The latest mechanism designed to support solar power is proving wildly successful in squeezing down the cost of energy. It’s also threatening to destabilize the renewable-energy industry.
From India to Mexico and the United Arab Emirates, authorities are moving away from making fixed subsidy payments for clean energy and toward a system of auctions. The new system forces companies to compete for contracts to sell electricity and has resulted in offers to supply photovoltiac power at record-low rates this year. Bigger markets including Germany and Japan will start the practice next year.
