Greentech Media

Jed Dorsheimer, a Canaccord Adams analyst, said he’s not sure whether the U.S. incentives will expire or if Congress will pass a temporary "Band-Aid solution" before the year’s end, but agreed that any "real material" subsidy program would have to wait for a new presidential administration.

But while the failure to renew incentives is negatively impacting the United States, the country makes up a relatively small portion of the market, so the worldwide industry impact also is fairly small, he said.

Uncertainty about the Spanish subsidy is more significant, Dorsheimer said. It has spurred increased activity as companies speed up projects previously expected to be completed in the fourth quarter, but could potentially lead to a slowdown at the end of the year, he said.

Conergy’s Epuron, for example, on Wednesday announced it had secured financing for a 21.1-megawatt solar project in Spain and would be able to complete the plant as early as this summer, on time to secure a feed-in tariff of 45.51 euro cents per kilowatt-hour.

"The construction time will then have taken less than one year up to the time of conclusion," according to a press release.

A confirmed drop in the tariff would be better than this uncertainty, Dorsheimer added.

"The worst thing is a lack of clarity - it creates confusion," he said. "For most of these installations, financing is critical in long-term payback periods, so a lack of clarity will stifle any installations and growth."

In spite of the lack of clarity so far, Pichel expects a modest decline in Spain in 2009, offset by strong markets in Germany, Italy, South Korea, France and the United States, and continued growth in Spain in 2010 or 2011, according to his research note.

The solar industry can’t complain too much. Solar companies did have a significant chunk of uncertainty put to rest earlier this month, when Germany lawmakers voted to cut tariffs by as much as 10 percent for the next three years - far less than the 30 percent the industry had feared (see Solar Prices Set in Germany).

Find out the forecast for Concentrating Solar Technologies at our seminar at Intersolar North America July 14, 2008 in San Francisco. Click here to register or for more details.