Solar industry grows, but future may not be so sunny

The solar industry in the U.S. continues to grow, but project financing remains the biggest hurdle.


The solar industry continues to grow, but project financing, and a lack of a national standard inhibits its growth.
Solar energy capacity in the United States grew by 17% in 2008, according to preliminary report released by the Solar Energy Industries Assn (SEIA). The recession has dried up the financing for many projects, but 2008 showed growth for a third consecutive year.

The report notes that 1,265 MW of solar power of all types were installed in 2008, bringing total U.S. solar power capacity up 17 % to 8,775 MW. The 2008 figure included 342 MW of solar PV, 139 MWTh (thermal equivalent) of solar water heating, 762 MWTh of pool heating, and an estimated 21 MW of solar space heating and cooling.

Rates of growth beat 2007 as well, with the grid-tied PV segment leading with a growth rate of 81% for the amount of installed power in 2008 (292 MW) over the amount installed in 2007 (161 MW). Solar water heating installation grew at a 50% rate in 2008 (139 MWTh) over 2007 (93 MWTh) and pool heating growth slowed by 3% in 2008 (762 MWTh) from 2007 (785 MWTh).

States that led in grid-tied PV installation were California (178.6 MW), N.J., (22.5 MW), Colo., (21.6 MW), Nev., (13.9) and Hawaii (11.3 MW). For solar water heating systems, Hawaii led states, installing 37% of the total U.S. systems in 2008, followed by Fla., (20%) Calif., (7%) Colo.,(5%) and Ariz. (5%) The Mid-Atlantic States installed 7% of solar water heating systems.

Several states added or expanded incentives or requirements for solar energy including California, Hawaii, Maryland, Massachusetts, Missouri, and Ohio.

To date, 28 states have renewable portfolio standards that require a certain amount of energy be generated from renewable sources, with 19 of these states mandating a portion come from solar or distributed sources. A total of 42 states and the District of Columbia now have net metering rules allowing owners of solar energy systems to sell excess electricity back to the grid.

The solar power industry received an enormous boost from provisions in last year’s bailout bill and this year’s Stimulus Package. The SEIA reported that the Stimulus Package contains 19 different provisions for aiding solar power. However, solar developers and manufacturers need more policies designed to help an industry struggling against a recessed economy. National policies like a national renewable electricity standard would require the country to get a certain percentage of its electricity from renewable power. The solar industry continues to lobby for a “solar-carve-out” in the policy, which would mandate a percentage of those renewables come from solar power.

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