Thanks for the elaboration on the subsidies. I agree that things like the Gulf War are part of a subsidy (although, in terms of price ratios, it isn't as large as one might think: If I recall correctly it was something like a $60 billion war, while the U.S. energy industry seems to be >$100 billion per year (I've found some total energy consumptions, and some prices, but not total dollar volume, so this is crude, look at http://www.eia.doe.gov/emeu/mer/mer.html for more data) - remember that we are discussing a price ratio which is around a factor of 4 now, and still nearly a factor of 2 even if solar cells were free. The Gulf War isn't big enough to flip it around.)
More generally, the subsidies are really a side issue in the following sense: Smalley was proposing a technical solution, not a political solution. If the technical capability of non-assembler solar cells is going to be sufficient to persuade people to stop burning coal, we must evaluate it within a constant political landscape, and therefore constant subsidies. I'm not claiming that the political landscape is unchanging, but rather that the shifting pattern of winners and losers in political battles has very little to do with Smalley's technical proposals. In any event, the politics of shifting differential subsidies amongst coal, gas, oil, nulcear power, and solar power is starting to creep well outside of the topic of sci.nanotech .
-Jeffrey Soreff
standard disclaimer: I do not speak for my employer.