Jayesh Goyal, Global Vice President of Sales, Areva Solar
We need to move beyond a discussion of silicon prices and expand our focus to other factors that are increasingly impacting the sales decisions of utilities and other energy customers. Due to global economic challenges this past year, some concentrated solar power (CSP) planned programmes were delayed.
To ensure the long-term growth of the industry, we must, among other factors, continue to raise awareness of and diversify our offerings with proven and dispatchable CSP and emphasise localisation in our supply chains.
As electric utilities add more renewable energy to their portfolios due to environmental standards and sustainability goals, they are faced with the challenge of delivering clean power regardless of weather conditions or time of day. Advancements in CSP solutions, such as easy integration with fossil fuels and storage options, allow the industry to overcome the intermittent nature of solar and address grid stability concerns.
We must also demonstrate a global execution capability while addressing the need for localisation. Understanding the regulatory and market differences of each country and then adapting expertise for best-in-class service delivery is vital to creating a vibrant international business. And, since many CSP technologies primarily use standard commodity materials like glass and steel, they can create local jobs and boost local economies. We see this in countries like India where, for example, a 250 MW CSP project currently under construction is becoming a source of local jobs and manufacturing.
Over the past decade, the solar industry’s growth has been phenomenal, but to ensure long-term growth, we need all technology segments to succeed, and that includes greater awareness of its benefits and wider CSP adoption globally.
Wendy Arienzo, CEO, ArrayPower
The biggest issue facing the solar industry is steady demand. 2012 is the year of global uncertainties, and if there is one thing that is bad for business, it is uncertainty.
European governments, sensitive to a changing political climate and economic austerity measures, are responding with reductions in and restructuring of feed-in tariff (FiT) programmes with a net effect of cooling demand. Germany has modified its FiT to focus on smaller installations and residences. Italy opted to continue incentives in its Conto Energia 5, but through an extremely complex programme. The softening of the European market combined with an uncertain future for incentives results in serious doubt that Europe can continue as the bastion of solar.
China presents the fastest growing global market; however, this is largely a China for China market stimulated by the government to boost outtake for Chinese module production. But for how long?
The US continues to suffer from a lack of consistent energy strategy and an ambivalent attitude toward renewable incentives. The 1603 Treasury program failed to be extended and, if that was not enough, the Department of Commerce supported tariffs on Chinese cells – both serving to quell demand.
The US must drive consistent actions – ranging from R&D funding to financial tools – to support the solar industry. Reaffirming commitment to state RPS goals and deploying tools to streamline permitting and financing processes will go a long way toward driving confidence and ultimately, industry growth.
Eric Peeters, Vice President of Clean Energy, Dow Corning
Though the preliminary finding regarding imports of Chinese-made solar panels is intended to protect the US market, the consequences of this decision will have exactly the opposite effect, proving devastating for the growth and adoption of solar technology in the US, job growth, and our competitive leadership in this industry worldwide.
Both the US and China will benefit by removing barriers to trade and promoting collaboration and open trade policies. Trade discussions in fast-growth, new technology industries like solar are best served by government and business leaders working together to develop constructive trade policies that foster growth and cooperation within the industry. Resolving trade concerns through an adversarial confrontation serves only to impede technological advancement and job creation, as well as the path towards energy independence.
While the trade issue as well as consolidation and economic challenges have been the focus of the past year, the solar industry has seen continued innovation and steady growth. New technologies that drive down costs and improve performance continue to be introduced. Efforts towards open trade and collaboration will continue to foster innovation and help make solar more competitive with traditional forms of energy.
Alan King, General Manager, Canadian Solar
This year the global solar industry’s biggest problem is market uncertainty. A lack of consistency in government support has created an atmosphere of uncertainty leading to project delays, price drops, and a decline in hiring and expansion plans.
In the US this is not new: the absence of a strong federal energy programme and lack of standardisation in state-to-state programmes are issues we have dealt with for some time now. What is troubling is the lack of a federal energy policy and the willingness to enact tariffs that hinder trade rather than encourage it.
Solar deployment creates jobs, which is the single most pressing need. The stronger the industry becomes, the more jobs we create. This was clearly demonstrated in 2011 when US job growth in the solar sector far exceeded that of most other industries. Unfortunately, rather than recognizing this and supporting further growth, the industry has been sidetracked by unnecessary and unwise trade action.
We should be finding positive methods to address and encourage global trade rather than implementing punitive tariffs. One strategy for government support with the potential for tremendous impact is to increase the current investment tax credit for projects containing US-manufactured content. This activity would help level the playing field for US manufacturers without harming the growth of the industry as a whole. A 10% – 15% increase in the Investment Tax Credit (ITC) could also encourage foreign companies to set up manufacturing in the US, thus creating domestic manufacturing jobs.
