Solar Energy: Economics, Government and Technology

Posted on March 27, 2008  Comments (10)

An American Solar Opportunity Gets Shipped Abroad

The project will pour $1 billion into utility-scale photovoltaic solar farms that will directly feed power into a country’s electrical grid. The installations will range from fewer than 2 MW to up to 50 MW, while a single farm could cover hundreds and hundreds of acres.

They’ll be installed in Europe. In Asia. And maybe even in America too, one day. Why not now? Because AES wants to sow its solar seeds in only those countries that offer the most “attractive tariffs.” That eliminates the US from the list of potentials, immediately. And it gives countries like Germany, Spain, Italy and South Korea the clear advantage. They all have can’t-beat national incentives for solar developers.

It’s one of the sad facts of Washington’s incoherent clean energy policy these days. How can a country lure in clean energy projects when there are far more appealing offers elsewhere?

Government actions impact economic decisions. It will likely take more than 10 years to have good data on what government investments pay off in the energy sector. But I would say it is a pretty good bet to invest in technology such as: solar, geothermal, wind… Countries that create global centers of excellence in these areas are likely to benefit greatly. The only question I think is that many countries are smart enough to see the benefits and so likely many countries will try.

Any time many actors pursue the same economic strategy there is the risk that the payoff is diluted with so many others having done the same thing. Still the reason so many countries have adopted the strategy of developing centers of excellence in science, engineering and technology is that it is such a good idea. The USA has a problem in that we are spending more than we produce on luxuries today so there is much less available to invest compared to other countries (and compared to 40 years ago).

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10 Responses to “Solar Energy: Economics, Government and Technology”

  1. No name provided
    April 13th, 2008 @ 8:37 am

    I do beleive that solar energy is the future while other sources of renewable energy will be kind of complementary. For example, you mentioned geothermal energy, well this source is great but it depends on location that has specific conditions ( Using biofuels reduce the polution but there is a concern that production of biodiesel or ethanol is on the account of food so it should be only a temporary solution or should be implemented only in places that have no no shortage of biofuels sources.

  2. Curious Cat Science and Engineering Blog » Solar Thermal in Desert, to Beat Coal by 2020
    May 26th, 2008 @ 9:49 am

    Great progress is being made adding wind and solar capacity. And the increasing oil prices are encouraging much faster adoption of these technologies…

  3. Japan to Add Personal Solar Subsidies at Curious Cat Investing and Economics Blog
    June 23rd, 2008 @ 3:35 pm

    Germany is the largest solar market (due to government policy encouraging solar development).

  4. Pat
    November 13th, 2008 @ 3:16 am

    It is so sad that the US is so far behind on having a good energy policy. Hopefully this will change when Obama gets into office.

  5. DIno
    November 20th, 2008 @ 8:44 pm

    This are indeed encouraging signs , that the shift to alternative and cleaner sources of energy has began to spread globally.

    Oil based energy is destructive to the environment , such as global warming and pollution we must act now or else we’ll be faced with an environment that is hostile to us and all other forms of life.

  6. Anonymous
    January 6th, 2009 @ 6:03 am

    Thanks to the poor US policies influenced by rich lobbyists of the oil giants, America is way behind the rest of the world when it comes to solar costs.

    Hopefully with Obama’s new administration and their new policies on green energy, America will finally catch up with the rest of the world. To think Bush’s administraion has been wasting of $200 million a day on the troops in Iraq! Hopefully that money can be put to better use – invest in Green Energy Companies!

  7. Russ
    January 16th, 2009 @ 4:36 pm

    Government needs to get some data from the private sector. We need some amount of ‘fast tracking’ and private industry is already getting the infrastructure in the United States for some interesting solar and wind related projects.

  8. Anonymous
    July 10th, 2009 @ 12:49 pm

    Solar energy is the future. We need to get it cheaper, however we must focus on natural things like solar and wind energy. Oil is almost over and we must seek alternatives now. If the oil companies want to cooperate fine, if not, the government should do something about it.

    My two cents.

  9. Anonymous
    September 6th, 2011 @ 8:43 am

    Solar energy is surely the future – and prices are continuing to drop. At time of writing reports suggest that by 2013 solar panels will be half of what they cost in 2009, resulting in solar electricity playing “an important role” in meeting the UK’s renewable energy targets (source – The Guardian newspaper).

  10. Anonymous
    September 21st, 2011 @ 10:41 pm

    This article shows how ahead of the time this article is. While solar power has become far more accepted across many developed countries it is evident that solar isn’t the only solution and their is still room for stronger solutions to come forward. The governments have to get on top of this and be far more proactive than reactive.

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