Tuesday, September 15, 2009

Green Bubbles?

From Time (Why the Solar Industry is Struggling):
Last summer the future of the solar industry looked bright. Demand was high thanks to generous government subsidies, and solar stocks were soaring. But now it resembles a classic bubble. The solar industry overbuilt and is now struggling under the weight of excess capacity and falling prices.
Then there's Hawaii (NYT):

With the most diverse array of alternative energy potential of any state in the nation, Hawaii has set out to become a living laboratory for the rest of the country, hoping it can slash its dependence on fossil fuels while keeping the lights on.

Every island has at least one energy accent: waves in Maui, wind in Lanai and Molokai, solar panels in Oahu and eventually, if all goes well, biomass energy from crops grown on Kauai. Here on the Big Island of Hawaii, seawater is also being converted to electricity.

As with other technologies, in the long-run cheap prices will drive adoption by consumers looking to reduce costs, so I take the fall in prices as a generally good thing, reflective of increasing scale. In the short-run the glut will probably be short lived as governments around the world prepare to increase their consumption of alternative energy sources.

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