There has been a lot of talk about the coming “age of green technology.” The popular notion is that green technology (in particular solar panel technology) is getting far cheaper – by 7% every year – as fossil fuels and natural gas become more expensive and less attractive.

Source: Renewable Energy Index

Source: Renewable Energy Index

However, even as prices tumble and companies flock to renewable energy, we might not find ourselves in the fantastical world of solar very soon. Why? Basic business is slowly killing solar.

As explained by Adam Smith Institute blogger Tim Worstall, profits from solar are diving because there’s an improper mix of competitive economics and private property. Solar is hard to patent and protect, and so it is very easy to get into. Thus, prices are being driven down by an influx of companies. The only way those companies can stay alive is by continually refining production methods and making every aspect that bit more efficient and inexpensive.

It’s fantastic for the consumer to see such drastic increase is solar power accessibility. It’s fantastic for the supplier that can compete in this price and production war. But it’s terrible for those companies in what I believe to be a “green energy” bubble. Investment is pouring in, but for how long can profits be pouring out?