Connect with us

Hi, what are you looking for?

CleanTechnica
2011 US solar power installations soared to a record, growing 140% year-over-year in Q3, and even greater gains are expected in Q4. Yet the US solar power industry, along with its counterparts in Germany and China, is in turmoil as supply-demand imbalances driven by slanted government policies on trade, investment, foreign exchange and clean energy production and usage push an increasing number of growing businesses to, and beyond the brink of financial solvency.

Clean Power

Going Bust Amid a Boom: US Solar Installations Soar as Growing Businesses Fall by the Wayside

2011 US solar power installations soared to a record, growing 140% year-over-year in Q3, and even greater gains are expected in Q4. Yet the US solar power industry, along with its counterparts in Germany and China, is in turmoil as supply-demand imbalances driven by slanted government policies on trade, investment, foreign exchange and clean energy production and usage push an increasing number of growing businesses to, and beyond the brink of financial solvency.

A record 449 megawatts (MW) of new solar electric power capacity was installed in the US in this year’s third quarter (3Q). More solar electric power capacity came online in 3Q 2011 than in all of 2009, and year-over-year growth is expected is expected to be higher yet in Q4, according to a GTM Research-Solar Energy Industries Association (SEIA) report released yesterday.

More than 1,000 MW of of solar power capacity was installed in the US through 3Q 2011, significantly more than 2010’s annual total of 887 MW, according to the “U.S. Solar Market Insight: 3rd Quarter 2011” report. The 449 MW of newly installed solar power capacity in 3Q 2011 represents a 140% year-over-year increase.

Yet amidst the boom, once leading industry players are going bust. Booming demand for solar panels was preceded by an even greater ramp up in production and supply of solar grade silicon wafers, solar photovoltaic (PV) cells and solar PV panels and modules. Young, growing businesses have failed and a growing number are being pushed to the brink, and not only in the US.

Solon, the first German solar panel manufacturer to go public, just filed for bankruptcy protection as it tries to reorganize its debt. Other world leading German industry players are retrenching as the German government lowers feed-in tariffs due to faster than anticipated growth. China’s LDK, along with Yingli Green Energy Holding Co. Ltd., Suntech Power Holdings Co. Ltd., Trina Solar Ltd., and JA Solar Holdings Co. Ltd. are relying on a $47 billion credit line from the China Development Bank arranged by the central government to assure their survival.

Bust Amidst Boom

It wasn’t long ago – in 2007 – that there was a supply shortage of solar grade silicon, which drove market prices for the raw material to record highs. Since then, governments around the world, most notably China, have pursued mercantilist foreign exchange, trade and industrial development policies and instituted a variety of subsidies and incentives that has turned the supply-demand situation on its head.

Solar module and panel manufacturers are being hit the hardest. Cheaper polysilicon, solar PV cells, modules and surging demand hasn’t been enough to offset the supply-demand imbalance and the fierce competition for business, which has been forcing them to drop their prices even faster. Better capitalized and more diversified solar grade silicon producers have been able to weather the storm in better shape, at least so far.

Clouding the outlook for the US solar industry further are looming expirations of key federal investment and production tax credits, a glaring lack of consistent federal government support for clean energy, an increasingly fragile economic recovery, the persisting overhang of government and bank debt in the EU and US, and the threat of solar PV, and now broader, trade wars.

Key Treasury 1603 Grant Program Due to Expire

Key to supporting development of young solar power industry businesses in the US has been the US Treasury Section 1603 program, in which cash grants of up to 30% are awarded to companies investing in clean energy projects in lieu of taking investment tax credits over a period of years. The program is due to expire Dec. 31, which has prompted a coalition made up of more than 750 clean energy companies, small businesses, environmental groups and other organizations to send Congress a letter urging legislators to extend it for another year.

Front-loading and monetizing these investment tax credits has provided critical cash flow to US solar companies as they have struggled to recover from the collapse of the tax equity market that began with the 2008 economic crisis. The 3Q Solar Insight report predicts that “there will be a tax equity bottleneck for projects in 2012, leading to a possible slowdown in installations in late 2012 and into 2013.”

“The U.S. solar industry is on a roll, with unprecedented growth in 2011,” Rhone Resch, SEIA president and CEO, stated in a news release. “Solar is now an economic force in dozens of states, creating jobs across America. But our industry needs stable policy on which to make business decisions, and unfortunately an underlying mechanism for financing solar projects is scheduled to expire on December 31.

“To keep the industry growing and creating jobs in the U.S. we need Congress to extend the 1603 program. The 1603 program has done more to expand the use of renewable energy than any other policy in U.S. history. Our country is not in a position to have Congress turn their back on American industries, and it is critical that Congress extend the 1603 program in the few days left before the end of the year.”

Critical Juncture

All this comes at a critical juncture in time. Our greenhouse gas emissions continue to grow at a rapid rate even as the costs of human-induced climate change, environmental pollution and waste spiral higher. We need to do as much as we can as soon as we can to alleviate the growing destruction of the natural ecosystems and resources we ultimately depend on for our survival as well as our livelihoods.

Failing to produce and enact a broad, proactive clean energy policy framework for the nation is a failure of federal leadership on multiple fronts. Allowing forward-looking federal clean energy tax credits that help build productive capacity while addressing critical environmental, health and safety concerns is 180 degrees from where enlightened government leadership should be taking us.

Our leaders need to get smart, and get united, on energy rather than pandering to vested fossil fuel interests. Broad public support and activism can change the tide, but assuring any gains hold long-term appears to also require a fundamental reform of how our representative democracy is financed.

 
Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 

Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
 

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Advertisement
 
Written By

I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.

Comments

You May Also Like

Clean Power

SACRAMENTO, California — [This week], the California State Legislature approved a two-year extension of a property tax exclusion for solar projects, providing stability to...

Clean Power

Maryland Energy Administration & Maryland Environmental Service offering $400,000 to help deploy solar power

Clean Power

Georgia Public Service Commission votes unanimously to establish clean energy working group, but rejects expansion of popular rooftop solar program

Clean Power

Annual U.S. Energy and Employment Report (USEER) Shows Strength in Clean Energy Jobs WASHINGTON, D.C. — The U.S. Department of Energy (DOE) this week...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.