DOE’s Latest Funding Package is a Win for Solar
Renewable resources are playing a bigger role in meeting our energy needs thanks to technological innovations that have helped to reduce costs and increase competitiveness relative to fossil fuels. Building on this trend, the Department of Energy recently announced plans to allocate $130 million in funds to research and advance solar technologies. This move will prove effective in helping the United States achieve an all-of-the-above energy approach that saves money for consumers, creates jobs, and ensures that our energy portfolio is secure and reliable.
During his time at the Department of Energy, Secretary Rick Perry has been a strong proponent of an all-of-the-above energy strategy. In response to this latest investment, he released the following statement:
“Solar is an integral part of the Administration’s all-of-the-above energy strategy and this cutting-edge, early-stage R&D will work in concert with other innovative technologies to provide affordable, efficient, & reliable energy to the American people.”
Secretary Perry is exactly right: this funding will go a long way in ensuring that solar energy continues along its trajectory of improving in efficiency and declining in cost. Specifically, this $130 million will accomplish these goals by placing a strong emphasis on research and development projects designed to reduce manufacturing costs and expand solar storage capacities. These innovative projects will provide long term benefits and represent a much better funding strategy than direct subsidization, which only distorts the market and inhibits competition-based innovation.
Despite already dramatic declines in prices, the Department of Energy is planning to use this funding to cut costs of solar photovoltaics by an additional half by 2030. Much of these cost-reduction efforts will go towards trimming down soft costs, which include things like permitting and complying with local regulations. Soft costs account for an astonishing 64 percent of the cost of residential solar systems, demonstrating the role that excessive red tape is playing in diminishing renewable energy potential. If solar is to become truly competitive with fossil fuels, removing pointless regulatory barriers and reducing soft costs – key goals of this funding package – must be aggressively pursued.
Solar costs are rapidly declining, but it will not enjoy widespread use without further improvements in storage technology. High capacity batteries and storage outlets are crucial to the reliability and success of weather-dependent energy sources like solar. Powerful storage infrastructure helps to compensate for solar’s varied productivity, and fortunately, the Department of Energy is allocating $33 million to generate improvements in this area. This funding is geared to develop technologies that will allow for storage at any time or season, which will go a long way in making solar a marketable and effective source of energy moving forward.
Investment in research and development provides a tremendous avenue to improving our energy grid’s efficiency, affordability, and reliability. The Department of Energy’s recently announced funding package recognizes the importance of these technology-driven solutions in maximizing solar energy’s potential looking ahead. These initiatives will produce a number of short and long term benefits, but chief among them is the creation of a stronger, more diverse energy sector that provides consumers with more affordable options.