The solar industry has boomed over the last few years, with the demand for clean energy fueled by government-sponsored financial incentives in several countries. Solar panels and power systems have been installed in many homes and businesses as a result. Companies around the world have installed solar systems for free, and the excess power has been sold to the grid. Many solar panel owners have actually profited from their installations. Government feed-in tariff programs in many countries have sparked a surge in demand, and businesses have sprouted up overnight to become lucrative enterprises. However, many countries have cut these incentives just as demand was reaching the highest levels seen yet. Since July, some solar businesses, which were thriving at the time, are now struggling to stay afloat. Australia, the United Kingdom, Germany, and even Ontario, Canada are facing similar dilemmas.

Australia cut its incentive program in August. This has hurt many thriving businesses, including a solar panel company run by Joe Darby, whose business reached a growth rate of 20% each year. Not only have ties with subcontractors been cut and jobs lost, but Darby’s business may completely go under and he may lose his house. A national survey said that the majority of the country’s solar energy firms have laid off workers or plan to. Renewablelogic, a solar company based out of Perth, reported that business between August and October declined by 90%. Half of the company’s workers have been laid off, while it may have to drop 25% more of its staff soon.

While proponents of the cuts suggest government rebates for solar panels still exist, and the investment is still a wise decision, a similar pattern is being seen in other countries. In the UK, the government is planning, as of October 2011, to cut the feed-in tariff rates in half. Experts say as many as 25,000 solar jobs may be lost. The cost of solar technology has decreased, according to UK Energy and Climate Change Secretary Chris Huhne, and that his department was looking for “appropriate levels of subsidies.” Solarcentury founder Jeremy Leggett said that the act is a “Spectacle of a government destroying jobs it had only just created to save next to nothing.”

As a result of threatening cuts, some installation companies are seeing a rise in orders as consumers seek to get what they can. This threatens the Parliament’s budget for the year in regards to solar energy, while a similar pattern could emerge in Germany which plans to cut the feed-in-tariff program in January 2012. Analyst Martin Simonek of Bloomberg New Energy Finance, in London, suggested that there could be a surge in German installations toward the end of the year. Shipments to Germany by a Yingli Green Energy Holding Co., in China, have increased, while other manufacturers of solar panel components were caught off guard when demand dropped. They had previously increased capacity to keep up with the demand, but government actions in many countries have had unpredictable results that have hurt most businesses.

Government action on a multi-national scale has seemingly reversed the optimal environment for business growth. The economic situation for many industries is dire, but solar system manufacturers and installers were experiencing a boom. Some think politicians were frightened by the fast pace in growth, but whatever the reason, the actions have changed the lives of business owners and dedicated workers who had reason for optimism.

Sources

• The Sydney Morning Herald: Solar businesses collapsing two months after feed-in tariff cut

• The Guardian: Consumers urged to install solar panels before subsidies cut

• Bloomberg Businessweek: Germany Plans Solar-Subsidies Cut, May See Installation Rush

Questions abound in the wake of the collapse of Solyndra, the California solar-panel maker that recently declared bankruptcy after securing approximately $0.5 Billion worth of loan guarantees from the Obama administration. Though we are not qualified or interested in making political statements one way or another, it is important that we clarify any confusion as to the broader impact of this situation and how it might relate to our customers and the solar power industry in Hawaii.

First, is important to note that this one questionable investment by the Department of Energy is not indicative of their energy investment portfolio in general. In fact, the reality is that the Energy Department’s loan-guarantee program, enacted in 2005 with bipartisan support, has backed nearly $38 billion in loans for 40 projects around the country – Solyndra represents just 1.3 percent of that portfolio — and, as of today, Solyndra is the only loan that has soured (Bill O’Leary – The Washington Post). Other solar beneficiaries, such as SunPower and First Solar, are still going strong and the Department continues to support new energy technology on many fronts.

This brings up a second point that strikes a little closer to home – there has been some reporting that SunPower might share a similar fate to Solyndra. As with much of the noise in a political season, this storyline seems to be more based in hyperbole than fact – but as Hawaii’s first SunPower Elite dealer and as a company that has worked closely and successfully with SunPower for years, we feel it is important to address these reports.

