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Steven Chu: Solar Power To Achieve Cost Parity With Fossil Fuels

Solar power plant – Spain

Although the U.S. clean energy sector has suffered a number of setbacks over the past few months, U.S. Energy Secretary Steven Chu insists that America should not give up its green energy agenda. The international market for renewable energy will be huge in the coming years as it approaches cost parity with fossil fuels. If the U.S. abandons its green energy efforts too soon, it will risk being left behind in the future green economy.

But with the recent bankruptcy of U.S. solar panel manufacturer Solyndra and a slow domestic economy, politicians on both sides of the divide seem hesitant to fully embrace green policies. In particular, Obama, once heralded by environmentalists for his forward-thinking green energy agenda, has recently reneged on his promise to impose tighter emission standards. Clearly issues over the environment have been put on the back-burner as concerns over the fragile economy continue.

But ironically, it is because of the economy the Chu insists the U.S. should embrace a strong environmental agenda.

He says that the price for solar power has dropped by 50% over the past 5 years, with every indication suggesting another 50% or 70% drop. Such huge price cuts in the cost for solar power make it viable for large-scale utility use, as the price would be hovering around 6 – 7 cents levelized cost per kilowatt hour, which is about as cheap as any fossil fuel.

Although critics point out that the success of renewable energy relies on government subsidies, Chu counters that “oil and gas have been subsidized for the past hundred years.” He projects that subsidies for clean energy will no longer be necessary far sooner than we might imagine – between 10 and 15 years.

In the end, Chu observes that the U.S. is at a turning point. It can either try to capitalize on renewable energy in the future by selling it, or it can end up buying it from leaders such as China or Germany. Obviously the former option would solidify the U.S. as a green energy leader well into the future.

But does the U.S. have the political willpower to fully embrace a green agenda?

Image CC licensed by Marco Cevat: Utility-scale solar power plant in Spain

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