Joshua Gans nails it:
If we believe Moore’s Law in solar, then the safe bet in terms of behavioural reactions is not to react. Within a decade or two, energy will be socially as cheap as it is privately as cheap now. That means that changing habits for environmental austerity is not the way to go.
I would make a simpler but less optimistic point. If a solar breakthrough is now likely, in which market prices do we see it reflected? It is true that fossil fuel prices took a steep tumble in the last few months, but I’ve never heard anyone suggest that price plunge had to do with a forthcoming solar revolution. It seems cyclical in nature, or perhaps related to the spreading news of further fossil fuel discoveries, including natural gas. For better or worse, those shale oil and natural gas discoveries — which by the way will create lots of jobs — will further raise the bar against solar power, and it’s not just the Republicans who will promote them.
Alternatively, is there a bubble in the stock prices of solar power specialists? What’s the total market cap of companies selling solar panels? Or is there a bubble in the share prices of companies which supply cheap and reliable power storage? The evidence on these points seems weak to say the least. Keep in mind that other countries can make the switch even if you think political conspiracy will prevent it here. And solar panels can be cheap in the sense that my bicycle is cheap, the real question is whether we see industry-wide price changes as would befit a systematic solar energy revolution.
Is there any reason, based in industry-wide market prices, to be optimistic about the near-term or even medium-term future of solar power? I don’t see it.