Media Matters, a non-profit, non-partisian research group, does a very thorough job of investigating the situation and addresses the merit of many of the different claims being made. If you’re interested, we definitely recommend reading their post in its entirity at MediaMatters.com, but if you’d like the quick synopsis, here it is:

• Fox News claims that SunPower is a ‘Failing Company’ - Many of Fox’s commentators, including Steve Doocy, Bill O’Reilly, and Elizabeth McDonald have made statements over the last few days implying that SunPower could go out of business. This is contrary to what experts at the NY Times, GTM Research, Baird, Wall Street Journal, Forbes, and The Washington Post have all reported recently – repeatedly stating that SunPower is not only a positive example of successful energy technology investment, but is also very well positioned for future success.
• Fox News commentators state that SunPower is using the loan guarantee provided by the US Government to create jobs in Mexico, not the US - Though many of the same commentators have stated that SunPower is exporting new jobs bolstered by the Energy Department loan guarantee, the truth is that SunPower is headquartered in San Jose, California and has approximately 1,100 employees in 4 states and of its 26 parts suppliers, 22 are U.S.-based. Additionally, the loan guarantee is estimated to create 350 construction jobs in California as SunPower builds the largest utility-scale PV project in the country – the 250-MW California Valley Solar Ranch. Not only will the project create construction jobs, but it stands to create 15 permanent jobs and create $315 million in economic benefit to California, as well as powering approximately 100,000 homes contributing vital renewable energy as the state aims to achieve its Renewable Portfolio Standard.

In the end, though Solyndra was a very sad story on many fronts, the solar industry in general, and SunPower specifically, are all positive narratives still being written – and all signs point to that they’ll have sunny endings.

We may have all heard the benefits of CFL’s before, but not everyone is switching their lights over. Next time one of your traditional incandescent bulbs burns out, swap it out for a CFL – Hollywood’s leading ladies are doing it, shouldn’t you?

Switching just one bulb can make a difference – According to EnergyStar.gov, if every American home replaced just one light bulb with a light bulb that’s earned the ENERGY STAR, we would save enough energy to light 3 million homes for a year, save about $600 million in annual energy costs, and prevent 9 billion pounds of greenhouse gas emissions per year, equivalent to those from about 800,000 cars

A segment aired on Hawaii News Now that has raised some questions regarding renewable tax incentives. In order to clarify any confusion that may exist, we’d like to highlight the facts and connect consumers with the information necessary to make an informed judgement regarding this issue.

Federal and State governments have supported solar because of the collateral benefits the technology provides. State and federal incentives reduce the cost of systems, increase adoption, spur investment in manufacturing and ultimately lower hardware prices. Incentives create viable adjacent businesses providing jobs and increased sales tax revenue. In Hawaii’s case, a vibrant alternative energy industry also helps to reduce the state’s potentially crippling dependence on imported oil as its primary energy source.

For 35 years, the government of Hawaii has been one of the most progressive in the country in its support of solar. With inspired leadership by the current and past governors, the state continues to set the standard in sustainable, environmentally-conscious legislation.

The state of Hawaii Tax Department updates its tax guidance regarding renewable tax incentives often, in fact, they have reiterated their position twice in the past year and a half (in May 2010 and again in September of this year). In both cases, the tax department clearly communicates that solar integrators and their customers should continue to operate as they have in the past, installing the most efficient and economical systems for each customer’s unique circumstances. The Tax Department is clear in their interpretation of proper ‘use’ of the existing tax incentives – and have been consistent in honoring multiple $5000 tax credits on a single property for a wide variety of technical reasons. To be clear, there are certain circumstances when multiple systems are permitted according to the Department of Tax, and if you have any questions concerning your system, you should feel free to call Sunetric for clarification.

The clarity gained in the these Tax Information Releases is another positive, progressive step towards a sustainable future for Hawaii. The insights and efforts necessary to reach this result, from both the Hawaii solar industry and the Department of Taxation, should be applauded.

