Solar energy: Cost over concern

These days, the benefits of solar power are known to most of us: sustainable, renewable and about as natural a power source as possible, the production of solar energy also requires very little maintenance. Photovoltaics (PV), the method of converting solar energy into electricity using solar panels, is far simpler production process than other sources; it’s also cheaper than initially anticipated, with solar-powered electrical energy now being equally or less expensive than any method of electrical power in current use.

In just five years, over 80% of the world’s population will live in areas where solar electricity will be just as competitive as electricity from other sources, and these figures are already apparent. In little over five years more than 166 coal-burning power plants have closed or announced closures, and a further 183 proposed new plants have been scrapped in the past decade.

Will the future of solar burn as bright after 2017? Image by John S. Quarterman

The shunning of coal as a main power source and the placing of faith in solar energy has been thanks in part to the federal Investment Tax Credit. Congress passed an eight-year extension of this 30% tax credit back in 2008, and this allowed solar to become the fastest growing energy source in the US, prompting a staggering 1,600% annual growth since it was first rolled out. More and more Americans are seeing solar power as the only way forward; around 158,000 solar panels were installed in homes in California alone in 2013 – this is double the amount from the previous year.

Yet despite this soaring success, concerns are mounting as to what will happen when the 30% tax credit expires in 2017. There are many who expect the 30% benefit to be slashed to 10% after 2017 – or perhaps even eliminated altogether. So what does this mean for the solar market? Will solar growth still continue as predicted if the same incentive is not renewed? And should we even need an incentive to work toward clean energy?

In the current uncertainty before the deadline hits, large corporations are rushing to make substantial solar investments and prove their green credentials. In February of this year Apple stated its intention to spend $848 million over 25 years to buy 130 megawatts of electricity. This is the largest commercial power purchase agreement the solar industry has ever seen, and a reflection of a very real desire for clean energy. But they are not alone.

Just a fortnight later Google followed suit, announcing that they would be making a $300 million residential solar project investment with SolarCity, the USA’s largest solar provider. Corporate competitiveness would lead one to think that whatever happens with the tax incentive after 2017, companies will still feel the need to show their commitment to the environment and solar energy surely must play a large part in that. Companies that have the budget for it may not be swayed by rising costs.

The general manager of Westcoast Solar Energy, Peter Renfro, is of the belief that the expiration of the tax credit would have a significant impact, although we will see further escalation in solar investing before the 2017: “The net effect of an expiration with no extensions or replacements would make sales more crucial for pending contracts triggering a flurry of activity prior to the expiration, since a solar project must be completed before the Dec. 31, 2016, deadline.”

The loss of the 30% credit would undoubtedly have some significant effects. The cost of PV would rise considerably if the tax credit goes away, and it is precisely the falling price of PV that made it such an appealing prospect to many in the first place. The reduction in the price of panels from around $7.50 a watt back in 2009 to around $2.39 in 2013 all helped make solar seem a viable energy option to many communities and companies – so once this is eradicated and prices soar, how many will still be quite as enthusiastic?

The spokesman for Solar Energy Industries Association says that plans to lobby to extend the credit are their “top priority,” and with Congress set to debate this soon, only time will tell if solar will continue to soar at such an great rate. With the current focus on protecting our planet being at the forefront of many governmental policies these days, it’s apparent that whatever happens post-2017, solar energy is going nowhere. Solar is, quite simply, far too valuable to be relinquished at any real level; using 86% less water than coal and with a 95% reduced toxicity level to humans, the stats speak for themselves

http://theenergycollective.com/trengels/2213221/solar-energy-cost-over-concern