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Notes from the Solar Underground: The Vertiginous Nature of Solar’s Identity Crisis

The photovoltaic industry remains committed to the story that it will be the cheapest energy source available – less expensive than fossil fuels and able to leap nuclear power in a single bound. The concept of grid parity has been a driving force in the industry for so long that for the industry to divorce itself from this goal would be akin to breaking its word. You can perhaps be forgiven, after all, for taking longer than expected to reach a goal, but perhaps not so easily forgiven for setting a goal that had little logical basis in the first place.

The history is well-known, the German FiT proved a highly profitable and seductive instrument for investors, leading to a highly profitable period in the solar industry as well as the beginning of multi-megawatt (utility scale) installations. This period coincided with a shortage of polysilicon, and thus crystalline PV modules. High demand and raw material constraints led to escalating prices for PV modules (even thin film modules), which in turn led to concerns about the price of solar. 

Grid parity has always been a better slogan than a goal particularly as it ignores the direct and indirect subsidies enjoyed by conventional energy.  Even the banking industry, architects of the financial crisis that led to a global recession in the late 2000s, enjoys direct and indirect subsidies.  Nonetheless, the PV industry has a reputation of developing an expensive technology with a too-long return-on-investment profile. No one (or very few) ever bought an expensive car with return-on-investment in mind.

The PV industry has been apologizing for so long for being expensive that it forgot, or was insecure about, its value proposition: A DG PV system is a high quality, reliable, long-lived source of electricity with low O&M that provides energy independence to its owner or owners. 

PV manufacturers lost money in 2012. Those that did not fail were forced to curb costs, which, in an industry that relies on R&D and innovation is a disaster.  Expectations for too rapid commercialization led to the failure of several startups and even long term participants.  Below cost prices for modules were defended until the facts made it impossible to deny the mark downs and then were defended as necessary for continued high levels of deployment.

High levels of deployment have cost the PV industry dearly in terms of quality control and innovation.  In an industry that relies on ongoing research and innovation and that hopes, no needs, to inspire innovation in the next generation of scientists and engineers, starving the innovative process is close to a crime.

Nonetheless, you can’t keep a good industry down. Innovation continues, startups are percolating and somewhere out there an idea or innovation (business or technology) is looking for funding.  Now is the time for the industry to return to its quality roots and this includes allowing manufacturers to earn sufficient margin to encourage on going innovation and a focus on quality. 

Quality, by the way, is not a minimum standard; it is a commitment to constant improvement that accepts no compromises.