What’s still holding solar back?

Solar and wind are now experiencing status as the nom du jour, like never before, as the promise of lower-cost renewable energy becomes ever more realistic. But some of this attention is cyclical, and lower fossil-fuel prices again threaten to lower interest in renewables, said Paul Norman, recently retired senior vice president of power services at the federal Bonneville Power Administration.

“If you compare the cost of building and generating power with a gas-fired plant, which is kind of the fossil fuel source right now that’s really low, and with construction costs that are low, gas [power] is cheap,” he said. “Solar is coming down, but over the last two or three years, gas has fallen a lot faster than solar has.”

But Norman said that those gas prices are cyclical, even though there are people in the industry who claim gas will always stay low. According to him, most industry forecasters make their cost projections based on the present state of the industry.

“So when the gas prices are down, the forecasters are saying they’ll stay down, and personally I don’t believe that.”

But Norman understands why the price of gas has overshadowed the solar industry thus far.

“When the cost of gas is $3 for a million Btus [i.e. British thermal units] that’s just—that is so cheap in the short term, it makes it hard for renewables to compete,” he said. “In the long-term the fundamental economics of fossil fuels would make—with hopefully a continual decline in the costs of solar—will make solar more cost competitive.”

But, according to Norman, gas prices alone aren’t to blame for solar’s less-than-meteoric rise in the U.S. energy industry.

“You have national politics; there seems to be very little appetite to put a price on carbon that would reflect the true social costs of carbon,” he said. “Absent a price on carbon, it’s hard for solar to compete.”

And, according to Norman, the country needs to talk both the short term and the long term when looking at solar.

“Right now the short term doesn’t look real great,” he said. “I think the long term looks much better. But for the long term to look better, you can’t stop solar development now. I think it’s important to keep moving on it, because the only way to bring that cost curve down is to continue to install it and learn about it,”

Image courtesy of NREL.