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Austin Vernon's Comments

February 13, 2012

2012 PV Forecast: Industry Value Chain Blues

Option 3: The market proceeds by the normal industry shakeout model with only the low cost producers surviving. These producers continue to increase scale by absorbing market share and creating new demand with lower prices. Increased scale drives costs down, driving a virtuous cycle until the market reaches an equillibrium. And innovation is happening everyday - producers are making their cells thinner, improving their production processes, and driving out costs throughout the manufacturing process. I'm sorry that it isn't happening fast enough in thin film, which you obviously favor, to compete with traditional silicon panels at this point in time.

December 29, 2011

Renewable Energy Adoption and the Increasing Cost of Electricity in the U.S.

In your possible causes you are missing a key one - deregulation. Several of those states (Texas and California especially) are pioneers in reforming utility governance. As our country proves, good ole fashioned competition is a powerful force. While others may not have argued effectively, it is hard for me to believe such a small portion of renewables could affect prices either way except maybe in Iowa because it has the highest penetration. To prove this one way or another you would need to do a regression that accounts for differences in competition, varying sources of generation, etc. like economists and credible researchers do in peer review environments. This isn't to say there aren't positive benefits to renewables (I believe there are) but this is not the proper method to show it. Analysis like this sets back the industry.

February 28, 2011

Will Distributed Solar Drive Utilities into Bankruptcy?

You should read up on the definition of LCOE. The IRR you calculated and cited is not correct as you do not take into account cost of capital, the time value of money, or even maintenance costs. The real return would be negative. You also fail to address the issue that most electricity markets are heavily regulated and not subject to market forces.

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