Tuesday, October 07, 2008

No Subsidy No Market

Makers of solar voltaics are in trouble. Without government subsidies they can't stay in business.

Amid uncertain markets and policies, solar panel makers are gearing up factories with an objective of pulling down costs to a competitive level.

One market watcher said she will review her forecasts for solar panels according to the financial crisis in the U.S., along with uncertainty about renewal of federal tax credits and a pullback of major solar plans in Spain.

"Without incentives, we don't have a market," said Paula Mints, principal analyst, Navigant Consulting, speaking at a solar event sponsored by the IEEE.

Other speakers also gave their insights about a lack of federal funds for research in solar energy. Tim Anderson, associate dean of research at the University of Florida, said he hopes this scenario will change soon.

"The impact in the academic community is that no one goes to do research in photovoltaics because there's no funding available," he added. "But the promise of more money to come is out there, and people are adjusting to take advantage of this," he noted.

On the commercial level, a group of companies is expanding production of solar cells toward driving mainstream costs. "We're building the equivalent of a large scale nuclear power plant per year," said Richard Swanson, president of SunPower Corp., one of the top 10 solar panel makers.

SunPower has recently completed a second plant capable of employing 400,000 wafers a day and has plans for plants in Malaysia that will use as many as a million wafers a day. "We know how to produce panels that cost $1.50 per watt by 2012, and we have detailed quarterly plans to achieve it," said Swanson.
I think subsidies should be rolled back to zero over a ten year period, giving the industry time to adjust. BTW $1 per peak watt is the price point where the industry can fly on its own. We are a ways from that. A declining subsidy will make it happen faster than maintaining a subsidy or cutting it off cold.

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