The good news is that solar is still growing at a pretty good clip, the bad news is that like almost every other durable good and infrastructure industry it is tied to pedantic factors like financing. I find it incredibly troubling that an entire industry is banking on increasing federal subsidies, on top of what is already a generous subsidy, in order to remain viable.
Barry Cinnamon, chief executive of Akeena Solar in Los Gatos, said his firm’s solar installation business has slowed from a growth rate above 40 percent to something more in the 25 to 30 percent range. He hopes that falling prices for solar arrays, coupled with more generous federal tax incentives, will re-energize orders.
We still don’t have the right mix of incentives and structural accommodations for solar in the U.S., which reflects a non-existent national energy policy. Even with tax incentives the cost of solar is prohibitively high and the strategy of feeding the power grid until your bill goes to zero is not enough to deliver a reasonable pay back period. If you are generating electricity you should be paid for it, period.
The other related technology that requires a national push to establish technology leadership is batteries. For homeowners the appeal of solar is dented by the fact that you don’t have access to it during peak hours. I am skeptical that the Federal, or any state government, can pull off such a feat because we lack precedent in organizing technology investments by government directed at a specific industry. Remember that effort in the 1980’s by the Feds to retain U.S. dominance in the RAM business? Failed, big time.