Tags: Cheap Solar, Feed In Tariffs, Subsidies
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The rationale for subsidizing newer, cleaner, safer forms of energy production is that by paying incentives to increase the pool of early adopters, a mass market is developed faster, which drives down production costs sooner, making a more desirable form of energy cost-effective faster, helped by all of us, in the form of government incentives. The (initially artificial) demand acts the same way as normal demand in speeding more product to market. We consumers drive down the costs. Because of the urgent need to reduce greenhouse gases, we have to create that market faster.
Building any new technology infrastructure is expensive, but if government steps in and helps the invisible hand of the market, it become less expensive, because with an increased demand, mass production lowers costs to manufacture.
One example: Solar panels and inverters cost much less now, due to government intervention, mostly in Spain and Germany, with Feed-in Tariffs that literally paid homeowners to produce electricity on their own roofs. New Jersey has just tried the same approach, and now rivals California in solar installation and pricing. It works. Solar is now available for less money a month than the utility energy in about nine states. We all benefit, consumers, and utility-scale solar developers alike, from cheaper solar due to the forward thinking of legislators in Spain, Germany and New Jersey.
But nuclear power is different. It can not be implemented by individual homeowners. We are not going to be popping a nuclear reactor in our backyards any time soon.
Susan Kraemer writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate and GreenProphet and has been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow and Scientific American. As a former serial entrepreneur in product design she brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention: solving climate change is the mother of all necessities! As a lover of history and sci fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan @dotcommodity on twitter.