How about this, a field, 2 kilometers by 600 meter, filled with solar cells (‘thin film’ solar cells, as it happens). Is this the future?
As the saying goes, the future is already happening, but it’s unevenly distributed. This is certainly the case with solar. One more case in which government (or local government) regulation can make a crucial difference. Markets are slowly reacting to the changing energy situation, but in this case, it might very well be too slow. They need a helping hand.
Ultimately, markets would have gotten solar energy off the ground, but without government incentives this would not have happened, even today, as solar is still some way off of competing with traditional energy on price.
And we have already decades of research and development behind us, as this is a technology with a long gestation period, and, almost equally important, needs economies of scale and learning to reap the advantages, hence the need for government incentives to prod things along.
What can be achieved then is this 2×0.6km field of dreams. It’s being built in Germany, the worlds most important solar market (we don’t need to explain why that is the case. One word; government incentives). This allows its builder, First Solar (FSLR) to reap the economies of scale and learning that are crucial to getting solar prices down to competitive levels.
The whole idea of these incentives is that they are temporary, help an ‘infant’ industry, so to speak. Here’s a picture. Look at the Fussballfeld (thats football field, if you have to brush up your school’s German)on the picture above. Or the car. This is big.
There are more of these ‘fields of dreams’ popping up. We have the Gore plan, the Boone Pickens plan, both have their merits. The energy scarcity is solvable, but the markets can’t do it on their own, sometimes, you need a little help from a friend.
And even investors can be happy, especially those in FSLR, although we’re unsure whether the future will be quite so brilliant. A possible plunge in polysilicon prices could dramatically reduce their cost advantage.