An analysis of the US solar industry, conducted by the Solar Energy Industries Association (SEIA) and Greentech Media (GTM) Research, shows the solar business still growing strong during the first quarter of 2011. The solar industry continues to generate new jobs and create economic growth at a time when recovery for the rest of the economy has stayed slow. Though solar still provides only a small fraction of US energy overall, the rate at which it is growing suggests it has potential to be a major source of electricity for the country.
If the United States can keep existing solar industry incentives in place while implementing new policies that make it easier for homeowners to go solar, then rapid growth in the solar sector is likely to continue. That’s good news for environmentalists who want to see the economy shift to clean, renewable energy sources and away from polluting fossil fuels like oil, coal and gas.
In total, the United States saw 252 megawatts of solar photovoltaics (solar systems that use light from the sun to generate electricity) added to the grid in the first quarter of 2011. That’s roughly the same amount of energy produced by a small power plant, and brings the total amount of installed photovoltaics up to 2.85 gigawatts. The US now generates enough solar energy to provide close to 600,000 homes with electricity.
In the early months of 2011 the US installed 66% more photovoltaic capacity than during the first quarter of 2010, which was a record-setting year for solar in the United States. If the current trend continues through the end of 2011, this should be another record-setting year for the industry.
So what has led to the rapid growth of solar power in the US? Obviously consumer interest in greener sources of electricity and growing concerns about the pollution impacts of fossil fuels are both factors. But the price of making and installing solar systems is also falling fast, making it easier for solar to compete with the heavily subsidized fossil fuel industries. Tax credit incentives meant to attract solar investments also helped, though these incentive programs face an uncertain future as Congress may decide not to extend them.
State programs can give a boost to solar projects as well, and states with good solar industry incentives in place have continued to see the most growth. According to the SEIA and GTM analysis, 88% of solar installations in the first quarter of this year took place in just seven states that did an exceptional job encouraging the industry.
Yet while existing incentives have done much to grow the solar sector, the US still lacks many of the policies that have been most effective at growing the industry in other countries. Germany, long one of the world’s biggest solar markets, generates a larger percentage of its energy from solar than any other industrialized country. Germany has achieved its solar success partly through implementation of a feed-in tariff system, which allows homeowners who install solar panels to sell the excess energy they generate back to utilities, helping recoup the costs of installation. A feed-in tariff in the US could dramatically increase solar installations while helping consumers more easily afford clean energy. But Congress has been reluctant to embrace a feed-in tariff so far.
The speed at which solar continues to grow in the US—despite lack of a feed-in tariff and uncertainty as to whether tax incentives will be extended—is a testament to the strength of the industry. Though still small and incompletely developed compared to the oil, coal, and gas industries, solar is gaining a foothold in the United States and approaching the point where it can compete with fossil fuels. In the process it’s creating thousands of construction and installation jobs, and generating lots of low-carbon energy to power our homes and businesses.
Photo credit: flickr.com/photos/knowmybackyard/2394376192/