Paul Merrion of the Chicago Business called me recently to discuss solar photovoltaic (PV) technology and its commercial viability. We talked about the declining cost of solar PV panels and the fact that they are still not cost competitive with their fossil fuel counterparts. Moreover, I stressed that “Solar… has not been able to stand on its own feet in the market place.”
The key metric in this case is the levelized cost of electricity (LCOE), a subject of my recent blog post. Until the LCOE of solar PV is equal to or less than that of fossil fuel generators, then the need for government subsidies will continue. Currently, the federal cash grant subsidy is set to expire on December 31, 2011.
Regarding federal cash grants, Paul Merrion noted in his article that “New solar installations next year could see ‘up towards a 50% drop off, given the lack of the grant program and the tightening up of other programs at the federal level,’ says Dan Simmons, director of regulatory and state affairs at the Institute for Energy Research, a non-profit arm of the American Energy Alliance, a Washington, D.C., lobbying group that supports the use of fossil and nuclear fuels.”
Paul’s article can be read in its entirety. Accessing it may involve setting up a free trial subscription.Tags: Chicago Business, Federal Cash Grants, Fossil Fuel Counterparts, Paul Merrion, SBIR, Solar PV