solar technology | analysis | markets
to Grow 21. 3
Percent by 2020
ThE 5.3-MEgAwATT SolAr fArM AT ColorAdo STATE unIvErSITy
In for T CollInS, Colo., uSES 23,000 ChInESE-MAdE ModulES.
When published in April, the “Annual
Energy Outlook 2012”
from the U.S. Energy
Information Administration (EIA) will forecast
renewable energy electricity generation growing by 21. 3 percent by
the end of this decade,
from 10.3 percent of the
U.S. electricity mix in
2011, to 13. 6 percent
numbers, posted to eia.
gov in January, suggest
that coal power will fall
4 percent, from 44. 6
percent of the mix today
to 39. 4 percent in 2020
(the numbers were calculated before the round
of coal plant closings
announced in February).
Natural gas generation
is forecast to grow 10
percent, to become 25
percent of the power
mix, up from 23. 7 percent today. And nuclear
power is expected to
increase 12. 7 percent, to
19. 9 percent of the mix,
from 19. 5 percent today.
Total U.S. power production is forecast to rise
6. 2 percent by 2020.
Historically, EIA has
had a tendency to
future growth rate of
By the time you read this, the U.S. Department of Commerce may have announced a deci- sion on the issue of tariffs for Chinese-made
silicon modules and cells. And at the end of January,
the Brattle Group released a study, funded by the
Coalition for Affordable Solar Energy (CASE, which
opposes tariffs), positing that a 100 percent tariff on
Chinese modules would cost as many as a net 60,000
jobs in the United States over three years, with losses
between $698 million and $2.6 billion.
On the other side, the Coalition for American Solar
Manufacturing (CASM, which asked for the tariffs)
pointed to a spike in Chinese imports at the close of
2011, asserting that this was evidence of anticompeti-tive dumping in advance of tariff impositions.
The assumptions behind the Brattle Group report
include a lot of second- and third-hand effects in
other industries. And the import spike had a more
proximate cause: the impending year-end expiration
of Section 1603 Treasury grants.
In fact, if we accept the Brattle Group calculation
that a 100 percent tariff would raise module prices
as much as 30 percent, we can calculate what that
would do to installed-system pricing. A nationwide
survey of installers conducted by IDC and SOLAR
TODAY in December determined that the median
cost of installed systems was $5.27 per watt (before
incentives) in Q3 2011, with modules comprising
about 24 percent of the cost. If module prices were
to rise 30 percent, modules would make up 29 per-
cent of the cost and system cost might rise 7 per-
cent, or 38 cents per watt. It doesn’t sound like much
unless you consider that it can erase the thin margin
on which the typical installer operates today. Jigar
Shah of CASM notes that large developers work with
a margin close to 10 cents a watt. He cites estimates
that tariffs would knock U.S. photovoltaic installa-
tions back by 1 gigawatt this year, from 3. 5 to 2. 5
GW. That’s not the end of growth, but it’s a significant
flattening of the curve.
Each side in this squabble has a legitimate case.
No one wants to see the establishment of a Chinese
monopoly on silicon manufacturing, but no one wants
to dampen the rate of installations. — Seth MaSia
Solar Tariffs in the Balance