Looking back at last week's solar power headlines

Solar panels and Chevy VoltThe solar industry faced another setback late last week, when the 1603 Treasury Grant program failed to pass with the payroll extension. Still, that shouldn’t be construed as a death-knell for the industry, which continues to push forward on anumber of fronts, from concentrated solar power (CSP) to PV.

And it turns out that even the now vilified DOE Loan Guarantee Program actually is performing better than anticipated. All-in-all, the industry is looking forward and looking to how best to ensure its future, reinforcing perhaps, that 2012 will indeed be a year for corrections.

The quick fall of PV prices now is one of solar’s worst enemies. Just a year ago CSP promised some of the lowest levelized costs of electricity available from solar. Now that’s in question because PV is now much cheaper. But CSP has a significant advantage over PV—storage. With storage, the power produced can be used during cloudy periods and even into the evening. But the question remains—is it bankable?

SolarReserve just completed its 553-foot tower at the heart of its Crescent DunesCSP project in Tonopah, Nev. When completed, that project will generate 110 megawatts of power and will feature energy storage, allowing it to operate into the night. Once operational, it may help make it easier for to CSP gain access to low-interest rate financing.

The Loan Guarantee Program, which helped projects and companies get access to lower-cost financing, was maligned for the failure of Solyndra. But it turns out that the $23.4 billion in promised loan commitments are expected to cost the government significantly less—$2.7 billion—than the $10 billion that Congress set aside for the program. That’s according to a new, independent report conducted by Herbert Allison, who has worked under numerous Presidents including Bush, Clinton and Obama. The report recommends that future incentive programs have some additional oversight to ensure that another Solyndra episode doesn’t happen.

Still there are a lot things that are in the air in terms of how solar will continue to grow in the next few years. During the recent Solar Power Colorado conference, solar executives discussed the turmoil the industry is facing today and how it will get to tomorrow.

Such trade shows are a valuable opportunity to gain information on the industry. But they also help companies enter into the solar industry. For instance, two companies, Microtherm and Samson Controls both used Solar Power Generation USA in Las Vegas to make their presence and wares known to the industry.

Still, the biggest issue for solar that you’re likely to hear about is financing. How can solar gain access to financing with low interest rates, which significantly helps to reduce the cost of the energy produced by the technology? The tools used thus far, loan guarantees, 1603 grants and the Investment Tax Credit (ITC), have helped the industry grow rapidly in the past few years.

Of those, only the ITC is now active, and it’s difficult to get low-cost financing through it since there are limited tax-equity investors willing to place big bets on solar. The industry is hoping that in the future projects can be financed through securities and bonds.

The changing incentive landscape is challenging to the solar industry and investors alike. Solar leaders want stability in terms of incentives. The policy landscape may offer some bones to the solar industry this year. But it may also challenge it. Some utilities are seeking to impose additional fees on solar owners at the residential and business levels, like San Diego Gas & Electric. They’re likely to do this through transmission charges and other tools and will try to codify them into law at the state level or through commission regulations.

Not all legislation will be damaging to the solar industry. For instance, Vermont’s solar industry is anticipating that the legislature could pass three pro-solar bills this session. Legislation that willshore up current programs and expand others like the state’s feed-in tariff program.