The Global View

What we know about solar energy

What do we know about solar energy? We know that, despite the popular criticisms leveled against government loans to the occasional failed enterprise (yes, Solyndra), incentives work and price wars can benefit users, even if they’re not always good for solar-energy companies.

These factors, among others, help explain why solar energy installations in the US, for example, reached a new record in 2011, more than double the amount installed in 2010.

According to new data from the Solar Energy Industries Association, the US added 1,855 megawatts of solar photovoltaic (PV) capacity last year, compared to 887 megawatts of new capacity in the previous year.

That’s an encouraging development, considering the wealth of solar energy potentially available to us globally: as the Desertec Foundation notes, “within six hours, deserts receive more energy from the sun than humankind consumes within a year.”

What else do we know about solar energy?

  • Feed-in tariffs work — Feed-in tariffs (FITs) provide payments to people who put up solar panels; it’s generally a standard rate offered by utilities for every sun-generated kilowatt of energy these panels feed back into the grid. Wherever FITs have been introduced, solar installations have risen quickly and dramatically … sometime too dramatically for austerity-minded governments that are now looking to cut those incentives.
  • Government incentives work — The growth chart for wind and solar development in the US demonstrates just how effective incentives like the 1603 Treasury program — which provided direct grants in lieu of tax credits — have been in promoting renewables.
  • Price wars benefit end-users — For better or for worse, increasingly affordable photovoltaics from China have made it possible for many more people to install solar panels on their homes. It might be “dumping” or “unfair trade” to US and European PV companies that have found it hard to compete, but anything that causes solar technology prices to drop 50 percent in under a year looks like a good deal to green-minded consumers who are watching their wallets.

The dramatic decline in the cost of solar module, in fact, is bringing us ever closer to “grid parity,” at which point solar energy prices are equal to those for fossil fuels. As the  one-year update to the Obama administration’s “Blueprint for a Secure Energy Future” just noted, “The cost of solar modules has come down 400 percent in the past four years, from about $4 per watt in 2008 to $1 today. We are well on our way to achieving our ambitious goal – that solar power that costs the same or less than fossil fuels by the end of this decade.”