DOE’s Solar Energy Sunshot Program – Right Focus?

DOE Solar Energy Program SunshotOn February 4th, U.S. Department of Energy’s (DOE) Dr. Steven Chu announced the Sunshot Program funding which has the goal of reaching $1/W installed cost for PV systems before 2020. The program goal is to reduce PV system installed costs by up to 75%. $1/W is a benchmark for some industry participants where utility scale systems compete with wholesale cost energy and loosely equates to $0.5kWh system output cost. Nine technology development companies received a portion of $27M Sunshot funding.

While any government funding support is good for the PV industry, $27M (part of a total solar program fund of $200M which supports President Obama’s broader “investment for the future” strategy) is a miniscule amount (compared to the billions in government support for renewable energy in China) and begs a number of questions.

First, why spend a relatively small amount, publicizing it widely, when the PV industry has made enormous progress in reducing installed system costs on our own over the last 5 years? The announcement does nothing but reinforce the erroneous mindset on Capitol Hill and elsewhere that solar is 10X more expensive than brown fuel energy and is a far cry from being competitive. It directly contradicts the impressive progress and the fact that solar energy is at retail grid parity in many markets, as the cost of fossil fuel generated energy is going ever higher.

Second, the nine Sunshot recipient companies are all technology developers. At some point, we need to recognize that solar energy technology is working now, and is improving every year, so it might be better to focus future funding on solving the real cost issues of streamlining permitting and interconnection in the project development cycle (among other downstream issues). These costs are as much as 25% of the total PV project development cost for small and large projects alike.

Third, DOE’s leadership must begin to see the big picture and the need for pushing a long-term energy policy that includes phasing out the enormous subsidies for fossil fuel.  It continues to frustrate me that the PV industry, with small and inconsistent government support, is continually asked to compete with embedded, highly subsidized fossil fuel generation which receives 12X more government support than renewables.

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