With 5.7 gigawatts of solar power now in place and growth booming, how many total installed gigawatts of solar will the U.S. have in ten years? What impact will the outcome of the November presidential election have on growth?
These and other predictions were asked of six of the most prominent solar industry players by Solar Electric Power Association (SEPA) President Julia Hamm and Solar Energy Industries Association (SEIA) President Rhone Resch at the kickoff event for Solar Power International 2012, the solar energy industry’s annual conclave.
The CEOs’ predictions for solar’s 2022 installed capacity ranged from 45 to 75 gigawatts.
“I see headwinds, and I’m very concerned,” NextEra Energy subsidiary Florida Power and Light (NYSE: NEE) President Eric Silagy, the panel’s utility sector representative, said of economic uncertainties, conservative political forces, cheap natural gas prices and creative destruction in the manufacturing sector. “Now is the time to be worried.”
“These things are true in any innovation cycle -- the early cell phone business, for instance,” venture capitalist Nancy Pfund, Managing Partner of DBL Investors, said. “Solar isn’t there yet, but signals are everywhere of mass adoption.”
--How many regulated utility monopolies will the country have in ten years?
Peter Marte, President of Georgia-based Hannah Solar, did not see utilities giving up their power easily. “Southern Company (NTSE: SO) is a fourth branch of government in the Southeast,” he said. “It is not going to go away.”
Recalling how disruptive to the recording industry the MP3 player was, SMA America President Jurgen Krehnke said he foresees a completely new role for the utilities as a manager of the transmission and distribution network. “Completely new business models will emerge. It will happen.”
“It took 100 years to build a dumb grid,” Pfund said that a utility executive recently noted to her. “Don’t hold your breath for a smart grid.” But, she added, renewable energy “is nimble” and can be effective in a new utility model.
--Willstoragebe commonplace for solar energy within five years?
Pfund pointed out that it is already in place in solar power plants and, because it is an ideal solution to solar’s variability, it will be commonplace within two to four years.
--With the manufacturing side of the industry now going through a painful process of maturation and consolidation, how many of the roughly 1,500 module manufacturers will be left in 2016?
“It is going to be 100,” said NRG Solar CEO Tom Doyle. The pipeline for low-cost modules of unproven quality is not there, he explained. There is a new, higher level of scrutiny by project funders. It requires a much higher level of demonstrated quality.
“Shoddy product quality,” Krehnke agreed, “is a threat to the industry.”
Proven quality and a good balance sheet, Doyle said, are the limiting factors to acceptance for a module manufacturer.
-- The industy now employs just over 100,000 people; how many will it employ in 2016?
Pfund, who just co-authored a white paper reporting enormous growth in green jobs, said the industry is “crossing the chasm of acceptance and people are finding solar at Home Depot or their auto dealerships. Solar installers,” she added, “will also get other work installing energy storage and electrical vehicle charging systems."
On the utility scale, she predicted, “once the gigawatt of solar power plants now under construction flip their switches over the next three years, reality will set in and growth will take off.”
“There will be more jobs,” Werner said. ‘The question is, how many more?” It is unclear right now, he said, because of so much economic and policy uncertainty.
--How much impact will the November presidential election have on the solar industry over the next five years?
Only one of the six expected the election to have a significant impact.
“It won’t disrupt solar growth,” Doyle said, “because that is being driven by state policies and because it is up to us to drive down costs.”
“As soon as the elections are over,” Krehnke said, “common sense will set back in and the financial sense of residential installs will drive further growth and greater acceptance.”
“We must continue to control our own destiny,” Werner said. “It is all about quality.”