Last decade's innovative industry is not doing badly either
Las Vegas, Nev.
It is not the best of times for the US solar industry, but neither is it the worst of times. Current economic troubles have taken a toll on the sale of solar equipment, but not to the extent that it has affected a number of other industries. So say the members of this fledgling industry gathered here for the annual meeting of the Solar Energy Industry Association (SEIA).
''1981 has, in fact, been an excellent year for the solar industry,'' says William S. Bergman, executive vice-president of SEIA.
To support this contention, Mr. Bergman cites statistics showing that the area of the solar flat-plate collectors sold from July 1980 to June 1981 was 32 percent higher than that of the previous 12 months. The photovoltaics industry sold enough solar sites to generate 3,259 peak kilowatts in 1980 and estimated sales for this year should top 5,000 kilowatts. And there has also been growth in sales of the concentrating collectors that produce high-temperature steam for industrial use.
''Overall, the industry has experienced a 25 percent growth this year. It wasn't as much as many people were counting on, but many other industries would love to be experiencing something similar,'' adds Paul Cronin, SEIA's president.
Despite this surprisingly robust picture, members of the solar industry are quite aware of their precarious circumstances. Starting a totally new industry is always risky. But with solar the risk is compounded by the highly regulated and politicized nature of the energy marketplace.
''We'd love a free market, it would make us extremely competitive,'' Mr. Cronin says. Solar advocates have pointed out repeatedly that traditional energy sources - oil, coal, nuclear power - receive a number of direct and indirect subsidies. Also, the artificially low price on natural gas, maintained by federal regulations, makes it difficult, if not impossible, for solar energy to compete in many parts of the country.
It was partially to counter these market distortions that tax credits were first proposed in Congress five years ago. Ironically, the proposals and Congress's failure to pass the tax credits for several years nearly killed the industry because purchases dried up as potential customers held off until the measure was enacted.
In 1979, when the credits first went into effect, the industry experienced a big sales jump and a similar response was felt last year when the credits were increased. But a Treasury study recently suggested eliminating the credits before the planned 1985 cutoff. Word of this created a considerable panic in the industry.
But now industry spokesmen have received White House assurances that the tax credits are not now in danger. Also, majorities in the US Senate and House have signed resolutions opposing any such cuts.
''We are cautiously optimistic. There is no question the tide has turned,'' says Ryc Loope of Sunworks Inc. ''I think that the impression that the President is out to get solar is false,'' he adds.
This impression comes from the disproportionately large amount (more than 60 percent) by which the federal solar program has been cut back by the current administration. The Solar Lobby, which represents solar consumer and user interests and is politically liberal, has opposed the solar cutbacks unreservedly. However, many of the more conservative solar industrialists applaud the reductions, within limits. In particular, there has been a feeling that some of the commercialization efforts coming from the government were misdirected and were better done by private enterprise.
On the other hand, the budget reductions have created a problem for a number of solar companies that have been getting substantial government support. This is particularly true of companies that are attempting to develop and market more advanced systems, such as those needed for many industrial applications.
''We are faced with a particularly delicate transition,'' explains Howard Morse of Acurex, a California concentrating-collector manufacturer. The firm has to move from federally backed projects to industrial customers. Several deals for using solar energy in tertiary oil recovery fell through when Mr. Reagan decontrolled oil prices earlier this year, because they benefited from related tax write-offs, Mr. Morse says.
Companies like Acurex are under pressure to make this shift as rapidly as possible. They need to build up their sales volumes so they benefit from economies of scale and so make these systems cost-competitive without tax credits by 1985, when they run out.
There are a number of other uncertainties in the future of solar power. Primarily, these involve the supply and price of other forms of energy.
For instance, Darcy Kopcho of Baker International, a California oil equipment supplier, told SEIA members why her company had decided not to get into solar energy. ''I hope I'm wrong but we don't see solar playing a major role for the next 20 years,'' she says.
Baker's latest projections show a substantial growth in natural gas supplies that will cut into the solar market. Also, the firm says it believes cogeneration and energy conservation technologies have a definite edge on solar.
The current ''oil glut,'' which should be over in nine months or so, according to current estimates, has cut into the solar industry market. So the outlook of a major ''natural gas bubble'' is bad news as well, unless this new gas is very expensive to produce.
Despite these potential problems, SEIA members say the industry has grown large enough to withstand all but the worst vicissitudes of government policy and energy price fluctuations. They also say they believe solar technology has an absolutely vital role to play in the long-term energy future of the United States.