Please feel free to contact Sunetric with any questions or for further clarification on this subject.

Download the most recent TIR (September 2011)

In July, HECO raised rates by 2.2%, another in a long line of electricity cost increases. We wrote about it in May, too.

SImply put, rising electric rates mean that solar makes more and more sense every day – not just because it can be cheaper than what you’re already paying for electricity, but because you’re guarding yourself against the inevitable price increases of the future.

Electric Rates

The graph below charts the average yearly electric rate from the last twenty years.

Source: U.S. Energy Information Administration, Form EIA–861, “Annual Electric Power Industry Report.”

From this data we can extrapolate how electric rates will continue to rise:

1. We can expect an 6% increase annually in electric rates.
2. HECO bills that are currently currently $160 per month can be projected to be:
   • $300 per month in 2020.
   • $600 per month in 2030.
   • $1,200 per month in 2040.

(The large drop you in 2008 was due to the combination of reactions to the global financial crisis and recession that made global oil demand go down about 4%, rather than the typical increase of 1–2% per year.)

The smartest way to protect yourself from this upward trend (and the unexpected spikes) is by going solar.

Try our solar calculator today and see how much you’ll save by weighing your solar options. It only takes a few minutes.

Green jobs are being created at record rates, which is great news for a struggling economy with 14 million unemployed.

A July report published by the Brookings Institution in conjunction with Battelle entitled Sizing the Green Economy: A National and Regional Green Jobs Assessment (read the PDF) looked into the ‘clean economy’ growth over the last seven years, and their findings are worth talking about.

Green Economy Growth

The Brookings report shows a 3.4% growth in the clean energy economy, compared to 4.2% in the national economy from 2003 to 2010. That relatively slow growth has some important data to consider behind it; the Society for Human Resource Management, reviewing the report, pointed out:

But underlying this data is a tale of two segments: Older construction-based companies in the clean economy experienced a high incidence of layoffs during that time, while newer “clean tech” segments, such as those in renewable energy, had substantially greater job creation than “nonclean” peers.

Of the clean Solar thermal expanded over 18.4% annually from 2003–2010. Wind power saw 14.9% and solar photovoltaic saw 10.7% expansion over the same period. Notable growth by any measure, illustrated in this figure provided by the Center for American Progress:

There are now more people in the clean economy sector than in the fossil fuels (2.4 million) and biosciences (1.4 million) sectors. Clean economy jobs represent 2 percent of all positions nationwide.
— SHRM

Cleaner Energy, More Jobs

• Nearly 63,000 jobs were created in the clean energy sector in California between 1995 and 2009, according to a January 2011 report by Next 10.
• The average clean energy job wage is 13% higher than the national average.
• As more and more buildings bring their facilities into the green era and focus on the energy efficiency, the clean energy jobs responsible for those improvements (such as consultants and installers) will see a lot of growth, says an October 2009 report from the Chicagoland Green Collar Jobs Initiative.
• The US Department of Energy has put out upwards of $1 billion for research and development of solar energy since 2001.
• The US Department of Labor has given more than $500 million in grants for green jobs training since 2009.
• Just announced and set for construction in the Florida Panhandle, the Southeast’s largest solar farm will create 400 construction jobs over 5 years and up to 120 employees, according to Progress Energy Florida.
• This graph from the Center for American Progress breaks down the job distribution in the aforementioned 2003–2010 green economy sector growth.
• The Center for American Progress also reports that: ‘Three separate programs for energy efficiency retrofits employed almost 25,000 Americans in three months since earlier this year. The Weatherization Assistance Program, Energy Efficiency Block Grant Program, and State Energy Programs collectively upgraded over half a million buildings since they began to ramp up earlier this year. These programs mainly hired construction workers, a key point during a time of particularly heavy unemployment in the construction sector.’

Investment is Needed to Further Growth

While recent controversial investments in the solar market have caused concern for some, the overall trend in the alternative energy economy and the jobs it stands to create is consistently improving and very exciting. It is vital that we all support investments in our clean energy future and the American workers who will make it happen.