|Monday, February 08, 2010
Government incentives and lower solar prices are starting to pay off.
By Kevin Bullis
In a few years, the United States is likely
to be the world's largest market for solar power, eclipsing Germany, which
has taken the lead as a result of strong government incentives in spite
of the relative paucity of sunlight in that country. A number of factors
could make growth possible in the United States--especially changes in
legislation that give utilities incentives to create large solar farms.
It's unlikely that a climate bill that puts a price on carbon dioxide will pass this year, but other legislation could further help the industry. A jobs bill, for example, might include incentives that were originally included in a climate and energy bill passed in the House last year. These incentives could include a renewable energy standard, which would require utilities across the country to use renewable energy. Just as important could be a national standard for connecting solar installations to the grid. Right now some states don't have laws that allow people to connect rooftop solar panels to the grid and receive credit for the power they generate, and the laws that do exist vary from state to state. A uniform standard could speed sales and installations.
Some experts, however, expect that a large number of the solar projects planned for the next several years will fall through--perhaps as many as 75%--because of the relative "immaturity" of the industry. Few large projects have been built so far, and so there will likely be large cost overruns.
For many solar companies, regulations, land-permit requirements, and the need for transmission lines have slowed down projects. In some cases, smaller solar projects located close to substations have a better chance than large solar farms that require special new transmission lines, even though the latter could, in theory, be more economical. One thing that could help with this would be designated areas that are preapproved for solar farms, and equipped with transmission lines that would serve a cluster of such farms. "But that would require a degree of strategic thinking that's currently absent," says Jim Barry, the chief executive of the Dublin, Ireland-based NRT, a company that's currently developing large solar projects in the United States.
Even with these problems, according to some estimates, the U.S. could account for 25% of the world's solar market by 2013, up from about 8 percent today. But the fraction of this solar that will be supplied by U.S. companies is less certain. Arun Majumdar, the director of the Advanced Research Projects Agency for Energy, said in testimony before the House Science and Technology Committee last month that over the last 15 years, the U.S. went from supplying 45% of the world's solar panels to less than 10%. But the growing U.S. market has started to attract solar manufacturing. Suntech Power, for example, which currently makes all of its solar panels in China, is building a solar factory in Phoenix this year. "We're the first Chinese company to export jobs to the U.S.," Efird says.