The Year for Solar In 2010—and Looking Ahead

As the sun shines its final rays this year, we wanted to wish all of you a happy holiday season.  These are some of the highlights of the year gone by and an outlook of things to come for 2011.

Home Solar Panels

Financing of solar energy systems.  The solar industry has waited to find out what would be the fate of the Treasury Grant program (also known as the 1603 grant in lieu of the credit). If you haven’t tuned in for this debate, this development is very good news for the renewable energy industry. It basically means that developers don’t need passive taxable income to take advantage of the tax credit. A one year extension will be an important lever in the growth of the renewable energy industry. It now appears that President Obama will sign today the Congressional tax compromise containing the one year extension to the program is in the works.

Financing continues to pose the single biggest hurdle to the solar industry, and the extension of this program is a welcome development for the solar industry. As we reported throughout the year, financing of residential solar installations is still not easy. State and local incentives still provide significant support to residential homeowners, but the long lines and diminishing pool of resources makes these incentives increasingly difficult to access. PACE programs are still in doubt. Solar leasing is becoming an option for some homeowners. At SolarTown, we offered a solar loan program, and although there has been considerable interest in a no interest one year loan, there have not been many homeowners who wanted the solar loan.

Solar industry.  The solar industry had another stellar growth year. A recent report predicted that the industry will grow as much as 22% in 2010, when all of the numbers (modules) have been counted. The good news is that the solar industry is growing leaps and bounds. The bad news is that the denominator is so small, any movement is going to shake the charts. The solar industry is poised again to ramp up in 2011 and with the extension of the treasury grant, the industry should have another very good year.

The one gnawing issue is that the solar industry is quickly becoming a Chinese industry, as even today the Chinese own 66% of world production. By and large, the Chinese modules are on par with other modules, and they have one major benefit: they are cheaper.  At SolarTown, we are closing out the year in a very good position. And yes, we’ve sold non-Chinese panels, but our three biggest sellers are all Chinese manufactured panels. All of the discount solar panels we sell are from China, and with the cost of solar what it is, consumers continue to be price-sensitive. Give us solar, but please give it to us as cheaply as possible.

Investment in solar energy stocks. It was a better year to put home solar panels on your roof than investing in solar stocks. From a combination of competition, mismanagement and other factors, some leading solar companies had a dismal year. Evergreen is down almost 60% for the year. Canadian Solar, whose prospects at the beginning of the year seemed so bright, is down 56% for the year. Trina is down only 15%.  Morningstar says that solar investors “could be in for a rude awakening come 2011.”

Innovations in solar. The biggest change in the industry came with the micro-inverter. Sure, solar panel efficiencies improved, which means more output for the buck, and the price of PV came down, but the biggest change in the industry came with the industry acceptance for residential PV installation of the micro-inverter. Enphase is no doubt the market leader, but there are many, many wanabees and the competition for micro-inverters will heat up in 2011. The other major shift we saw in the industry is that regardless of whether the homeowner gets a micro-inverter, the homeowner almost invariably wants to get monitoring of the solar energy system. Earlier this year we had a customer who purchased a large home solar panel system, and one of the panels was defective—very unusual, but it does happen. If he did not have micro-inverters and a monitoring system, he would never have known that one of the solar modules on his roof was basically shooting blanks.

As the year comes to a close, the thin film technologies are still looking for a market niche. SolarTown does not sell much in the way of thin film panels, even though we believe that there is a niche. The price for crystalline panels has come down so much that the argument for thin film does not win the day. But if there were a better niche for thin film, and I am thinking here of conditions where there is non direct light or where the heat causes a significant reduction in output for crystalline panels, then thin film may still have a chance to capture market share.

We have had a good year at SolarTown thanks to many of you and we are looking forward to 2011.

Tags: , , , , , , , , , , , ,

Comments are closed.