Breakthrough: Solar Breakthroughs Needed, Says New UC-Berkeley Study

After we published Break Through last fall we constantly heard from old-school environmentalists like the Center for American Progress blogger Joe Romm that we don't need technological breakthroughs. (Romm was careful to narrowly define "breakthrough" as the invention of a brand new technology, even though we had explicitly defined it as "breakthroughs in performance and price.")

One of the chief barriers to dealing with global warming is that clean energy remains much more expensive than fossil fuels. As long as that remains the case, neither rich countries like the U.S. nor poor countries like China are going to move to clean energy sources any time soon. What to do? We argue that major federal investments in clean energy are required to scale up the technologies and bring down their price.

Now a new report by UC-Berkeley's Severin Borenstein makes the same point. This from the San Jose Mercury News.

Under the most likely scenario, the cost of a 10-kilowatt solar system would be three or four times as much as the electricity it'll produce, Borenstein found. And even using a more favorable set of criteria, the cost would still be as much as 80 percent more than the value of the electricity it will produce.

Borenstein's research wasn't sponsored by any group or organization or industry, and the UC Energy Institute does non-partisan research, he said.

"I have nothing against solar PV and I hope it gets better," he said. "It's just very expensive and not terribly efficient."

What to do?

Borenstein argues against government subsidies, such as California's million-solar-roofs program, and for more research-and-development money from the U.S. and state governments to develop more efficient solar systems.
"We need a major scientific breakthrough, and we won't get it by putting panels up on houses," he said.

One idea we've toyed with is simply buying down the price of solar panels through government contracts with private firms over a 10 - 20 year period. Manufacturing and materials advances would bring down the price over time, and firms that get breakthroughs in performance and price would have an advantage in winning future contracts. Would Professor Borenstein support such an initiative? We're requested an interview so hopefully we'll find out soon.

Borenstein is taking a deep economist view which is fine. The problem is that the same analysis can be made for many major economic activities. Take transportation for example, it is expensive and inefficient and is sustained by subsidies. Yet, we have made the automobile a center of economic attention despite massive inefficiency compared to alternatives. Dido for agriculture, you know that great sucking sound that takes money from the blue states and redistributes it to the red states.

The ultimate win-win will be advancing PV to make it economically effective, and we must do this. However, some economically irrational baby steps like the million solar roofs provide an important infrastructure catalyst. Given all the other money we are flushing at the moment, I can live with this one.

Call me a relativist.

Ray

Posted by: Ray at February 22, 2008 1:29 AM

http://www.salon.com/tech/htww/2008/02/22/solar_power_economics/index.html
This recent Salon.com "How the World Works" piece discusses two recent studies - one of them Borenstein's- on the economics of solar power investing and attempts to answer the question "When does solar power make economic sense?" The conclusion seems to be that when the carbon dioxide price point - the point at which a particular renewable source of energy becomes cost-competitive with a fossil-fuel energy source - is taken into consideration, public investment in large-scale energy projects in developing countries probably makes sense but investment in small-scale projects like installing solar photovoltaic panels on residential homes in the US might not.

Posted by: amy.leblanc at February 29, 2008 6:54 PM

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