Richard Keiser is the president of Keiser Analytics, a solar PV investment and consulting firm. Prior to founding Keiser Analytics, Richard was a senior analyst at Sanford Bernstein, where he led the Technology Strategy group. He publishes Solar Sector Strategy, a monthly analysis of critical topics in the solar industry. He is a graduate of MIT.
Company executives and analysts alike face a number of difficulties in answering this very important question. To reach the answer requires strong fundamentals in solar PV economics. This, however, is unfortunately not enough. The data necessary to answer the question are difficult to collect and even more difficult to structure and maintain. Further, the data are highly dynamic: US incentives change in structure, decrease or expire and electricity prices change in both magnitude and composition. All of these variables affect a market’s attractiveness, which itself can change substantially over time.
Non-linear systems are often difficult to understand. The famous “penny game” is a good example. In this game, a hypothetical person is given one penny (or one euro cent) on the first day, two pennies on the second day, four pennies on the third day, etc., and then asked to guess the total value of the pennies at the end of one month. Very few people guess correctly – US$21 million – or appreciate that 75% of that value is created on the last two days.