Most people in cleantech already know that Moore’s Law doesn’t apply to cleantech, but it doesn’t hurt to get a reminder every now and again. This morning it comes in a note from Merrill analyst Steven Milunovich, who is writing about the opportunity in energy storage (here for more info on that).
Cleantech doesn’t enjoy Moore’s Law-like performance improvements. Semiconductor densities doubling every 18-24 months implies a 35-50% annual rate of improvement while solar is on a 10-15% curve. Batteries and screens always were the technology laggards—batteries improve at a 5-10% annual rate. That does risk near-term disappointment though breakthroughs are possible and there are storage approaches beyond batteries.
It’s important to remember because there’s a lot of hype around cleantech. Many people assume we’ll be getting lots of solar and wind power in the near future. The truth is we’ll be lucky if 20% of our energy comes from renewables by 2020. When people don’t see solar panels gaing rapid acceptance, they could become disillusioned with alternative energy.
The speed at which computers and cell phones have improved spoils us consumers. Just like an iPod transformed from a clunky brick in 2001 to a sleek phone in 2007, we think the same should happen with solar panels.
While the costs of renewables have fallen, it’s not following a Moore’s Law like pattern. “Technology costs haven’t necessarily fallen as much as we think, so much as the scale has changed, making costs look like they’ve fallen a significant amount,” writes Neal Dikeman at Cleantech.org, in a post called The REAL story on Moore’s Law and solar. He’s saying the technology isn’t improving, we’re just installing more solar panels. The scale is driving costs lower.
Steve Fludder, VP of GE’s Ecomagination, told investors at Goldman Sach’s alt energy conference last month, “The fact of the matter is that alternative energy technologies are all about scale.”
This is why everyone in the renewable energy space wants government subsidies. They think if they can get more projects built, then they can drive down costs and compete with traditional energy sources like coal in the next few years.
If they had a Moore’s Law at their back, those subsidies wouldn’t be necessary.
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