Whenever government support for solar declines, we are reminded of how important it is for renewable energy markets -- especially solar power -- to operate independently of government support. Consider for example the boom-and-bust cycle experienced in Spain. It's clear that feed-in-tariffs do not create sustainable markets.
The solar industry absolutely needs regulatory certainty, but it also needs to become sustainable on its own…a process that is referred to as market transformation.
The term market transformation has been used in the energy efficiency industry for a long time now. It is essentially the process of expanding a market in ways that create lasting change. Here's the definition of market transformation used by the Northwest Energy Efficiency Alliance (NEEA):
Market Transformation is the strategic process of intervening in a market to create lasting change in market behavior by removing identified barriers or exploiting opportunities to accelerate the adoption of all cost-effective energy efficiency as a matter of standard practice.
The key words in NEEA's definition are "lasting change." Because government subsidies do not create lasting change, we need to identify ways to intervene in the solar market in a way that accelerates the adoption of solar, but also leads to a sustainable market.
Governments worldwide have implemented a variety of solar incentives and support, with mixed results. Here in the U.S. the latest example of "government support" is the installation of PV on the White House. But if you look at the history of solar on the White House, it's no different than any other form of temporary support. We're now seeing the third time solar will be installed on the White House. President Carter installed solar on the White House…Reagan removed it….Clinton considered it….then George W. Bush installed solar again….and now Obama is [presumably] adding more.
It seems that solar on the White House is just like any other type of government support…it's on, it's off, it's on again. In the end it's just another form of regulatory uncertainty...leaving the solar industry to guess about how long the current administration will support solar.
So here's my question. What's the best way to expand solar markets WITHOUT government subsidies? And how do we create lasting change without relying on transitory support?
As you may know, I have a clear opinion about how to achieve market transformation in the solar industry. And most of the strategies I recommend include reducing the perceived risk of adoption which will help people learn to "trust" solar.
But as the saying goes, there's more than one way to skin a cat. So I'd like to hear what others think about this subject. What can the solar industry do to truly achieve market transformation?
Now we all know that there's been massive government support for fossil fuels ever since christ was a small child. But that's not the point of this dialogue. Assume energy generation and delivery can be achieved without subsidies, and let me know your ideas for making solar a self-sustaining industry.