Common Tragedies

Thoughts on Environmental Economics

Google drops a dime or two (or a billion) on solar

Posted by Evan Herrnstadt on November 29, 2007

From the Guardian:

The web portal Google aims to develop cheap and clean sources of energy to replace polluting fossil fuels and tackle global warming…The company’s clean technology initiative, called REC, aims to develop renewable energy sources that are cheaper than coal, the cheapest, most abundant and dirtiest fossil fuel.

This initiative was slightly disparaged by one of the discussants at yesterday’s RFF U.S. Climate Policy rollout because it seems unlikely to attain its goal of making solar power cost-competitive with coal. I agree that this is a pipe dream for the near future, but essentially carbon-free energy sources such as solar must be aggressively pursued to successfully create a suite of clean energy. Clearly Google is setting a tanglible, discrete goal (cost of solar ≤ cost of coal). They aren’t necessarily expecting to achieve this goal, but if they feel like investing hundreds of millions of dollars to edge us toward cheap renewable energy, I think that’s great. It would be encouraging if more concentrated sources of capital undertook major green initiatives instead of simply greenwashing. At any rate, isn’t this a great situation for everyone? We basically have a private enterprise willing to accept potentially massive technology spillovers due to their organization’s preference for monumental green investment. This is the kind of R&D for which the federal government normally has to accept responsibility, and if private enterprise wants to absorb the costs for society, I’m totally willing to live with that.

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7 Responses to “Google drops a dime or two (or a billion) on solar”

  1. I wonder if Google shareholders expect the company to get the same rate of return from investments into renewable energy that the company captures from its core enterprises?

  2. Evan Herrnstadt said

    That’s a good question. Perhaps the possibility that a “socially-conscious” enterprise might toss some money at a potentially unprofitable “feel-good” project is simply an incorporated risk. Or maybe it will become one from here on out…

    Although, if cheap solar pans out, Google (and its shareholders) are very much in the money.

  3. Daniel Hall said

    I wonder how much of Google’s non-labor expenses are electricity.

  4. Evan Herrnstadt said

    This isn’t quite an answer to your question, but:

    A Google engineer has warned that if the performance per watt of today’s computers doesn’t improve, the electrical costs of running them could end up far greater than the initial hardware price tag.

  5. Daniel Hall said

    I wonder if Google shareholders expect the company to get the same rate of return from investments into renewable energy…

    Felix Salmon basically tells Google shareholders, “Tough luck, you were warned.”

  6. B.D. Nichols said

    Hay folks, Google has stumbled onto something. Hard work pays off.
    Google sharing some portion of their fruites off labor seems to me to be in the best intrest of the common good. This billion $ dime is money well spent and help propell the U.S. goverment to divert big oil tax breaks toward the renewable energy sector. You go GOOGLE.

  7. [...] few weeks are: To come to know that google had shelled out one billion dollars towards research to develop renewable energy sources that are cheaper than coal. Essentially on making solar power the de facto source of energy. To learn that one of my [...]

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