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From the NYT, http://www.nytimes.com/2005/08/05/national/05solar.html
August 5, 2005
Shortages Stifle a Boom Time for the Solar Industry
By CHRIS DIXON
With a bill in California that aims to put solar power in half of new
homes within 13 years, and with installation incentives in the federal
energy legislation passed last week, the future of solar energy in the
United States would seem all the brighter. But the future may have to
wait, if only a little while.
American suppliers for the solar energy industry say that burgeoning
demand both domestically and overseas, a weak dollar and shortages of
raw material have created back orders of several months on
electricity-generating photovoltaic, or PV, panels.
"For all the years I've been doing this," said Daryl Dejoy, owner of a
solar installation company in Penobscot, Me., "I could get all the
solar panels in the world and no customers. Now I have all the
customers in the world and no product."
Executives of American solar manufacturers and industry groups say the
global solar market has grown roughly 40 percent annually in the last
five years, driven in large part by Germany. Under an incentive
program championed by that country's Green Party, German businesses
and individuals with solar equipment can sell power they create to
utilities at above-market rates. The utilities pass the excess cost on
to their customers.
"It's giving Germans a solid 15 to 20 percent return on equity," said
Rhone Resch, president of the Solar Energy Industries Association, the
trade group for the American solar industry. "You're seeing a lot of
companies in Germany start venture capital units based on solar farm
development. People are even putting panels up on barns."
Germany consumes 39 percent of all solar panels in the world, with
Japan next at 30 percent and the United States a distant third at 9
percent.
Germany installed nearly 400 megawatts of solar power last year, Mr.
Resch said, while Japan, whose government subsidizes solar energy
consumption, installed nearly 300 megawatts. Americans, with far less
in subsidies, installed 90 megawatts, most of it in California.
Japan had the greatest total solar power capacity by the end of 2004,
at 1,100 megawatts, followed by Germany, with 790 megawatts, and the
United States, with 730, said Noah Kaye, spokesman for the solar
energy association. The American figure was enough to power about
300,000 homes, however, some 120,000 more than in 2000.
Now the Million Solar Roofs legislation in California, passed by the
State Senate and under consideration in the Assembly, would subsidize
the installation of solar equipment with a goal of putting 3,000
megawatts of solar energy to work by 2018. Assessments on electricity
bills would pay for the subsidies.
California is among many states - New York, New Jersey and Connecticut
are others - that already provide subsidies to solar power users. But
the scope envisioned by the new California bill, whose enactment
appears likely, dwarfs all others.
In addition to the state efforts, the energy measure passed by
Congress last week offers a tax credit of up to $2,000 for homeowners
who install solar equipment.
But the shortage of solar panels has led to long waits and
inconvenience for many Americans who are ready to spend $10,000 to
$20,000 for residential solar power systems of 2,000 to 5,000 watts.
The shortage has been made worse because photovoltaic electricity is
used to power not only homes but also businesses, boats, recreational
vehicles, highway signs and cellphone towers.
Mr. Dejoy, of Penobscot Solar, said that for the nation's installers,
the situation was "brutal." Even orders that were paid for months ago,
he said, had no guaranteed date of delivery or even final price.
Recently, a customer who had agreed on an order of several thousand
watts balked when Mr. Dejoy told her that a panel supplier had
increased the price by a dollar a watt.
Matt Lugar, director of solar sales for the Sharp Electronics
Corporation's solar division, in Huntington Beach, Calif., said the
supply problems were "a natural evolution in any industry that's
exploding."
"There's a lot of panic among our customers who have been in solar for
a long time," Mr. Lugar said of the installers. "Prices are rising
dramatically. Unfortunately, it's the natural movement of supply and
demand."
Until early 2004, Mr. Lugar said, the price of solar panels was
dropping as technology advanced. Since then, manufacturers' prices
have risen as much as 15 percent, he said, adding that the purified
silicon at the heart of solar panels and computer semiconductors alike
had also been in extremely short supply.
Mr. Lugar said it was difficult to predict when the industry would be
able to meet demand, given a possibility of large subsidy increases in
Spain, Italy and Portugal.
But Mr. Kaye, of the Solar Energy Industries Association, said that
California's incentives could entice suppliers to increase production
for the domestic market.
And his boss, Mr. Resch, said the shortage of customary solar
resources provided an opportunity for producers of newer "thin film"
solar panels. These panels, which can be rolled up for portability or
installed on curved surfaces, are now produced in relatively small
quantities by several Silicon Valley manufacturers.
"The solar energy industry is diverse," Mr. Resch said, "and will meet
the challenges the market presents."
For now, solar installers like William Korthof of Pomona, Calif., can
only lament.
"We're getting unannounced price hikes from suppliers," Mr. Korthof
said, "and are seeing a complete inability to forecast when they can
ship us product. Last year I had waits of two weeks for panels. This
year it's two to three months."
Mr. Korthof said that his business, Energy Efficiency Solar, was
installing roughly 25 kilowatts of solar power a month for customers.
With a reliable supply, he said, he would be installing 50 or more.
Mike Dewalt, who lives outside Peoria, Ill., said he had waited three
weeks for a shipment of solar panels for his home. Several weeks
later, Mr. Dewalt said, the supplier told him that four more 120-watt
panels he wanted would be at least eight weeks in arriving, and that
payment would be required immediately.
Mr. Dewalt said that after calling Northern Arizona Wind and Sun, he
had his panels in a week. But Eric Phillips, general manager of that
business, said its waiting times had also lengthened.
"I'm probably taking 10 to 20 calls a day for modules I can't supply,"
Mr. Phillips said.
