After a banner year for solar power installation in the United States, reports on the progress of solar power in the first quarter of 2017 have industry advocates hopeful that renewable energy will continue to grow throughout the year, despite competition from fossil fuels, U.S. government support for traditional energy sources and resistance towards cheap imported solar panels by domestic manufacturers.
The first months of 2017 saw 2 gigawatts of photovoltaic panels added, continuing a six-quarter streak and a huge boost in solar installations that came at the end of 2016, when more than 6 GWs were installed. The growth in Q1 of 2017 marks a slight decrease of 2 percent from the level last year, but it’s still indicative of an overall growth trend, as total additions have increased year on year since 2012, according to the Solar Market Insight Report.
Out of the 2 GWs added, about a quarter came in the form of rooftop panels added in the households segment, while utilities added the bulk of new production. The non-residential solar market has increased 29 percent year-on-year.
The growth comes as costs continue to fall. The report from the Solar Energy Industries Association indicated that for the first time, utility-scale costs for power fell below $1/Watt. Solar power accounted for 30 percent of total electricity capacity added in Q1, while natural gas came in at 41 percent and wind power 27 percent. Related: Record Breaking U.S. Exports Could Hurt Oil Markets
Solar now accounts for about 2 percent of total electricity generation in the U.S., behind wind power at 6 percent and natural gas at 34 percent.
Most of the projects currently adding new solar capacity were planned some years ago, and there is some speculation that continued growth in solar power will slow due to policies undertaken by the Trump Administration, a strong advocate for conventional oil and gas. Yet the SEIA estimates that 12.6 GWs of solar power will be added in 2017, a slight decrease from 2016 but a strong indicator of growth nonetheless.
While there is wariness on the part of the industry towards the attitude of the Trump Administration, including its decision to withdraw from the Paris climate change agreement, the mood continues to be cautiously optimistic, according to a report from the Washington Post.
A potential challenge could come in the form of federal action against important solar panels. Suniva, an Atlanta-based solar power manufacturer, has argued that imported panels at rock-bottom prices has cut into its bottom line and forced it to lay off hundreds of workers. In late May the U.S. government agreed to hear Suniva’s claims and is now mulling the possibility of a tariff on imported solar panels and modules.
Suniva filed for bankruptcy in April, and shortly thereafter applied for relief against imported competition. Such applications, filed under Section 201 of the 1974 Trade Act, are quite rare, yet the federal government has already indicated its willingness to hear the case. Should the International Trade Commission rule in favor of Suniva, prices on solar panels would return to 2012 levels, rendering many planned projects uneconomic and potentially dooming the growth of solar power in the United States.
The SEIA has come out against the case. The ITC has determined that Suniva’s grievances are representative of the entire solar industry, but SEIA has argued that this is not the case and that a ruling in Suniva’s favor would be disastrous for solar power. Related: Libya’s Largest Oil Field Resumes Production
A second manufacturer, SolarWorld, has joined Suniva in requesting a federal investigation of solar panel imports. Meanwhile, SQN Capital Management, Suniva’s chief creditor, has hinted that a buy-out of the company’s assets by Chinese solar panel manufacturers would settle the issue, allowing the company to rehire its former employees and remain in business.
The U.S. has alerted the World Trade Organization that it is considering tariffs against imported solar panels, with a ruling from the ITC likely to come by November 2017. Such an act would be chiefly aimed at China, which leads the world in solar panel production and exports, and it would be an aggressive move from a federal government which has thus far utilized both protectionist rhetoric and attitudes decidedly hostile towards renewable energy.
It will take some months before the Suniva dispute has any impact. In the meantime, solar power will continue to grow in the United States, driven by low cost, high demand and rising interest in renewable energy.
By Greg Brew for Oilprice.com
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