Financial Innovations and Falling Prices Lead to Solar Growth

2012 was a very productive year for solar and 2013 is looking just as promising. Between a wide variety of financing options and falling costs, solar is becoming even more readily available to anyone who wants it.

An increase in third party solar leasing programs gives potential solar customers more options to go solar, especially if they’re not in the financial position to go with a purchase. Solar leasing allows customers to–at zero or low upfront cost–have solar installed on their homes. The monthly lease payment and utility bill with solar are less expensive than your utility bill without solar.  Since utility rates are only projected to go up, this means substantial savings over time.

Solar Savings

Customers also have the choice of a Power Purchase Agreement (PPA) in which case the customer pays for their energy at a set rate (per kilowatt hour). In either case, with third party financing, the risk for the customer decreases as they don’t have to shoulder the responsibilities that come with ownership (maintenance, monitoring, insurance, and production guarantees).

These financial innovations are part of the reason why total installed solar capacity reached 1,992 MW in 2012 with 684 MW occurring in the third quarter alone–118 MW of which being residential installations.

The growth of the solar industry can also be attributed to costs dropping almost 40% in the past two years. Though this has been beneficial to consumers, the price drop comes in part from an increase in global oversupply which has created problems for the US solar manufacturers who’ve had trouble competing with unfairly low prices.

But despite quarrels over the oversupply, solar in the US is still growing and responsible for adding 13,872 jobs in 2012 according to the National Solar Jobs Census report. Currently, there are more than 119,000 workers employed in the solar industry, a 13.2% increase since 2011.

Between financial innovations and falling costs, solar is becoming even more accessible to families, businesses, and a wide range of other applications including utility scale projects and military installations.

Solar Wars

Solar wars might not be terribly riveting to the average American, but it’s definitely something solar manufacturers and installers are keeping tabs on.

An invasion of inexpensive solar panel imports from China are sparking mixed reviews from the U.S. solar industry. On the one hand, parts of the industry say the cheap panels are creating a solar boom in the states. On the other hand, panel manufacturers are concerned because its hurting their businesses, and want a tariff attached to the imports.

SolarWorld’s Gordon Brisner argues that China’s threatening SolarWorld’s underlying principles, “to build products here in America, for America’s community, for America’s energy independence, and really leave the world a better place.”

By flooding the market with cheap panels, Brisner argues it’s contributed to the collapse of some U.S manufacturers. Brisner has petitioned the U.S. Department of Commerce and the International Trade Commission to tie tariffs to Chinese panels to level the playing field.

Though most people agree that American panel manufacturers have indeed been harmed by Chinese imports, it remains to be seen whether or not there’s any illegal activity occurring–in which case a tariff would be justified. “Dumping” refers to a foreign producer selling a product in the U.S. at a price that is lower than the cost of production, or subsidizing panel manufacturers so they can sell below the average price.

A tariff would indeed rise the price of solar, causing concern with the Coalition for Affordable Solar Energy  (CASE) who says higher prices will hurt solar installers–whose numbers outweigh the number of U.S. manufacturers.

Kevin Lapidus vice president of SunEdison and worker at CASE argues that we’ve just gotten to the point where solar’s reputation of being too pricey for regular people is being let go, and imposing a tariff will set the industry back by years.

Though some people who go solar are interested in buying American made (like SolarWorld), most are just looking for the best price. With Chinese panels running about 10% cheaper, they’re a popular choice.

Imposing a tariff could come with potential consequences, a trade war with China, higher panel prices hurting installers, a ripple effect throughout the solar industry if there are less installations. But is establishing a “made in America” industry worth it?

A big push behind solar energy (and renewable energy in general), is not only to be less fossil fuel intensive, but to stop importing foreign oil. Establish energy independence.

Of course, I think some solar is better than no solar regardless of where it comes from, but aren’t we contradicting ourselves a bit if our aims are to achieve energy independence if we’re importing solar panels from a foreign country? Would it be worth it to pay a slightly higher price for solar panels if it meant keeping jobs and manufacturing at home instead of abroad, if it meant actually achieving energy independence instead of shifting our dependence to another country?

Over the next few months, the federal government will decide if China is playing by the rules, or if a tariff on Chinese panels should be imposed.