At the Solar Power International 2008 Conference held this week in San Diego (October 13-16), the mood was very upbeat. With over 20,000 attendees expected at the meeting, it’s one of the largest solar events around and with the recent US Government extension and expansion of tax credits for renewable energy there was good reason for optimism. The 30% tax credit for renewable energy has been extended for eight years, and the previous cap on residential tax credits has been lifted, all of which should have a great impact on the market for solar, particularly for the residential market. Solar has already been growing at a blistering 40% a year, and even in the midst of the current anxiety about the economy and the stock market, almost everyone I talked with at the meeting expected the industry to continue growing rapidly in 2009.
There is a lot more to solar than producing and installing photovoltaic panels. Many representatives of these businesses were present, of course, but the opportunities don’t stop there. The opportunities being developed by businesses include:
• Producers of inverters that convert DC power from panels to AC (like Fronius)
• Solar integrators working out in the field designing and installing systems (like Borrego Solar)
• Those developing new solar technologies (like Morgan Solar, developing their own low cost concentrating solar technology)
• Solar hot water and heating (Rheem)
• Solar gadgets, like bags with integrated panels (Innergy)
• Robotics for panel production (Adept)
• Panel mounting systems (Power-Fab)
• Storage of power with batteries (Trojan Battery Company)
• Financial Solutions (SunRun Inc.)
These are only a few examples of course. There are many other companies and business plans, with more joining the mix all the time. And what about the credit crunch? It’s hard to say that this, or any industry, will be completely unaffected and business is likely to slow for those dependent on home equity loans or credit from large banks. Many in the solar industry are finding though that the impact of these issues has not been great so far, or they are finding their way around these limitations. Wealthy investors are finding that financing solar systems, forming LLCs that buy solar installations, can produce a healthy return of as much as 15% with almost no risk.
If the solar business slows, producing only 20-30% growth, this is still a great rate of growth by any normal standard. Only time will tell what happens, but so much support for solar and so much room for long-term growth, the opportunity still looks tremendous.