GTM Research and the Solar Energy Industries Association’s (SEIA) latest report came with two surprises. Overall, was the need to respond to false suggestions that the solar industry is a weak or ailing industry that is being supported, against the public interest, only on the backs of government money.
Lower PV module prices are in the industry’s benefit as a component of overall PV electric costs that need to be on par with other forms of electricity (without taking health, national security, and environmental externalities of fossil fuels into account, which would already make solar cost-competitive or even much cheaper).
Solyndra was marketing a competing product to more expensive crystal silicone modules. When a glut of silicone modules and cheap production in China caused a price collapse, Solyndra lost its profitability and the government may lose its money. That glut is presently being investigated and the industry welcomes any Congressional investigation that will help uncover more facts.
What complicates the issue is that loan guarantees were issued under government programs that were started with the Bush Administration. The process was completed under the present administration and, with the present political climate, any perceived failure is being attacked without regard for the potential harm it may do to working people, an industry, or the country by opponents of the industry.
The Solar Industry is showing its highest employment, growth, and innovation at a time when the balance of the country is not, however. 6,735 new solar jobs were created between August 2010 and August 2011. Solyndra was an exception, not a representation of the industry as a whole.
Solar Industry Employment
Rhone Resch, president and CEO of SEIA, tells us “More than 100,000 Americans are employed in solar, twice as many as in 2009. They work at more than 5,000 companies… across all 50 states.” Stephen Lacey of Climate Progress wrote an excellent article yesterday to further emphasize not only our present solar industry employment but the potential growth (chart from that below). This is something we’ve covered a number of times before as well, and the story hasn’t changed.
Most of the growth in the last quarter was in the utility (+37 %) and commercial (+22%) markets. Residential PV experienced a 5.7 percent drop over last quarter. In the second half of 2011 and into 2012 , however, residential solar-leasing business models are expected to expand nationwide and encourage renewed growth.
Installed PV to DOUBLE in US in 2011
In 2011, the US solar industry is advancing in world market share, from the 5-7% that has held steady at since 2005 (exact global market share numbers to come in the future), and the country is on schedule to double the total installed PV of 2010 in 2011. In Q2, the U.S. solar photovoltaics (PV) market installed 314 megawatts, 69 percent more than Q2-2010 and 17 percent more than the first quarter of 2011.
In the concentrating solar market, including both concentrating solar power (CSP) and concentrating PV technologies, over 600 megawatts are now under construction in the U.S. The U.S. concentrating solar pipeline now holds more than 7,000 megawatts (enough to power 1.4 million homes), of which more than 4,000 megawatts of projects have signed power purchase agreements with utilities.
We might well ask if the US can compete in industries where 3rd world countries supply labor at a lower rate. But solar energy is a domestic resource. It is to be collected domestically. It is our workforce that is to be employed to build the infrastructure that will benefit our society. Solar PV modules are most cheaply built in factories by automation. Innovation and engineering will lower costs, not cheap labor. The modules are even cheaper if they are built domestically. There are now 51 companies building PV modules in the US. The US market is so strong that companies from around the world will supply the need if we don’t provide the economic setting.
What is needed most for continued solar industry growth in the U.S. is stability. With stability, we can predict potential income and avoid risks. Solyndra failed due to market instability and an inability to adapt. Long-established companies like those found in the petrochemical industry have many years of growth and capitalization to fall back on or draw from, along with subsidies and supportive policies that have lasted over a century. Like a small sun-green potted plant, the solar industry needs attention and stability if it is to grow.
While U.S. solar is on track for a banner year overall, the market does face potential challenges in 2012 and, if appropriate policies are not implemented, we could stunt the type of growth seen in the industry over the past year and a half. “The potential expiration of the 1603 Treasury program, along with current malaise in major markets such as New Jersey and Pennsylvania, threatens to slow growth in 2012,” said Shayle Kann, Managing Director of Solar at GTM Research.
What is ailing us is not the solar industry, but our political discourse and our fascination with failure. Like watching a car wreck, our attention is easily diverted by the promise of morbid entertainment. Except for those ready and able to take advantage of public interest, these entertainments are not giving us our livelihood. That is more likely to be found by a vision of the sun shining over every curiosity.
The U.S. Solar Market Insight: 2nd Quarter 2011 report
Executive Summary (Free)
Full report (Purchase)
U.S. Solar Energy Trade Assessment
9/20/11 press release and teleconference with Rhone Resch and Shayle Kann
Top Photo via Alex Bellink