Solyndra shouldn’t spur Congress to throw solar industry under the bus

October 30, 2011

With about five years worth of e-mails and other materials to examine, political and media investigations into the Solyndra bankruptcy are far from over. Given the mood in Washington, I worry that the entire solar industry might be thrown under the bus as part of this mad rush to use the Solyndra bankruptcy to score political points or win journalistic renown.

While just taking off in the U.S., the solar industry is recognized by most of the industrial world as a major economic driver. It would be extremely shortsighted for the federal government to reduce or abandon its support for the U.S. solar industry as a result of the failure of one solar manufacturing company.

The solar industry is one of the few bright spots in the American economy. In the last year, solar grew by 69 percent, making it one of the fastest growing sectors of the economy. The industry is strong and getting stronger. More than 100,000 Americans now work in the solar industry, double the number since 2009.

Small business is now recognized as the biggest driver of job growth in the American economy; and the solar industry is all about small business. Most of the nation’s more than 5,000 solar companies are small businesses serving local markets with local employees. Since solar electricity will first become cost-competitive with the utility-supplied power at the retail level, these small companies are poised for continued rapid growth.

In 2010 the U.S. was a $2 billion net exporter of solar products, even to China. Since the start of 2010, the price of solar panels has dropped by more than 30 percent.

Continuing reductions in the cost of solar hardware and other costs of solar installations coupled with expected increases in the cost of grid-supplied electricity should make solar cost-competitive in half the U.S. within the next five to seven years. The U.S. is projected to become the world’s largest solar market by 2014. Solar is already the fastest growing energy sector in the U.S. and will likely be the largest source of new electric capacity in the country by 2014. Solar manufacturing is growing rapidly as well. In 2010 and 2011 alone, 27 new solar manufacturing facilities have begun or will begin operations across America, including Arizona, Ohio, Michigan, Mississippi, Pennsylvania and Tennessee.

The impressive growth of the U.S. solar industry in the past few years has been fueled by federal, state and, in some instances, local government incentives. Now, with the solar industry within striking distance of utility cost-competitiveness, it would be an incredible policy mistake if the federal government chose to eliminate or substantially reduce federal incentives for solar energy.

However, with the dismal state of the economy, the continuing paralysis on Capitol Hill and the deadlock between the White House and Congress, it might be easy for partisan politicians to tar and feather the entire solar industry as part of the Solyndra bankruptcy. Economic development should be bi-partisan, and the economic success of the overall solar industry over the past few years argues strongly for a bi-partisan effort to support the rapidly growing U.S. solar industry.

Another five years of existing solar incentives will have minimal impact on the federal budget, but a thriving solar industry that is cost-competitive with grid-supplied electricity will have an enormous positive impact on our economy and our domestic energy supply picture, providing hundreds of thousands of new jobs and contributing to a positive balance of trade for the U.S.

The premature elimination of federal incentives would have devastating consequences to the solar industry – forcing widespread job losses and eliminating any prospect of near-term cost competitiveness with the utility-supplied power.

Our political leaders must recognize the tremendous economic opportunity offered by the solar industry and not be swayed by the politics of the moment and the Solyndra bankruptcy.

Tony Clifford is chief executive of Standard Solar of Rockville.

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