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Mixed messages, partisan noise, and solar energy

September 19, 2011

Since the bankruptcies of Solyndra, Evergreen Solar, and SpectraWatt, a great deal of prognostication on the future of the solar industry has broken out, in the media.  and in the halls of Congress.  In addition to legitimate technical and economic speculation on the short and long term viability of the growth of solar energy, the various American partisan noise machines have fired up.  On the downside, most of the cacophony is partisan noise, and purveyors of partisan noise don’t even particularly care whether the noise they are making is accurate, positive for the nation, or even particularly coherent.  On the positive side it’s given solar energy broader exposure and discussion than it’s received in decades.

There are legitimate questions involved in the handling of the Solyndra loan guarantees:

  1. Did Solyndra receive undue consideration because of political connections?
  2. Were there signs that Solyndra lacked viability as a business before the loan was issued?
  3. Did Solyndra present itself  in a fraudulent manner, beyond the normal wishful thinking of a startup company.

Since Solyndras guarantees only represent about 1.3% of the entire  program, it’s also worth figuring out if there are any companies remaining in the program which should not have been extended the loan guarantees.

But all that being said,  it shouldn’t be surprising that a startup solar company with unique technology failed.  Its failure isn’t even indicative of the success of the DOE’s loan guarantee program, since one of the reasons for the program was to make capital available for renewable, unconventional energy sources.  While solar energy represents a growing share of the world’s energy market, it’s still dwarfed by fossil fuels, and Solyndra’s technology was unconventional by any definition.  More to the point, new technology businesses usually fail.

So where does this leave the solar industry, both in the U.S. and worldwide?

IEEE’s publication Spectrum ran an article a few days ago expressing pessimism about the U.S. solar industry entitled “Solar Eclipse” .  Among other things it noted that the role of China in marketing cheap conventional polysilicon cells worldwide has made it difficult for more efficient competing technologies to gain market share (and advanced technologies are a strength of the U.S.),  that solar fares best in heavily subsidized environments such as New Jersey, and that First Solar, a relatively strong and stable U.S. company, is shifting some of its resources into project development and construction. It also noted that, given the infancy of solar as a large scale energy source, the industry is discovering some pretty basic facts, like the fact that the cells get dirty and have to be cleaned.

Despite all this, the solar market grew at an amazing rate of speed.

In 2010, the U.S. solar market grew 67%, making it the fastest growing component of the energy market.

Worldwide,  solar energy demand has been growing about 30% per year over the past 20 years.

Solar energy has some innate advantages which make the increased adoption of solar energy inevitable in the long run.  First of all, direct energy from the sun is ubiquitous.  It’s much more evenly distributed across the world than fossil fuels, and it doesn’t require the same sort of capital to extract as, say, oil, nor is there a lot of financially high risk exploration involved.    Solar energy does have to be harnessed and processed, but  it doesn’t require the preliminary steps of drilling or mining.  Consequently, it doesn’t involve  tearing up layers of the earth, or rearranging terrain in close proximity to water tables  and the level of risk to workers in the industry pales in comparison to coal mining, or working on an offshore oil platform.

Once in place, solar cells create no pollution, are durable and long lasting, and require relatively little maintenance.  While there is no such thing as a really “clean industry” (all manufacturing and installation industries have an environmental footprint) solar compares well against the alternatives.

So the question is not whether solar industry is going to be a major component in the future of energy.  The question is whether the U.S. is going to be a viable player in the solar economy.  If the political silliness around U.S. policy toward solar energy doesn’t subside, the answer might be a clear no.

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