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4 Factors Slowing Solar Energy Growth in US

solar electricity, pv, solar panel, US solar, solar power, solar tax credit,

Despite all the talk about solar energy, it only generates a measly .1% of electricity in the US. Meanwhile, national demand for electricity is growing by 2% annually. Considering that solar technology has been in use for decades, why is it not more widespread?

Cheap Fossil Fuels

Even though sunlight is free, fossil fuels in the US have been widely available at a very low cost. There are extensive coal fields all across the country. Nationally, coal produces about 50% of our electricity, with a majority of it being used for base load. That means that coal plants produce a steady stream of electricity a majority of the time.

Natural gas however has skyrocketed in price over the last 6 years. It is widely used to generate electricity during peak times, typically on warmer days when we are cranking up the air conditioning. Natural gas plants can start up quickly and come to the rescue when needed, but the cost of fuel has gotten quite high recently.

solar thermal, solar power plant, solar energy, ausraSolar energy is very capable of producing peak electricity and is ideally suited for for it. Solar radiation is what causes us to need air conditioning in the first place. The utility companies have started taking notice of solar energy’s potential to generate electricity during peak demand.

Real Cost Pricing

When we turn on a light, we don’t pay the real cost of generating that electricity. The federal government absorbs some of that cost through subsidies and the environmental cost is rarely taken into account. For example, asthma is linked to the burning of coal, but I don’t pay for asthma attacks when I pay my electric bill. A carbon tax is one method for accounting for some of these hidden costs.

Scale and Price of Solar

Remember how much cell phones cost when they first hit the market? When larger manufacturing plants are constructed, the cost per unit typically decreases compared to smaller plants. Germany, Japan, and California have all stimulated the solar market. Photovoltaic solar panels have already come down in price by 90% over the last 20 years.

Stable Solar Energy Policy

The US had impressive solar energy incentives under the Carter administration, which quickly vanished when Reagan took office. There is currently a 30% commercial tax credit for solar energy, but it is set to expire at the end of the year.

There are purchase agreements for 3.2 gigawatts of concentrated solar power during 2007, but solar power plants cannot be constructed before the tax credit expires. The coal, nuclear, and oil industries have stable energy policies and the same is needed for solar energy to thrive.

Sarah Lozanova is a freelance writer that is passionate about the new green economy and is a regular contributor to environmental and energy publications and websites, including Energy International Quarterly,, Triple Pundit, Green Business Quarterly, Renewable Energy World, and Green Business Quarterly. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and is a co-founder of Trees Across the Miles, an urban reforestation initiative.

Related Posts on Solar Energy


Solar Thermal Electricity: Can it Replace Coal, Gas, and Oil?

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Solar Panels and the Quest for $1/Watt

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4 Things to Consider Before Going Solar

Photo Credit: Ausra

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Written By

is passionate about the new green economy and renewable energy. Sarah's experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and is a co-founder of Trees Across the Miles, an urban reforestation initiative. When she can escape the internet vortex, she enjoys playing in the forest, paddling down rivers, or twisting into yoga poses.


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