UNEP Report: Does This Mean a Bright Future for Solar?
The American solar industry is a lot like a child-star: young, has immense potential, and wants to make a lot of money when it grows up. But it is impossible to know how bright its future can be unless we give it the chance to fill a bigger role in our energy needs.
Last Monday we saw how this future star is growing in the findings of the United Nations Environment Program (UNEP) report entitled “Global Trends in Renewable Energy Investment 2012.” The report presents a narrative of green energy investment from last year centered around two key points: huge growth in the solar industry, and the rise of renewable energy investment in America.
In his foreword to the UNEP report Udo Steffens, President and CEO of Frankfurt School of Finance and Management, noted that although some actors have gone bankrupt and left the solar stage, the “sector shows all elements of a highly dynamic and vibrant industry.” Furthermore, he is “convinced” that green energy led by solar will continue to “offer exciting career opportunities for years to come.”
Many of these opportunities have come over the last twelve months as the introduction of cheaper photovoltaic (PV) panels – particularly those imported from China – have led to solar technology becoming accessible for more homes. The report notes that “with PV solar…prices falling rapidly, there is a ‘promised land’ in sight” where solar will at least be competitive without government subsidies.
What does the report tell us about solar in the US?
The possibility of not needing government subsidies to sustain a solar industry in the near future should be pleasing to everyone, but there is still a lot of work to be done before this can be a reality. The report notes one obstacle can be seen in recent criticisms toward government assistance of renewables, which occur “ironically at a time when fully competitive renewable power is starting to be a realistic possibility in a few years.”
Unfortunately, the possibility of solar slowly weaning itself off government assistance has become victim to political opportunism. As the report alludes, the collapse of Solyndra has been used to move energy policy away from support of renewables in the US. Debate on this issue itself is problematic because such funding should not be controversial, just as it’s not for liberal or conservative governments in the rest of the world. Germany’s funding of renewable energy under a conservative government has led to record breaking power generation in solar this year.
Some antagonists have made solar the whipping boy of green technology. Opponents of solar have used Solyndra as a reflector for the entire industry; turning it into a political piñata to negate any success solar has had. But this is not an accurate depiction of the entire industry, and claiming Solyndra is somehow a mirror for solar’s economic future is as absurd as using Enron to illustrate the reliability of natural gas companies.
In the report, Steffens suggests “global competitors…are changing the game” for solar. Emerging markets frequently have failed enterprises as businesses become more in tune to market trends and develop accordingly. The solar industry is no exception, with Steffens acknowledging the “painful disparities between the performances of different companies.” But current inequalities should not lead to despair.
When Henry Ford began the first of his two failed automobile companies there were sixty aspiring automakers in the United States. From 1899-1919, 77% of the automobile firms that entered the industry went out of business. During this same period auto’s net product value went from 150th to 2ndin all American industries. Although solar is not likely to grow at that same rate any time soon, due partly to the European economic downturn, expansion of solar this year does dispel the argument that Solyndra in particular is some yardstick for solar’s economic viability.
Where do we go from here?
Current fossil fuel consumption is unsustainable. The need to invest in alternative energy will rise with increased energy demands, particularly in the US where we expect to see an increase 25% by 2035. It is important we keep our options open and give alternative sources of energy like solar a chance to prove themselves. The $147 billion investment in solar last year is a good start. But more must be done to show the public how government support of solar will encourage future investment, allow solar to stand on its own two feet, and ultimately benefit us all.
