Solar Energy Is Fastest Growing Industry In US

The new numbers for solar PV’s Q2, just reported by GTM Research and the Solar Energy Industry Association (SEIA), make solar, according to SEIA President Rhone Resch, “the fastest growing industry in the United States.”

Resch kicked off the opening session of Solar Power International (SPI) 2012 by briefly recounting those numbers: 742 MW installed in 2Q 2012, a 45% jump over the first quarter and twice the Q2 2011 total. Solar’s total installed US capacity is now 5,700 MW, he said, and there are 3,400 MW under construction. The 2012 total PV installed capacity for the US is projected to be 3,200 MW, 71% higher than the 2011 total.


The remarkable growth recounted in the new numbers has been driven by two prominent factors: falling solar system costs and innovative third-party ownership (TPO) financing models.

TPO models have created a boom in residential and commercial solar installation but they are largely dependent on the ITC and other tax incentives. The long-term success of the industry rests on its ability to keep driving down costs after the manufacturing sector rights itself in the wake of the glut of imported, low-cost Chinese modules. But, Resch explained, those who benefit from the ITC benefit more when the system price is high. Some stand accused of inflating numbers to that end.

Called lease escalation, installers write into end users’ 20-year contracts a slowly rising lease payment. Because they use third-party money from institutional investors to cover the high upfront costs of the solar system, end users perceive a great opportunity. “But a 10% lease escalation today that requires a $100 per month payment today,” Rhesch cautioned, “will require a $700 per month payment at the end of the contract.” This practice is the result of a few companies’ greed, Resch said, but it impacts all legitimate installation and financing businesses. “SEIA will expel violators,” he promised.

In 2016, when the current 30% ITC diminishes to 10%, Resch predicted, the industry could employ 250,000 people and be building 10 GW every year. But to reach those heights, he said, it must police itself. “Only together can we achieve this future.”

Solar Electric Power Association (SEPA) President Julia Hamm appeared alongside Resch and also closed her opening remarks with an observation about the future, this one from former President Bill Clinton, who will give SPI’s keynote address Wednesday night. “The future is not an inheritance,” Clinton has said, “it is an opportunity and an obligation.”

Herman K. Trabish, Green Tech Media, September 11, 2012