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The industry needs to offer competitively priced, high-quality products. We should work together not just to maintain the gains we have made over the last decade, but also to increase the adoption of solar as a mainstream source of clean renewable energy.
Mark Bronez, President, Hanwha SolarOne USA
The solar industry struggled for the last year with a supply-demand imbalance and tight credit lines, which drove less competitive companies out of business and will continue to do so for the next few years. To be competitive over the coming year, solar companies need a strong project finance capability, attracting project equity and debt at low cost.
Additionally, PV panel costs have fallen sharply in the last year, but entire balance of system costs need to fall accordingly to make solar more competitive. The industry will need to invest more in research and development, and solar companies need to form strategic alliances across the value chain to improve overall product offerings.
Michelle Ostiguy, Director of Photovoltaic & Barrier, Flexcon
To say that it has been a year of continued solar expansion can be somewhat misleading since it depends upon what area, both geographically and economically, is discussed. Some sections of the world certainly are posting a small but steady growth in solar development, but many others see slowed growth and, in some cases, halted production altogether.
While the US Department of Commerce has made its preliminary ruling against China in an anti-dumping suit brought by, among others, CASM (Coalition for American Solar Manufacturing), which has given a slight uptick in marketing and sales momentum, there are other difficult factors facing the industry. A major roadblock is the severe cutback in tax incentives both for the manufacturer and the consumer.
The overall economic malaise has caused many government agencies and municipalities to severely reduce or, in some cases, eliminate tax incentives that at one time made it more attractive to both produce and install solar power systems and devices commercially and residentially.
The anti-dumping suit was a long-sought-after attempt to level the playing field for US solar manufacturers, and a similar suit may not be far behind in Europe. But until the overall economy strengthens to the point of increasing available investment capital to grow the solar power industry even more, steady to slow growth can be expected.
Gaurav Naikm, Principal, Geogenix
One of the biggest impediments facing the solar industry over the past year – and historically – is the public’s perception of the cost and effectiveness of solar. The general public falsely thinks solar is much more expensive than it actually is and that it is not an effective technology.
It has taken close to 15 years for technological enhancements to make solar competitive with traditional forms of electricity in markets such as Germany, Portugal and island nations that are using diesel to generate electricity.
As improvements in technology continue to take place and as costs continue to come down, the technology will only get cheaper and more effective, which will create new markets and new opportunities.
Solar is a real technology when it comes to energy generation. As time goes on, it will become more and more of a compelling business case for different applications, which we are seeing play out worldwide right now.
However, the public needs to recognise its true cost and effectiveness to ensure the widespread application of solar. Whether it’s a large public awareness campaign coordinated by solar advocacy groups such as the Solar Energy Industries Association (SEIA)or by individuals in the solar industry – from integrators to manufacturers – the general public needs to know how solar can serve as an affordable, reliable source of clean, renewable power.
Chris Tilley, CEO, Sunlink
What is the greatest challenge facing the industry today? In a word: stability.
In order for the industry to reach its potential, we need to restore stability on a number of fronts. Volatility in module prices, the financial viability of key industry players, the cost and availability of debt and the forward value of RECs and other key incentives have created an uncertain and difficult environment for project sponsors and hindered growth.
All of these factors will eventually stabilise and, under nearly every foreseeable outcome, the solar industry will grow. The industry’s progress in bringing down costs has been spectacular, and the future is clearly bright in the medium-to-long term. Today’s challenge is how to manage through the near-term volatility and shorten its duration.
The key is to hold steady on growth. The political will to accomplish this stability is being tested in Europe by the debt crisis, in the US by the unfortunate politicisation of solar, and in Asia by the slowing economic growth.
Now, more than ever, the solar industry needs to remind political leaders of the long-term benefits of solar in addressing the serious problems we face: environmental degradation, global warming, energy security and sustainability. These issues will remain long after the current economic volatility subsides, and a robust solar industry will be an important part of the solution.
Nancy Hartsoch, Senior Vice President of Marketing and Sales, Solfocus
The most challenging issue in the global market today is sustainability. With dramatic pricing cuts and strategic country focuses on market dominance, the solar market has grown rapidly. However, the question remains whether this is sustainable since product is being sold at next to no profit margin, each week companies go out of business, and many of the doomed companies have received government incentives.
These factors have created scepticism about solar as a mainstream source of energy. What needs to be done to make the market sustainable?
First, we need to continue to advance solar technology, striving to get more and more electricity from less equipment. Solar companies must stay dedicated to commercialisation today, and advancement for the future. Without this focus, the industry will in the longer term be challenged by capital and land constraints.
Second, the private financing sector for the near term is extremely conservative. The government can play a big role, not via direct subsidies, but by enabling deployment through low-cost, available capital. Without that, solar manufacturers will have to continue to be creative with insurance products to remove the risk for investors.
Last, solar companies should look at a global footprint, which may increase the cost of doing business, but can dramatically reduce risk and market uncertainty.
