In 1936, American Sociologist Robert K. Merton wrote about the law of unintended consequences using the following five sources to define this phenomenon: Ignorance, error, imperious immediacy of interest, basic values, and self-defeating prediction.
Here are a few pertinent unintended consequences:
- Aggressive pricing for share might end up being the status quo, keeping margins low.
- Governments may perceive aggressive pricing as 100% correlated with manufacturing costs when in some cases the two are mutually exclusive with the outcome of lower incentives.
- Promising grid parity is translated to without incentives for solar, leaving the industry to complete with conventional energy, which continues to enjoy subsidies.
- Promising that the industry can get along without incentives and subsidies means, well, it may have to do so.
The cold hard truth is that demand for grid-connected solar is 100% driven by incentives of some type -- so it has always been, but so it may not always be. The feed-in tariff model of incentives has proven to be the best tool for stimulating demand. Before FiTs, capacity based incentives (primarily rebates) drove demand from low megawatts to >100MWp by 1997; the FiT drove demand in the solar industry to multi-gigawatt levels.
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