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September 2, 2009

Why American PV Makers Do Not Want Cheap Solar

Posted by : admin
Filed under : Enviornment News

If it were possible to make perfect public policy, we would not be in the middle of our nation’s 111th Congress. Alas, there is no “set it and forget it” formula for governing. Add in complex scientific questions, global-scale economics and technological innovation, and you have the energy and environmental policy challenge: how do we succesfully incentive and subsidize renewable fuels (or penalize emissions and fossil fuels)? Feed-in tariffs pose problems. Cap-and-trade has proven thorny. Green power options still need a lot of fine-tuning.

One universal difficulty is the continuing cost gap between renewable and fossil fuels. Creating an incentive program that works within the prevailing market – even a heavily regulated one – without interfering with normal market operation is very difficult when the price points are so far apart. Internalizing some of the costs of burning fossil fuels would help close that gap, and that is what cap-and-trade is all about: promote and subsidize clean energy and put downward pressure (both economically and through command and control) on dirtier fuels.

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