Monday, July 11, 2011

The death of the "green energy" trade-off.

CNet reports on the predicted demise of the current vision of green energy where the energy is produced at high cost with massive government subsidies.

The July/August edition of Foreign Affairs features "The Crisis in Clean Energy--Stark Realities of the Renewables Craze," which offers a grim outlook for solar, wind, and other green technologies--a crisis that will make it tougher for the U.S. to address energy security, the trade deficit, and global warming. Another piece by Devon Swezey of the Breakthrough Institute, teeing off the Foreign Affairs article, calls it "The Coming Cleantech Crash."

Contrary to the report, I believe green energy will do well long-term. Today, electric energy is a commodity, therefore a new method of energy production has to be competitive with the old methods. Otherwise, it will not be widely adopted by businesses and consumers. As I wrote before, there are good technologies and business models available to companies that want to deploy solar panels in residential areas. A real breakthrough is still ahead of us, but we won't achieve it unless we drop the old thinking that green energy cannot become competitive without huge government subsidies.

tags: inertia, trade-off, problem, energy, synthesis, system, economics, business, model, psychology

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