An interesting look at things. Just as Government subsidies for Ethanol are causing a shift in agriculture that is driving food prices up worldwide, the same thing is happening on the Solar arena.
From The Economist:
More light than heatAnd what happened?
Bureaucratic meddling has harmed solar power
Last week, EDF, one of the world's biggest energy firms, announced it would invest $50m in a firm called Nanosolar, which aims to produce cheap solar panels. Nanosolar believes it can sell panels for a little as $1 for each watt of capacity�less than one-third of the best deals currently on offer. If true, that�s great news, especially since it would reverse a worrying trend.
It used to be an axiom that solar power grew steadily cheaper as time passed. Solar panels were once too expensive to install on anything but satellites. But as the technology improved, they became cost-effective, first in isolated spots such as weather stations and oilrigs, and later on lonely farms and houses far from the grid.
But in 2004, everything changed. Prices of fossil fuels began to climb, and worries over global warming and security of supply intensified. Those factors might have been enough to boost investment in solar by themselves. At any rate, the riches that undoubtedly await the first firm to create cheap solar power were already luring venture capital.The worlds biggest lie: "I'm from the Government and I'm here to help you." Subsidies create problems in other channels and they seldom help what they are applied to.
But governments such as Germany�s, who wanted to give solar and other forms of renewable power an extra boost, began subsidising wind turbines and solar panels in order to speed their adoption. This was supposed to have three benefits: it would reduce emissions of greenhouse gases, spawn a fast-growing and lucrative domestic industry, and help to lower the unit costs of solar panels, thanks to the bigger volumes. Indeed, the three goals are interdependent: solar power will have to be deployed on a massive scale if it is to make much of a dent in emissions, which will only be affordable if it becomes much cheaper.
But Germany�s subsidy, which takes the form of a generous tariff for solar power, has had the opposite effect. So many firms rushed to install solar panels in such profusion that the world ran short of the type of silicon used to make them. The price of silicon�and thus of solar panels�rose. Many firms began to pursue radical new panel designs, simply to reduce their silicon consumption.
Meanwhile, Germany has wound up with more solar panels than any other country in the world�a perverse result for such a cloudy place. It also has fewer wind turbines than it might otherwise�again, an odd outcome for a blustery country. The German government has decided that the subsidy is too expensive, and wants to revise it�just the sort of unpredictable behaviour that tends to alarm rather than entice investors.
