Understanding Solyndra: Solar is not Silicon

I have talked about Moore's Law in many posts here, because I have an expansive view of the concept. But it's confusing to people, so from now on I'm going to talk about Dana's Law instead. 

Dana's Law holds that the amount of solar energy in production will double every year or 18 months as far as the eye can see. It's a Moore's Law frame applied to technology that's not entirely silicon.

Take Solyndra, for instance. Not silicon. Solyndra was using thin film CIGS technology and a new circular panel design. It hoped to produce energy at $3/watt, including capital costs. A year ago, when panel prices were at $5/watt, that was a breakthrough. But Chinese oversupply this year sent prices plunging to $1/watt, and Solyndra went bankrupt.

Some people are trying to spin this as bad news. It is not. It is good news. Production efficiency and market competition have cut the cost of producing solar energy.  The “problem” is that Chinese companies produced more panels than their own market could absorb and so “dumped” a ton of them on the U.S. market, killing some suppliers that were using technologies, like CIGS that could not scale as fast.

This happens often in tech. It's one reason our big tech companies hold so much cash. It's only a “scandal” if you're looking to make up a scandal. The solution is to do what some smart energy companies have been doing – make a switch from solar thermal to solar electric, and pick up some bargains. Lower costs now mean big profits later.

In fact, as Nancy Pfund's Double Bottom Line (DBL) Investors has shown, subsidies in the renewable space are puny, and the American response to change in the past was always to double-down on the new. Around the turn of the last century the government delivered .5% of its total budget to the new oil and gas industry, five times the level of current renewable aid. 

The problem, in Solyndra's case, is that we delivered the aid to the wrong party. We needed it at the front-end – in research – and at the back end – in purchasing. Instead we got it in the middle – in production – and since this is a tech space, not a manufacturing space, we took risks with the public money.

Learn that lesson, get renewable subsidies anywhere near the level of what we gave oil back in the day (or even now) and you get an absolute boom.

Just remember, however, that you put it on the front end – cutting-edge research – and at the back end – absorbing cheap production – rather than in the fast-moving middle.

And tons of new ideas are already coming out of the front end, like this from Penn State, a new method for producing hydrogen from waste water cheaply, using biology rather than electricity. 

What we should be doing, as a society, is celebrating these breakthroughs more than we do Joe Pa's big win against Eastern Michigan. Send the President to Happy Valley with a check, hold a little rally, promise more. Focus public attention on the future, and the present doesn't look so bad.