Message from my son Paul

From Economist.com
Apr 7th 2008

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More light than heat
Bureaucratic meddling has harmed solar power
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LAST week, EDF, one of the world’s biggest energy firms, announced it would invest $50m in a firm called Nanosolar, which aims to produce cheap solar panels. Nanosolar believes it can sell panels for a little as $1 for each watt of capacity-less than one-third of the best deals currently on offer. If true, that’s great news, especially since it would reverse a worrying trend. It used to be an axiom that solar power grew steadily cheaper as time passed. Solar panels were once too expensive to install on anything but satellites. But as the technology improved, they became cost-effective, first in isolated spots such as weather stations and oilrigs, and later on lonely farms and houses far from the grid.
By 2004, solar panels were coming very close to generating power at the sorts of prices regular grid-connected customers pay in places where electricity is expensive, such as Japan. Enthusiasts confidently predicted that solar cells would soon supplant grimy old power plants, and spare the world the tiresome chore of digging for coal, uranium and natural gas. Fans of solar power were so sure of themselves they came up with their own version of Moore’s law for the sun’s power, rather than that of computer chips. Every time the volume of solar cells produced around the world doubled, they predicted, the price per watt would fall by 20%. After all, it had done so reliably for the previous 40 years. In 2004, everything changed. Prices of fossil fuels began to climb, and worries over global warming and security of supply intensified. Those factors might have been enough to boost investment in solar by themselves. At any rate, the riches that undoubtedly await the first firm to create cheap solar power were already luring venture capital. Governments such as Germany’s, who wanted to give solar and other forms of renewable power an extra boost, began subsidising wind turbines and solar panels in order to speed their adoption. This was supposed to have three benefits: it would reduce emissions of greenhouse gases, spawn a fast-growing and lucrative domestic industry, and help to lower the unit costs of solar panels, thanks to the bigger volumes. Indeed, the three goals are interdependent: solar power will have to be deployed on a massive scale if it is to make much of a dent in emissions, which will only be affordable if it becomes much cheaper. But Germany’s subsidy, which takes the form of a generous tariff for solar power, has had the opposite effect. So many firms rushed to install solar panels in such profusion that the world ran short of the type of silicon used to make them. The price of silicon-and thus of solar panels-rose. Many firms began to pursue radical new panel designs, simply to reduce their silicon consumption.

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