What Obama’s Re-Election Could Mean For The Solar Industry

by Trefis Team
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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. [1] Employment in the solar sector too almost tripled during this period, although the number of solar manufacturing jobs has remained relatively constant. [2]

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.

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  1. BP Statistical Review Of World Energy []
  2. U.S. Solar Photovoltaic Manufacturing, Congressional Research Service []
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  • commented 9 years ago
  • Sure, President Obama champions renewable energy , but I wonder what his expectations of the potentials can be? Reliance on "cagey" clean energy experts held in panels is no sure fire way to accomplish this ... Experts already with feet deep in already obsolete clean energy technologies would do anything to block any emerging new clean energy technolgoies like I use now.. I have very little hope of having my solar idea breakthrough attaining any success at all . My solar idea though crude works so well keeping my home warm while the sun shines. It is a very simple but ugly looking idea. I can envision better designs that consumers will want to have only if the experts just stop keeping themselves so conflicted about investments in both clean and dirty energy .. with trillons already invested in dirty energy, what makes you think we will be able to abandon dirty energy in favor for clean energy that can become a huge reality . I ask you what is really in the minds of those clean energy experts. are they assuming that clean energy will take much longer time to become a major energy source based on conflicted views still intermixed with both clean and dirty energy . We must push as much dirty energy out of our future energy projections as practically possible without too much concerns for those dirty energy investors... Those dirty energy investors has to understand that dirty energy is not risk free to own.. Solar energy is not really expensive unless we confined ourselves to photovoltaics only. There is far more to solar energy than just electricity.. Solar energy is far more efficient as a heat source than as a source of electricity. as well as far cheaper.. We have to start removing and cleaning up all the red herrings surrounding solar energy now. No question about that... We must go all out to arrest the further development of dirty energy just because it suddenly get cheaper recently.. This is a major mistake as far as our investments in future energy go. Solar energy is ;still hindered clearly in front of our eyes yet we are so blind to it.
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  • commented 9 years ago
  • billions of more dollars down the drain