We have been focusing on the section of the stimulus package devoted to batteries and electric vehicles, but today we want to examine some renewed prospects on solar power.  The Financial Times reported a burgeoning U.S solar energy sector that is predicted by Pike Research to lead the global solar industry by 2014.  The U.S. is currently lagging behind Germany, Spain and Japan, so let’s take a look at why the industry is so optimistic about the future of solar in America. 

While the stimulus package is a real boost to clean energy technologies and the creation of green jobs, growing demand for solar energy is attributed to state regulations that require a certain percentage of power generation to be met by renewable sources.  If the proposed federal climate legislation (Waxman-Markey) passes the Senate, renewable power supply will eventually have to make up 15 percent of total power generation.  As written, the American Recovery and Reinvestment Act will finance 30 percent of any solar installation in 2009 and 2010, in addition to the tax credit for clean energy technology investments.

 There is no doubt about the government’s intention; however, it is clear that much of the expansion relies on political will since solar energy is still four times more expensive than gas-fired electricity (Financial Times).  While the government plays a crucial role in limiting the externalities of our energy consumption, such as abating air pollution, consumers could pay higher electricity bills until more breakthroughs in technology can reduce the high cost of solar.

The optimism for growth in the renewable energy sector is also signaled by concerns over transmission capacity that must be tended, such as transmitting wind and solar energy from plants that are in remote areas to the bulk of demand in urban centers.  The Strategic Midwest Area Transmission Study was created to explore a robust transmission system for increased renewable power capacities.  Solar energy alone is projected to reach an annual capacity of more than 20 gigawatts by 2013 (click on the Financial Times chart below to take a closer look at forcasts), a significant leap from the level of 1.17 gigawatts in 2008. 

 Here’s a rundown of some of the big U.S. players:

SunEdison (Beltsville, MD):  Known for their Solar Power Purchase Agreement, SunEdison has led the pack in solar financing options, and is the country’s largest solar energy service provider.  While not a manufacturer of solar products, SunEdison develops, finances, installs, and operates solar plants and commercial installations.  By eliminating upfront costs and concentrating on those areas with the highest solar investment credits and incentives, they’ve attracted commercial clients like Staples, Kohl’s, and Whole Foods.

First Solar Inc. (Tempe, AZ):  As the largest manufacturer of thin film solar modules in the world, First Solar has one of the fastest growing manufacturing capacities since its product launch in 2002—their module capacity is now more than 1GW.  However, they may best be known for their breakthroughs in cost.  In Q1 2009, First Solar achieved the lowest manufacturing cost per watt in the solar industry, at 87 cents/watt. 

Solyndra (Freemont, CA): Founded in 2005, Solyndra specializes in the low-slope commercial rooftop market for its thin film photovoltaic (PV) systems.  The panels that Solyndra manufactures are designed to avoid the “tilting” that other flat roof panels typically require, and to allow wind to flow through to avoid costly anchoring

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