California Surges Ahead on Solar Technology

Britain under cloud

It's a gloomy solar outlook for Britain, with no tax incentives and little stimulus

Installations of Photovoltaic (PV) solar energy systems in California will more than double from 2008 because of incentives from the US stimulus package, in marked contrast to the downturn in the UK, says a new report from IT-footprint.

Installations in California are set to rise by 120.1 percent in 2009, compared to a 26.9 percent decline for the entire world. California’s photo voltaic surge is expected to continue in 2010 even as global installation growth will resume.
Analysts are unsurprised by the results.
“The market for PV solar energy systems was severely affected by the world economic crisis,” said Dr. Henning Wicht, senior director and principal analyst for PV at iSuppli. “The debt financing of solar plants for commercial customers and investor syndicates has slowed dramatically across Europe.”

But in the US, those looking to install PV systems in the country have been helped by the American Recovery and Reinvestment Act of 2009 – AKA the stimulus programme - as well as the Solar Investment Tax Credit of 2008. These government programmes allowed 30 percent of a project’s cost to be rebated and also created loan guarantees for commercial projects. Because of this, IT-Footprint believes these initiatives will help offset, to a limited degree, the negative factors that have impacted the US photo voltaic market.

The new sunshine state
In particular, California has taken advantage of these incentives, causing installations in the state to rise even during the worst phases of the economic downturn. At the height of the credit crunch in the first quarter, California’s installations increased to 77MW, up from just 38MW during the same period in 2008. Applications for rebates continued to increase, reaching 65MW in the second quarter, with only half the quarter counted in this data.

This is a very encouraging sign for the solar market, says Wicht. “It’s extremely beneficial for those investors wishing to take advantage of the new federal tax credit. It’s also a boost for those wanting to install residential household systems using the higher incentives from the California Solar Initiative programme.

Italy’s hot and cold
California isn’t the only region still pushing ahead with plans for PV installations. The Italian electricity administration authority, Gestione Servizi Electriche (GSE), in April announced that 338MW had been installed in 2008. This far exceeds the 220MW forecast for the country.