It is an old debate. In the past half-century, federal funding of the space program, cancer research, military aircraft and the precursor to today's Internet all created transforming advantages for U.S. companies, historians of American business note.
Those efforts supported innovation on new frontiers. The infant solar power companies, however, must gain their foothold by taking business away from the incumbent and politically powerful coal, natural gas and nuclear power providers, at a time when overall growth in U.S. electricity demand is still slowed by an underperforming economy. And the case for solar energy rests on the proposition that the United States must move to low-carbon or carbon-free energy production to meet climate threats -- a premise that sharply divided Republican and Democratic party leadership.
"You can come up with endless scare scenarios that we aren't insuring ourselves again, that are just as worthy as climate threat scenarios. Just because you can image a scenario that's high-cost isn't a reason to take out an arbitrarily large insurance policy," said David Kreutzer, one of the Heritage report authors.
A draft report on an Energy Department workshop on solar power's future last year said that preliminary analysis suggests that if solar power could hit a $1 per watt target for installed systems by 2020, one-third of the current cost, total U.S. solar generating capacity could rise to 5 percent of the nation's total. By 2030, the figure could grow to 14 percent of capacity, a level that would be met with "minimal" additional investments in power transmission and storage, while significantly cutting carbon dioxide emissions from power plants, the draft asserted.
The surest way to achieve these goals would be for the United States to set a rising price on climate emissions, or create a "feed-in" electricity tariff that subsidizes an expansion of renewable power, as Germany and Canada's Ontario province have done, said Rooney. Increasing production will continue to push prices down, reducing the needs for subsidy, he said. "I believe within five to seven years, the U.S. would claw its way back to technological dominance, and we would recoup a justifiable number of manufacturing jobs," he said. Then the United States could let the market choose winners, he said.
A starting point in 'no-man's land'
The major international hurdle is that the worldwide "market" for solar power is anything but free, U.S. industry leaders say. American solar firms must survive in an international arena dominated by national governments pursuing explicit strategies to win scientific and commercial leadership.
China, which became the world's largest producer of photovoltaic panels in 2008, with one-third of all shipments, has made development of renewable energy a national security priority, and is providing a 50 percent subsidy for grid-connected solar plants, a National Research Council panel noted last year. The report added that within the next two decades, China could dominate renewable energy industries "that are emerging as among the most critical sectors of the 21st century."
"In an era of massive high-tech investment in next-generation products, it's stunning to me that we neither own the high ground on technology nor on manufacturing," said Rooney. The United States is "square in no-man's land," he said.
The report last year by the National Research Council panel focused on the technology strategies of Brazil, China, India, Japan, Russia and Singapore. While the United States' model still leads, the report raises questions of whether the traditional American process -- with top-down government-sponsored research support and commercial development by an entrepreneurial private sector, can prevail against more directed national programs.
Creating a new U.S. approach "is a tall order for a decentralized democratic government that has never had a comprehensive national S&T [science and technology] strategy," said the authors of the report, "S&T Strategies of Six Countries -- Implications for the United States."