What made solar panels so cheap? Thank government policy?

It's by that nice Dave Roberts, in Vox (arch). Naturally, he omits the second question mark. His text is Evaluating the causes of cost reduction in photovoltaic modules by Goksin Kavlak, James McNerney and Jessika E.Trancik. I'd feel guilty for not reading it but it's paywalled so I'll rely on DR's paraphrase.

Anyway, the paper takes the observed steep decline in solar PV price, and tries to work out what caused this: things like building bigger plants, efficiency (of the panels) and R+D. This is a sensible thing to do, and nicely they do it over two decade-length times, so you can see to some extent how the drivers change over time. Read Vox, I won't re-say it here.

DR's point is that it were the gummint that dunnit, and naturally I'm a bit dubious about that. If you break down the drivers into "low level" and "high level", then each contributes about 100% (by a quick by-eye addition), and the largest single factor is a high level one, public and private R+D, which is ~60%. Unfortunately it then starts to get blurred: DR doesn't split R+D up into the obvious categories of public and private. Then "market-stimulating policies" come in from the left field, and are policies "which create legal or economic incentives for private actors to research, develop, and invest in technologies"; and apparently "do the bulk of the work". So it was mostly private R+D, stimulated by govt policies? This is believable.

While I'm here, I should link to Auke Hoekstra's update of his "solar PV is doing much better than the projections" that I blogged as Photovoltaic growth: reality versus projections of the International Energy Agency – the 2017 update.


* Extinction rebellion - ATTP. Well, someone had to write it. I notice he isn't brave enough to venture an opinion. Having written that, I suppose I ought to. Reading Rupert Read, philosophe, it would seem that they're fine because they're "righteous"; I'm dubious.
Transportation is the Biggest Source of U.S. Emissions - from 2017, but the point is interesting: with large-scale solar supplying more power, and coal less, there will come a point where addressing (electric) transportation becomes more important. Fortunately, that's already happening to some extent.
* Thanksgiving in Little Hill Village - Scott Sumner
* Astonishingly, Timmy has a different answer: It’s Capitalism That Made Solar Panels Cheap. Capitalism And Markets, Not Public Policy. Although actually he mainly points out that the paper doesn't answer the question he is interested in.
* Nice cartoon.


Phil said...


Hmm. "Fatal error reading PNG image file: Not a PNG file"

Phil said...

"R doesn't split R+D up into the obvious categories of public and private."

So let us see how that might be done.

Widgets are subsidized. Most of the market for widgets are due to the subsidy.

Joe's Widget Company makes widgets. JWC wouldn't be in business without the subsidy. JWC invests in R+D. This is 100% private R+D, right? Then cut the subsidy and see what happens to it.

David B. Benson said...

I view the matter as part of the advance in semiconductor physics and engineering.

Tom said...

Government certainly played a part, subsidies encouraging new entrants into the market--and when some of those entrants were in low cost countries like China, it slammed prices.

Government could do a lot more. One of the bigger hindrances to solar take-up is piecemeal and confusing permitting processes in the developed world, put out by the same government that is encouraging take-up. More could be done with non-rooftop installations--community solar gardens would be much cheaper and could benefit from lessons learned from rural solar electrification programs.

We've done a lot and we should congratulate those who have worked so hard to see the progress we've made. And then we should get right back to work and continue doing a lot more.

cce said...

It's not paywalled.


cce said...

In case the other one doesn't work: