Solar Energy Is Ready. The U.S. Isn’t – Businessweek
Oct. 25 (Bloomberg BusinessWeek) — Clean energy has become a dirty word in presidential politics. In their second debate, Mitt Romney and Barack Obama each tried to outdo the other’s love of fossil fuels: Obama extolling his record on oil and natural gas production, Romney vowing to take “advantage of the oil and coal we have here.” The Republican candidate has ridiculed the administration’s $535 million loan guarantee to Solyndra, the bankrupt California-based solar panel maker, and accused Obama of living “in an imaginary world where government-subsidized windmills and solar panels could power the economy.”
The candidates’ coolness to renewable energy comes at a time when the domestic supply of traditional energy sources, such as oil and natural gas, is at an all-time high. And yet this failure to make the promise of renewables a keynote in the debate is a huge missed opportunity. In particular, it ignores the dramatic reduction in the cost of photovoltaic solar power worldwide and the considerable benefits to U.S. consumers and the environment. The untold story of this campaign is that what killed Solyndra may turn out to be a boon for the nation. “Economically and technologically, the game is over,” says Bill Powers, a San Diego engineer and board member of Solar Done Right, a group that proselytizes for rooftop solar power. “The hangups in the U.S. are strictly political.”
Over the past five years the price of photovoltaic panels has plummeted 75 percent, due largely to a glut of Chinese-made panels. The fall in prices rendered technically advanced photovoltaic panels, like those produced by Solyndra and other U.S. companies, too expensive to compete. But cheap panels have been a godsend for consumers such as Powers. He recently took advantage of a sale at his local retail solar panel store and self-installed 1,000 watts of extra solar power on his roof at a cost of $2 a watt, including a 30 percent federal tax credit. Nationally, the average cost of residential installations—including hardware, permits, and labor—has plummeted from $9 a watt in 2006 to $5.46. Averaging in commercial industrial installations, the national installed price plummets to $3.45 a watt, says the Solar Energy Industries Association, a Washington-based trade group.
The result is a burgeoning rooftop revolution. The SEIA says almost 52,000 residential rooftop systems were installed in the U.S. last year, up 30 percent from a year earlier. Total rooftop installations, including on commercial buildings, grew 109 percent from 2010 to 2011, according to SEIA data. Total photovoltaic installations are projected to grow an additional 71 percent this year from 2011 levels.
Worldwide, the picture is even more positive. Australia projects that 10 percent of its 8 million houses will have rooftop systems within the next 12 months—most of that growth coming in the past three years. European rooftop installations continue to outpace those in the U.S., even as some countries begin to pare subsidies that have helped spur a continental rooftop boom. Including residential, commercial, and industrial-scale projects, the world had installed about 67 gigawatts of photovoltaic power at the end of last year—up from just 1.5 gigawatts in 2000.
Despite such breakthroughs, the U.S. economy is harnessing only a fraction of solar’s potential benefits. Based on U.S. Census Bureau data, about 100 million U.S. residential units could physically hold rooftop systems one day, generating by one estimate 3.75 trillion kilowatt hours of electricity a year. In 2011, total U.S. electrical generation from all sources was about 4 trillion kilowatt hours—42 percent of that from coal, according to the U.S. Energy Information Administration. The trouble is, many of the big,investor-owned utilities that provide about 85 percent of America’s electricity see solar as both a technical challenge and a long-term threat to their 100-year-old profit models. And the lack of a national energy policy means regulation of solar is up to states, public service commissions, and a wealth of local governments and bureaucracies—many of whom have a vested interest in maintaining the status quo.
The experience of Orrin Kohon, a Los Angeles resident with a second home in Hawaii, reflects the hurdles facing consumers hoping to join the rooftop movement. If all goes well, Kohon will soon receive local government approval to let workers mount an $18,000 leased solar power system on the roof of his Honolulu house. Monthly electric bills for his modest 1,750-square-foot abode run about $400—at 32.6¢ per kilowatt hour, the highest in the nation. With his rooftop system, installed by a third-party contractor, he’ll generate enough of his own power to lower that rate to 7.3¢ per kilowatt hour for the next 20 years. That’s a savings, he says, of $120,000 over that period. “It’s a hedge, like locking in $2-a-gallon gasoline,” says the 63-year-old owner of a Los Angeles career counseling service. “The thing is, I have to act now. If too many of my neighbors beat me to the punch, I won’t be able to connect.”