Solar energy currently generates very little of the United State’s electricity (0.1% or less by some measures). Company’s like First Solar (FSLR) are getting their fat valuations off European subsidies and demand. However, a new study by Clean Edge and Co-op America shows that the US could be 10% solar by 2025 (cleantechnica):
…solar energy is already reaching cost parity with conventional sources in some areas of the U.S. where electric rates are highest. By 2015, this will be achieved in many more areas, including Boston, San Diego, and New York. By 2025, cost parity will be achieved throughout the U.S.
Cost parity is the single most important hurdle for the solar industry to clear. But it won’t be easy (RenewableEnergyWorld):
Utilities will need to take advantage of the value of solar for peak generation and alleviating grid congestion, implement solar as part of the build-out of the smart grid and adapt to new market realities with new business models, according to the study.
Solar companies must bring installed solar systems costs to US $3 per peak watt or less by 2018, streamline installations and make solar a truly plug-and-play technology, Clean Edge said. In addition, regulators and policy makers will need to pass a long-term extension of investment tax credits (ITC) for solar and other renewables, establish open standards for solar interconnection and give utilities the ability to “rate-base” solar.
Great news for today’s solar companies? Not necessarily. It’s still early going, investors are already wild about solar’s long-term promise, and today’s entrants may get swamped by the rush of competition and money into the market. (Any of you Internet vets remember Infoseek, Lycos, and Excite? And how about Yahoo? Remember when it was the clear market leader and an absolute must-own?)
First Solar (FSLR) and SunPower (SPWR): US Solar Legislation Stalls Again (FSLR, SPWR)
First Solar (FSLR) Moving Into France, Reducing Reliance on Germany (FSLR)
First Solar (FSLR): The Heck With Europe Concerns–FSLR’s Future is the US (FSLR)
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