Although it is undeniable that solar energy will play an increasingly dominant role in the global energy mix, one can’t help but become frustrated when governments pass up opportunities to speed widespread adoption.
In a surprising move, the US Senate recently voted not to extend the Department of Treasury’s Section 1603 program and a host of other renewable energy tax incentives. At a time when most of the economy is stagnant or shrinking, PV installations grew 109% in 2011, proving that incentives and government backing do indeed work.
In fact, few areas of the economy have come close to what solar has achieved. For despite highly publicized bankruptcies, intense international competition, and expiring incentives, the solar industry actually creates jobs – lots of jobs. Over the past year, roughly 7,000 new solar jobs emerged, accounting for 7% growth for the solar industry compared to 0.7% for the rest of the economy.
Solar Policy Dictates Solar Results
In regions with strong incentives and green policies, solar continues to flourish. Germany, Italy, Japan, Ontario, China, and until recently, the US are all perfect examples. And the correlation between economic growth and solar growth is impossible to ignore (remember the 7% growth compared to 0.7%). So why would any country with such a strong solar track record let incentives expire – especially during a recession?
Perhaps we’ll never know.
Or maybe, solar energy has matured enough that continued incentives simply aren’t necessary any more.
US Solar Incentives as Roadmap for Other Countries?
The next few years will determine whether or not the US Senate made the right decision. Whatever results emerge will likely guide other countries as they explore whether to implement, let expire, or block their own solar incentives – especially countries with much smaller budgets, more sunshine, and greater dependence on dirtier forms of energy.
In their quest to generate the most affordable kilowatt-hours with the highest returns, sun-bathed nations like the Bahamas and Jamaica have recently toyed with their own solar incentives. Unfortunately, fiscal policies prevent them from implementing the same types of solar tax incentives that will soon expire in the US. However, government support from both countries has already spurred tremendous interest in green technology, with an increasing number of citizens from the Caribbean flocking to the US for solar PV installation training.
If America’s solar industry begins to falter over the next few years, it is likely that Jamaica and the Bahamas will explore solar incentives more carefully as they try to avoid making the same mistake the US Senate just has.
