As part of the burst of activity during the lame duck congressional session in December, President Obama signed tax legislation extending the deadline for renewable energy project construction by one year, enabling projects in 2011 to be eligible to apply for the 30 percent tax credit that can be converted into US Treasury cash grants. While the solar and wind industries gave a sigh of relief, others had a different reaction. For example, William O'Keefe, chief executive of the Marshall Institute, has been quoted as saying: "If 30 years isn't enough for the industry to stand on its own feet, you have to ask how long it will be."

Mr. O'Keefe, to be fair, is apparently against subsidies of any type. But other critics of tax credits or other support for renewable energy often do not seem to mind similar supports for established fossil fuel industries. President Obama's two attempts to drop the drilling cost tax breaks oil companies enjoy – breaks that cost about $5B per year – were shot down by Congress, and the repeal of this tax break has been opposed by many of the same people that oppose any support for renewable energy.

But let's not get caught up in the difficult process of trying to compute the size of fossil fuels subsidies (the International Energy Agency recently estimated that fossil fuel consumption subsidies totaled $312 billion worldwide in 2009 alone), or addressing the issue of equity. I am even more struck by the willingness of many to write off renewable energy sources, such as Solar PV, and other technologies such as electric vehicles as being too expensive and, therefore, never to be practical alternatives.

Perhaps none of these people noticed that flat screen TVs cost about $10,000 when they were first introduced. Some early adopters bought them, and guess what happened: prices came down. And more people bought them. And prices came down more. And the technology improved. And then still more people bought them. And so on. This phenomenon has been repeated in all sectors of the technology world. (The first time I priced a CD-ROM burner it was $30,000. I finally bought my first one for business use when the cost hit $1,500. I am not sure what it costs today, since it is bundled in with many low cost computers). Why is it so far-fetched for people to see the same thing happening to the cost and efficiency of Solar PV? Or, the cost and capacity of car batteries?

In fact, it has been happening. The cost of producing a watt of energy from solar power has dropped almost 50 fold over the past 35 years. The cost of solar panels has dropped about 40% over the past 2 years alone. It is now possible to install a solar power system in a home for under $7 per watt – including all labor costs - down from over $10 in 2008. The market is responding just as you would expect; private capital is flowing to start-ups working on innovations, while large companies are investing huge amounts in their own technologies.

But this has accelerated over the past several years while there has been a clear government commitment to support renewable energy – i.e. since the tax credit was initially extended for 2 years and allowed it to be converted into grants for those who cannot benefit from credits. State programs have also played a huge role; see for an example a recent article in GreenTech Media on the effects of the Solar Renewable Energy Credits in New Jersey. (New Jersey Solar: Solis, SRECs and Sometimes Solyndra; What's the number two state in the US in solar demand?). As tax credits and other financial incentives have ebbed and flowed over the years, there has been a corresponding boom and bust cycle of renewable energy implementations, research and innovation.

It can certainly be argued – even if not everyone will agree - that it is reasonable government policy to support new industries and technologies that in turn support national goals, whether one perceives those goals in terms of national security, job creation, or climate change. It is also reasonable to expect that short-term investments – whether in the form of tax credits or subsidies – will lead to innovation, demand growth, and reduced costs. To dismiss new technologies as being too expensive to ever make sense ignores the entire history of technological progress in this country.