Solar Funding Survives Budget Cuts, Gains New Initiative

President Bush sent a budget request to Congressional lawmakers this week that proposes drastic cuts in many domestic programs in an attempt to reign in ballooning budget deficits. While some key renewable energy and energy efficiency programs took a funding hit, the US$ 2.5 trillion proposed budget plan largely preserves status quo funding level for solar energy research and funds what the solar industry is calling “a promising new initiative” to advance the development of crystalline silicon solar power.

The Administration’s budget request would lower overall solar funding from $85.07 million in FY ’05 to $83.95 million in FY ’06 — a 1.3 percent cut. However, the budget request specifies $4.5 million for a new industry-led Crystalline Silicon Initiative. This initiative targets the material used for over 90 percent of worldwide photovoltaic (PV) production, seeking to reduce costs, increase system efficiency, and improve the manufacturing of crystalline silicon solar power. The solar industry considers the Administration’s support for the initiative proof that the federal government is committed to developing a high-tech U.S. solar industry. “We appreciate the Administration’s continuing support for solar energy research, especially given this year’s tight budget situation,” said Rhone Resch, president of the Solar Energy Industry Association (SEIA). “Aggressive research funding — and an emphasis on near-term, market-ready technologies — can help the U.S. compete in the global solar marketplace. Innovative solar research programs have historically been a trademark of America’s national laboratories, universities, and industry partners, helping to lower prices for solar electricity by 95 percent in the past 25 years. Meanwhile, since 2002, the global market for solar PV has doubled in size, generating more than $5 billion in annual sales in 2004. However, in 1998, the U.S. lost market leadership of the industry to Japan and Europe, and now manufactures just 10 percent of global demand. The Crystalline Silicon Initiative seeks to reverse recent market trends, and re-establish U.S. market leadership and technology ownership in PV. By 2015, the initiative aims to increase performance by 50 percent, reduce solar power costs to less than 6 cents per kWh; cut system manufacturing costs dramatically, and decrease price to consumers by 40 percent from today’s $6.10 per watt. According to industry leaders, the initiative will start solar power on a path to deliver half of all new U.S. electricity generation by 2025. To reach the goals of the initiative and gain an edge in the global solar marketplace, Resch said that funding levels on the order of $30 million per year would be needed. He noted that Japan currently funds PV research at levels four to five times higher than the U.S., while Germany’s funding is triple that of the nation. “The U.S. has an opportunity to sell high-tech, domestically manufactured products to the rest of the world,” said Resch. “The Crystalline Silicon Initiative will bring us closer to realizing near-term gains in technology and market growth, and we are pleased that the Administration has embraced this path.” The President’s budget is only a proposal and will need to be acted on or amended by Congress, which has so far expressed a low level of support, even from some prominent republican legislators. Congress should begin the process of reconciliation on April 15 to reach consensus on a budget resolution. For more information and analysis on other renewable energy and energy efficiency government programs that didn’t fare so well under the President’s budget proposal, see the following link.
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