Judging by recent headlines, it appears the global solar industry is getting very close to the sun after half a century of record growth and government investment. California, a long-time pioneer in solar energy development, has received the most attention here. In the tiny Golden State, companies that install, assemble and manufacture rooftop solar panels are cutting thousands of jobs and teetering on the brink of bankruptcy. Thanks to a huge drop in demand, according to executives. This is a direct result of state governments reducing incentives for solar growth. But it's not just California. Florida-based home security company ADT recently decided to shut down its solar installation division after just three years. Even the largest U.S. solar companies, such as Texas-based Sunnova, are facing financial problems, as Alana Samuels of Time magazine noted in a report titled "The Solar Industry May Be on the Verge of Collapse." Many other states, including Idaho, are also reducing rooftop solar incentives.
The broader European solar market also faces challenges. "We will lose the entire European [photovoltaic] manufacturing industry," a regional solar energy association warned after Germany's latest domestic solar module maker announced plans to move to the United States. Other solar plants are either shutting down entirely, planning to try their luck in the US, or seeking more financial support from EU lawmakers, citing difficulties in a market suddenly saturated with cheap Chinese products. The decision comes in response to calls from US senators for the Biden administration to raise already high tariffs on Chinese imports of key solar energy components, even as many solar manufacturers who rely on the components say it would hurt their operations. Meanwhile, key solar cell components such as silver remain expensive, while interest rates and catastrophe insurance premiums discourage potential investors.
It all sounds so bad. Is the sun doomed?
I am glad that the era of solar energy is not over yet. On a larger scale, the solar energy sector is still thriving and providing record amounts of green energy around the world. Despite production problems, Germany's nationwide solar installations by 2023 exceeded expectations. Greece aims to triple its solar power generation capacity by the end of this decade. China, the undisputed champion of solar energy, expanded its economy last year thanks in large part to its rapid development of renewable energy; By the end of this year, the country's solar and wind generation will finally surpass coal power, which will accelerate innovation in offshore floating panels. In 2023 alone, China will have installed more solar panels than the United States. Global renewable energy capacity grew more in 2023 than in 2022 despite continued economic uncertainty in the post-Covid supply chain. Stability, inflation and rising interest rates. North of the US border, Canadian solar has become a popular investment vehicle. Even in the US, success stories happen in unexpected places. The country's most Republican county is excited about the arrival of a solar farm in the city. Puerto Rico is expanding incentives for rooftop solar, helping stabilize the region's power grid. The Biden administration has set aside millions of acres of land for large-scale solar power in western states. Cooperative solar systems are still developing in both California and Texas as the Lone Star State continues to set records for solar energy production. Tennessee Valley officials have signed major new contracts to expand the range of solar panels and batteries, and New Jersey has passed legislation limiting community solar expansion.
Unlike all the conflicting forecasts that have plagued the offshore wind industry over the past year, this is a confusing mix of good and bad news. But a more careful analysis of all the factors here consistently points to the main problem. Relying primarily on the private sector to shoulder the burden of the vital energy transition is unwise.
The original sin of American solar energy dates back to the 1980s, when the country that first produced silicon solar cells (which was America) abandoned its original interest in powering homes with solar energy. This has allowed East Asian countries already rich in deposits of important minerals and metals to attract promising developers, while Western fossil fuel companies such as Exxon, which previously explored alternative energy sources, have abandoned such projects. : There is oil. Then, to address the situation after decades of neglect, the Obama administration passed legislation to provide mostly liquidity subsidies to private companies willing to close the loopholes. While these tax breaks have been and continue to be beneficial, they have done little to support companies, leaving them vulnerable to a US-China tariff war that is costly to build a domestic sector. I am talking about China. Thanks to a decade-long government-backed mission to dominate the solar energy industry (which included human rights abuses), the country has built a large-scale enterprise capable of producing low-cost solar panels and components. Export route. It also exploded China's renewable energy potential and weakened international competitors who could not keep up with such low material prices.
There's a reason America is so far behind. Taking advantage of low global prices due to the explosion of cheap supplies from China is another matter. Coordinating the supply chain, providing all the necessary ingredients, training qualified personnel and dealing with regular price fluctuations is more difficult without government support and assistance. (Note that tax-exempt houses of worship were not eligible for Obama-era subsidies if they wanted to use solar power, an issue that was only later addressed by an amendment to the Inflation Relief Act.) As of the early 2010s, there was no battery storage. and available. was so common. And affordable as it is today, which is known to create problems with "breaking" (the sun doesn't shine at night, the wind isn't as strong in some areas). etc.) caused more concern then than now:
This (long-awaited) boom in battery production is one of the reasons the solar industry is currently reinventing itself. Previously, in some states, rooftop solar users generally benefited from generous "net metering" policies that compensated homeowners for feeding excess solar power into the grid for greater use. The idea behind today's solar incentive revisions for New Mexico and Maine is that net metering has worked too well, raising additional state revenue to prevent the tax credits from declining too quickly. As Heatmap News' Matthew Zeitlin explains, California is now so saturated with rooftop solar that it encourages solar systems and batteries that can store energy instead of encouraging energy sharing, which can strain the grid.
The problem is that these battery systems are difficult to manage. Batteries are cheaper than before, but more expensive individually, so they are used more in commercial applications than residential ones. (Connecticut regulators recently increased residential battery storage incentives by about $10,000.) According to Times Samuels, some homeowners also own panels from companies that have long been bankrupt or killed by private shareholders with little interest in maintaining quality and durability. Panels As a result, many panels are abandoned and homeowners become frustrated.
There are still plenty of incentives for solar and battery use in the US, allowing places like sunny Arizona to promote hybrid equipment and installations. On the other hand, EU members often fail to coordinate reasonable and sustainable rebates and fees for clean energy, resulting in an impressive array of solar technologies being unevenly developed and distributed across their continent.
On both sides of the Atlantic, it is clear that the strategy of pouring money into small producers without additional insurance and support for scarce resources does not in itself create jobs or large-scale training. — Without careful coordination of local, national and international cooperating authorities, transition plans help create an energy transition economy, which makes it severely vulnerable to shocks and changes. America's mess with rooftops and solar systems shows that while private enterprise can play a role in greening global energy, it can't be guaranteed to get the job done with some government funding in its pocket . Abandoning necessary energy transfers driven by the profit motive means leaving smaller solar companies at the mercy of a still-growing market as China helps drive down the cost of solar energy supply and production. He hopes that private companies, or better capitalized businesses, will produce and maintain solar systems out of altruism, although the private capital roof disasters show this to be false. The future of a healthy and sustainable clean energy industry must be driven by government-led public projects, with more intensive government support in training, tuning, installation, energy pricing, storage and recycling (and batteries). Additionally, companies taking advantage of government incentives are only required to turn off solar power if it is not in their best interest.
Finally, the United States may take notice, as the Federal Emergency Management Agency is proposing to compensate local governments that speed recovery from extreme weather events by installing solar panels, heat pumps and microgrids. At a time when sustainably installed solar panels have been proven to help communities weather climate change-related storms, this is a step toward top-down action. The federal government is also accelerating efforts to green its infrastructure, sending rooftop solar power to the Pentagon and batteries to major observatories. The U.S. government may not do everything, but it can at least do its part to protect the potential of solar energy for companies that use solar energy in the West or on their own premises. But everyone prefers to have more structure for the roof.
