By Jennifer Kho

At a discussion about solar policy held by Pacific Gas and Electric in San Francisco on Thursday, Khosla Ventures founder Vinod Khosla said low cost is the bottom line for making clean-energy technologies successful.

“Growth will never be sacrificed for the environment,” he said, in a press conference before the panel. “I don’t agree with it, but there it is.”

The realistic way to take a significant bite out of global warming is to focus on technologies that can compete on price, he said at the panel. That’s not to say Mr. Khosla doesn’t believe in government involvement. Mr. Khosla supported California’s Proposition 87 last year, which would have taxed oil companies and spent the money on clean-energy research.

But the solution is not to force companies to go clean with new laws, he said. “We should make it so they want to do x or y because it’s something that’s in their interest,” he said.

His view was contradicted by German parliament member Hermann Scheer, who is also president of EUROSOLAR, a European renewable energy association, and the general chair of the World Council for Renewable Energy.

Mr. Scheer, who is also credited with introducing the legislation that made Germany the largest solar market by far, said renewable energy should be worth more because people prefer it to energy that is bad for health and the environment, and said governments need to get involved to make sure people have that option.

Saving the World

To reduce emissions enough to save the planet, the world should focus on low-cost technologies that can be rapidly deployed on a large scale, and that can quickly reduce costs with new technology development, Mr. Khosla said.

He said solar thermal technologies, which make electricity using the sun’s heat instead of its light, are the most promising, and said they are “in a horse race” with clean coal technologies, which reduce emissions from coal-burning.

“I expect clean coal will lose because every piece of that is increasing in cost over time, whereas every piece of solar thermal is decreasing in cost over time,” he said.

It’s not the first time Mr. Khosla has advocated solar thermal (see Khosla Touts Centralized Solar.)

Wind and photovoltaic, or solar-electric, technologies are less likely to solve the world’s climate-change problems, he said.

Wind isn’t a reliable-enough power that can produce more electricity on demand, and “will fundamentally not solve the problem because wind can’t be 50 to 80 percent of the power solution,” he said.

“I’m not interested in solving 10 percent of the problem,” he said, adding he’s interested in technologies with the potential to replace at least 20 percent of power.

Almost all of the photovoltaic technology is going in the wrong direction, as well, he said.

Again, Mr. Scheer disagreed with Mr. Khosla.

“It would be a mistake to concentrate on only one technology—a heavy mistake,” Mr. Scheer said. “If we would have had that perspective 10 years ago, we would not have had the increase in wind energy, we would not have had the advancements in photovoltaics [solar-electric technology].”

While solar thermal makes sense in some areas—such as the Sahara, Tunis, Madagascar, Marrakesh, Cairo, and southern Spain, the transmission costs make decentralized renewable energies—such as rooftop solar-electric systems—a better option in other places, he said.

“Solar thermal was around before photovoltaic, but it’s not everywhere,” Mr. Scheer said. “It has problems, and it’s not just the technology. “

Michael Peevey, president of the California Public Utilities Commission, said he agrees with Mr. Scheer that you shouldn’t put all your eggs in one basket.

“We have to stimulate all of these things,” he said, referring to different clean-energy technologies including wind and solar power, but also agrees that solar thermal is promising.

He said it’s important to look at the full life-cycle costs of these technologies, not just the upfront cost.

Replacing Fossil Fuels

Mr. Khosla said he agrees that diversity is needed, but said the real challenge is to replace almost all fossil fuels. “I don’t think wind will ever get there, or solar photovoltaics,” he said. “And I’m probably the biggest technology optimist out there.”

That’s not to say he thinks these are bad technologies, he said, adding he’s invested in photovoltaics.

“What’s good for me as an investor is not necessarily what’s the solution for the planet,” he said. “Are these good technologies? Should we encourage them? Yes. But what will convince TXU?” (TXU Energy is a Texas utility that is proposing building 11 new coal-fired plants.)

But even before renewable energy is deployed, energy efficiency should be considered, Mr. Peevey said. “Investment in energy efficiency is the most-effective thing to do to reduce global warming,” he said.

While Mr. Peevey said he isn’t sure the proposed ban on incandescent light bulbs in California is realistic in five years, he said the policy direction is the right way to go, and also teased PG&E for having the panel in an incandescent-lit room.