Memos are just one thing that politicians don't get, but it could be true in the case of solar energy. Technology has advanced so fast and so far that policy makers and even utilities have been left behind. Many experts are working off outdated information and don't realize renewable energy is now cost competitive in many circumstances, according to this report from Bloomberg New Energy.
"...awareness of the current economics of solar power lags among many commentators, policy makers, energy users and even utilities," the report stated.
Authors attributed the lag to rapidly dropping prices of solar panels, ambiguous metrics used in the solar industry and persistent dissemination of outdated data - "occasionally by those with an interest in clouding the discussion," they say.
The authors also take issue with traditional metrics and messaging, such as "grid parity," which is used to describe the point where the cost of renewable energy matches other more traditional power sources. But the method is so yesterday, according to the authors, because, in part, it often compares a "retail technology to a wholesale price."
Bloomberg isn't the only group touting the attractiveness of renewable energy. Goldman Sachs put its money where its mouth is to the tune of $40 billion. Such an investment in clean technology isn't greenwashing, says Christopher Swann in Slate. As he says, "The Wall Street firm....is never far from the money."
Goldman Sachs is trying to capitalize on an emerging industry - one with many twists and turns. The Bloomberg report entitled, "Re-considering the Economics of Photovoltaic Power," suggested that obtaining an accurate accounting of industry shifts is difficult because prices change so fast, and because the supply chain and manufacturing process is complex.
A trip down memory lane
The authors give a brief history lesson on solar energy, and acknowledge that costs have generally exceeded other forms of power generation. But that was then; this is now:
"...With rapid cost reductions, a changing electricity industry context with regard to energy security and climate change concerns, increasing costs for some generation alternatives and a growing appreciation of the appropriate comparative metrics, PV‟s competitiveness is changing rapidly. As an example, large drops in solar module prices have helped spur record levels of deployment, which increased 54 percent over the previous year to 28.7 GW in 2011. This is ten times the new build level of 2007. "
Again, from the report: "Grid parity is now largely an outdated concept stemming from an industry that has traditionally been used to being an "underdog" of small scale, and constantly fighting for a "level playing field".
Clean energy is maturing, and in some ways repeating history. Technological changes aren't smooth. Just look at what is happening to the newspaper industry . The Bloomberg authors suggest the rapid changes in solar energy carry implications for policy makers designing new fiscal and supporting programs.
"The challenge is to elegantly transition PV from a highly promising and previously expensive option, to a highly competitive player in electricity industries around the world," they say.
Financing mechanisms evolving
Bloomberg New Energy also found, in another study, that the evolution of the industry is leading to new financing vehicles. It is moving toward a broader array of support. Read more here.
Bloomberg and its consultant on the study, Reznick Group, contend the broader support will help the industry keep growing. The new financing sources will replace traditional players, such as the federal government, who cut back. New players include pension funds, insurance companies, big corporate firms such as Google, and vehicles such as partnerships and programs akin to real estate investment trusts.
New financing methods. Falling costs. Technology improving.
Sounds like an industry on the move.