John Ransom
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Solar is the power of the future and the power of the past. What solar isn’t, is the power of the present. That’s because using solar power to generate electricity is expensive. Still. And that’s not going to change anytime soon, no matter how many political fundraisers are held by solar advocates.

According to Bloomberg, recent price decreases in solar equipment have driven costs from about 25 cents per kwh to 17 cents per kwh for photovoltaic (PV) powered solar energy, the least expensive form of solar power deployable at scale. But that’s a far cry from the average retail price for electricity as of June 2011. In May, according to the US Energy Information Agency, customers paid 9.70 cents per kwh for electricity generated by conventional means, nearly half of solar’s cost.

For decades, solar’s advocates have predicted that economies of scale, technological advances and pixie dust will soon kick in allowing the world to hold hands, sing songs and enjoy the “free,” and limitless power of the sun. 

The amount of energy available through solar is astonishing and bewitching, true. Because of the huge mass of energy available through solar, there’s no doubt that solar has potential to solve many of the earth’s energy problems. It just doesn’t do so right now. Nor will it ever be “free.” Heck, it might not ever even be cheap.

The sun does provide quite a bit of energy. According to NASA we use an equivalent of 1/10,000 of the sun’s available energy here on earth in fossil fuels. While 30 percent of solar energy that reaches us is reflected back into space, what’s left over is more energy in one year than all the energy that can be created by fossil fuels combined, ever.

Capture, conversion, storage and transmission of solar energy at costs close to fossil fuels however remains elusive.

So, the reality of the sun’s “free” energy continues to fall far short of the promise year after year despite rosy predictions. Devotees from Bloomberg New Energy and the IEEE have predicted that soon solar energy will compete with coal-the cheapest of all the energy sources- in price. Even assuming sunshine and salad days for solar, BrightEnergy.com says that “[b] y 2050, it is expected that solar PV will provide 11 percent of global electricity production, corresponding to 3,000 gigawatts of cumulative installed capacity.” That seems like a pretty modest target for an energy source that competes with coal for price. And it underscores the uncertainty of solar’s future.

The truth is that no one really knows what the future for solar is, in part because government is muddying the waters.

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.