The mood of the US solar industry is likely to be positive with Barack Obama being re-elected to the White House. The President has long championed renewable energy, viewing it as a means of achieving energy independence and reducing green-house gas emissions. In contrast, his opponent Mitt Romney was less enthusiastic about funding renewable energy, preferring to develop resources like clean coal and enhancing offshore drilling programs.
Improvements During First Term
Since solar power is more expensive than power generated through conventional sources like coal and natural gas, the industry continues to depend on government subsidies and tax breaks to remain competitive. During his first term in office, the President spent over $90 billion on renewable energy through the economic stimulus plan of 2009. Solar installations in the United States rose from 1.6 GW in 2009 to about 4.4 GW at the end of 2011.  Employment in the solar sector too almost tripled during this period, although the number of solar manufacturing jobs has remained relatively constant. 
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Despite strong government support, the sector witnessed several bankruptcies over the last few years due to the steep fall in panel prices caused by the glut of Chinese panels flooding the US market. In view of this, the Department of Commerce launched an investigation in 2011 at the behest of a consortium of US solar manufacturers into the dumping of Chinese solar products. Earlier this year, the department found Chinese manufacturers guilty of dumping solar panels and will be finalizing the anti-dumping and countervailing tariffs this month.
Recently, the Obama administration outlined a road-map for utility scale solar development that made available large swaths of public lands with close proximity to transmission lines for building solar farms. The road-map also outlined a more streamlined permitting process to reduce project lead times.
To incentivize solar power generation, the government has been offering an investment tax credit, which allows for a 30% tax rebate on the installation on solar equipment. After 2016, the credit drops to 10% for commercial installations and expires altogether for residential installations.
Outlook For The Second Term
We do not expect any significant enhancements to the government’s support for the solar industry given the grim fiscal situation and difficulties coming to a consensus in Congress. However, we believe the re-election will mean that current policies stay the course, improving overall confidence in the solar sector. The President’s re-election would also mean that Energy Secretary Steven Chu, a Nobel Prize winner who is also a strong advocate of renewable energy, will continue in office.Notes: