An estimated 29,000 people attended Intersolar North America this week as visitors, speakers, or organizers -- an indication of the solar industry’s vitality and relevance. But the industry has been experiencing a number of bumps, giving rise to a pronouncement echoed by a number of speakers: we’re looking at an industry at a crossroads.
What does that mean? As is typical when talking about solar, it means more than one thing.
The changing market
Europe’s status as a leader in solar energy is being eroded by reductions to FITs and upcoming tariffs for Chinese modules. Demand is shifting to markets like North America and Asia, and a larger number of smaller markets will take the place of a few big ones. According to Michael Barker, Senior Analyst at NPD Solarbuzz, that’s creating a more levelized playing field where the focus won’t be on just one region.
An interesting part of this trend is the emergence of markets in sun-rich areas that have limited grids but huge energy demands. Many of these regions also feature abundant, cheap land, which could promote a shift toward larger-scale projects.
As easy financing comes to an end for Asian solar companies, Johannes Kneip of Centrosolar AG believes we’re entering a new phase in the solar industry. The hope is that this will lead to a more sustainable way of doing business -- which is fitting for a business that’s ultimately about sustainability.
One thing is certain: Different policies, project types, and financing structures are needed in different regions. As the industry moves to different markets, we’ll need the flexibility to adapt to each.
A more self-sustaining industry
Though CEO Panel moderator Dr. Eicke Weber of the Fraunhofer Institute called attention to the “dirty secret” of major fossil fuel subsidies around the world, most speakers reflected the pressure on the solar industry to be subsidy-free.
In California, the California Solar Initiative (CSI) for solar PV has declined ahead of schedule and the industry is now more self-sustaining. In the PG&E territory, solar has been thriving for a while now without a significant rebate, aided by net metering, the Investment Tax Credit (ITC), and the drop in PV prices. Installed costs are still about twice those in Germany at an average of $4.40 statewide, but high electricity costs ensure that solar remains an attractive option in California.
As we move away from subsidies, what remains to be seen is what will take their place, and whether anything will impede the current growth of solar.The ITC and net metering are critical components for solar in much of the U.S., and net metering has come under attack in many areas.
More financing options will also be crucial, and capitalizing solar as an asset class is an interesting element of this that had a whole day devoted to it at Intersolar.
Not surprisingly, storage was a key focus at Intersolar this year. Angiolo Laviziano of Mainstream Energy called it the “Holy Grail” -- whether or not you agree with that designation, there’s no doubt that for a significant percentage of our power to come from solar, storage will have to play a role. Questions remain about which storage technologies, or combinations of them, will prevail, and that will likely depend to some extent on the needs of different markets. The big question on people’s minds is, When will storage options be ready for prime time in a big way? The answer to that will certainly affect the future of solar
Other important shifts at this technology crossroads involve interconnection with electric vehicles, weather forecasting, and system integration. We’re just starting to see these trends, so time will tell which become the most prominent. For more on technology's role in the industry, see our report on technology at Intersolar.
An energy future crossroads
The biggest crossroads we’re facing is that of our energy future. We’re poised to make some crucial choices.
Lyle Rawlings of the Mid-Atlantic Solar Energy Industries Association highlighted the issue with a discussion of what’s happening in his region of the U.S. New regulations are taking coal out of the equation. And it’s a lot more expensive to build new nuclear plants than to install solar. With coal and nuclear out of the picture, we have just a couple choices to fill the energy gap: natural gas and renewables. Given that the methane released into the atmosphere by fracking may be worse than pollution from coal, the choice seems clear.
So, what will we choose? Will we create a renewable energy future? Those of us in the solar industry are poised to help make that happen.