U.S. solar and wind industries expand

Mar 21, 2012 - Wendy Koch - usatoday.com

Despite last year's bankruptcies of several solar manufacturers, including government-backed Solyndra, the U.S. solar and wind industries continue to expand in the face of obstacles this year.

Newly installed solar panels produced 109% more electricity nationwide last year than in 2010, reaching a record 1,855 megawatts, as the price of these panels plummeted by more than 50%, according to a report today by the Solar Energy Industries Association (SEIA), an industry group, and GTM Research.

"The U.S. remains the innovative center of the solar industry worldwide," says Rhone Resch, SEIA's president. He says "run-of-the-mill" panels may increasingly be made overseas, but the U.S. still will make the most advanced solar components and post double-digit annual growth. He expects solar power, which now produces less than 1% of U.S. electricity, to generate 10% by 2020.

"There's no bubble" bursting in the clean-tech sector, Resch says, although he cautions that more companies likely will fail as the industries mature and cope with decreased government subsidies.

Other recent reports indicate that the U.S. clean-tech sector remains strong despite Republican criticism of President Obama's half-billion-dollar loan guarantee to Solyndra and his other support for renewable energy.

Wind power increased 31% last year, says the American Wind Energy Association, and venture capital invested in clean technology grew from $3.8 billion in 2010 to $4.3 billion last year, the National Venture Capital Association says.

Still, even advocates see challenges ahead.

"It's not all rosy. … There have been growing pains of late," says Ron Pernick, managing director for Clean Edge, a research firm. He expects "considerable consolidation."

A federal "production tax credit," which lowers the wind industry's cost of producing power, is slated to expire at the end of 2012. Also at issue:

•A Treasury Department program, which Resch says helped many solar start-ups, expired at the end of last year. On Tuesday, the U.S. Senate rejected an effort to restart the Section 1603 program, which allows companies to take upfront cash grants in lieu of tax credits.

•The Department of Commerce is likely Monday to decide whether to impose duties on solar panels made in China in response to an unfair-trade complaint filed by Oregon-based SolarWorld and six unnamed solar manufacturers. If it imposes duties, Resch expects a slight increase in panel prices.

•Low natural-gas prices are threatening the economic rationale for renewable energy. Pernick says the wind and solar industries will still grow, because more than two dozen states now require utilities to produce more of their power from renewables.