perspective
SOLAR TODA Y®
Leading the RenewabLe eneRgy RevoLution
Things look bleak right now,
but the solar industry has a bright future.
soLaRtoday.oRg
a dark night, a Fine sunrise
Iwas asked recently about prospects for the solar industry in 2010. The questioner was troubled by
the slowdown in the
solar business in his
area and the growing
number of layoffs in
the solar industry. It is
easy to enumerate the
reasons for the slowdown. But it’s not hard
to assess the future.
The reasons follow the money cycle.
The credit crisis of
late 2008 hit suppliers, manufacturers, installers
and the entire solar value chain, creating market
stagnation, caution and some contraction. Less
credit meant fewer installs. Modules languished
in warehouses. As inventories grew, prices fell and
manufacturing slowed. We saw all this in 2009.
With few new homes being built, the demand
fell for new residential solar installations. Loss of
value in the real estate market made it harder for
homeowners to finance retrofits.
In the commercial market, financing was difficult to find. Lower demand for energy led to
lower energy prices, affecting the payback calculus and making solar less attractive to chief financial officers. Companies contemplating commercial solar installations had to plan for persistent
market uncertainty. Caution prevailed.
What can we expect for next year? Consolidation. Vulnerable companies now owe money
to suppliers and are barely keeping accounts
receivable ahead of accounts payable. Many will
go away or be absorbed into larger entities.
Even if we believe that the recession is over, it
will be a number of months before the financial
markets begin to lend for solar at the level they
did a year ago. Since December 2007, employment has fallen by 6. 9 million; those who have
lost jobs will have to wait months before the
economy begins to add significant numbers to
Brad Collins is the
executive director
of the American
Solar Energy
Society ( ases.org).
the nation’s payroll. It will take time to absorb
laid-off workers back into our economy once we
have growth. It should be assumed that until consumers are employed and feeling secure, they will
not contemplate major expenditures.
But I do not despair. I see a bright future for
the solar industry in 2010. It just won’t be the
solar industry it was in 2008. I propose these
three forecasts:
•;First,;we;can;expect;to;see;more;mergers
and acquisitions as companies with solid finances
take advantage of the environment to buy competitors and thereby increase market share in
preparation for the rebound to come.
•;Second,;the;rest;of;the;world;recognizes
that the solar market of tomorrow is the United States. Many companies are laying plans to
become active players in the U.S. market —
entering the market under their own brands,
with joint partners or by purchasing American
brand names.
•;Third,;Congress;will;pass;some;form;of;re-newable energy standard (RES). Regardless of its
initial size, a federal renewable electricity mandate will be a huge economic driver for broader
deployment of solar technologies. The experience of the past several years shows that once an
RES or renewable portfolio standard is in place,
it becomes a floor, not a ceiling. Therefore, whatever becomes the law of the land for renewably
sourced electricity will be superseded by an even
more aggressive standard within a few years.
Solar industry professionals both here and
abroad realize that the United States will soon
be the world’s largest solar market — possibly in
2010. They want to be ready when the economic
elevator goes up. 2010 will finish in bright sunshine for the solar industry. ST
Brad Collins: Executive Director/Publisher
publisher@solartoday.org
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SOLAR TODAy (ISSN: 1042-0630) is published nine times
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FAX 303.443.3212, ases@ases.org, ases.org. Copyright © 2009
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