On a sunny afternoon in California, I drive past the shuttered factories of Solyndra Corp., the bankrupt maker of solar panels. A billboard-size “For Sale” sign sits prominently on the frontage road of Interstate 880, a main artery into Silicon Valley. Solyndra’s empty factories are grim reminders of how—even in America’s innovation heartland—life on the solar frontier can be nasty, brutish, and short.
My destination is Sand Hill Road, home to the world’s largest concentration of venture capitalists. I meet a gang of them at a swanky bar where they are celebrating (a few days in advance) Facebook’s extravagant initial public stock offering. While VCs who are invested in social media cheer their bonanza, those who had bet on solar energy ponder the difficulties of innovating in the energy field.
“We tried to apply the Silicon Valley model to solar,” one VC explains. “Moore’s Law would make everything go faster and cheaper. We’d become environmental heroes—and rich.”
Demand for solar doubled last year, but technologists overpromised and underdelivered. The few solar champions that have avoided Solyndra’s fate are firing staff, curtailing ambitions, and conserving cash. The solar panel, once seen as the “microprocessor” at the heart of an energy revolution, turns out to represent only a sliver of the actual cost of assembling and installing solar systems. Government subsidies to makers—Solyndra received US $535 million—and consumers contributed to a glut.
Then China’s solar exporters, fueled by cheap capital, overwhelmed their American rivals by providing sturdy and reliable, if not particularly innovative, products, often at below the cost of raw materials, no less assembly and shipping.
“Forget solar,” one of the VCs says. “Even the word energy scares me now.”
The debacle on the solar frontier confirms anew that innovation in electricity is ridiculously hard—far more difficult than, say, creating Facebook or any number of photo-sharing programs. What ails solar is a dearth of revolutionary innovations—either present or in the pipeline—that would make solar generation, distribution, and storage far less expensive and far more compatible with the existing grid.
The need for more inventiveness is only part of what’s holding back solar. Electricity is, after all, the product of a complex technological system that stretches back more than a hundred years. This system, while dependent on great gobs of (carbon-spewing, climate-altering) gas- and coal-powered plants, permits us to plug in and turn on, whenever we want, 24/7.
Electricity is also political. In the Great Depression, the federal government built a vast hydro network in the Appalachian region to bring electricity to some of America’s poorest. In the 1950s and ’60s, the government aggressively promoted nuclear-generated electricity. Today, reformers insist that modernizing electricity generation is so costly to undertake, and the benefits sufficiently difficult to capture, that ultimately private actors will underinvest in this area.
What’s needed to correct the solar market failure is a powerful political movement that imposes a single set of standards for solar generation and delivery across the nation. The resulting economies of scale are impossible today because hundreds of local and national governments insist on differing rules and requirements for the technology.
This kind of regulatory standardization—which is distinct from the technological standardization that organizations like IEEE spearhead—is not going to happen. The United States is pluralistic: Let a thousand solar shoots bloom. We are not China, after all, a country led by a politburo of engineers who can impose a technological system on a billion people.
As with electric cars, solar as a major source of U.S. electricity is at least another generation—technologically and politically—from coming of age. This technology will not be ready for prime time during my lifetime (I’m 56). Solar will be a small player for the next 20 years: an expensive novelty that attracts enthusiasm, talent, and some investment but fails to deliver at scale.
About the Author
G. Pascal Zachary is a professor of practice at the Consortium for Science Policy & Outcomes at Arizona State University. He is the author of Showstopper!: The Breakneck Pace to Create Windows NT and the Next Generation at Microsoft (The Free Press, 1994), on the making of a Microsoft Windows program, and Endless Frontier: Vannevar Bush, Engineer of the American Century (The Free Press, 1997), which received IEEE’s first literary award. Zachary reported on Silicon Valley for The Wall Street Journal in the 1990s; for The New York Times, he launched the Ping column on innovation in 2007. The Scientific Estate is made possible through the support of Arizona State University and IEEE Spectrum.