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Is Solar Going to be a big flop?



September 19, 2011 – Comments (8)

It is the dawn of a new generation of energy generation. We will wean ourselves off of petroleum and gain our energy from renewable, environmentally responsible sources. We will protect our environment, and get the energy we need from responsible sources.

A defense of solar? Nope: the sort of arguments for fuel cells (50’s) and ethanol (about a decade ago). It seems that every decade or two, someone reinvents the wheel and promises us a cheap, easy, universal source of energy and power that does not pan out. So it seems with solar.

There is a current shakeout with solar companies, such as Solyndra and Evergreen Solar and others. Further, this has been blamed on cut rate prices on panels made in China with the help of gov’t subsidies, and so forth. I do not think so. I point out that if these things were so wonderful and economically advantageous, people would be buying these things hand over fist. All manufacturers would be totally sold out and would have a backlog of orders. This situation does not exist. The demand for solar is small, and the supply is large.


#1) When I was in HS in the 70’s, I checked out a book from the HS library printed in the mid 50’s that foretold the future of cars. It attracted me by the funny car pictures that were supposed to be what we would be driving in 20 years (they kinda looked like the stuff from the Buck Rogers movies of the era). It further foretold that at that point, all cars would be using fuel cells for energy. It is now 60 years later, and I am still waiting for passenger sedans equipped with fuel cells (although I think the Governator had a Hummer powered as such).

#2) Archer Daniels Midlands. I drank the Kool-aid: I believed that ethanol was the fuel of the future, and besides, they are very efficient vacuum cleaner of gov’t subsidies, so I bought ADM. That investment lost money. I did not know that making ethanol from corn actually used more energy to manufacture than the energy you got from it. Further, there was not nearly enough excess corn supply to supply even a tiny bit of the US demand for fuel.

#3) Steve Jobs calls it cute. True. Even cheerleaders for solar admit that it will never be more than a miniscule source of energy for the grid.


So why would anyone buy it? The second a country withdraws feed-in tariffs, the sale of solar plummets, because the numbers simply do not add up. Further, I would be willing to bet that theoretical maximum efficiency of solar panels is around 20%, which is almost where commercial manufacturing is at right now, so do not look for more dramatic improvements in efficiency.

Like ethanol, I wonder if the total energy used to make a solar panel is more than the energy from the solar panel over its limited lifespan. I do not know the answer, I am merely asking.

Another factor being overlooked is that you have to replace the solar panels regularly, since they do not last forever. So, it your installer says that you will have to replace them every 15-20 years, but that, even with gov’t subsidies, it will take 20-25 years to recoup your losses, would you buy them?

Just because solar energy appeals to you environmental or emotional or psychological sensibilities, it does not mean that the industry will be successful or ever become profitable.

Perhaps I am wrong. But you have been warned.

Thinking about the current state of solar, against the promise of fuel cells or ethanol of yesteryear, it might turn out to be OK, but it sure seems to be deja vu all over again. 

8 Comments – Post Your Own

#1) On September 20, 2011 at 1:05 AM, traderbach (< 20) wrote:

I believe that solar is like any other technological innovation and requires the time for thorough R & D & to achieve economy of scale to become truly viable.  Without going back & researching all the material I have studied on the subject it is my understanding of the cost/return on solar technology is that it is cost-effective in a relatively short time.  Several people I know have been in profit already from domestic setups.  There has to be the will by governments to make any new technology work & this is the major stumbling block right now, especially in the economic climate of today.  I have also studied the other technologies for clean energy from their inception to today. I believe, as do those more erudite in the subject, that, failing a breakthrough in a radically new technology, what will inevitably be used is a whole spectrum of energy sources with solar as a useful component in that array.  Thank you for bringing up the subject.  I think that many are mulling over the same thought processes right now & such a discussion is very useful for the community.

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#2) On September 20, 2011 at 11:12 AM, mhy729 (30.41) wrote:

It was Bill Gates that called solar "cute", and he further supports nuclear energy as an answer to the man-made global warming problem (I am not stating AGW to be true, only that Gates believes it to be).  Both nuclear and solar have been taking major beatings lately, but do they make for good investment opportunities?  I am strongly considering starting small positions in each and further accumulating over time.

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#3) On September 20, 2011 at 1:17 PM, chk999 (99.96) wrote:

The solar enthusiasts keep saying that solar is the future. But when you remove the subsidies, solar installation plummet. This should be telling somebody something.

There are niche markets (like a cabin a long ways from power lines) where solar is the best alternative. But it won't ever provide baseload. Nuclear is the best source for that, but it will be a while before people see this. 

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#4) On September 20, 2011 at 5:35 PM, EnigmaDude (55.96) wrote:

Well all of my solar picks took a beating today, so you might be on to something.  Like chk999 states in #3 the incentives have been "priming the pump" for solar investments but it looks like those incentives and subsidies are running out and the allure of solar energy is fading.  Maybe it's just that Big Oil is winning the energy battle in the short-term (go natural gas!) but I don't see solar going away completely, nor do I see nuclear energy as the long-term answer.

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#5) On September 21, 2011 at 1:55 AM, traderbach (< 20) wrote:

 After Fukushima can anyone be so arrogant & short-sighted to say that mere humans can plan for everything that nature can throw at us? If we're going to talk profit & loss the negatives and losses associated with the continuing use of nuclear dwarf any potential gain in energy.  Posterity will look back at this, if we're lucky enough to survive sawing off the branch we're sitting on, and marvel at the caperings of their anthropoid ancestors playing with fire.

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#6) On September 24, 2011 at 6:20 PM, jwebbzor (< 20) wrote:

Ray Kurzweil's has predicted that in 5-6 years, solar will be cost competitive with fossil fuels. Nanotechnology is a game-changer.

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#7) On September 24, 2011 at 6:37 PM, jwebbzor (< 20) wrote:


You said you think the theoretical maximum for solar panels is about 20%. You are right and wrong, the current theoretical maximum for a semiconductor solar panel is about 32%, this is because as the bandgap increases, we see a decrease in efficiency.

However, semiconductors are not the most efficient ways to siphon solar energy, they are just the easiest way to bring solar energy to market. More efficient ways involve advanced plastic materials or nanoantenna.

We have seen close to 100% efficiency in the lab, and have seen over 90% efficiency almost a dozen times.

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#8) On September 25, 2011 at 1:04 AM, Melaschasm (71.33) wrote:

For two decades I have heard people claiming that solar is just a few years from cost parity.

The best estimates I have seen indicate that solar is 1.5 to 2 times as expensive as natural gas, if all government subsidies are removed.  

I suppose if the experts forever predict that solar is just a few years from cost parity they may be right at some point in the next few centuries...

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