After Scandal, Solar Industry Looks On Bright Side
Solar power's image has taken a hit lately with the bankruptcy of Solyndra. The California solar panel manufacturer received more than half a billion dollars in Energy Department loan guarantees before going belly up.
But the industry is still optimistic — that much was apparent at the Solar Power International conference held in Dallas in mid-October. Walking into the big hall of the Dallas Convention Center, it was impossible not to be impressed by the huge array of black solar panels hanging from the ceiling.
Those were the Japanese manufacturer Sharp's new state-of-the-art panels for residential customers, and right beside them were panels from its large Chinese competitor Suntech. Next to Suntech was the elite German glass manufacturer Schott.
A Gloom-Free Industry
Salesman Matthew Kraft has his pitch ready. Schott likes to think of its panels as the Mercedes-Benz of solar panels.
"What we're looking at here is a couple of our innovations modules," Kraft explains. "You know how at car shows they always have the concept cars of what's coming down the line, or what they could be making?"
In the U.S., Schott focuses its sales on commercial rooftops, customers who might be less interested in the cheapest price than the quality of the solar panel.
"Every step of the manufacturing process, every material choice including the encapsulate, the back sheet — all have to work together well if they're going to survive 25 years and generate the electricity expected," says Tom Hecht, a top executive at Schott's U.S. division.
The displays at the conference were from China, Germany, Japan, Malaysia, Spain, Korea, Portugal — in all, 1,400 panel manufactures from 125 different countries. If you were expecting a certain level of gloom and malaise because of the negative press surrounding the Solyndra bankruptcy, there's just not much of it to be found.
With a dramatic drop in silicon prices, solar panel prices have come down 50 percent and business is good.
The United States is the fastest growing market for solar energy in the world today. In fact, solar is the fastest growing industry in the United States. In the last year we've grown by more than 70 percent.
"The United States is the fastest growing market for solar energy in the world today," says Rhone Resch, chief executive officer of the Solar Energy Industries Association. "In fact, solar is the fastest growing industry in the United States. In the last year we've grown by over 70 percent."
Concerns Over Chinese Subsidies
But not everything is coming up roses. Last week a group of seven U.S. solar panel manufacturers filed petitions with the Commerce Department and the International Trade Commission alleging that China is illegally subsidizing its solar industry and flooding the worldwide market with underpriced panels to drive weaker competitors bankrupt.
Resch wants an investigation. "I think the jury's still out, but this case at least will be a very transparent process in which the information will be gathered, and the courts will be able to decide whether the Chinese have been unfairly subsidizing their industry or not," he says.
But the manufacturers' petition has split the solar industry because the lower panel prices have been a boon to solar developers and installers. For them, lower prices mean more customers.
New Ideas In The Market
Still, in this economy, laying out $35,000 is asking a lot of a residential customer, so some in the industry are taking a page out of Dish Network's playbook and renting the necessary equipment to residential customers. That means there's no money down.
"Instead of what you would be paying to your electricity [company], you're going to make a lease payment to us," says Sherry Pittman, a vice president at Sungevity, based in Oakland, Calif. "That lease payment that you're paying to Sungevity is going to be less than what you were paying to your electricity company."
Sharp, on the other hand, is attacking the financing issue through technology. Its new residential panels each come with their own inverter. Sharp Senior Vice President Eric Hafter explains the significance of the development.
"The inverter is matched with the panel so each panel is actually producing AC power, which goes straight into the home. It's also set up so that you can install as [little] as one panel and then add to the system over years," Hafter says.
Hafter says there is no question that U.S. manufacturers can compete, and points out that the cheapest solar panel currently on the market is made by an American company, not a Chinese one.
Regardless, there's going to be a lot of product in the market going forward, prices are expected to remain fiercely competitive, and the industry predicts robust growth for this coming year at 60 percent.
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