12 Solar Power Myths and the Saving Grace of a Worthwhile Cause

By Paula Mints SPV Market Research/Strategies Unlimited
December 10, 2012 

 

Over the course of its terrestrial history, solar industry growth has primarily relied on incentives and subsidies for growth and as a mark of success, instead of healthy margins and profits. For most of the industry's history buyers of technology (cells and modules) have enjoyed price control. The primary reasons that buyers have controlled the price function for most of the PV industry's history are: a) The industry requires incentives/subsidies for its growth b) Without subsidies there is not pull for the technology c) There are many substitutes, both renewable and conventional d) all substitutes enjoy some degree of subsidies themselves e) the task of educating consumers that owning the means of electricity production offers more control than continuing to rent electricity is daunting and f) the industry continues to promise prices so low that continued investment in high quality technology and R&D is almost impossible.

The solar industry – referring to all solar technologies and the entire solar value chain – has courageously persevered in the face of significant doubts, cheap (and subsidized) conventional energy, and the powerful lobbies of conventional energy along with its own sometimes questionable choices.  The industry has persevered primarily because of its belief that solar is the energy technology of the future.  In terms of success, believing will not necessarily make it so, and years of battling entrenched conventional energy remain ahead, but without this core belief in the rightness and inevitability of victory, solar will not succeed.  It takes courage to plow ahead during tough times and relatively easy times simply because you believe that you are on the right path. 

As demand for solar products is fragile, and the industry’s incentives are controlled by governments (who often do not understand the technology or the industry), participants tend towards extremes in terms of wishful thinking often seeking out information that confirms its hopes. It is difficult for any group or individual to avoid confirmation bias, which is the tendency to seek out information and data that supports a closely held view. This behavior brings out the best and the worst of an industry that has overcome much in its ~40 year history, has more to overcome, but no matter what, is not going away. Success will, however, continue to require hard work, development of new business models, cost reduction and, yes, believing in the impossible.     

Solar Myths:

 1.     Crystalline Technology is the technology of the past

 In 2004, the Germany feed-in-tariff incentive model began to stimulate demand in Germany and was quickly copied by other countries.  Noting the apparent security of the FiT, investors became interested, and the market in Europe surged.  This period of strong demand