Background Image
Previous Page  23 / 60 Next Page
Information
Show Menu
Previous Page 23 / 60 Next Page
Page Background

PCCA Journal|2

nd

Quarter 2015

23

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.