It is now more or less taken for granted that solar panels are getting cheaper and cheaper. But that didn’t just happen — solar PV did not jump onto that trajectory on its own. After all, solar panels have been around for decades, but they didn’t really start plunging down the cost curve until the mid- to late-2000s.
Germany deserves some credit for creating demand with its aggressive feed-in tariffs. President Barack Obama and the Democrats deserve some credit for creating demand with the 2009 stimulus bill. But the lion’s share of credit goes to China, which, rather than fiddling with tax breaks and credits and “market mechanisms,” invested a boatload of money into production subsidies, scaling the industry up by brute force.
China’s wild binge of solar manufacturing drove down the costs of panels, both by oversupplying the market and by hastening economies of scale. In effect, the country voluntarily took on the costs of pushing solar panels onto the “S-curve” of rapid growth, a strategy that will greatly benefit the Chinese — and the rest of humanity.
Now there’s evidence that China is in the midst of doing the same thing for another key clean-energy product: electric buses.