The US solar power industry employs more than 100,000 people, twice as many as it did two years ago and more than the steel industry or coal mining, the industry’s trade group has said.
In a bid to deflect some of the bad publicity the industry has attracted since the collapse last month of Solyndra, an innovative solar module manufacturer that was backed by a $535m federal government loan guarantee, the Solar Energy Industries Association is emphasising its job creation and growth.
In its regular quarterly assessment, published on Tuesday, the SEIA says investment in solar power should add about 1,750MW of capacity in the US in 2011, up from 900MW last year. Employment has continued to rise, although more slowly over the past 12 months than in the previous year.
Rhone Resch, SEIA president, warned however that the threatened end of so-called Section 1603 grants to renewable energy developers at the end of the year would be a severe setback to the industry.
The growth of the solar industry has been supported by several federal and state government incentives, including renewable portfolio standards mandating a proportion of electricity supply to come from renewable sources such as solar and wind and tax credits allowing the write-off of 30 per cent of the investment cost of a project.
Thanks to those programmes, solar power has been growing fast, although only about as fast as the global market, which is supported by similar incentives in European countries.
However, curbs on those incentives in Germany and Italy, two of the world’s largest markets, have slowed growth in Europe, making the US a more important part of the world market.
The leading state for total new solar installations in the second quarter of the year was California, which has sunshine and supportive policies, but the largest non-residential market was New Jersey, which has also had strong support for solar power from the state government.
However, the analysis prepared for the SEIA by GTM Research, a consultancy, warns: “Looking ahead, nearly every major market is facing some difficulty, California, New Jersey and Pennsylvania principal among them.” Demand for solar power has been helped by falling prices for modules, which have made conditions difficult for manufacturers and helped tip Solyndra and other companies into bankruptcy, but increase solar’s competitiveness against coal, gas and other fuels.
In some sunny markets, including California, the industry says solar is now at or close to the point where it can compete with gas-fired power stations, the regulators’ benchmark for electricity costs, at peak times during the day.
The report says three uncertainties face the industry: whether falling costs will stimulate much new demand, whether new projects emerge once the existing pipeline of new developments has been built, and what happens to the Section 1603 grant.
These grants allow developers to take a tax credit worth 30 per cent of investment cost once a project is complete, rather than waiting to generate enough earnings to set the cost off against tax. They seem likely to be ended by the Republican-controlled House of Representatives when they come up for renewal at the end of the year.
Mr Resch said: “Much of the growth of the past two years can be attributed to the 1603 programme. We could see the solar industry turn down in 2012 if the grants are not extended.”