Google: innovation in renewables is a victim of ethical consumers

There has been a furore over yesterday’s announcement that Google.org will invest ‘tens of millions’ in renewable R&D in 2008, with an aim of finding a renewable generation technology that is cheaper than coal in ‘years, not decades’. Over the longer term, Google anticipates investing ‘hundreds of millions’ in the profitable technologies that emerge.

Google’s analysis is that generation companies are unwilling to gamble on potentially cheaper renewable technology when there are plenty of customers willing to pay a premium for electricity from existing, more expensive renewable sources.

Essentially, according to Google, ethical consumers’ willingness to pay higher prices is stifling innovation, and also the potential for renewables to become a viable alternative to fossil fuels. Google proposes to bypass this with a huge investment that would not pass standard investment criteria. Hats off.