Letters to the Editor
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Bubbles are like weeds
To make an eco-friendly analogy: market bubbles are like weeds. Weeds grow fast, and far too large to maintain their structures, then they die. While they rot they feed other plants, and actually make nutrients available that would otherwise stay inaccessible.
Market bubbles serve exactly the same purpose. The 2001 tech bubbles created a huge oversupply of infrastructure and workers. Tech innovation has benefited as a result. The same could happen with a solar bubble. Yes, individual companies may fail, but the industry should benefit long term if there is a glut, and consequent price drop, of solar energy infrastructure.
(As an aside, we're still in the crash of the real estate bubble, so not much benefit is evident yet. Also, it may be too severe to see anything good out of it for many years...)
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This is exactly why
no one makes memory chips anymore.
Oh wait, there still are memory chip manufacturers out there?
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Yes yes yes
Let's overbuild to the sky and by a process, called 'magic' it will result in mysterious free 'innovation'.
You do know that the dotbomb bubble wasted hundreds of billions in capital, put hundreds of thousands of people out of work and slagged the stock market for 6 years, don't you? In fact one upside is that it's permitted my company to forgo 'innovation' completely and just buy small companies that ran short of VC money. Then we take that intellectual capital and send it Asia where it's cheaper to deploy.
Hell current course and speed some bright light will figure out a way to build all of "our" power plants in China and drag the long lines to us.
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One man's waste is another man's treasure
One man's waste is another man's treasure, Nulla. The anonymous post above gives a good example of that. The overproduction of chips resulted in a glut of purified silicon. The solar industry has benefited greatly from that glut.
And, it's not magic. When a plant rots and it's eaten by others in the environment, is it magic? Is it a waste? Sure, it might be wasteful, and a more efficient process may be possible, but efficiency isn't everything.
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A Market Believer is Crushed.
"a glut of supply doesn't incite a crash so huge that the industry is crippled for years to come."
But the American Enterprise Institute says that the free market solves all problems! How could a crippling crash result from the perfection of the free market?
You're bursting my bubble, man. Next you'll be telling me that CEO's aren't demi-gods.
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Oversupply?
Oh, puh-leeze.
Ball, in his ersatz economic analysis, has completely avoided the economic principle of substitution, in this case, the replacement of high-cost suppliers - nuclear power and gas-fired plants - with low-cost suppliers, based on solar power.
Supply may exceed demand somewhat for some time, but the supply and demand curves will adjust, as they always do.
Balance will be restored.
Peace shall reign again.
Faith in free market forces will prevail, and bloom as they never have before.
Although perhaps at a somewhat lower price point.
Of course, so far as nuclear power and gas-fired plants are concerned, any supply from solar power is going to be 'oversupply'. That's likely what Ball is talking about. He's shilling for entrenched industry interests.
Ball should get a job for which he may be more qualified. No telling what that might be. Bush might have an opening for a PR guy with his qualities.
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Parse TFA a bit more carefully ...
Ball actually makes sense on two fronts.
Firstly, solar has not reached parity with fossil fuels. As such, it is being propped up by a few sources. One is government subsidies, another is the hopes and dreams of environmentalists. Economically, both sources are small when compared to the size of the market as a whole. Basically, only a certain amount of money is likely to be spent on solar generation before parity is reached. After parity is reached, then the market will gobble up everything that can be produced.
Regardless, the market for solar generation capacity is limited. It is not limited by the need for energy. It is limited by the lower price of coal, oil, and NG.
Secondly, are solar stocks a good investment? Right now, there are a lot of companies building capacity to meet a limited market for solar generation of electricity. There will be blood.
On the bright side, it means a supply glut for folks like me who want to tile their roof with solar cells.
Side note - Moore's law has nothing to do with solar. Some of the materials and tools are similar, but it ends there. It hardly makes sense to try to make a corollary. Efficiency per square meter favors the expensive multilayer stacks. Price per watt is tainted with market speculation.
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chip analogies are misleading
Fueling all the giddy dreams is the hope that the same relentless process of manufacturing innovation that continually drives down the price of computer hardware components will work its magic on a smorgasbord of solar power technologies.
The process of manufacturing innovation at work in computer hardware involves squeezing lots of stuff into an ever smaller area. Since costs are a function of area, but value is more related to the amount of stuff you can fit in that area, the cost curve for computer hardware had a lot of room to grow downward.
With computer hardware, small is good. But with solar, small is not so good. The amount of power you can generate is a function of area. So your costs are pretty closely related to the value you can create; with solar, you can't have your cake and eat it too the way you can with computer chips.
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Tyler_Mason
Firstly, solar has not reached parity with fossil fuels. As such, it is being propped up by a few sources. One is government subsidies, another is the hopes and dreams of environmentalists.
So long as we're discussing 'parity', you should also discuss how fossil fuels are subsidized by the government and how large costs - like pollution - are almost fully externalized.
To make a correctly parametrized economic comparison, you must discount the subsidies, the externalized costs, and the economies of scale. Do that, and solar power wins conclusively, even ignoring the likelihood of future improvements in solar technologies.
Since we're at Peak Oil and fossil fuels supply must decrease, and since solar has not yet fully exploited the economies of scale which are expected to be realizable in due course, the economic advantages of solar over fossil fuels must necessarily increase in the future. This realization may be the single largest driver of current investment trends in solar.
These analyses have already been done by Goldman Sachs but the public is not privy to them. They have also done similar analyses for wind power, which is why they're one of the biggest - if not the biggest - investor in wind-based energy.