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Solar uncertainties cloud the short-term outlook

April 4, 2012

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

Photon magazine’s monthly summary of photovoltaic installations indicated projects and incentives are being revised, stalled or moved forward, introducing uncertainty into their projects.

In Illinois, 18 MW of solar capacity was added in 2011 with another 30 MW for 2012. Indiana added 2.6 MW in 2011 and anticipates an additional 25 MW in 2012. Iowa added 1MW in 2011 and will add the same in 2012. Michigan’s added capacity will drop to 4 MW in 2012 after experiencing a 6 MW addition in 2011. Added capacity in Wisconsin in 2012 is expected to drop to 3 MW after having added 4.5 MW to capacity in 2011. Ohio has revised downward by 10 MW the anticipated 50 MW of solar power because of regulatory uncertainty.

On the federal level, solar policies are either negative or in a holding pattern. A recent ruling by the United States only assigned preliminary penalties ranging from 2.90 percent to 4.73 percent instead of the expected 20 percent to 30 percent. The Coalition for American Solar Manufacturing complained that massive Chinese subsidies were driving them out of business.

In 2010, solar cells and panels imported from China were worth around $1.2 billion; they rose to $2.8 billion in 2011, more than doubling their value.

The Coalition for Affordable Solar opposes any penalties on imports of panels from China that will raise their cost and adversely affect the sales of pv systems.

The small penalties are only a preliminary finding and could be changed in a later final ruling.

Solar advocates fear proposed changes to the German Renewable Energy Law, which provided the basis for the country’s feed-in tariffs program, could destroy the world’s largest solar market. In 2011, Germany, with a population of around 80 million, installed 7.5 GW compared to 2 GW installed in the U.S. with a population greater than 300 million.

The proposed changes are drastic and rapid. Cuts of 20 percent to 30 percent would apply to feed-in tarrif rates. Payments for production from new PV facilities will decline on a per-kilowatt basis each month. If the new laws are enacted, control over PV incentives will shift from parliament to the minister of the environment and the minister of economy.

The German Solar industry, which employs thousands and feels threatened with extinction, reacted to the proposed changes. The changes will need legislative approval to become law.

The biggest opposition comes from the German states of Bavaria and Saxony-Anhalt, which are home to many solar manufacturers. Somewhat ironic is that Germany has determined to phase out of nuclear power following the nuclear disaster in Japan, and many assumed the phase-out augured well for solar energy.

The proposed cuts to solar subsidies in Germany have also caused concern for international solar companies. There has been little good news to report about sales in 2011, and many firms expect 2012 will be another difficult year.

As solar system prices continue to fall and the market expands, resistance to such systems on the part of utilities and fossil fuel interests will intensify, and contributions to politicians protecting the resistors are expected to increase.

Sources: Photon The Photovoltaic Magazine, Issue 4, 2012; and Reuters.com, March 27, 2012

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the April 4-10, 2012, issue

One Comment

  1. James C. Davis

    April 5, 2012 at 7:40 am

    Why does the taxpayers in the United States have to pay for development of solar, if there is a need ( guess this is because obama killed the Keystone pipe line) why doesn’t the private companies develop solar, they would make millions.
    James C.Davis
    Byron

    Breitbart Reports 4-5-12 that Reuters reported 4-2-12

    World’s Largest Solar Power Plant Goes Bankrupt
    On Monday 4-2-12 (Almost an April Fool Joke), yet another Department of Energy funded solar energy company –the world’s largest solar power plant—filed for bankruptcy. Reuters reports:
    The Oakland-based company has held rights for the 1,000-megawatt Blythe Solar Power Project in the Southern California desert, which last April won $2.1 billion of conditional loan guarantees from the U.S. Department of Energy. It is unclear how the bankruptcy will affect that project
    In addition to the offer of financial benefits this politically tied company received, Solar Trust also received regulatory benefits. The Bylthe Solar Power Project is located on federal land. While the Obama administration is decreasing development of proven energy sources like oil on federal lands, they actually fast tracked this project’s permitting process:

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