| THREE KEY LEVERS |
Technology
Challenges include the need for breakthrough
improvements—not just
incremental ones—that can dramatically reduce solar’s
costs and improve its efficiency and reliability. This is due
in part to inadequate government support for research and development,
as well as investors’ sense that the potential market for
solar is too small to justify massive infusions of capital.
Policy Challenges center
on the lack of government support for solar, relative to
conventional energy technologies. Like coal, oil and natural
gas, solar is dependent on supportive policies and initiatives
at the local, state and federal levels.
Finance presents additional
challenges and opportunities. Cost and affordability are the
key detriments for many would-be solar buyers, whether consumers,
businesses or governments. Easy financing remains a weak link;
there is a need for financiers to reassess the risks of solar,
giving large-scale solar projects better financing terms from
lending institutions. |
The Solar Opportunity Assessment
Report (SOAR) released in late 2003 examines what is needed to grow
the U.S. solar industry incrementally into a thriving industry,
as well as through bold, audacious measures that could dramatically
accelerate the transition to a clean-energy future. SOAR is based
on interviews with more than 30 leading PV manufacturers, system
integrators and industry experts, as well as on additional research.
Participants in the survey included major solar companies such as
BP Solar, Evergreen Solar, PowerLight, Sharp and Shell Solar, as
well as major trade associations, current and past government officials
and leading consultants.
According to the report, while new installations for solar PV systems
have experienced a compounded annual growth rate of 24 percent over
the past decade in the United States, the installed base remains
frustratingly small. “This report illuminates what the current
industry players think it will take to sustain or double current
total cumulative installation projections by 2025, as well as outlining
a far more ambitious path of capturing 10 percent of total U.S.
electricity production by 2025,” explains Alisa Gravitz, founder
of the non-profit Solar Catalyst Group and executive director of
Co-op America Foundation. SOAR was produced by the Solar Catalyst
Group, a project of Co-op America, and Clean Edge, Inc., a leading
research and consulting firm focused on clean-energy technologies.
SOAR identifies a number of key challenges to growing the U.S. solar
marketplace, including:
* its small production scale, which keeps quantities low
and prices high;
* on-again, off-again government funding of solar research
and development;
* a dearth of financing solutions, pricing solar out of reach
of most users;
* a patchwork of regulations related to solar, forcing manufacturers
and buyers of solar systems to meet different requirements in each
state;
* a lack of coordination among companies, government agencies,
the solar and building industries or potential buyers of solar systems;
w a lack of standardized, plug-and-play systems that would greatly
reduce the complexity and cost of designing and installing a solar-energy
system;
* and a lack of education about solar’s benefits to
a variety of audiences.
The report focuses on three pathways for solar’s future over
the next quarter-century: Current Growth, Accelerated Growth and
Hypergrowth, and describes the challenges and opportunities within
each. The report also identifies the three key levers of the solar
industry—technology, policy and finance—as well as three
cross-cutting strategies that could help bring solar to scale: education,
standardization and market development and aggregation.
SOAR also highlights what it would take to pull the various levers
and coordinate the various strategies in order to double projected
PV installations from 35 gigawatts to 70 gigawatts by 2025. The
report also outlines an even grander vision dubbed the Solar High-Impact
National Energy project or SHINE. The SHINE project calls for 290
gigawatts of cumulative installed PV in the U.S. by 2025, providing
10 percent of total U.S. electricity consumption.
To download a free copy of the Solar Opportunity Assessment Report,
visit: www.solarcatalyst.org
or www.clean
edge.com.
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