Solar energy leaders at Solar Power Colorado, the state’s premier solar industry conference organized by the Colorado Solar Energy Industries Association, can all agree on one thing:The future is uncertain.
None of the four panelists at the opening ceremony of SPC had quite the same amount of enthusiasm as last year, and that’s because the tail end of 2011 saw a trade war erupt, incentives decline, and prices drop at a rate faster than the industry could adapt.
The consensus: 2012 will be a correction year.
“This industry is going through trying times,” said an animated Paula Mints, Navigant's principal solar analyst. “It’s obviously a correction period.”
Mints said last year’s growth of 60+ percent was impressive, but not necessarily what to expect every year.
“That’s amazing,” she said. “But that’s an immature industry.”
She said the projected correction period is due to the fact that, in the last couple years, solar rebates and incentives were too high, and markets moved too fast for their own britches.
And recently, according to some analysts, the grid-parity goal—the price when solar is cost competitive with other forms of electricity generation—has been reached, to a certain extent, in this country.
“This doesn’t feel like grid parity is supposed to feel like,” said Travis Bradford, author of the book Solar Revolution. “We have done everything we were supposed to do to get these systems truly competitive. And solar and PV is not going away. It’s already cost effective.”
Mints isn’t so sunny.
“If grid parity means we are putting manufacturers out of business, then we need to come up with a new definition of grid parity,” she said.
The price of solar has come down tremendously in the last two years, which in the long run, is a blessing. But the market has had a difficult time keeping up.
“Module prices are coming down really fast,” said Bradford. “That’s generally good news, but it introduces a lot of uncertainty.”
The difference module price and installation cost, according to Bradford, has pushed margins into scary territory for many solar businesses.
But the potential of the U.S. market still makes it very attractive.
“We’re a $10 billion industry in America,” said Rhone Resch, CEO of Solar Energy Industries Association. “That’s amazing.”
According to an NREL study, the U.S. solar market has a 540-gigawatt potential. Currently, the country has installed about 2.47 gigawatts, less than .5 percent of the total market.
“That’s the reason why solar is so exciting, why you see more people moving in this direction,” said Resch.
So what’s the answer then about the future of the industry? Will 2012 be a correction period with net growth? Will more manufacturers shut their doors?
“I think if you were to survey anybody, no one knows what’s going to happen in the future,” said Resch.
But Resch did have a guess where solar itself, not necessarily the U.S. industry, could be headed: portable solar.
“Maybe that’s the future of solar. That is the way we decrease our dependence on foreign sources of energy,” said Resch. “If we can tap into the transportation market, that will be the game-changer for solar.”