Sunshine

When did the future get so bright?

The solar industry is going gangbusters. Wasn’t it just yesterday that solar panels were those rickety old things you found precariously perched on geodesic homes in places like Idaho Springs, Colorado? Finally, finally, finally, solar is becoming cost effective, with incentives of course.

Ten years ago, I performed a lifecycle cost analysis of various power generation technologies. Despite the free fuel, photovoltaic came in squarely at the bottom. At that time, it cost about 10 times more than other conventional power generation methods like nuclear, coal and gas plants. I even thought at the time that the inclusion of PV in the study was a bit superfluous, but I was doing this study from a Japanese research center. And the Japanese tend to take a long-term view. They really wanted to know, because they saw this coming.

Since then, in our quarter to quarter and election day to election day world, we got caught up in gas turbines, then wind turbines, then clean coal. Now it's solar. And the emergence of solar has been something like a mackerel slap across the face, emerging in just the past few months.

A good handful of enterprising dot commers and silicon valley VCs are driving this. After all, PV is fundamentally Silicon, and who knows silicon better than, well, the folks in Silicon Valley.

Solar is expensive, but has a lot more potential for efficiency improvements than wind. After many years of development and utility-scale testing, wind turbines are pretty much dialed in. Wind turbines will get bigger - we will see humungous, 1 MW size turbines with blades that can span a football field, and armadas of offshore machines perched far off the shores of Cape Cod and Long Island. But, those are utility scale machines that require a tremendous permitting and construction effort, and bond-type financing.

Unlike wind, gas, coal or nuclear power, solar developers won’t get a whole lot of NIMBY protestors. At least not in California (see my blog about West Virginia Coal). So the permitting process should be a relative breeze. They're also relatively small and cheap, and can be put up anywhere. Which makes it a nice distributed generation option. (That means no stress on the transmission system, and easy interconnection agreements too)

It's good news to hear that the oil giants BP and Shell really are thinking “beyond petroleum". Even if it is just to make a pretty cover photo op for the 2006 Annual Report and a folksy commercials that features woman-on-the-street talking about what will happen in the "future, coming years". These subs provide a convenient place to direct huge oil profits, and benefits the industry by channeling a whole lot of R&D funds into new technologies.

Will they get spun off, or will these oil companies really transform themselves? Will they gobble up all these new solar entrants and be a serious contender or will today's emerging solar companies be the giants of tomorrow. Whatever happens, I can only hope that we can put all those free photons to good use.