In the classic children's book, The Wonderful Wizard of Oz, by L. Frank Baum, Dorothy's dog Toto pulls back a curtain to reveal the Wizard as nothing but a normal man. "Pay no attention to the man behind the curtain," the man says. With solar energy, that man behind the curtain could be the hidden subsidies that conventional energy enjoys, but, it could also be the promises of low prices for photovoltaic (PV) technology that are proving disastrous to all solar technologies.
Currently the PV industry is going through a significant correction as a result of an seven-year FiT-fueled party filled with capacity building, aggressive pricing and promises of grid parity that ignored the realities of technology development and have led to manufacturer failures, losses and failures on the demand side, and questions about the stability of the technology in the field. Demand for PV systems, especially multi-megawatt investor owned systems, drove the industry to multi-gigawatts of annual demand. The idea that a period of shrinkage might improve the industry’s odds of avoiding a severe correction was not considered, while suggestions that the low prices were artificial and would lead to disaster were ignored. Over this period, unfortunately, progress was defined as being the cheapest electricity source available. The cost of keeping this promise is a steady march of company failure after company failure. This is more than a shame, it is a painful lesson that the entire solar sector must now endure and overcome.
From the Wonderful Wizard of Oz: “If we walk far enough,” says Dorothy, “we shall sometime come to someplace.”
It is critical that the PV industry’s “someplace” is a goal it can be proud of, and that includes educating the electricity-buying public about the value of clean, reliable solar electricity.
When you are on top, everybody loves you and when troubles come (and they always do) beware of Schadenfreude. During the early FiT days, many companies took the IPO route, so, the cost of the current low prices in terms of company failures, is impossible to ignore. Concerns about the photovoltaic sector have spilled over to influence investor confidence in CSP and CPV technologies.
Promises of achieving grid parity with conventional energy and doing so without subsidies ignores the fallacy of this goal, which is that parity with a subsidized source of electricity, for which the true costs of production are largely unknown, is not possible. Actual parity cannot be achieved, only the appearance of parity. Meanwhile, given the subsidies that conventional energy enjoys, and given the current low price of natural gas, this unfair race simply cannot be won. The cost to the environment of using fracking to access natural gas, particularly in the United States, remains largely ignored while the low prices of NG, which are often not passed on to the consumer, are celebrated. It is time to pull the curtain back on the true cost of all energy generating technologies – from conventional energy to solar energy. Once this happens parity will likely be much closer than previously thought.
At the recent Intersolar North America conference held in San Francisco each July, the conference organizers presented awards to the top three solar projects during the previous year. The projects that won provide examples of the value that solar brings to communities. The winners were Enerworks for a large scale thermal cooling and heating installation on a retirement home in Canada, ESA Renewables, for a PV solar farm that provides income to a school including paying the salaries of two teachers, and Vanir Energy, for a large scale solar thermal system on a YMCA in North Carolina. These community solar projects help to educate communities about the value of solar, including energy independence. Promises of energy independence along with highly visible community solar projects will help educate energy consumers about the value of solar.
From the Wonderful Wizard of Oz: “You have plenty of courage, I am sure," answered Oz. "All you need is confidence in yourself. There is no living thing that is not afraid when it faces danger. The true courage is in facing danger when you are afraid, and that kind of courage you have in plenty.”
Lead Image: Yellow Brick Road via Shutterstock
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