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The future is being driven by dropping prices. That’s nothing new. It’s when innovative products drop in price, moving from the elite to reach a mass market, that they become transformative. Think cars, mobile phones, personal computers and air travel.
It’s true also of the tipping point where one technology replaces another. And that’s what we’re currently seeing with renewable energy.
Subsidy was used to help onshore wind farms develop. They are now commercially viable, and only seek a floor price through the subsidy auction in case the price drops.
Offshore wind may eventually go that way, its price driven south by the downward pressure of government auctioning the right to supply the grid at a floor price. Slow to start, the efficiencies have accelerated.
A danger to wind is that solar keeps plummeting in price. I’m told that, even at the efficiency level you can get out a solar panel in Scotland, they’re now so cheap that they’re becoming commercially viable.
That’s on open land, at least. It’s becoming a viable crop for farmers. The cost of putting them on your roof is still a sizeable financial hurdle. And it’s a technology that could eventually be overtaken by the arrival of photo-voltaic tiles, replacing the entire roof.
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