Fossil fuels are the backbone of economies worldwide, so governments spend a lot to support them. A new report from Bloomberg New Energy Finance says altogether governments spent between $43 anf $46 billion on renewable energy and biofuels last year, not including indirect support, such as subsidies to corn farmers that help ethanol production. Direct subsidies of fossil fuels came to $557 billion, the report says.

This disparity raises the question--if the report is right and fossil fuels require so much backing, can they compete with renewables without government support? After all, some renewables--such as sugarcane based biofuels and some wind farms--can already compete with fossil fuels. Without the huge government subsidies for fossil fuels, wouldn't they be eclipsed by renewables?

The answer, for now, is no. So far renewables just can't provide enough fuel and power to displace fossil fuels. The infrastructure to make and distribute them isn't adequate, and many renewables have shortcomings that can make them difficult to work with--solar panels, for example, only generate electricity when the sun is out. If the fossil fuel subsidies disappear, gasoline and electricity prices will increase. That will help renewables compete, and increase in scale, but it will take years--likely decades--for them to reach levels high enough to replace all fossil fuels.

This year's winner of the Millennium Technology Prize, Michael Grätzel, director of the Laboratory of Photonics and Interfaces at Ecole Polytechnique Fédérale de Lausanne, has appeared often in Technology Review for his work developing dye-sensitized solar cells (also called Grätzel cells). The solar cells can be flexible, transparent, and tinted just about any color you'd like--features that make them attractive for consumer goods and windows. We wrote about the first product to use the devices last fall--a backpack with a solar panel attached to the back for charging portable electronics.

They're not ready to replace crystalline silicon and cadmium-tellluride thin film solar panels, the kind sold today for rooftop and large-scale utility installations. Ultimately, when their cost is figured not by initial price, but rather the price divided by the total kilowatt hours produced during their warrantied life, they're not yet cheap enough. But Grätzel and many other researchers are hard at work to make them more durable, cheaper to make, and more efficient.

Over the weekend, President Obama announced two massive loan guarantees meant to promote solar power manufacturing in the United States. The guarantees will make it easier for the projects to raise financing.

One project, which involves a guarantee for a $400 million loan, is for the start-up Abound Solar Manufacturing, based in Loveland, CO, which has developed a new method for manufacturing cadmium telluride solar panels, the most successful type of "thin-film" solar panel on the market today. (Last year First Solar, a cadmium telluride solar manufacturer, produced more watts of solar panels than any other solar company.) The money is for two factories, one in Colorado and another in Indiana.

The second guarantee, for a $1.45 billion loan, is for the Spanish company Abengoa to build a large 250 megawatt solar power plant that will use parabolic mirrors to concentrate heat from the sun, which will then be used to make steam and drive turbines. The press release accompanying the announcement takes pains to note that the project will create manufacturing jobs in the United States, not just in Spain. It says that "over 70 percent of the components and products" will be made in the United States. Building the plant will employ 1,600 workers in Arizona, and drive the construction of a new mirror manufacturing plant near Phoenix, but the finished power plant will only provide 80 permanent jobs.