It would appear that there are problems with the solar industry in Nevada. There have been reports by the New York Times claiming that SolarCity amongst other solar companies does not have a bright future. According to the article, the issue is that the industry is heavily reliant upon local, state and federal subsidies but in reality, the future will not be as dull as it may now seem. There are ten reasons why this is the case:
1. Diversification
Due to companies diversifying, they are better able to overcome issues surrounding bad policy. The reason for the misunderstanding is that the New York Times based their story on residential properties, yet this is only a quarter of the industry according to Kevin Brehm – RMI Associate. Companies such as SolarCity have found that diversifying limits the effect of the changes in Nevada policy.
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2 Global Industry
The American PV industry is growing globally regardless of issues with the local market. Predictions show a 33% increase in global PV requirements in 2015 and there would be a further increase in 2016. India and China are causing the growth, and the USA has companies able to cope with the increase in demand according to Brehm. SunPower is working in the Middle East and Africa, SunEdison has a pipeline outside the States, and 60% of First Solars potential business will not be USA based. Hanna Solar’s Market Development VP Anthony Coker agrees that the global business screens companies from policies made at home.
3 Robust Technology
Due to robust technology, energy is still coming in from panels installed over 40 years ago despite a 25-30 projected lifetime. Inverters are also providing 20-year warranties and are prepared to replace after 15 if need be.
4. Cost V Fossil Fuel
The Levelized Cost of Energy Analysis is showing that unsubsidized solar PV is still cheaper than fossil fuels. First Solar provide a kilowatt hour for 3.87 cents, and this is thought to have been the cheapest electricity has ever been. Austin Energy has received bids where the cost per hour was under 5 cents.
5. PhotoVoltaic ( PV ) Prices Will Still Fall
Reports show that the PV costs will fall still further. This will be due to the improved installations and a better supply chain. This is the information received from LCOE 9.0. Canadian Solar expects drops of 25% for three years, and GTM believes it will be 40% by 2020. Improved business plans and scale are the primary reasons.
6. Business Leaders
According to Forbes the brightest talents are working in PV – “Top 30 Under 30.” They seem to have learned from the crisis in 207-2009 and unlike their predecessors accept green energy as a long term solution for both a career and energy solution.
7. Closing Coal Plants.
The Clean Power Plan will see a significant reduction in coal production over the next ten years. It could be as much as 46,000 MW of this form of fuel will be lost. As solar PV is affordable, it will fill the gap created, and Brehm believes that this will work. Regardless of the plan, Duke Energy are going to ensure new installations are renewables and natural gas. Coker commented that it was the economy that was leading to the changes and wind, and solar is the cheapest.
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8. New Markets Globally
Lower income households are soon going to be able to afford the new products that are on the market. This will create $250 billion worth of new business and on top of this will be customers in developing countries who will want electricity around 1 billion. It will be an ideal way for them to get clean energy.
9. New Markets in the U.S.
Community solar is likely to be the new market targeted, and it will be co-ops in rural areas which lead the charge. Kieran Coleman, an RMI Associate, warns that it is early stages, but there are major possibilities.
10 Innovation
The New York Times shows a downside that it is believed does not exist. Non-profit and for-profit companies are continually making changes to their working practices and products mean more people can afford and access solar and renewable energy. Big companies are getting involved and using solar power, and Mississippi Power is planning new solar farms. There should also be thanks given to New York Public Utilities Commission as they are innovating in both emergent and current sectors.
The Future
Unlike oil and gas, the future looks good for solar energy. Policies and the stock market are not holding them back, so the future is bright for solar PV.