U.S. Solar on the Way Back?

Some voices in the U.S. solar industry are looking for better times in 2010, despite the country’s lackluster economic condition.  But solar companies still have to overcome obstacles such as competition from overseas, particularly China, and difficulty in obtaining credit.

Attendees at this week’s investors’ conference in New York hosted by investment company Piper Jaffray were told of signs on the demand side that Solar, having survived the downturn of 2008 and 2009, could be gathering strength this year.  One reason given for the industry’s survival was the level of government support provided, although this came with the caveat that the support was more visible on a global basis than in the U.S. alone.

It’s also true that this global support has been dampened somewhat by the world economic situation, which has caused some European governments to scale back their subsidies and credits.  But in general, those subsidy cuts were considered to be much less damaging to demand than they might have been, indicating continued base support for renewables overseas.

Continued prospects for an energy or energy/climate bill from this U.S. Congress are helping to boost hopes for a sound year in Solar.  The overall feeling among solar companies was that they would need such a bill to help overcome the threat of Chinese competition.  Chinese Government support for Solar, including easy access to credit, has dwarfed the support offered by the U.S. Government, resulting in prices per Watt for panels made in China that U.S. firms cannot meet.  In fact, in the case of Massachusetts-based Evergreen Solar, the company’s way of ‘adapting’ to the situation is by outsourcing finished panel manufacturing to China.

It’s a very clear-cut argument;  in countries where the nascent clean energy industry is appropriately valued, government plays a critical role in supporting and developing it, and economic benefits follow.  If our country’s government doesn’t value, support and develop our clean energy industry, those benefits will continue to flow out of the country indefinitely.

As Thomas Friedman wrote in his 2008 book Hot, Flat, and Crowded:

If only we could be China for a day…