The US Renewable Energy Community

The Solar Industry

The renewable energy industry, specifically in solar, is poised for unprecedented growth in the United States.  The “Bailout Bill” of 2008 contained legislation that uncapped the 30% Federal Tax Credit’s limit of $2,000 per family for residential solar PV installations.  Residential customers can now take advantage of a tax credit which equals 30% of the system cost.  California and other progressive states also have incentives that cover a portion of the costs.  In certain states like California, the combined state and federal governments literally pay for 45-50% of the cost, making it much for affordable for homeowners.  In some other areas, state governments offer larger incentives which also make solar attractive.  The solar industry will explode within the next 5-10 years.

Motivations for Solar

People who are interested in solar products usually have 3 motivations.  Predominantly, they want to reduce their utility costs.  Some want to improve the environment and lastly, they desire to reduce the country’s dependence on foreign energy.  With the crisis in the economy, solar becomes a product that offsets most household energy costs and completely eliminates them within 7-11 years.  There is a movement in the US toward a “Green” trend.  With high gas prices and increased weather patterns, people are becoming more conscience of the environment.  The sun provides clean energy that is free and clean.  Utilizing solar energy also frees the United States from political pressures from foreign and sometimes hostile sources. There is also a sense of pride from homeowners when solar energy is produced on top of their homes.

Green Trends in Building

There is an environmental trend in the building industry as well.  Many smaller cities are making it mandatory for new buildings to be LEED certified.  In the near future, local governments will require solar and other forms of alternative energy sources on new builds.  Cities like Berkley, CA have programs where home owners can finance solar through property taxes.  This concepts is also being proposed by Chula Vista, CA and San Diego, CA.

A study released by the U.S. Conference of Mayors says that about 750,000 people work today in what can be considered green jobs.  By 2038, 4.2 million green jobs are expected to be added, accounting for 10 percent of new job growth, according to the report by Global Insight Inc.

Solar Growth

A report on GlobeNewswire stated “Finally, the federal government has implemented a set of policies that will spur the long term growth of the solar industry,” said Barry Cinnamon, CEO of Akeena Solar. “Our customers can now achieve a payback on their solar investment in five years instead of ten, with a 20 percent return on investment (ROI). In today’s uncertain economy, rooftop solar power may be the very best investment a homeowner can make.” According to the Solar Energy Industries Association, “Installed grid-tied solar PV grew more than 48 percent in 2007 compared to 2006.  The pool-heating market continued steady growth of 8 percent.”

The California Energy Commission confirms that installations of solar photovoltaic systems in California have grown from under 1,000 in 2001, to 15,000 in 2005 and then doubled to 30,000 in 2007.

California Solar Initiative CPUC Staff Progress Report – October 2008

“The distributed solar PV industry in California has been growing at roughly 35 percent per year since 2005, a breakneck pace for any industry. That growth appears to be accelerating, even as the overall economy is slowing in the United States. In 2006, the industry grew by 34 percent, and in 2007, the industry grew by 37 percent. In the first nine months of 2008 alone, installed capacity grew by another 37 percent over 2007. That means that by the end of 2008, California is likely to see an industry growth rate of well over 40 percent relative to last year.”

This growth was spurred by Governor Schwarzenegger’s “Million Solar Roofs Plan” or the California Solar Initiative rebate and can not reflect the solar boom that is expected in 2009 due to the Federal Tax Credits.  HelioNation is expecting solar sales to double in 2010 and competition between installers to be fierce.