PCCA Journal|2
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in perpetuity.
“It has a little bit of the flavor of Saint Augustine’s prayer,
‘Lord, give me temperance and chastity, but not right now,’”
he said.
An Urgent Matter
Although the cliff is nearly two years off, we should
resolve the issue now, Reichelstein says. For one thing, it
would help ensure the industry doesn’t
mirror the wind industry, which suf-
fered whiplash as incentives expired and
were renewed at the last minute multiple
times over the past decade, contributing
to a “prolonged market contraction” in
that industry.
“The wind industry has really been
at the whims of Congress,” Reichelstein
said. “So putting solar on a long-term
footing would be helpful for suppliers
and consumers in the industry so they
can plan farther out.” Otherwise, he
said, “it’s very likely that running up to
the end of 2016 we would see a boom
followed by a bust with all the costs that
come with such a cycle.”
We already see evidence of this boom.
Companies like SolarCity are hiring in
droves. In fact, according to a report by
the nonprofit research group the Solar
Foundation, one of every 78 new jobs in
2014 was created by the solar industry.
Further, it anticipates that the total em-
ployment by the industry will grow over
20 percent in 2015, to 210,060 workers.
“You can see what would happen in
2017,” Reichelstein said. “Companies
like SolarCity may be well-positioned
because they are cost leaders. The way
they have phrased it is, ‘We’re fighting
the step-down, but we will survive.’ But
not everybody will survive.”
Greater Market
Still, the U.S. is only one country that
accounts for less than 10 percent of the
global solar market, whereas China,
which has historically dominated solar
panel production, is quickly becoming a
leading installer and consumer of solar power.
“The good news to keep in mind is that irrespective of
what happens here, the rest of world will continue to expand
rapidly with solar deployments,” Reichelstein said. “The
question is where that would leave the U.S. solar industry.”
This piece was originally published by the Stanford Graduate
School of Business.