September 17, 2012
US Solar Installations Set Records Despite Insufficient Government Action
by Robert Kropp
The Solar Energy Industries Association reports that solar installations in the US totaled 742
megawatts in the second quarter of 2012, but Ernst & Young warns that policy gridlock prevents
lawmakers from making the necessary long-term investment decisions.
On Friday, September 14th, Republicans in the House of Representatives passed the No More Solyndras
Act, the primary aim of which—aside from election-year grandstanding, as the bill stands no
chance of passing in the Senate—appears to be preventing the US Department of Energy from issuing
loan guarantees to solar and other renewable energy companies.
But if House
Republicans had bothered to read a report issued four
days earlier by the Solar Energy Industries
Association (SEIA), they would have learned that during the second quarter of 2012,
installation of solar power in the US totaled 742 megawatts (MW). It was the second-best quarter in
the history of the US solar industry.
Apparently, Republicans would prefer to reserve the
$34 billion in authorized funds remaining in the loan guarantee program for nuclear energy and
unproven carbon capture projects by the beleaguered coal industry. That they would take such a
position in the face of incontrovertible scientific evidence on climate change is not surprising,
given that Party leaders such as Fred Upton and James Inhofe have publicly denied the role of human
activity in global warming and extreme weather events.
Yet despite the stalemate on
addressing climate change by policymakers, the solar industry in the US manages to grow. The SEIA
report states that the US now has 5,700 MW of installed solar capacity, enough to power more than
"System prices continue to fall," the report continues, "Bringing the
market ever closer to the point where residential and non-residential demand is driven more by
solar radiation and retail electricity prices than state-level incentives." It forecasts that 3.2
gigawatts (GW) of photovoltaic (PV) solar will be installed in the US in 2012, a 71% increase over
With the decline in prices, however, a global overcapacity has occurred, leaving
manufacturer margins "severely compressed" and leading to a slowdown in major markets such as
Germany and Italy. The most significant growth in solar capacity has occurred in China, where
installations are expected to more than double to over five GW in 2012.
In fact, China has
far grander plans for its solar capacity by 2020, according to the Renewable Energy
Country Attractiveness Indices recently published by Ernst & Young. The Indices rank China
first in the world. "Having quadrupled its solar capacity target to 50GW by 2020 and begun an
accelerated domestic installations program to tackle the oversupply of solar panels, China looks
set to continue its domination of the global renewable energy market," the report observes.
And the US? It dropped into a tie for second place with Germany, having lost 1.5 points from
its previous score. "The upcoming November elections have led to policy gridlock in the US," the
Indices state. "With voters weary of recession and squeezed by ever-increasing demands on their
finances, policymakers have yet to demonstrate the appetite to make long-term investment decisions
that would necessitate short-term cost increases."
Meanwhile, "Germany is pushing ahead
with its ambitious renewable energy agenda," Gil Forer, Ernst & Young’s Global Cleantech Leader,
said, "Including the introduction of a new solar PV tariff and compensation for offshore grid
Keeping in mind that the uptake of renewable energy technologies in
the US and elsewhere is a critical component in efforts to avoid the further worsening of the
effects of climate change, the situation in the solar market aligns with recent reports published
by the Carbon Disclosure Project (CDP).
Despite the absence of meaningful government action in the US, CDP's executive chairman Paul
Dickinson observed, American corporations are increasingly aware of the business imperative of
addressing climate change.
But in the absence of meaningful government action, efforts by
businesses and other stakeholders are likely to remain insufficient. At a press conference
announcing the publication of CDP's reports on carbon management by companies in the Global 500 and
the S&P 500, Fatih Birol, Chief Economist of the International Energy Agency (IEA), warned, "In 2011, carbon
emissions reached a record high, despite the slowing down of economic activity. This put us
perfectly in line with a temperature increase of six degrees Celsius, which puts us on a very
In fact, as the IEA reported in
2011, governments are not only failing to meet their responsibility to address climate change.
In some respects, they remain complicit in its worsening effects.
encourage wasteful consumption of fossil fuels jumped to over $400 billion" in 2010, the IEA
reported. The role of governments is critical, the report continued, "to define the objectives and
implement the policies necessary to shape our energy future."