A few quick responses
I agree there are problems with the debate becoming somewhat dogmatic and ill-informed. Unfortunately, this makes for messy arguments that are detracting somewhat from the need to do something now. I'll avoid the planned versus free market debate, as the US and European contexts are more relevant to this discussion, and they have a free market bias. However, I wanted to respond to some of your specific points regarding forms of energy production.
Solar PV is reducing in price faster than any other form of energy production, but it is not at grid parity in the UK. It's mostly a matter of how much sun there is, and the U.K. isn't ideal from that perspective. It IS approaching grid parity in many parts of the world, and is there in some sunnier parts, Hawai'i and Southern California for example, and in these places solar PV is starting to attract massive investment. However, this grid parity is on a cost/watt sense, and some issues linger with respect to balancing variable supply with variable by different demand levels (which is a problem for fixed-rate energy production too); In short, rooftop installations are already cost-efficient in many places, but big solar farms are still a challenge. I agree there are issues regarding the metals required for production, and only a fraction of this can be tackled by recycling (which is now done by many solar companies) due to exponential industry growth. R&D activities are on-going to address this.
Wind is already very cost effective on a cost/watt sense (cheaper than nuclear in most countries), but, as you mentioned, the variability/unreliability of wind is even more difficult to deal with in a grid system.
Several developments are necessary in order to make large scale implementation of variable-supply clean energy (especially wind) cost effective: (1) An improved wide-spread efficient grid system capable of utilising geographic distribution of installations in order to smooth out supply and transfer efficiently over great distances; (2) Smart metering and billing that can match demand to supply (e.g. turning dish washers on when supply->demand; (3) GWh-scale pumped storage to further smooth out supply. For the U.K., the first of these is cheaper than many countries due to the small scale, but also will not smooth out supply as much for the same reasons; An interconnected European system would be ideal, but hard to implement. The technology for smart metering and billing is already there, in both public and private hands. Pumped storage technology is often combined with hydroelectric facilities, with the most well-known UK example being Dinorwig, Wales (see e.g. http://en.wikipedia.org/wiki/Dinorwig_Power_Station).
Natural gas is cheap at present, but remains a finite fossil fuel, and so may be useful as a stop-gap, but not in the very long term. Shale gas reserves are hard to tap, and highly dangerous. The technology may improve, but it's not there yet.
Nuclear power (also subsidised) is currently cost effective in a $/watt sense, in most countries, lagging slightly behind wind and lots behind more efficient fossil fuels, but ahead of solar. It has the advantage of a smooth supply, but bear in mind that demand is not smooth although is, to a large extent, predictable. However, in the light of Fukushima, tighter safety standards, rising insurance costs and a not-in-my-backyard mentality are likely to cause these costs to increase. The nuclear industry also consistently underestimates the cost of waste disposal in the very long-term future. Regarding insurance, nuclear power stations and their operators are not liable for the full cost of major nuclear accidents, keeping economic costs artificially low. Even the U.S., which has national reserves specifically for nuclear incidents (Price-Anderson Nuclear Industries Indemnities Act), cannot afford a Fukushima-scale incident without public payout.
Also, don't forget wave, hydroelectric, solar thermal and geothermal energy sources. Only the first two of these are really viable in the UK, and neither are probably sufficient on their own without massive land-/sea-scape changes.
No solution on its own is ideal, but the need to do SOMETHING is urgent. All supply methods have pros and cons, and market prices are likely to fluctuate. By combining multiple production sources, and the various grid improvements, most of the problems (esp. variable supply rates and finite metal resources) are eased. National or even international infrastructure (electricity pipeline from Iceland to tap their vast geothermal reserves, anyone?) is required in order to deal with the challenges of green energy, which is difficult in a competitive free market. Given the fragmental nature of most nation's energy supply, especially in more free market countries, some level of government involvement is essential.
Within a free market context, there are three strong arguments in favour of subsidies: (1) It provides a kickstart for the industry in order for mass production to continue increasing efficiency and thus become more universally cost effective; (2) It makes it affordable in the near-run in order to tackle climate change now and prevent massive environmental costs later; and (3) Because infrastructure costs are massive compared with running costs, which delays profitability potentially for over a decade in some instances, investments in solar and wind are hard to attract.
-Karl
P.S. And as I'm sure has been pointed out, wind turbines are NOT windmills, which are for grinding. What you mean is wind turbines.
Biting the hand that feeds IT
