Subsidizing Solar — Both Sides of the Coin

A reader from Savannah, GA and I spoke on the phone the other day and became fast friends. In response to my piece on subsidies for solar, he writes:

I keep going back and forth on this very difficult issue. On balance, I’m against photo-opp seeking politicians and their bureaucrats (pol-crats) picking winners and losers.

Still, the last decade’s big gush of subsidy bucks (grants, credits, feed-in-tariffs) may be cited as birthing a gold-rush style ramp-up of solar PV production that maybe would not have otherwise happened.

And sure, if all that leads to unsubsidized, $1/watt pricing and thus 100 million arrays erected, then I can see some substantial positive economic/ecologic impact resulting.

All of this analysis changes, by the way, once the Holy Grail (cost-feasible electricity storage) is invented.

Right.  There is no quantum shift from solar at an unacceptably high price to solar at sub-$1/Watt; rather, as R&D happens and manufacturing capacities scale, the price comes steadily down. And, of course, subsidies that are designed to make this process more attractive to early players facilitate the process.

Compare this to the subsidies for oil that were (legitimately, in my book) handed out 90 years ago. In their absence, oil exploration would not have happened, and the boom that we saw in the 20th Century would not have occurred.

Of course, here we are 90 years later, and, via corruption, we’re still shelling out subsidies to the most profitable industry on the planet, but that’s another matter.  They were, in my view, as correct actions in their day as are our subsidies for renewables today.