Obama plans could boost US solar development, demand, Gartner says

Obama's New Energy for America plan could have a significant impact on the US solar industry, according to Gartner Research Director James Hines.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 11/10/2008

The Democratic Party's multiple wins in the November 4 United States elections could have a sizable impact on the US solar industry, Gartner Inc reported today.

Gartner reminded that democratic President Elect Barack Obama's win was complemented by the Democratic Party maintaining majorities in both houses of Congress, and said that combined the wins increase the likelihood that the party's energy policies will be implemented.

"Obama's New Energy for America plan could have a significant impact on the US solar industry," Gartner Research Director James Hines (pictured) said in a report from the company today.

Obama's plan calls for federal renewable portfolio standard (RPS) that requires 10% of electricity consumed in the United States come from renewable sources by 2012; a $150 billion investment over 10 years in research, technology demonstration, and commercial deployment of clean-energy technology; an extension of production tax credits for five years to encourage renewable-energy production; and a cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions.

"Demand for solar energy remains dependent on government subsidies because it costs more than conventional forms of electric power generation. However, the new US administration could help encourage investment in solar energy projects, if it succeeds in implementing some of its plans," Hines said. "This increased emphasis on renewable energy and the extension of the 30% investment tax credit for solar projects—passed in October—could finally help realize the US' vast potential for solar energy."

To comment on the impact  the recent US elections will have on technology, see "Obama wins, gives nod to tech."

Hines said that as a result of the plan, the United States could overtake Germany as the largest PV (photovoltaic) market within a few years.

However, the Gartner analyst also noted that the incoming president faces a difficult economic situation that could significantly impede his plans.

"Expensive government programs will be hard to pass if tax receipts are declining and corporate earnings are depressed, even with a Democratic control of Congress," Hines said.

"During the next year, it is likely that the RPS will be passed, which will provide a strong boost to US demand for solar energy. The other provisions, which require significant spending or tax breaks, might have to wait until the economy starts to recover," he continued.

Hines has recommended in Gartner research that solar panel vendors accelerate plans to penetrate the US market by establishing relationships with distributors and system integrators and building up sales and service capabilities in the US. He has also recommended utility companies with coal-fired power plants begin evaluating solar-energy technologies and vendors in anticipation of a federally mandated RPS. Hines has further recommended enterprises consider solar energy as part of a strategy to reduce carbon emissions and that US companies developing solar energy technologies prepare to submit applications for grants should new government funds become available.