20 November 2006

Alternative Energy Back in Vogue?

WashingtonPost.com is carrying a story on alternative energy on their frontpage today. I should know better to draw any conclusions from a datum but I am somewhat surprised to see this given where oil is on the market. When oil was hitting records articles on alternative energy sources, biofuels, and hybrid cars were all the rage. Now the price has dropped 20 %, which is, gasp, 2005 levels, people don't seem to be quite as concerned. Proof that value is a relative measure if anyone ever doubted it.

Where the story is interesting is that it focuses on the employment potential of alternative energy. Unlike oil, alternative energy is fairly employment heavy. It also doesn't export jobs to the same extent. It also makes some key points that I've never seen in mass media before on costs. First, the author quotes BP's spokemen as stating:

If they last as long as planned, solar panels might become competitive without government subsidies. Edwards said that every time industry capacity doubles, the cost of panels falls about 20 percent.

Capacity has doubled over the past three years, but costs haven't dropped as much as expected because of a silicon shortage. Eventually, though, Edwards said that "if we can keep driving costs lower, we will reach a point where solar is the same price as grid power."

I've historically seen this as a 15 % drop per doubling of capacity but the end result for an industry growing at 35 % annually is more or less the same. Thin film is coming and it will have a huge reduction in the amount of bulk semiconductor consumed. The next step is to use growth processes that minimize the degree of vacuum required for production, since high vacuum requires expensive, time consuming production techniques.

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