I hopped on a plane to Las Vegas on Monday to attend the Solar Power Generation conference and boy, I’m glad I did.
The first day started with remarks from Barry McDonald, Vice President, Solar Energy Development, TetraTech, who outlined the challenges that faced the industry in 2011. He cited the bankruptcies of companies like Solyndra, Evergreen Solar and the rest, as well as plummeting PV prices as two of the biggest challenges that faced the industry.
In 2102, McDonald says there are two major challenges facing the industry. First, financing for utility-scale will be difficult, especially in light of the European debt crisis that is expected to continue throughout the year. In addition, the industry is doing so well that it is meeting the government-mandated goals quickly in many states, and the next generation of incentives has been slow to catch up. As a result, the ability to finance residential projects will also slow.
Then Shayle Kann from GTM Research took to the stage to talk about the state of the U.S. solar industry. Kann says the U.S. solar market has been 5% or 7% of the international market, but it hasn’t driven the market. He said the industry was not going to see the growth rates in 2012 that they have seen in the past two years because the global market will slow down a bit. But the U.S. market will be growing much faster than the global market and, Kann said, by 2015, the U.S. will be either 1st or 2nd largest market in the world.
Kann also noted that Solyndra has done two things for the solar industry: It changed the political atmosphere around solar (it had been pretty bipartisan, but as a result of the bankruptcy, the Republicans and Democrats find themselves on opposite sides of the debate). On the plus side, it also raised solar’s profile significantly with the public — and a huge majority of the U.S. public still supports solar.
Kann expects tariffs to be imposed — anywhere from 10% to more than 100% — on Chinese imports rising out of the SolarWorld trade complaint — but he added that the Chinese producers will not stand by and let that happen without consequences. China could impose tariffs on silicon imports, or they could move their production plants to other Southeast Asian countries to avoid the tariffs (and in some cases, this is already happening). Kann doesn’t see any huge spike in the prices of PV modules because the PV market will remain so competitive.
There were several other themes that pervaded the first day of the conference. Among them were:
- There’s a lurking market that the wise companies are looking at more closely and are starting to invest in: municipalities. There are 2,000 municipalities in the country and could really be a huge market for companies looking to build utility-scale projects.
- The European debt crisis will continue to slow the European markets in 2012 and will make financing utility-scale projects difficult.
- One of the ways to get around the credit crunch will be to bundle smaller projects (anything below 100 MW) and treat them like a larger project. This will provide smaller developers with an opportunity to bank more projects and will open up the market to more people.
I can’t wait to see what tomorrow brings — stay tuned for my wrap-up blog after tomorrow’s sessions.
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