Can Incentives Drive PV Industry Forward?

The PV industry is seen as a brilliant energy industry in term of long time development and environment protection. A few days ago the US and China signed an agreement which requires the two countries to reduce their greenhouse gas emissions to make a clean world for our generations to come. Yes, the two countries are moving to reduce their emissions now. Along this great mission, incentives are given. It is this that I get interested in and will discuss in the following paragraphs.

Incentives or subsides are always we want, especially when we run a business that needs funds or operation financial support. The PV industry is a new baby in the energy market compared with the biofuel industry, which has developed for years and has formed its own tracks no matter how good or bad it is However, the PV industry cannot reach this level due to its young age. Thus, countries which have accepted solar power generation have subsidized the industry. But is this a healthy habit?

This idea still needs testing. The current condition is, although solar power is soaring, its capacity in power generation is much lower than fossil fuels’. No matter whether it is in the US, India, China or any other country, the situation seems to be the same. And another fact is that these governments’ subsidies for fossil fuels are much higher than those on renewables. For example, the US government’s subsidies for fossil fuels on annual average are $4.8 billion, while its subsidies on renewables are only $370 million. Under such a skewed condition, do you think it is possible for the renewable industry to move forward? Since renewables’ development has be limited, so has solar power. Yes, this is unfair, but the current condition is so.

On the other hand, does a free market need incentives? Or should a free market be manipulated by a government?

Incentives can be comfortable for an industry when it just shoots out, something like we should protect our new-born children against unexpected outside conditions. However, when our children grow up to 18, we don’t have to help them anymore. On the one hand, they need independence for their own; on the other hand, this is a natural circle of life. This is the same to the PV power industry.

The second question seems controversial and unrelated, while it is closely associated with the topic. A totally free market is really the choice of nature, while it seems to be so tough for newborn babies. A government should take care of her babies, but the precondition is that this act must be fair and just, not skewed.

Therefore, the conclusion is incentives cannot drive the PV industry to move forward although they can help it grow.

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