Solyndra, Innovators or Crooks?
Solyndra had a great idea. They developed solar technology that promised to be cheaper than silicon. The Department of Energy believed in the venture enough to loan $500 millions dollars of Recovery Act funding. Private investors put their money down, too. They didn’t foresee that the cost of silicon would drop sharply and that China would ramp up and produce super low-cost silicon PV. And, of course, they didn’t foresee that they would go bankrupt.
Is Solyndra a prime example of government wasting your tax dollars on renewable energy? Many folks have been making this claim. But do they know that Solyndra is only a tiny fraction of Department of Energy’s green-energy loan program, and that it is the only DOE loan to default so far? Solyndra’s loan guarantees are also infinitesimal compared to those of both fossil fuel and nuclear companies. Investigations reveal that there was no real scandal in the loan process. It’s also normal to have a certain fraction of speculative programs like this fail.
What happened with Solyndra actually points to positive change. Competition in solar technology has become so fierce that we are fast fowarding to the day when the cost of solar power will equal the cost of electricity from our utility company.
There is a lot of talk lately about Moore’s Law in regards to solar. In the computer technology field, Moore’s law says that the number of components that can be placed on a chip doubles every 18 months. According to Scientific American, if Moore’s Law were applied to solar power technology, we would eventually have the solar equivalent of an iPhone—very cheap, mass produced energy technology many times more effective than the giant and centralized technologies it was came from.
Over the span of thirty years, the cost of solar cells has reduced 7 percent each year on average. If this continues, the cost of solar will be just over 50 cents per watt in 20 years. PV modules historically have been about half the installed cost of a solar power system. With the cost of installation falling at the same rate as solar panels, the cost of solar in the U.S. will cross the current average retail electricity price of 12 cents per kilowatt hour in 2020. In fact, given that electricity prices are currently rising a small fraction per year, prices will probably cross earlier, around 2018 for the country as a whole, and as early as 2015 for the sunniest parts of America. Read more.
Solyndra was blindsided by a field that’s growing exponentially. It’s clear to us now that solar power is here to stay.