I can’t recall when the solar industry received as much attention as it has from the recent collapse of California-based solar power company Solyndra. Some say its fall portends the demise of the entire U.S. solar industry. However, as best expressed by Adam Browning of VoteSolar, “This is like saying there is no future for the internet because Netscape went out of business” (Grist.com). Rather, Solyndra's bankruptcy actually represents the industry's strength; despite solar's historical disadvantage in energy policies and planning, it's been documented that solar is the fastest-growing industry in America.
In fact, according to the Solar Energy Industries Association (SEIA), the national trade association of the U.S. solar energy industry, the declining costs of solar were a main factor in the industry’s growth in 2010. Last year’s record build-out in the residential and commercial property segments were driven by a 8% and 11% respective decline in installed annual PV system cost. This decline is to be celebrated, not feared, as Danny Kennedy, founder of California-based solar service provider Sungevity, expressed during a recent conference, “Oversupply is good for you and me. […] We shouldn’t see [cheaper solar panels] as a threat but an opportunity. We are doing what we are meant to be doing, which is to make solar cheap and affordable” (Forbes.com).
Some argue Solyndra’s collapse is proof that the U.S. government should not be incentivizing solar technologies, thereby giving solar an unfair advantage. The truth is that the subsidies in place for the coal, oil, and nuclear industries are far greater and decades longer-standing than those in place for solar. Solar subsidies reduce solar installation costs to building owners, produce domestic jobs that cannot be outsourced, and drive the industry to the economies of scale it needs to compete with the entrenched energy industries.
As we have seen in our Renewables division here at Bright Power, declining PV prices spurred the design and completion of innovative solar projects like the 66-kilowatt solar installation at Via Verde, an affordable housing development in the Bronx. This installation, together with energy efficient features, is trimming the property’s energy bills by 30%. Via Verde is just one of many American success stories that would not have been fully realized if not for the financial support of government subsidies and market-responsive incentives. The government subsidies of today are spurring ambitious and profitable projects for owners, while paving the way for the energy independence of tomorrow. Learn more about solar incentives and the subsidies needed for U.S. solar industry success inside this newsletter here.
Don’t let the collapse of Solyndra fool you: the solar power industry remains on a trajectory of rapid growth in production and popularity. We are on the verge of a turning point in solar power – one where solar-produced electricity is approaching price parity with conventional fossil fuel prices in some U.S. markets, and will achieve that price parity in many more non-U.S. markets.
Andrew McNamara is Senior Consultant and Vice President of New Construction & Renewables at Bright Power.