Solar investments are paying off26. May 2010 By: Rhone Resch, SEIA
Although the U.S. photovoltaics industry has not boomed as predicted, it definitely has enormous growth potential, as Rhone Resch, president of the Solar Energy Industries Association (SEIA) recapitulates.
AMIDST a worldwide recession, everyone is studying the returns on their investments more carefully. Since I installed a photovoltaic (PV) solar system on my home four years ago, it has become one of the best investments I’ve ever made. In fact, solar gives me better returns than my retirement investment plan.
And I have been seeing positive returns since day one. When President Obama and Congress look back at how economic stimulus funds were invested, they will see that the solar industry was one of the best investments for the American people.
In April, the Solar Energy Industries Association (SEIA) released its 2009 U.S. Solar Industry Year in Review. Despite a recession, the U.S. solar industry, particularly the PV sector, did not just survive, it thrived. We estimate that U.S. solar electric installations grew by 37 percent, led by the residential grid-tied PV market doubling and utility grid-tied PV installations tripling.
With a focus on job creation, President Obama and Congress enacted the American Recovery and Reinvestment Act (ARRA), establishing the Treasury Grant Program that allowed the solar investment tax credit (ITC) to work even in a recession. This program provided solar consumers with a grant in lieu of the 30 percent ITC.
Despite being delayed in implementation until late last summer, this program has been wildly successful and was instrumental in spurring the industry’s growth in 2009 and into 2010. We are advocating for a two-year extension of this program that will lead to even stronger growth beyond 2010.
This industry growth led to job creation. While other sectors were flat or declined significantly, the solar industry supported 17,000 new jobs in 2009. Solar now employs 46,000 U.S. workers and supports an additional 33,000 jobs in other sectors. We expect that number to surpass 60,000 by the end of 2010, and there is nowhere to go but up, especially when considering the growth we have experienced in manufacturing.
Though the U.S. has lost the global lead in PV manufacturing, both domestic capacity and production continue to grow steadily, with a seven percent increase in PV module production from 2008 to 2009. This growth was driven by the manufacturing investment tax credit (MITC), which has been awarded to 61 facilities in 21 states, including traditional manufacturing states such as Michigan, Ohio and Pennsylvania.
Despite this steady growth, the U.S. still ranks well behind China and Taiwan, Europe and Japan. By extending and modifying the MITC, the U.S. can reclaim its position as the world’s leading manufacturer of PV cells and modules. New PV installations continued robust growth in 2009 despite difficulties in the housing and construction sectors.
In 2009, cumulative grid-tied capacity sailed passed the one gigawatt (GW) mark. Notable growth came in the utility sector, which nearly tripled from 22 megawatts (MW) in 2008 to 66 MW in 2009.
Additionally, two utility-scale power projects became the largest and second largest PV installations in the U.S. – the 25 MW DeSoto Next Generation Solar Energy Center in Florida and the 21 MW FSE Blythe plant in California.
But the real leader in growth was in the residential sector, which saw a 101 percent increase in installations, from 78 MW in 2008 to 156 MW in 2009. Several factors played a role, including the removal of the $2,000 cap on the ITC.
Another factor that played a substantial role in residential market growth was the emergence of new business models, like property assessed (PACE) financing, which is now enabled in 16 states. Additionally, technological advancements helped drive prices for PV modules down more than 40 percent from prices in mid-2008.
We expect industry growth to continue in 2010 driven by strong policies at the national and state level, new business models, expanded research and development, and decreasing costs.
Our growth outlook is buoyed by strong investor interest in the solar industry. In 2009, venture capital firms aggressively pumped $1.4 billion into solar, more than any other renewable technology.
Residential and commercial rooftop installations are expected to remain strong and utility-scale PV is expected to grow significantly, with more than 6,000 MW in announced projects in the pipeline. With economic returns like this, we’re continuing to advocate for investment in the solar industry. We’re expecting a breakout year for solar in 2010.
As we look to the future, we are changing the conversation from megawatts to gigawatts.
Rhone Resch is the president and CEO of the Solar Energy Industries Association (SEIA). He has over 15 years of experience in the public and private sector working in clean energy development and climate change issues. Resch holds an MPA in Management from Syracuse University's Maxwell School, a Master of Environmental Engineering from SUNY Syracuse, and a B.A. from the University of Michigan. He lives in a solar-powered home in Washington, D.C. with his wife and two children.
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