Solyndra, which the Obama administration once deemed to be a model clean-energy innovator, declared bankruptcy on Sept. 13. The solar-panel manufacturer’s high-profile debacle has left elected officials and the general public to question the stability of investing in alternative-energy industries. Yet what some consider the canary in the coal mine for the solar-energy field really could be nothing more than the very public growing pains of an emerging industry.
Some industry analysts believe that the turbulence that’s affecting U.S. solar-panel manufacturers—which is due to falling silicon prices and China’s increased solar-panel-production capabilities—actually could make solar-panel installation more affordable and give consumers more choices.
Competition in solar-panel manufacturing has grown steadily in the past few years, stirred in part by China’s entrance to the sector and its manufacturers’ ability to mass-produce solar panels more affordably than its competitors can. This, combined with dropping silicon prices (silicon is a key material in the manufacture of solar panels) and the current economic climate, has hurt some U.S. manufacturers, such as Evergreen Solar, which declared bankruptcy in August 2011, and Solyndra.
However, Peter Asmus, who is a senior analyst at Pike Research, believes that the industry’s increased global solar-panel production is helping to drive down prices. “In the long term, that’s going to be good for consumers,” he says. “Right now, the bad side is some U.S. firms are going to go belly up.”
The trend of decreasing installation costs has been noted. Reports from Solar Energy Industries Association (SEIA) state that the average cost of solar-panel installation decreased by 20 percent in 2010. Monique Hanis, who is a spokesperson for SEIA, says the average homeowner can expect to pay $25,000–$35,000 for solar-panel installation.
Hanis also believes that the bankruptcies at Evergreen Solar and Solyndra aren’t indicative of the overall industry and that other subsectors of the solar-energy field continue to grow and create more affordable options for customers. Hanis cites the increased number of experienced solar-panel installers as an example of how increased competition helps to drive down costs and allows consumers to compare prices.
“When you go out and get an estimate to have solar put on your home, you can get three [estimates],” she says. “Four years ago, in a particular market, you might not have been able to find installers with enough experience.”
Reese Tisdale, who is a research director at IHS Global Insight, says several solar providers—companies that provide full-service solar installation, monitoring and financing—offer more incentives now than they have in the past.
Tisdale also agrees with Asmus’s assessment that increased global competition is driving down solar-panel prices. But for consumers who are concerned about the quality of overseas solar panels compared with U.S. products, Hanis points out that all products must receive the safety certification from Underwriters Laboratories, which is a company that tests the safety of electrical products. UL has verified that it tests solar panels that are manufactured in and outside of the United States. John Drengenberg, who is a manager at UL, says products from overseas must pass the same standards as U.S.-made products. “Regardless of where the product is made, or what materials are used, it has to pass [UL’s] tests and meet construction requirements,” he says.
Consumers also have recourse if further U.S. solar-panel manufacturers go out of business. If a consumer purchases solar panels and the manufacturer of those products goes out of business, Hanis says, the consumer should contact the company that installed his/her solar panels for information about how to obtain replacement parts. If the manufacturing company was purchased by a new company, the new company usually will honor the warranty. But calls to Evergreen Solar and Solyndra to confirm their cases weren’t returned.
Asmus believes that, down the road, solar energy has the potential to become one of the most affordable energy choices that are available to homeowners, and he’d like to see elected U.S. officials take a cue from their European counterparts and develop a long-term perspective of the alternative-energy industry. “In the U.S., we’ve always had this ideology of watching the market and the ‘magic’ of the market,” he says. “In Europe, they set long-term goals . . . it is a steady market that they make long-term investments [in] and plan accordingly.”
– K. Fanuko