I am shocked that you do not believe the magical, mystical ability of Capitalism to solve every problem thrown at it with equanimity and ease. :-) Ok, I agree with you on that point but probably not for the same reasons.
"If money was guaranteed to purchase technological innovation, by now we should have cured cancer, had cost competitive ethanol, and dozens of working fusion plants. Money is required for innovation to occur, but it is no guarantee."
Q. Why have we not cured cancer?
A. Because Big Pharma are run by Capitalistas who see quarterly profits only. There is no other consideration. Cancer has not been cured for the same reason that HIV/AIDS has not been cured, same reason as for a whole host of other diseases and conditions: it is far more profitable to treat you than cure you! Jonas Salk is rolling over in his grave...
Q. Why do we not have cost competitive ethanol?
A. Ethanol has only been receiving significant investment in the past few years. The pilot plants for cellulosic ethanol haven't even been completed. Big industries follow a process. I don't like that they can't just jump to full scale production but I do not have the inside info on how many process, software, management, etc., issues need to be ironed out during the pilot plant stage in order to have successful full scale production. Corn ethanol in my opinion is nothing but a stepping stone. It is cellulosic ethanol and algae/biomass biofuel to replace diesel that will be the "magic bullet" that will be competitive with fossil fuels.
Q. Why don't we have dozens of working fusion plants?
A. Now you've activated my cynical side. I can only relate it to the German scientists working on the atom bomb on the orders of Hitler. These scientists faked test results, slowed down their progress on purpose, and went down dead ends on purpose, all in an effort to slow down the research to give allied scientists time to perfect the bomb for the west. How would WWII have ended had Hitler gotten the bomb first? Would Washington D.C./London/Moscow be a smoldering ruin to this day? Ah... yup. But that's only a guess on my part - it's what I would choose to do if I were working on the American fusion project. I also have to admit that fusion has been achieved in experiments, with a net energy generation but fusion may be one of the most difficult of nuts to crack due to the very nature of the forces at work.
As to your chart, I appreciate your effort to track that down. It's a very informative chart and nicely shows that improvements in solar panels have been achieved despite the fact that government funding was basically ZERO for 30 years. But it is only telling one side of the story: efficiency of the panels. The more important part of the equation is the cost per watt. My own personal opinion is that I do not care how efficient the panel is, as long as it is cheap enough to be affordable.
Take for example the thin film solar panels. They are not super efficient but due to their manufacturing process they are less expensive on a cost-per-watt basis. That is the innovation that my earlier post talked about was really all about making solar affordable, not fantastically efficient but also fantastically expensive. Does that make any sense to you? In other words, we've always had super efficient cells, they are used in satellites and the space station, but they are VERY expensive so I don't care about them at all.
From my perspective, as soon as the government began to state publicly that we need innovation in solar panels all of a sudden we had several companies bringing out advances in solar technology. It has been the lack of a plan that has hurt the solar industry more than anything else. The cost of solar panels has been dropping but I have no hard evidence that Carter's plan would have kicked that into high gear -- I just firmly believe that it would have.
FOR 40 years or so, the price of solar panels fell steadily, as volumes grew and technology improved. But in 2004 Germany enormously increased subsidies for solar power, prompting a surge in demand. The supply of pure silicon, the main component of most solar cells, did not keep pace. Its price rose from $25 a kilogram in 2003 to as much as $250 this year, abruptly halting the downward march in the price of panels. If making energy from sunlight is ever to become as cheap as burning fossil fuels, the price of silicon will have to fall.
Happily, it seems likely to do so soon. Silicon producers, whose biggest customers were always chip makers, have been slow to cater to the solar industry. They were scarred by the memory of the technology bust of 2001, which had weighed them down with excess capacity, and so delayed expansion—despite the boom in solar. Moreover, it takes three years or so to get a new plant going, so new silicon supplies are only just beginning to materialize.
New Energy Finance, a research firm, expects the output of silicon for the solar industry almost to double next year. It has asked big buyers and sellers what prices they have agreed on this year for silicon to be delivered in the future. The responses suggest that participants in the industry expect prices to fall by more than 40% next year, and over 70% by 2015 (see chart).
http://www.economist.com/node/12010071?story_id=12010071 The outrageously high feed in tariffs in Germany have skewed prices, causing a flattening over the past couple of years in panel prices. But most experts expect solar panel prices to resume their downward movement in the near future.