The memoer states that costs have begun to drop for various types of equipment used to convert solar energy into electricity, a claim that is probably true. The company, Solario, also claims that new types of equipment are being developed to convert solar energy into electricity, although this claim is difficult to evaluate. Evidence to support the CEO’s assertion that Solario’s chief executive was once on Ready-to-Ware’s financial planning team is presented. If the chief executive officer’s experience with both companies adds credence to the memo’s conclusion, then the argument holds water. However, if Ready-to-Ware’s growth is not as impressive as the memo implies, then the opposite is true

Ready-to-Ware was incorporated in 1999. It grew quickly, but within a few years, its rate of growth began to slow down. A 2002 article in the Puget Sound Business Journal reported that the company suffered a 9.4 percent decline in revenues from the previous year. The article attributed the shortfall to a number of factors, including a large investment in the launch of a major new product, which was difficult to justify. The article went on to say that Ready-to-Ware was considering bringing in outside investors to help it achieve profitability. This did not happen, and in 2005, Ready-to-Ware was purchased by another company. The chief executive associated with Solario, however, left Ready-to-Ware in 2002, two years before its acquisition, so he cannot have been responsible for its financial problems. The memo’s assertion that Solario’s chief executive had been on Ready-to-Ware’s financial planning team does not suggest that he was responsible for Ready-to-Ware’s financial problems. Moreover, it begs the question of why Solario’s chief executive would want to leave Ready-to-Ware for Solario

The memo also says that costs are falling. This may be true, but the cost of solar energy is still high. A 2010 article stated that, in June of that year, the average price per watt of solar power was 2.8 cents. In contrast, electricity generated from natural gas costs 1.4 cents per kilowatt hour (kWh). The cost of converting solar energy into electricity is still much higher than the cost of converting electricity from natural gas. Furthermore, solar energy is not reliable. It is only available during daylight hours, and even then, the sun’s intensity varies across the Earth’s surface, and clouds often obscure the sun’s rays. For these reasons, solar energy is not a viable substitute for electricity generated from coal or oil

Further, even though costs have begun to decrease, there is insufficient evidence to suggest that solar energy will soon become cheaper than coal or oil as a source of electrical power. The memo cites Ready-to-Ware as an example, but this company is the exception rather than the rule. For example, in 2002, a study in Renewable Energy World reported that companies in the United States that specialized in producing solar photovoltaic (PV) panels were making fewer sales than they had in previous years. At the present time, PV panels are still more expensive than electricity from natural gas. Additionally, the article points out that PV panel manufacturers are relying on government subsidies to help offset the ever-increasing cost of PV panels. Therefore, it is unlikely that PV panels will become more economical in the foreseeable future

The memo also states that new technologies are being developed to convert solar energy into electricity. This statement is true, but the technologies are still in their infancy. For example, the shingles used in PV panels have a lifespan of about 20 years, after which the PV panels must be replaced. A 2009 article stated that, during that period, solar manufacturers must replace 20 percent of their installed PV panels. The replacement rate is expected to go up significantly

Another problem is that PV panels are not suitable for application on a large scale. An article in the February 2009 issue of Popular Science reported that solar PV panels are expensive to produce, and they require a great deal of space. As a result, PV panels cannot be produced and deployed on a huge scale at this time. The article points out that this idea is not as far-fetched as one might think. Solar panels have been used at places, such as large airports and race tracks, where space is at a premium. However, PV panels are not ideal for use in residential homes, where space is not limited

Solar energy will be a viable source of electrical power only when it makes economic sense, and this is unlikely to occur in the near future.