MIT study urges increased R&D funding, policy changes to chart strong US solar future

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A new study released by the Massachusetts Institute of Technology Energy Initiative (MITEI) on the future of the solar industry highlights a wide swath of potential for the sector — but also stresses the need for lower-cost technologies and a more effective deployment procedure if it wants to succeed.

The study bills solar energy has having the best potential for meeting humanity's long-term needs while cutting greenhouse gas emissions, but says a number of technical and policy developments are needed to support a massive scaling up of the technology.

Robert Armstrong, director of MITEI, said: “Our objective has been to assess solar energy’s current and potential competitive position and to identify changes in US government policies that could more efficiently and effectively support its massive deployment over the long-term, which we view as necessary.”

Richard Schmalensee, Howard W. Johnson Professor of Economics and Management Emeritus at the MIT Sloan School of Management — as well as the study’s chair — added: “What the study shows is that our focus needs to shift toward new technologies and policies that have the potential to make solar a compelling economic option.”

The study takes a look at the technical, commercial and policy factors shaping the solar market today, outlining recommendations to policymakers to ensure continual growth for the market.

With the solar market expected to grow in its role as a major provider of the US’ energy output going forward, the study notes that if solar wants to become a leading source of electricity by 2050, it will have to increase its 2013 level of production 50 times over.

In order to fight the challenges presented by large-scale solar generation deployment, the study suggests a focus on added support for research and development (R&D), especially in regards to low-cost, large-scale electricity storage technology.

While silicon-based PV technologies are still expected to dominate the field in the near future, efforts must be made to invest in new materials and products such as emerging thin-film PV technologies, which will eventually become the dominant technology. In particular, the US must look to invest in transformative new materials and methods, rather than allocate funds towards technology that will only create incremental advances for the sector.

The MITEI also states that federal and state programmes that cater towards spurring investment in the solar market should be reviewed and modified in order to increase cost-effectiveness and add a larger focus on handing out incentives for the production of solar energy.

In addition, the study notes that state renewable portfolio measures should be brought together under a united national programme that would help reduce the cost of reaching set goals by giving way to unrestricted interstate trading of credits.

James A. Mueller, director of research at the George Washington University Solar Institute, said that while some of the recommendations from the study could eventually come to fruition, measures such as revising net-metering policies likely won’t be acted on anytime soon.

“The likelihood of a lot of that — at least on the R&D side — is probably one of the more likely suggestions that could occur from the recommendation,” Mueller said. “There are jurisdiction states and people considering what to do on net metering, but this is kind of like a long-term view of what do you do when solar actually penetrates the grid at large percentages.

“The net metering, it’s not a huge problem right now, they’re just saying, ‘When solar reaches high penetration rates, we may need a different framework.’ So I think that’s probably realistic over the long term, but that’s not something that’s necessarily needs to be done today.”

News of MITEI’s recommendations comes with a potential crisis for the US solar market slowly approaching, with the country’s international tax credit (ITC) set to drop from 30% to 10% at the end of 2016, hinting at the reality of an upcoming drop for the market in the near future. MITEI notes in the study of the potential that certain deployment polices, such as the ITC, could be reformed by focusing on electricity output rather than capacity investment.

On the heels of the study’s release, the group is presenting its findings to lawmakers and legislators this week in Washington, D.C.

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