Even in Recession, Future of Solar Power is Bright

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San Francisco has been host to some big solar industry events this month, especially the Intersolar North America conference. In the middle of a recession, it is hard to walk the halls of a trade show of an industry dominated by manufacturers and not feel some pain. And it has been tough – industry revenues are forecast to be down 40% this year. But hopefully most of these players know that what doesn’t kill them, makes them stronger.

While some analysts are still down on the sector, and in some cases for good reasons of too much capital in the wrong places, most are bullish for next year. Some forecast 60% growth for 2011 and beyond. Certainly our experience is that there’s a lot of residential consumers out there that still want to go solar as a great way to save themselves money.

So the truth is there is much light at the end of this tunnel and it is coming from the sun.

The net result of these hard times will inevitably be leaner production and lower cost solar modules for customers. That long-term trajectory is going to continue in coming years and it’s been the reality of photovoltaics since they were first produced in 1954.

Most projections show that while we continue to sell solar electricity (at the end of the day that is what we sell) at lower and lower prices per kilowatt-hour, the carbon-based generators will continue to raise their prices. To prove the point our local utility PG&E recently announced plans to raise rates 6.5% in the next year. So before too long we’ll be head to head competitive, without subsidy, with conventional, dirty sources of electricity.

And for now the market support mechanisms have never been better to boost the solar industry to get to that reality. Here in the US, the Federal government covers a third of the value of the system with a tax credit and state and municipal rebates cover much of the rest – up to 50%. Those rebates are designed to go down over time, so to take the most advantage of the power of the sun for your home the best time to go solar is today.

By building the whole solar value chain – from low-cost, volume producers, to efficient and affordable installers – the industry is looking to get to that point of “parity” (where we cost the same or less than fossil fuel based electricity) within a few years. One report recently suggested we’d be at parity as an industry in two-thirds of America from 2015.

So if and when we can, the industry needs to lift its eyes up out of the weeds of the current downturn and focus on the bright line on the horizon. That’s the dawn of an amazing new era when our industry’s biggest challenge will be managing the growth. Shine on!