Despite reports from the National Bureau of Economic Research that the U.S. has officially been in recession all year, the solar industry seems poised to soldier on. The evidence? The Solar Energy Industries Association (SEIA) just announced plans to relocate the Solar Expo 2009 from San Jose to Anaheim. The facility in San Jose, apparently, isn’t big enough to accommodate the 27,000+ expected to attend next year’s event:
Attendance at what was already the industry’s largest solar conference and expo in North America jumped from 12,500 in 2007 to 23,200 in 2008, according to the Solar Electric Power Association (SEPA) and Solar Energy Industries Association (SEIA), the show organizers. The new location will be able to meet the increased demand for hotel accommodations, exhibition and meeting space, and will allow the event to deliver a positive experience for all participants while maintaining its reputation for excellence within the industry.
The trade groups originally planned to hold the 6th annual event in San Jose, California. However, due to the unprecedented growth and anticipated increase in demand due to the extension of the federal investment tax credit in the U.S., a larger venue was required to meet the needs of the event exhibitors and attendees in the upcoming year. The exhibit floor is expected to sell out quickly as between 650 and 800 companies from around the world gather to showcase their technology. Overall attendance is expected to top 27,000 in 2009.
Like in any industry, solar manufacturers and other solar professionals face challenges and opportunities. In the first category, cheap oil (currently trading at about $40 a barrel) may erode the incentive to develop alternative sources of energy, like solar. Cheap electricity — say, from new nuclear power plants — would increase price competition. And, as the present recession continues, lending will remain tight and consumer demand may weaken.
So have all of those will-be attendees (including us) gone completely mad? Are we naive? Delusional? As it turns out, there are a number of factors in the “opportunities” category suggesting that the solar energy market may hold up, despite ongoing challenges.
First, and noted above by the SEIA, is the recently extended investment tax credit (ITC). In short, the ITC makes it easier for individuals and businesses to shoulder the costs of installing a solar energy system. Importantly, the ITC has been extended for eight years, which provides regulatory certainty over a longer time frame, enabling solar companies to plan accordingly. Moreover, the credit, worth up to 30 percent of final installation costs, is no longer limited by a nominal dollar-amount cap (as was the case for residential systems up ’til now — read here for more details). The bottom line: the ITC will make it easier for consumers, nationwide, to purchase a solar energy system.
Second, many in the renewable energy sector are expecting big things from the incoming Obama Administration. As relayed by Reuters,
“The biggest challenge for the next energy secretary is to develop, support, and adopt clean energy policies that put Americans to work and reduce global warming pollution,” said Dan Weiss, energy expert at the Center for American Progress think tanks.
“The Energy Department must shift its mission to speeding the transformation to a clean energy economy, rather than finding new ways to concoct or burn fossil fuels,” Weiss said.
Weiss’s comments reflect a growing sentiment that America’s economic woes, and long-term energy demand growth, could/should be addressed through fiscal spending and investment in cleantech sectors. How much support the solar sector will actually get is anybody’s guess. But I’d wager that many of the companies that plan to attend the 2009 event are expecting more, not less, support than they’ve received under the current administration. Add to this a national climate policy, which is, in my mind, a plausible outcome within the next four years, and you’ve got a pretty robust case in support of solar’s prospects. Sure, 2009 is gonna be painful for many solar companies, but they won’t be alone in this regard: ’09 will be a trying year for companies across all sectors.
SEIA President Rhone Resch sums up the solar industry perspective in perfect public-relations-ese:
“Despite a challenging economic climate, we have gained significant momentum in the U.S., especially with the recent eight-year extension of the solar investment tax credit. Also, hopes are that a new administration with a commitment to renewable energy and the environment will enact policies that stimulate domestic solar manufacturing and installation, creating hundreds of thousands of permanent green jobs while increasing our energy independence and security.”