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Why won’t the US live up to its PV potential?

09. August 2011 By:  John Stevens, Luvata

In pv magazine’s latest Opinion & analysis piece, Luvata’s president, John Stevens, asks why the U.S. isn’t exploiting its full photovoltaic potential. Could it be that it’s not emotionally ready?

Take a look at the first video home recorders with their rotary dials, large size and $2000 price tag, then fast forward about 30 years. Think about the battle between betamax and VHS to today’s blu-ray.

Back then, there would be one video player per street, today there may be 10 playback devices in every household, the smallest being a mobile phone. The adoption and development of the technology has been amazing. It is interesting to wonder, therefore, when a similar transformation will happen with solar photovoltaics in the U.S.

The photovoltaic industry’s transition began with Japan’s dominance in the 1990s. Then it moved to Europe (in particular Germany) at the beginning of this century, then to China and finally the U.S. Germany remains one of the star performers of photovoltaics, but why is the U.S. so late to the party? What’s standing in the way?

Supply and demand are certainly there. In terms of population, the U.S. is three times bigger than Germany* and consumes almost eight times more oil*. At the same time, the U.S. has significantly greater volume and intensity of sunshine hitting its rooftops than Germany. 

Ability is certainly there. The U.S. has a marginally higher percentage of its population (51.4 percent) versus Germany’s 51 percent in the labor force* and also a higher innovation index*, which measures the adoption of new technology and the interaction between the business and science sectors. Between 2005 and 2007, the U.S. filed six times more patents than Germany.

Prime conditions

The U.S. offers prime conditions for installed photovoltaics, the capabilities and the need. Why then, when Germany installed a record 3.8 gigawatts of solar photovoltaics in 2009, did the U.S. weigh in at a disappointing 500 megawatts? What is holding back the uptake of photovoltaics there?

Just over the border in Ontario, Canada, a system of feed-in tariffs (FITs) is based on the cost of generation from each different technology. This has been the cornerstone of successful European programs. The province will pay CAN $0.80/kWh (U.S. $0.69/kWh; €0.51/kWh) for a period of 20 years for electricity from small rooftop solar systems of less than 10 kilowatts and, as a result, is expecting a boom in rooftop solar installations.

What makes Ontario really unique is the domestic content requirement of the FIT program in which all photovoltaic projects must include a minimum amount of goods and services that come from Ontario. Even as its FIT program is working out the kinks, the Ontario market is an increasingly important kick-start to the North America photovoltaic industry. Canada clearly has solar in its mindset.

Back in the U.S., the lobbying efforts in Washington for the Solar Energy Industries Association amounted to $1.6 million in 2009. In the same period, the oil and gas industry spent $175 million lobbying the federal government with 807 lobbyists, as reported by credit the Center for Responsive Politics. This means that there were nearly one and a half lobbyists for every single member of the House and Senate.

And, although efforts to date have delivered results, including Renewable Portfolio Standard (RPS) programs, the Department of Energy SunShot Initiative and Green Building Initiative, with no unified energy policy will this be enough to make photovoltaics economical for all parties? 

To put it simply, is the U.S. emotionally ready to embrace photovoltaics? Do we have the desire, commitment and competitive spirit to become the world leader in the industry? As the country first to the moon, home to the inventors of electricity, radio, airplane and the assembly line, I can’t see why not.

*The Economist. Pocket World in Figures, 2011 Edition, Profile Books Ltd., 2010.

John Stevens is president of Luvata Appleton LLC, and vice chairman of the board of directors for the Wisconsin Paper Group.  He is also on the board of directors for the Hinterland Brewing Company.