US Solar Energy Market Dynamics

This report out of Pike research has interesting conclusions. That likely now apply to the other renewables of wind and geothermal. We are a couple of short strokes from making the industries build out completely and easily financeable. Developers are always looking for an extra hand out, so that has not changed. Most critical is a system of underwriting that the banks can utilize and this has fallen into place.

So with or without the infinite wisdom and proactive support of the administration, it appears we are about to get a massive energy build out that will only end when everyone is driving an electric car. For investors, that means concentrate on alternate utilities since they will be attracting the big money.

The size and scope of this build out will quickly compare to the Tarsands in Alberta and surpass anything ever imagined before in the USA. Because of the present recession, it can not develop too soon and it will lead every other industry in terms of job creation. What is more exciting, the jobs will be everywhere.

U.S. Solar Energy Demand Dynamics

Financing Structures, Government Incentives, and Market Drivers for Solar Photovoltaics Projects: 2009-2015

The United States has become one of the more aggressive nations in promoting alternative energy technologies, but at the federal level tax credits and depreciation incentives are not currently enough to encourage sustainable demand growth. Instead, some states and municipalities have taken the lead in providing incentives through a variety of mechanisms ranging from upfront rebates and property tax credits to renewable energy credits and even European-style feed-in tariffs. Pike Research’s extensive interviews with both end-users and manufacturers conclude that for sustained growth in the U.S., incentives must be increased at the federal level. Due largely to the credit crisis, funding for solar projects has been tight. In the U.S., this has particularly been the case, because banks are unwilling to lend to projects that have undetermined cash flows.

Our five-year outlook is that the combination of federal and state incentives and falling module prices will work together to dramatically increase demand in the U.S. As more banks become comfortable with funding these projects, and find ways to securitize the cash flows, we believe it will become an attractive revenue stream for commercial lending divisions. Utilities, which are just now getting serious about meeting RPS goals, will likely take the lead in developing new solar projects. Until now, they have been unsuccessful in getting support from their ratepayers who would see up to a 10% increase in their utility bills. However, we believe that the emphasis that the Obama administration is placing on climate change will eventually filter into the fabric of American society, propelling the U.S. into a global leadership position in solar PV market share by 2014, according to our most recent forecast.

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