Just a brief post that backs up previous posts on PV prices ticking up as the market stabilizes. This link is about GTM's near term PV price predictions. GTM publishes market research on the PV business. They are usually bullish and over optimistic. 

 This is good news for the PV business, as it means that it is finally getting to a more healthy footing after several years of disarray.  This is mostly because China decided to support it's PV investments by subsidizing local demand within China. It will be interesting to see how far this goes, and also it will be interesting to see how long the recent surge in Japan lasts, now that they are adopting far more limited and realistically achievable  CO2 emissions reduction goals.

The deeper reality is that PV panels at these prices produce electricity that is still too expensive without subsidy in almost all markets. What is called grid parity for rooftop solar is now achievable in a few markets, but this is only because retail electricity is an overpriced monopoly in those markets. 

Solar with current subsidy levels is a stable business, but its not likely to grow to a size that will have an impact on CO2 emissions reduction. Hopefully the failure of over optimistic projections of PV price reductions based on short term extrapolations will sober up the eternal optimists and get some sense back into discussions of viable and realistic ways to reduce CO2 emissions. I doubt it. 

Published By Edmund Kelly

The non-fossil energy from current nuclear, wind and solar are failing and will continue to fail in reducing CO2 emissions. This is borne out by all credible projections by the EIA, IEA world bank and others. Optimists in all current non-fossil energy camps rationalize why these projections are wrong, but my assessment agrees with the objective observers.

Too much of alternative energy is wishful thinking. No current choice is economically viable so the common reasoning is to pick one and argue it will get better if we support it wholeheartedly, and by implication reject the other alternatives. This makes for a polarized debate that goes nowhere.

Currently the US spends about $12B/y on green energy. With current politics its hard to see this amount growing. This amount of subsidy will support wind, solar and bio at slow growth rates if they get cheaper. This is the acceptable amount of subsidy that balances the current political realities. Realistically the subsidy level is more likely to fall, with the wind PTC on a yearly cliff and the solar ITC expiring in 2016.

Energy is too big a part of the economy with too many powerful entrenched interests for government to afford the subsidies or fight the battles necessary for any meaningful impact based on currently available technologies.

Current economic and political realities make it clear that economically viable clean energy that does not need subsidy is the only way to grow clean energy.

My point is not that we should stop supporting current non fossil fuel alternatives. What we do need to do is to invest intelligently in new  non fossil technologies that might have the potential to succeed. While the debate centers on in fighting between the current alternatives, and a search for more taxes and subsidies to prop them up, a real debate on how to grow the pool of options cannot start. The air has been pulled from the room.

A new approach to fund power plant development (rather than basic research) is needed. A model I like is SPACEX. This is essentially a government funded system level startup that is succeeding. Rather than the cost plus model of government contractors, this was essentially funded with fixed priced contracts for tangible results. Unfortunately the DOE has not learned from NASA's experience, and even if it had, entrenched fossil fuel interests ensure that Congress will block any attempts at reform.

A stepped funding model that offered initially small funding for tangible results, with more funding as viability is demonstrated would allow a range of new ideas to be tested cheaply. There are currently a handful of fusion energy and advanced sustainable safe nuclear companies that could benefit from investments in the $10M/y to $100M/y range. There are some crazy wind and solar alternatives that might succeed. Were they to demonstrate they were on a path to viability, larger funding for the few that make it would be forthcoming.  A yearly budget of $10B could fund dozens of new system level energy companies. The key would be to avoid long term subsidies for boondoggles. The $10B/y is just a swag. Less could easily accomplish a lot, and it all does not have to come from the US.

By Edmund Kelly