Reviewing last week's solar energy news

Week in review—fluctuating solar stocks, but still looking brightOver the past few weeks, photovoltaic companies have been reporting fourth-quarter and full-year 2010 earnings and guidance for 2011 with mixed results. The uncertainty in some solar stocks is based on the uncertainty of incentives across the nation and the world.

For instance, the potential for more subsidy cuts in Italy—at present the world’s second largest solar market—could reduce companies’ sales for the full-year of 2010. The potential cuts have increased investor uncertainty, leading to a dramatic drop in share prices even as companies posted positive fourth quarter 2010 results. While companies like SunPower (Nasdaq: SPWRA) have felt the drop, others like First Solar (Nasdaq: FSLR) have thus far weathered the fluctuating market.

Italy could be an international harbinger of the issues facing the solar market through the rest of 2011. But incentives and the solar industry are also at risk domestically. Xcel Energy’s recent actions in Colorado to temporarily halt its Solar Rewards program and subsequent proposal to significantly reduce the popular incentive programs have drawn unrest among the state’s solar industry, stoking fears of jobs loss in this still youthful industry.

As always, the industry has a silver lining. Even as Xcel moved to reduce its Solar Rewards program, it was moving ahead with Colorado to support the construction of Community Solar Gardens. Solar gardens are a unique way to allow people access to solar power without having them actually install it on their homes. Instead, they buy a piece of a larger array and own the generation provided by that piece.

Another sunny piece of news for the solar industry is that solar projects are increasingly attracting more traditional energy-project financing. Investors have observed that solar projects have show a higher-than-anticipated return on investments; that’s helping to open the market to syndicated financing (engaging multiple partners for financing) and even bond issuances to support solar projects. That means that future large-scale solar project could be much less reliant on government stimulus to get going.

Still, there’s an important place for government support. One federal program alone, the 1603 Treasury Grant Program, is responsible for creating 59,000 new clean-energy jobs, according to Environment America. The program had been close to the chopping block last year, but solar advocates prevailed in passing a one-year extension of the program.

Also, solar prices are continuing to fall as other power generation prices continue to edge up. Investment analysts say the cost of solar is already reaching grid parity with other forms of electric generation in markets like Hawaii and California. And some expect it to reach parity in more markets as soon as 2015.

That’s good for the U.S. because it may soon become the world’s largest solar market, according to a Solar Energy Industries Association report issued with GTM Research, which showed that the amount of installed solar in the U.S. more than doubled in 2010. The report projected that the U.S. could be the world’s largest solar market as early as 2013.

While most of the U.S. solar generation is used for home and business use, more and more is being used for transportation. ECOtality North America is working to install more than 15,000 electric car charging stations throughout the U.S. It recently received a $115 million DOE grant to install solar-powered car-charging stations in communities with Chevy Volts, Nissan Leafs and other electric cars. ECOtality will focus on towns like Beaverton, Ore.

Image courtesy of NREL.