While John McCain calls for more offshore drilling and Barack Obama attacks energy speculators, something else is happening that may have a far more important impact on energy prices than any number of new wells or crackdowns on traders. Solar power is growing, fast. But it could be growing faster.
The market intelligence firm iSuppli predicted on Monday that by 2010, "worldwide investments in the production of photovoltaic (PV) cells will rise to the same level as those for semiconductor manufacturing by 2010." That's a big deal, given the importance of semiconductors in the global economy.
By 2010, says iSuppli, "as many as 400 production lines in the world that can produce at least 1 megawatt of PV cells per year will be in place."
The significance of such strong growth will be a reduction in production costs by as much as 40 percent between 2006 and 2010, say manufacturers quoted by iSuppli.
And here's the kicker:
With these cost reductions, many regions throughout the world will soon reach grid parity -- a point at which PV electricity costs the same or less than power derived from the electrical grid. PV grid parity is expected beginning 2012 in nations where sunshine is plentiful and constant, and 2018 in areas of the world with adequate or medium sun exposure.
At the point of grid parity all kinds of things become possible, including the widespread introduction of plug-in hybrids, and a corresponding decrease in global dependence on oil for transportation needs. Sure all such predictions need to be taken with a grain of salt. But 40 percent annual growth -- which is what is occurring right now -- is nothing to sneeze at. We are getting closer.
But we could be much closer, if our government was providing true leadership.
I can't say it any better than Thomas Friedman did on Sunday. Mercilessly mocking President Bush's Fourth of July deadline pressuring Congress to relax restrictions on drilling offshore and in ANWR, Friedman wrote:
... This deadline is from a president who hasn't lifted a finger to broker passage of legislation that has been stuck in Congress for a year, which could actually impact America's energy profile right now -- unlike offshore oil that would take years to flow -- and create good tech jobs to boot.
That bill is H.R. 6049 -- "The Renewable Energy and Job Creation Act of 2008," which extends for another eight years the investment tax credit for installing solar energy and extends for one year the production tax credit for producing wind power and for three years the credits for geothermal, wave energy and other renewables....
People forget, wind and solar power are here, they work, they can go on your roof tomorrow. What they need now is a big U.S. market where lots of manufacturers have an incentive to install solar panels and wind turbines -- because the more they do, the more these technologies would move down the learning curve, become cheaper and be able to compete directly with coal, oil and nuclear, without subsidies.
That seems to be exactly what the Republican Party is trying to block, since the Senate Republicans -- sorry to say, with the help of John McCain -- have now managed to defeat the renewal of these tax credits six different times.
What do we want? Grid parity. When do we want it? Now.
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