Investing in solar

Remember that massive stimulus bill worth $787 billion that the U.S. government passed over a year ago? Well, they are still spending it on various projects. Most recently, $1.85 billion of that bill was announced by President Obama that is will go to investments in solar companies. This money will go towards creating about 3,100 permanent jobs and about 2,000 construction jobs. The figure sounds a little high for the amount of jobs that will be created from it, but I guess it depends how permanent those “permanent” jobs will be and what the average salaries will be.

Aside from the jobs it will create, this investment, or actually $1.45 billion of it, will go to a Spanish company with a subsidiary in the U.S. that will build one of the largest solar power generation plants in the world. The plant will be based in Arizona and will give the U.S. another step in the right direction in the goal of becoming energy independent. I am a little surprised that critics have not complained that the majority of this solar investment, which is tax payer money, is going to a foreign company. I am not necessarily opposed to investing in a foreign company, as long as they commit to staying and operating in the U.S. for a specified minimum amount of time that will allow the government to see a positive return on investment.

The remaining $400 million dollars from this investment will go to a Colorado- based company that manufactures advanced solar panels. I think that from a stimulus bill worth $787 billion dollars, they should have allocated much more money to alternative energy projects than just the less than 0.25% that they did. I would invest $20 billion or more on projects ranging from solar, wind and geo-thermal, among a host of other energy technologies. The U.S. is always complaining that China is beating them in investments in these categories but, when the opportunity arises to make serious investments in it that can potentially give the U.S. the lead in the industry, they essentially lay an egg.

It is impossible to tell if solar energy will be the one that replaces fossil fuels as the dominant energy source of the future, but in places that have an abundance of sun, like Arizona, it makes a lot of sense to run the majority of homes and businesses through this source. It looks more and more likely that instead of having one energy technology/source replace fossil fuels as the main fuel source, it will be more of a team effort comprised of several sources. This will likely be similar to a glorified race like the one that took place between Betamax and VHS in the videotape format war in the 80′s. Eventually, we will likely see one technology and source become the dominant one in the world, but that will likely take time as the technologies have a long way to go before they are cost-effective enough and efficient enough to be relied upon in such an important way.

Although this investment is too small, it is another small step towards becoming energy independent and also a step in the right direction for leading the world in the alternative energy race. Hopefully, many more investments will come because the U.S. and the world need it.