Solar Industry Finds Itself in the Shade

Asked about the state of her industry, Sue de Witt, executive director of the Sacramento-based California Solar Energy Industries Assn., put it this way:

“I think we’re in the deepest, darkest recession since we began building up (the solar energy industry) in the 1970s.”

In 1981, she said, the organization--usually called CAL-SEIA--had 600 members, but now the membership is below 200 for the first time since the group became established. CAL-SEIA had about 270 members last September, she added, and at the latest count had 173, a drop of about 35% in a little over half a year.

Even more blunt than hers--and possibly overly pessimistic--was the comment of one successful and respected solar industry businessman (who is now switching his efforts into cogeneration). His statement: “Solar’s dead.”


Blamed, not only by De Witt but generally in the solar industry, is the demise at the first of this year of the federal income tax energy credits, which had been 40% of the cost of the alternative energy installation, not as a deduction but right off the top of the tax owed.

The California state tax credits were not killed outright but slashed drastically. The credit for residential solar applications, probably the most widely known among the general public, was cut from 55% to 10%, and that for non-residential installations down to 25%. Another alternative electricity producer that depends on a renewable power source, wind generation, also was hit by both the federal and state cuts.

And this climate of governmental indifference or even hostility toward alternative energy sources cannot fail to reduce their production, throwing more load on the old-line producers: nuclear, oil- or coal-powered steam generation and (the only one not dependent on fossil fuels) hydroelectric plants.

All this is particularly disturbing in view of the Soviets’ Chernobyl disaster.


There has been anti-nuclear feeling since the beginning of that method of electrical generation. Our Three Mile Island nuclear accident in March, 1979, gave a focus to the fears of plant safety, fears that the Chernobyl incident have deepened and made more intense.

In the last half a dozen years or more, several European nations have either shelved plans for nuclear plants or decided to phase out those they have. In the United States, no nuclear plant has gone into construction for several years, leading to some speculation that, without a formal policy decision, we have embarked on a de facto phase-out program. That may be so, but is not necessarily the result of opposition to or fear of nuclear generation.

Costs of constructing nuclear generation plants have increased at a rate of nearly 20% a year and, along with massive cost overruns, have staggered some utilities. Further, a nuclear power plant takes 10 to 15 years to plan and build. One estimate is that a plant begun now would find itself eventually producing electricity for 15 cents a kilowatt hour, about twice today’s average production cost.

So the turn away from nuclear power generation isn’t based entirely on Three Mile Island and Chernobyl--although it can’t be denied that those accidents, and particularly the recent Soviet one, have heightened the feeling against nuclear power. It may just be the Almighty Dollar doing its proper work--pushing us toward the more efficient and less costly solutions.


And the alternative energy sources are far from being counted out. Barbara Crowley, California Energy Commission vice chair, has pointed out that, in California, nearly 5,600 megawatts of power have been developed from alternative sources--solar, wind, geothermal, cogeneration and small hydroelectric installations.

That is about 10% of the state’s power supply mix and enough electricity for 4 million homes. Roughly half of this amount, or about 2,800 megawatts, has been developed since 1983 (before that year most of the production capacity was utility-owned) until about February of this year.

Crowley was announcing the commission’s new Energy Technology Export Program, whose objective will be to assist California energy firms to export both technologies and products. It was funded by the Legislature, approved by the governor and developed with the help of the World Trade Commission and the state Department of Commerce.

Strategies Unlimited of Mountain View has a $190,000 grant from the energy commission to evaluate the international market and survey the domestic industry. It will be looking for ways to help California businesses export energy technologies and products and for the locations of usable energy resources (solar, wind, biomass, etc.) in foreign countries.


Crowley said, “California’s thriving alternative energy industry has inspired other nations to develop their indigenous energy resources. Energy officials from the Pacific Rim, India and Latin America have all expressed interest in California’s innovative approach to securing low-cost, reliable energy supplies.”

Could very well be a way to brighten up the scene Sue de Witt described.