"Only three to four years ago, solar was a really hard sell - trying
to convince people to put a system on their home," he said. "These
days, we say, 'I can't get the kinds of numbers you need.' "
August 5, 2005
Shortages Stifle a Boom Time for the Solar Industry
By CHRIS DIXON
With a bill in California that aims to put solar power in half of new
homes within 13 years, and with installation incentives in the federal
energy legislation passed last week, the future of solar energy in the
United States would seem all the brighter. But the future may have to
wait, if only a little while.
American suppliers for the solar energy industry say that burgeoning
demand both domestically and overseas, a weak dollar and shortages of
raw material have created back orders of several months on
electricity-generating photovoltaic, or PV, panels.
"For all the years I've been doing this," said Daryl Dejoy, owner of a
solar installation company in Penobscot, Me., "I could get all the
solar panels in the world and no customers. Now I have all the
customers in the world and no product."
Executives of American solar manufacturers and industry groups say the
global solar market has grown roughly 40 percent annually in the last
five years, driven in large part by Germany. Under an incentive
program championed by that country's Green Party, German businesses
and individuals with solar equipment can sell power they create to
utilities at above-market rates. The utilities pass the excess cost on
to their customers.
"It's giving Germans a solid 15 to 20 percent return on equity," said
Rhone Resch, president of the Solar Energy Industries Association, the
trade group for the American solar industry. "You're seeing a lot of
companies in Germany start venture capital units based on solar farm
development. People are even putting panels up on barns."
Germany consumes 39 percent of all solar panels in the world, with
Japan next at 30 percent and the United States a distant third at 9
percent.
Germany installed nearly 400 megawatts of solar power last year, Mr.
Resch said, while Japan, whose government subsidizes solar energy
consumption, installed nearly 300 megawatts. Americans, with far less
in subsidies, installed 90 megawatts, most of it in California.
Japan had the greatest total solar power capacity by the end of 2004,
at 1,100 megawatts, followed by Germany, with 790 megawatts, and the
United States, with 730, said Noah Kaye, spokesman for the solar
energy association. The American figure was enough to power about
300,000 homes, however, some 120,000 more than in 2000.
Now the Million Solar Roofs legislation in California, passed by the
State Senate and under consideration in the Assembly, would subsidize
the installation of solar equipment with a goal of putting 3,000
megawatts of solar energy to work by 2018. Assessments on electricity
bills would pay for the subsidies.
California is among many states - New York, New Jersey and Connecticut
are others - that already provide subsidies to solar power users. But
the scope envisioned by the new California bill, whose enactment
appears likely, dwarfs all others.
In addition to the state efforts, the energy measure passed by
Congress last week offers a tax credit of up to $2,000 for homeowners
who install solar equipment.
But the shortage of solar panels has led to long waits and
inconvenience for many Americans who are ready to spend $10,000 to
$20,000 for residential solar power systems of 2,000 to 5,000 watts.
The shortage has been made worse because photovoltaic electricity is
used to power not only homes but also businesses, boats, recreational
vehicles, highway signs and cellphone towers.
Mr. Dejoy, of Penobscot Solar, said that for the nation's installers,
the situation was "brutal." Even orders that were paid for months ago,
he said, had no guaranteed date of delivery or even final price.
Recently, a customer who had agreed on an order of several thousand
watts balked when Mr. Dejoy told her that a panel supplier had
increased the price by a dollar a watt.
Matt Lugar, director of solar sales for the Sharp Electronics
Corporation's solar division, in Huntington Beach, Calif., said the
supply problems were "a natural evolution in any industry that's
exploding."
"There's a lot of panic among our customers who have been in solar for
a long time," Mr. Lugar said of the installers. "Prices are rising
dramatically. Unfortunately, it's the natural movement of supply and
demand."
Until early 2004, Mr. Lugar said, the price of solar panels was
dropping as technology advanced. Since then, manufacturers' prices
have risen as much as 15 percent, he said, adding that the purified
silicon at the heart of solar panels and computer semiconductors alike
had also been in extremely short supply.
Mr. Lugar said it was difficult to predict when the industry would be
able to meet demand, given a possibility of large subsidy increases in
Spain, Italy and Portugal.
But Mr. Kaye, of the Solar Energy Industries Association, said that
California's incentives could entice suppliers to increase production
for the domestic market.
And his boss, Mr. Resch, said the shortage of customary solar
resources provided an opportunity for producers of newer "thin film"
solar panels. These panels, which can be rolled up for portability or
installed on curved surfaces, are now produced in relatively small
quantities by several Silicon Valley manufacturers.
"The solar energy industry is diverse," Mr. Resch said, "and will meet
the challenges the market presents."
For now, solar installers like William Korthof of Pomona, Calif., can
only lament.
"We're getting unannounced price hikes from suppliers," Mr. Korthof
said, "and are seeing a complete inability to forecast when they can
ship us product. Last year I had waits of two weeks for panels. This
year it's two to three months."
Mr. Korthof said that his business, Energy Efficiency Solar, was
installing roughly 25 kilowatts of solar power a month for customers.
With a reliable supply, he said, he would be installing 50 or more.
Mike Dewalt, who lives outside Peoria, Ill., said he had waited three
weeks for a shipment of solar panels for his home. Several weeks
later, Mr. Dewalt said, the supplier told him that four more 120-watt
panels he wanted would be at least eight weeks in arriving, and that
payment would be required immediately.
Mr. Dewalt said that after calling Northern Arizona Wind and Sun, he
had his panels in a week. But Eric Phillips, general manager of that
business, said its waiting times had also lengthened.
"I'm probably taking 10 to 20 calls a day for modules I can't supply,"
Mr. Phillips said.
"Only three to four years ago, solar was a really hard sell - trying
to convince people to put a system on their home," he said. "These
days, we say, 'I can't get the kinds of numbers you need.' "
