Solar Power - It’s Here to Stay

By Noah Kaye, Solar Energy Industries Association

“Some day,” Thomas Edison said in 1910, “some fellow will invent a way of concentrating and storing up sunshine to use instead of this old, absurd Prometheus scheme of fire.” The past five years have made Edison look like a prophet, as the global solar photovoltaic (PV) industry has seen a growth rate of 30+ percent annually, with manufactured output tripling between 2003 and 2006. Annual revenues have grown to $15 billion, and are projected to grow to as much as $60 billion by 2010. Strong consumer demand for clean, reliable energy where it is needed – on the rooftops of homes and businesses – has led to record levels of interest – and investment – in the power of the sun.

What’s energizing the global PV boom? Primarily, the economics of solar have improved owing to:

• Skyrocketing natural gas prices, which translate
into electric rate hikes

• Technology improvements and manufacturing scale-ups, which have slashed the cost of solar by 95% since the 1970s

• A suite of incentives and other policies that encourage consumers to go solar

Most notably, the state of California recently moved ahead with a $3.2 billion incentive program to build 3,000 megawatts of solar generating capacity on homes and other buildings in the next decade. New Jersey, Pennsylvania, Arizona, and other states have made long-term commitments to build thousands of megawatts of PV. And in 2005, the U.S. Congress enacted new federal tax credits for homeowners and businesses that install solar, greatly fueling consumer interest nationwide.

With energy issues in the public mind, and solar becoming a compelling alternative to fossil fuels, your company can capitalize on this consumer interest to market your solar and other products. Here are some basic resources to get started.

Technology 101

Photovoltaic devices convert sunlight into electricity using semiconducting materials, usually polysilicon. Individual PV cells (typically producing 1 or 2 watts of power) are connected together to form larger units, or modules, which in turn can be connected to form arrays. The “modularity” of PV enables the installer to size systems to meet the power needs of the customer, whether that is a single-family home or a large commercial building.

Increasingly, the solar industry is marketing building-integrated photovoltaics (BIPV), or PV products that integrate with traditional roofing materials. Nearly every major manufacturer offers a type of solar roofing tile or shingle, combining the photovoltaic cells with slate, metal, asphalt, or fiber-cement. BIPV products are installed over new or existing roof sheathing, wired together, and tied into the home’s electrical grid.

The old paradigm of solar homes, completely off the power grid and using batteries to store excess power, has shifted. Most new solar installations are interconnected to the power grid. These “grid-tied” systems include an inverter to convert the DC electricity produced by the solar modules to AC electricity. The AC feeds directly into the building load, and any excess electricity is fed into the power grid. Consumers use their grid-connected system to supply some of the power they need, and use utility-generated power when their power usage exceeds the current PV system output. With this arrangement, there is no lifestyle sacrifice, no requirement for the system owner to curb power.

Economics and Incentives

In general, the entire US has generally good solar resources – meaning that the economics of going solar depend far more on local electric rates and incentive programs than on the amount of sunlight. For example, the same PV system may produce 25% more electricity in Albuquerque, NM, than it would in Boston, MA, but the savings are the same because electric rates are higher in Boston. Using typical financing assumptions, a home PV system will generate power at a fixed and constant $.25 - $.35 / kWh over its 25-year-plus lifetime. This cost should be compared with the retail cost of energy from the local utility.

Incentives, both state and utility company, for going solar differ greatly throughout the country, with some states paying as much as 50% of system costs. At the Database of State Incentives for Renewable Energy (www.dsireusa.org), you can determine whether there are any state or utility financial incentives – tax credits, exemptions, rebates, loan or grant programs, or production incentives – in your service territory. When you visit this website, make sure to research your area’s interconnection and net metering regulations, which differ in all 50 states. In 41 states, the owner of a grid-connected PV system can sell any excess electricity back to the local utility, watch their meter spin backwards, and receive a credit on their electric bill - a process called net metering. Some states, recognizing the peak power/renewable energy value of solar electricity to an energy portfolio, offer special incentives for grid-connected solar.

Getting to know the Industry

Building your business starts with building knowledge of the solar industry, the products, and the companies that are fueling its growth. Solar Power 2007, the largest business-to-business solar industry conference in the United States, is a can’t-miss event for companies looking to break into the business. The conference has grown rapidly in recent years; more than 10,000 people are expected to attend, and more than 190 companies (primarily manufacturers and large integrators) will exhibit. Many manufacturers hold product workshops and certified installer-training classes at the conference. The conference offers a chance to see all the new products launched this year, as well as to attend educational sessions on technology and policy developments – and, of course, the chance to build relationships with all of the major manufacturers and dealers in the industry. This year’s conference will take place in Long Beach, CA from September 24th - 27th. The website for the conference is: www.solarpowerconference.com.

Joining the national Solar Energy Industries Association (SEIA) and its state chapters offers your company great networking opportunities, as well as a chance to keep up on the industry’s advocacy efforts. With 50 different state policies on incentives, interconnection, and net metering, it is important for the growing solar industry to come together and speak with one voice. You can learn how to join the national trade association by visiting www.seia.org.
Noah Kaye is the director of public affairs for the Solar Energy Industries Association, representing over 20,000 employees in the U.S. solar industry. You can contact him at nkaye@seia.org.