developments and volume-related economies in both thermal and PV solar energy systems will almost certainly approach the 10 cents per KWH level in the near future. Some companies are projecting 4 cents per KWH, matching the cost of the cheapest pulverized coal-fired generators.

Two decades ago, the US was at the forefront of solar energy technology, but we lost that lead because fossil fuels were so cheap. Japan, where carbon-based energy is a great deal more expensive, has moved ahead of us in solar technology, both in design and production. This is unfortunate, but not a tragedy, as we can compete effectively if we give it high priority and a predictably high conventional energy costs. But Japan's experience does show that leaders in "clean tech" not only solve their internal problems quickly, but they also develop export markets for their solutions. Germany, also, is a leader in renewable energy sources, including solar.