Solar Growth Expected Despite Economy

We saw this article by Elisa Wood, which has excellent information on solar trends. We wanted to share it with you. Ben Boothe, Publisher, Global Perspectives.

Tax credits, new trends and independent companies are spurring a solar surge. Elisa Wood reports from San Diego, USA, on the growing consumer interest in solar energy, despite the financial crisis.

Outside the doors of the San Diego Convention Hall the world economy was falling apart, inside Aaron Hall, chief executive of California’s Borrego Solar Systems, was describing the rapid growth of his solar electric contracting firm. Revenue was US $7 million in 2005, $12 million in 2006, and $30 million in 2007. For 2008, Hall projected revenue of $60 million, and possibly $80 million. ‘With the government passing the extension of the solar investment tax credits, we anticipate that 2009 will be another phenomenal year for Borrego and the entire solar industry’, he said

Hall’s words – coming in October just after the stock market’s record crash and the tumbling of major merchant banks – underscored the rarified business climate renewable energy currently enjoys in the US. Attendance at Solar Power International 2008 spoke volumes about the perceived health of the industry, with more than 22,000 people – at least twice as many as last year.

As the US stock market sags, the solar industry appears to be surging.

Solar has grown for the past several years, but it received a major boost in October when President Bush signed into law an eight-year extension to the solar investment tax credit (ITC).

With the incentive in place, the industry expects to add 19 GW of solar energy from 2009–2016, equivalent to a $232 billion investment, according to the Navigant Consulting report ‘Economic Impacts of Extending Federal Solar Tax Credits’.

Most striking, the report forecasts the addition of 440,000 jobs at a time when employment is shrinking in many sectors.

Solar is seeing ‘more action than some of the action movies out there’, said California Governor Arnold Schwarzenegger at the conference. Rhone Resch, president of the Solar Energy Industries Association (SEIA), added that solar has moved from a cottage industry ‘to not only an economic engine, but a political force.’

But the industry isn’t immune to the economic downturn, and solar insiders aren’t pretending to be worry free. The ailing credit market may not punch solar as hard other industries, but some hit is likely, they say. In addition to government incentives, solar companies rely on financing from banks now in peril and a credit industry now stingy about lending.

‘You are all part of Wall Street, whether you like it or not’, John Jacobs, executive vice president at Nasdaq warned conference-goers.

Solar advocates are particularly concerned about the fate of third-party financing, also known as solar power purchase agreements, in which solar service providers offer long-term contracts to help customers avoid high upfront costs associated with solar.

The agreements depend upon investors with a strong tax appetite, often large banks. The banks cover the cost of solar system equipment and installation; customers pay only a monthly electricity bill...