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Borenstein says direct government subsidies to support existing photovoltaics could in fact impede the development of more efficient technologies. “There is no question that there is what economists call ‘option value’ lost when you invest in the current technology,” he says. “If the technology is about to get a lot better, and is about to get a lot better for reasons that don’t have to do with building out the current technology but because the science is going to improve, that’s an argument for waiting. You’re crowding out future investment by investing now. The money would be better spent five years from now on the new technology.”

In a recent paper, researchers at Carnegie Mellon University’s Department of Engineering and Public Policy surveyed leading solar-power experts on the future of photovoltaics and concluded not only that the technology is far more expensive than other renewable sources of energy, such as wind and even solar thermal power, but that it “may have difficulty becoming economically competitive” in the next 40 years. The results are “dismaying,” says Granger Morgan, a Carnegie Mellon engineering professor and the department’s head.

Short-term subsidies for wind and solar thermal power could help them become cheap enough to compete with conventional sources of electricity, Morgan says. “But silicon photovoltaics are really a different matter. With existing technology, I just don’t see it happening.” He doubts that even doubling or tripling the use of current photovoltaic technologies will dramatically bring down the prices. “Of course,” he says, “if you get up in a room and say this, the tomatoes start flying.”

Indeed, plenty of experts believe that existing photovoltaics have an important role to play in promoting new forms of solar power. Deploying them on a larger scale will “pave the way for the next technologies,” insists Lawrence Berkeley’s Alivisatos. For that reason, he says, it is important to establish photovoltaics in the market. “It makes sense to have an industry that can gear up now,” he says. “Hopefully, that industry will absorb the new developments and bring out newer products over the next couple of decades.”

Caltech’s Harry Gray agrees: the urgency in his voice is palpable when he argues that we need to install as much solar power as we can, as soon as possible. “We need to make investments now in the technology we have, which is silicon photovoltaics,” says Gray. “We should be putting in [solar power] everywhere we can so people can see that it can make a difference. We can’t sit back and wait for breakthroughs. We need to show people that solar can work.”

The disagreement on the role of solar photovoltaics illustrates the larger debate over the best way for government policy to encourage a national shift to cleaner energy. And it is about to be played out around the country.

The DOE will probably decide soon on Exelon’s loan application to build the Chicago solar plant. If it gets built, the facility will represent only a tiny fraction of the nation’s total solar capacity, or even of Exelon’s electricity portfolio. But Gray is surely right on one point: such a facility, located in one of the nation’s largest cities, would be the face of solar power for many. Its fate will matter.

According to accounts by several companies, the DOE is thorough in reviewing the hundreds of loan applications it’s received, rigorously evaluating the financial health of the applicants and the market potential of proposed facilities. Nevertheless, it is hard to ignore the role of politics in deciding whether Exelon will build its facility on the South Side of Chicago. After all, President Obama’s home is just 13 miles away, and local politicians have been trying for years to reinvigorate the neighborhood that surrounds the site.

But then, politics have always played a major role in deciding the nation’s energy future, especially when it comes to solar power. Just ask Arnold Goldman.

David Rotman is the editor of Technology Review.

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Credits: Chris Strong, Technology Review
Video by Robert Brilliant

Tagged: Business, Energy, renewable energy, solar power, economics, stimulus package

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