Only a few decades ago, solar power was held up as an example of the problems inherent in government subsidies. Politicians would look at attempts to adopt early versions of the technology, which inevitably proved economically unfeasible once government supports were removed, and assumed solar power was nothing more than wishful thinking.
The explosion in solar development in the time since then, particularly within the last decade, has illustrated exactly how short-sighted those assumptions were. The National Renewable Energy Laboratory released a report on the development of solar technologies in 2010 that illustrated the dramatic drop in the cost per watt of solar modules even without many of the earlier government investments. Between 1980 and 2008, the real cost of solar installations dropped from more than $22 per watt to beneath $4 per watt.
Nonetheless, at least in some areas solar power remains relatively expensive when compared to some traditional fuels like coal and, more commonly, natural gas. In other areas, similar costs have led people to choose more familiar technologies or to shy away from solar because of challenges like intermittency.
Hoping to tackle the nation’s growing energy issues and ongoing environmental struggles, the Department of Energy introduced a program designed to overcome these challenges known as the Sunshot Initiative. As of November 2011, Solarbuzz reports the average cost of solar in the U.S. is still $2.49 per watt, down more than 4 percent just from October. The Sunshot Initiative hopes bring the cost of solar installations down below $1 per watt, which officials hope could bring the cost to produce solar electricity down to as little as 6 cents per kilowatt-hour, easily competitive with other sources of energy. At that price, the DoE hopes that solar could account for as much as 18 percent of the country’s electricity by only 2030.
When President Barack Obama proposed the Sunshot Initiative along with many the other programs designed to stimulate economic activity in the wake of the recent recession, part of his efforts to encourage investment in research and development. But Science magazine reported in February that the initiative seemed unlikely to survive the cuts that Congressional Republicans insisted upon before approving the latest budget.
Those dim prospects only got dimmer with the high-profile collapse of several major solar companies including, in particular, Fremont, California-based Solyndra. The potential loss of $535 million in loan guarantees to the company quickly soured many people’s attitudes toward solar, causing many to fear the country would end its investment in new technologies.
But the Obama administration pushed forward with the program, announcing at the start of September that it had issued more than $145 million in funding and loan guarantees to potentially transformative technologies in the solar sector.
Solar cell efficiency has steadily progressed from only a few percent to above 20 percent in some high-end solar cells over the past few decades, and Sunshot spent more than $35 million on such research, but many companies and agencies already invest heavily in this field. With most of its funding, Sunshot took a dramatically different approach, offering comparatively small amounts of money to projects addressing often overlooked problems that, if successful, could revolutionize the industry. Even the investments in improved solar cell efficiency went to technologies that might not otherwise have found funding.
The greatest part of the funding – $42 million – went not to developing solar technologies, but research into reducing balance of system costs, all the parts of a solar installation other than the panels and cells themselves. These parts account for more than 40 percent of the cost of a solar system. Many millions more went to systems designed to ease the integration of solar systems into the grid, such as helping account for bi-direction flow of power, and nearly $6 million was used to create systems to help move new technologies from the laboratory to the market.
With this low-risk, high-reward model, the Sunshot Initiative can hope that only a few of its investments ever make returns and still feel confident that it could revolutionize solar power and the U.S. energy industry.