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Storm Clouds Gathering Over the US Solar Industry

According to Tony Clifford, CEO of Standard Solar and a keynote speaker during PVAmerica 2014, which opened in Boston on Monday, solar PV could see some difficult times in the near future, many of which are out of the industry’s control.

Clifford spoke about three pitfalls that he sees in the coming years for solar. The first words of warning were regarding the solar trade case between the U.S. and China, which he attributes to a 12- to 16-cent-per-watt tariff overall already and that's before the new module-level tariffs have been factored in.  He said that he does not see a settlement between the two countries likely even though SEIA is hard at work trying to broker one. “Module prices are going up, not down, and uncertainty confuses the supply chain and the entire industry,” he said.  “That is truly bad news for our industry.”

Clifford said that he is no longer optimistic that the industry will reach grid-parity in many states by 2016, something that he was optimistic about only two years ago. “I don’t see a tipping point by 2016. We may wake up on Jan 1 2017, with a huge hangover,” he said.

The second storm cloud that Clifford sees brewing is the battle between utilities and solar. He said that utilities see solar as a threat and have not yet begun to do the work involved in adapting to a changing electricity market.  The wake-up call for them came last year when the Edison Electric Institute said that solar and other forms of distributed generation posed “disruptive challenges” for the utility industry.  Clifford said that solar companies need to be prepared for a fight. However, he said, these battles won’t take place in a large arena but rather in small utility rate cases at public utility commissions all across America.  “Decisions of utilities will vary,” he said.  But they are conservative by nature and “most will fight to defend their turf,” said Clifford.  “Ultimately the value of solar will be determined in utility rate hearings across the country, he warned. “To protect our interests the solar industry must be present and well-prepared for hearings nationwide otherwise utilities will eat our lunch,” he concluded. 

The extension of the ITC is the third major storm cloud that awaits the industry, said Clifford, “unless the terms of it are changed,” he explained.  Clifford would like to see start construction language added to the investment tax credit, which was an amendment that was added to the wind power ITC at the end of 2012. This language would enable developers to take the investment tax credit as long as they had begun construction on their projects by the end of the 2016.   But due to other circumstances named above, Clifford said that it has become increasingly clear that the industry will need more that just a language change.  The ITC should be extended to 2018 “and possibly longer.”

Clifford would like to see the 5,000 solar companies that exist in the U.S. today all join together to help conquer these issues.  He said that there are currently only about 1,000 solar companies that are members of SEIA and that's not enough.

“These three issues — the trade war, utility rate design and the extension of the ITC — impact every solar firm in the country and every firm in their supply chain,” he said, urging those solar companies who haven’t joined SEIA to do so in order to help win these battles. 

“These issues cannot be dealt with successfully by individual companies,” he concluded.

Lead image: Storm clouds over a field of rapeseed via Shutterstock

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