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U.S. Solar Industry Expands Thanks to Cheaper Foreign Panels

The U.S. solar power industry is growing quickly, despite the doom and gloom of the past few years, thanks in large part to installation of cheaper, foreign-made solar panels.

According to GTM Research, a consulting firm that released a report on the U.S. solar market last week, the price difference between solar and traditional power sources is quickly decreasing. Back in 1970, solar panels cost about $15 per watt of electricity generated, or around $50 in current value. Now that figure is down to around 84 cents per watt.

An employee at Abound Solar's Longmont, Colorado facility. Photo Credit: Abound Solar

This massive fall in prices indicates that solar power could be a major player in the country’s power generation mix. Having said that, the industry has seen this success thanks in big part to favorable state and federal policies. For example, states like California have implemented subsidies for solar energy developers and required utilities to purchase solar power and other renewable energy, increasing the demand for solar power in the state.

A report by Paula Mints of Navigant Consulting indicates that the U.S., which dominated the solar industry at one point, produced just 3% of solar panels used worldwide in 2011, down from 7% in 2008, while China provided half of the world’s supply, up from one fifth in 2008.

However, despite the current political emphasis on generating more manufacturing jobs in the U.S., “there should be little emphasis put on where the panels are made,” Lyndon Rive, C.E.O. of SolarCity Corp., a company that finances and installs rooftop solar systems, told the Wall Street Journal.

“Most of the jobs are in delivery and they’re long-term, permanent jobs,” he added.

Either way, the U.S. is on track to install as much solar power this year as it did from 2000 to 2010, which is at least 2,500 megawatts—more power produced by two nuclear power plants.

“As systems prices come down, people will buy bigger systems to offset the most expensive part of their electricity bill,” said Nat Kreamer, chief executive of Clean Power Finance Inc., a San Francisco solar-power financing firm. This makes solar power a more practical source of electricity in places where rates have been rising quickly.

After 71% growth this year, the U.S. is moving toward 21% growth next year, and 25% to 40% a year through 2016, according to GTM Research.


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