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Here we have proof that solar power is not economic yet

Summary:
There is much shouting to and fro about the economics of renewables and solar power. Those who insist that it really is economic and all we need to do is roll it out, those who are equally vehement in their insistence that it’s simply not ready for prime time - if it ever will be. Each side presenting their own calculations to make their point.What we’d like of course is some neutral totting up of the costs and benefits. Fortunately we have just such a system - the market. Home solar panel installations fall by 94% as subsidies cutHome solar power is not yet economic.The Labour party has accused the government of “actively dismantling” the UK’s solar power industry after new installations by households collapsed by 94% last month.Rebecca Long-Bailey, the shadow business secretary, used

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There is much shouting to and fro about the economics of renewables and solar power. Those who insist that it really is economic and all we need to do is roll it out, those who are equally vehement in their insistence that it’s simply not ready for prime time - if it ever will be. Each side presenting their own calculations to make their point.

What we’d like of course is some neutral totting up of the costs and benefits. Fortunately we have just such a system - the market.

Home solar panel installations fall by 94% as subsidies cut

Home solar power is not yet economic.

The Labour party has accused the government of “actively dismantling” the UK’s solar power industry after new installations by households collapsed by 94% last month.

Rebecca Long-Bailey, the shadow business secretary, used prime minister’s questions to challenge the government’s record on climate action after scrapping subsidies for domestic solar panels from April.

Without subsidy people won’t install. The level of subsidy required to get them to install is exactly the measure by which they are uneconomic. QED.

We don’t want people to do uneconomic things so their not installing solar panels is just fine - why would we want people to make themselves and us poorer?

That’s not the end of the argument though. For there is that climate change argument. Perhaps solar panels will become part of the solution? And at some - lower than today - price they could well become so. The answer being that we should wait until those prices are lower and then install. How do we reach that lower price?

Well, no one does actually make solar cells in this country. Our installation or not has near zero effect upon their price, that’s something driven by global technological change, not anything we do here. The answer therefore is obvious enough. As and when global technological change drives down prices so that domestic solar PV is economic then we should be installing it. And there’s no need for us to be doing anything at all to be encouraging anything either. When solar PV is economic people will naturally install it. The price change - the technological advance - that leads to it being economic is entirely unaffected by anything we do so there’s no argument for even encouragement, let alone subsidy, there. And as we don’t, and won’t, take part in the manufacturing anyway there’s no argument for “creating a national industry to compete” and all that malarkey.

King Log is the correct ruling ethos here. When installing solar power is logically sensible then people will o it unprompted and unaided. There’s absolutely no point in subsidising them into doing so when it’s not logically sensible.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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