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Amid Boom, U.S. Solar Industry Fears End of Government Incentives

Recent gains in the U.S. solar market are due largely to support from two federal funding programs that are set to expire this year and next

By Maria Gallucci, SolveClimate News

Jun 20, 2011
solar thermal

U.S. solar energy installations are poised to double in 2011 for the second year in a row, but the industry could fall short of its lofty, long-term goals for growth if two key federal programs dry up, officials say.

"We are in reach of our goal of installing 10 gigawatts of solar annually by 2015. That's enough to power more than 2 million homes with clean reliable solar energy each and every year," Tom Kimbis, vice president of strategy and external affairs for the (SEIA), told reporters on a conference call.

"But to reach that goal, Congress needs to make the right investments in solar energy," he said.

Around 1,800 megawatts of solar power will be installed in the U.S. this year, up from the 887 megawatts installed in 2010, Shayle Kann, managing director of solar research at , said on the call.

"This is going to be a time when we see enormous changes ... and everything that comes with the maturation of a sector is going to be compressed into a very short period of time over the next year and a half in the U.S.," Kann added.

Last Thursday, Kimbis and Kann announced a joint for the first quarter of 2011.

The report noted that grid-connected photovoltaic (PV) installations grew 66 percent in the first quarter over the same period last year, bringing more than 250 megawatts of solar electricity online — enough to power around 50,000 homes.

The boost brings total grid-connected PV projects in the U.S. to over 2,300 megawatts, or the amount of power used to light up 460,000 homes.

Although no new concentrated solar power (CSP) or concentrated photovoltaics (CPV) projects were finished in the first quarter this year, a total of 1,100 megawatts from both technologies are now under construction across the country, and more than 9,000 megawatts of CSP and CPV projects are currently in the pipeline.

Kimbis said the steady gains in the U.S. solar market are due largely to support from the Treasury's and the Department of Energy's Loan Guarantee Program, both of whose funds for solar are set to expire before the industry approaches its five-year target.

He added that the programs had contributed in part to the doubling of solar industry jobs from 2009 to more than 95,500 positions in 2010, a figure expected to increase by nearly 30 percent this year, according to the 2010 .

"Smart targeted investment of taxpayer dollars can yield a high return on investment for the public," he said. "It gives solar businesses a predictable policy framework that allows them to innovate and drive down the cost of solar."

Industry Lobbies for Extension

The 1603 treasury program gives cash grants to cover 30 percent of the cost of a renewable energy project, in lieu of a 30 percent investment tax credit. The U.S. Treasury thus far has given $936 million in stimulus grants to nearly 2,200 solar projects, according to an by SEIA.

Kimbis said SEIA is lobbying to extend the cash grant part of the program beyond October 2012 — when final applications to get the incentive are due — to 2016, when the entire treasury program expires.

He pointed to a by the that found that "one dollar in cash has nearly double the value of a dollar in tax credits to a project developer," according to the center's press release.

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