Monday, January 24, 2011

Getting to an Incentive-less Future of Solar

A 12 step program for solar industry recovery from incentives
What the solar industry really needs is a recovery program, so that it can wholeheartedly approach a future in which incentives will likely not be generous -- if they exist at all -- and programs will be capped. After all, incentives were not meant to last forever (though those for conventional energy well may). The following twelve steps are meant to provoke thought and help an industry that has become addicted to incentives -- though realistically, these market stimulation tools are still necessary.
  • Admit it -- the industry has become powerless over demand, and most markets have become unmanageable.
  • Focus on lower technology and system costs. Develop innovative and standardized installation techniques. These may well wean the industry from a reliance on incentives.
  • Focus on the system. Fit the technology to the region, the customer, and the application.
  • Develop products -- not just technologies -- tailored to the application and the customer. BIPV is not just shingles or roof tiles.
  • Look for three characteristics in markets and customers: a need for a reliable electricity source, price elasticity, and undaunted by the high upfront cost.
  • Stop banging the grid parity gong. Talk about competitive electricity pricing market by market based on solar attributes.
  • Delight the customer. That's just Marketing 101.
  • Form a consortium among manufacturers to discuss how most FiT markets were destroyed, and how to avoid this in emerging markets such as the US, China and India. This is not collusion, it is common sense.
  • Invest in system design and balance of systems. This is worth repeating -- it's not boring, and it is crucial to industry survival.
  • Hey, governments: All solar is amazing. Stop looking for a magical, heretofore undiscovered magic technology or material that will change industry dynamics forever. All of this stuff sits in the sun for >25 years and reliably delivers electricity. What more do you want?
  • Hey, governments and politicians: Progress isn't cheap. Renewable energy and solar is the future, and getting to it will be expensive. So was the Industrial Revolution, and going from wagon trains to railroads, and the Pony Express to the telegraph. Toilets were once options in houses, not mainstays. Stay committed. Develop controlled incentives -- the industry still needs them, and will have a difficult time without them.
  • Hey, industry: FiTs are a-changin'. The trend is clear: FiTs as the industry has known them recently (and seriously, FiTs are a recent industry phenomenon) are changing. Adapting to this change is crucial. So, you'd better adapt.

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