2012: Solar Revolution in the United States?

Posted on December 26th, 2012 by
   

Photo courtesy of APS-ES

Sometimes the biggest stories go unreported. Of all the news that didn’t make headlines this year, the dramatic increase in U.S. solar installations ranks near the top of the list. While we were reading about weak demand for manufactured goods and a slow economy throughout 2012, Americans installed over 3GW of solar photovoltaic (PV) systems — an unprecedented level, up 71 percent year-over-year. Can you name another industry that grew this much?

Actually, America’s forecasted 3.2GW in 2012 is up from 1.9GW in 2011 and less than 1GW in 2010. Global PV demand is now shifting away from Europe, where new installations fell by about 3GW in 2012. And beyond the U.S., the addition of a feed-in tariff in 2012 has made Japan perhaps the world’s fastest-growing market for solar energy.

The U.S. industry grew despite questions about economic recovery, limited financing opportunities, polarizing viewpoints about renewable energy, an abundance of “cheap” natural gas, and a presidential campaign that made energy independence a political hot potato. One or two high-profile failures brought skepticism on an energy resource that, by all accounts, is one of the most promising ever discovered. The reality is that 2012 was the biggest year ever for U.S. solar installations.

American homeowners, businesses and utility companies drove investments in solar energy. California, Arizona, and Colorado accelerated the uptake of solar energy systems to the point of decreasing their incentive programs significantly. The lack of low-interest financing from conventional banks allowed third-party financing to sweep across states with leasing and “power purchase agreement” programs that encourage homeowners to install solar equipment without putting money down.

You could argue that the success was not evenly distributed. Insiders will look back on 2012 as a year of consolidation. Several well-known brands actually pulled out of the U.S. solar market in 2012, including Sharp, Schott, Siliken and Uni-Solar.

Further, the influx of PV modules from China drove prices down an astonishing 30 percent. And while lower costs are generally good for consumers, this sudden phenomenon resulted in U.S. trade sanctions amid charges of “dumping” ― the illegal practice of exporting products at prices below their manufacturing cost in an effort to disrupt markets. While installations expanded, only the industry stalwarts remained profitable within this tumultuous pricing environment.

Some of the PV highlights of 2012 included:

- The National Solar Jobs Census reported that the industry enjoyed 13.2 percent year-on-year employment growth, significantly outpacing the overall economy. The U.S. solar industry now employs more than 119,000 Americans.

- Sempra U.S. Gas & Power completed construction of the first 92 MW phase of its Copper Mountain Solar 2 solar PV plant in Nevada using First Solar modules. Another 58MW is planned for installation by 2015.

- The NEDO Japan-U.S. Collaborative Smart Grid Project launched in Los Alamos, N.M., representing a landmark cooperative effort between top international researchers to develop the “smart grid” that will be instrumental for the further optimization of PV.

- Kyocera celebrated its two millionth PV module produced in North America, with manufacturing plants that are generally running near capacity. As a reflection of growth, it took Kyocera five years to produce its first million modules in North America ― and less than two years to produce the second million.

This is all good news for consumers. It means the initial questions regarding the cost and reliability of solar energy have now been completely overcome. While concerns remain about the reliability of low-cost imports, polycrystalline silicon PV cells now have four decades of successful field experience behind them — and products from established producers represent a very reliable solution.

Consumers do need to be informed. According to SustainableBusiness.com; competition resulting from oversupply and plummeting PV module prices present a new problem: poorly made product. In their frenzy to enter the industry, many new companies were founded in the past 10 years, and some undoubtedly rushed to market. When a product competes solely on price, there is a real risk that cost-cutting shortcuts will affect performance and reliability. As with anything, the adage “You get what you pay for” holds true with PV modules.

A consumer might minimize risk by looking at the warranty on a PV module. If the module is guaranteed for 25 years, and the manufacturer hasn’t been in business that long, the lower price may merely represent a higher risk.

As we celebrate a milestone year, we must also look ahead. In 2013, many solar incentive programs will be winding down. With current low costs and more consumers installing photovoltaic systems, we will likely see more financing models — not just solar leases and loans, but also “solar share” programs, which enable consumers to invest in single large-scale solar installations and “virtually”, use the solar electricity in their own homes … even if they move! We must also address ongoing challenges that pit our nation’s utilities against the adoption of solar energy, resolve concerns about the grid, and identify what costs and benefits there are to non-participants in the American solar revolution.

Finally, there’s a great need for storage options for all the solar power being generated. These options will become more prevalent, as California and Pennsylvania begin pilot programs encouraging homes and businesses to include electricity storage options similar to the Home Energy Management System demonstrated at the NEDO smart grid project in New Mexico.

2012 was a year of solar revolution because, against the odds, Americans moved their solar market forward. We must recognize that the 30% federal investment tax credit helped accelerate the U.S. solar market, and that a growing number of states are encouraging solar adoption. Still, kudos go to the home and business owners who take the bigger step to install and use solar energy, and to the utilities serious about building a sustainable energy portfolio for their service territories.

One thing is certain: the new year brings new promise for America’s energy future. And there has never been a more exciting time for the U.S. solar energy industry.

 

The opinions expressed in this article are solely those of the author Cecilia Aguillon, Kyocera Solar, Inc. Cecilia Aguillon is director of market development and government policy for Kyocera Solar, Inc., recognized as a world-leading supplier of solar electric energy products since 1975.

 

 

 

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