Sustain Our Earth

Energy is a crucial ingredient in every aspect of our lives, whether at home, school, or work. Fortunately, over the long-term, energy has become more affordable for Americans, measured in various ways. This is not a surprise, as human ingenuity and (relatively) free markets allow entrepreneurs to multiply the gifts of nature, even for so-called “depletable” resources.

However, in recent years energy has become less affordable. This too is not surprising, as the federal government has impeded the ability of firms to develop domestic energy resources, and as the Federal Reserve has weakened the dollar. If policymakers wish to raise U.S. (and world) living standards, they should move back in the direction of stable monetary policy and unfettered capitalism. The natural forces of innovation in a market economy will lead to more abundant supplies, in the economically relevant sense.

In 2011, residential solar system installers paid a little over $1.80 per watt for solar panels in both Germany and the United States. In Germany, installers added $1.20 to the cost of the solar panel to complete an installation. But in the U.S., they tacked on $4.36 per watt, more than three times as much.

A report released this month by Lawrence Berkeley National Laboratory explains why.