San Diego Is California's Top Market for Solar Energy
May 09 - San Diego Business Journal
One of the sunniest regions in the nation, San Diego has become a boomtown for solar energy systems.
Countywide there are more than 2,000 solar energy systems installed,
according to the San Diego Regional Energy Office, an independent, nonprofit
corporation that provides information, research, analysis and long-term planning
on energy issues.
But as the interest in solar energy systems rises across the county, the
supply of solar energy panels, which are the basic building block of these
systems, has dropped significantly, according to several local executives.
The panels are being shipped to European countries that are offering a higher
price for the products than what installers in the United States are able to
offer.
"There is high demand for all these (solar) modules," said Linda
Strand, the chief executive officer of San Marcos-based Independent Energy
Solutions, an installer of solar energy systems, also known as photovoltaic
systems. "The panels that we normally get are being shipped out to
Europe."
European countries have become a top market for solar energy systems, she
said.
And for companies here in the States, that means that customers are having to
pay more or forgo their solar energy systems altogether.
"Since March 2004, there has been more demand than supply," said
Brian Weintraub, the president of Allied Sun Technologies, an installer of
commercial and residential solar energy systems. "The cost of panel prices
have risen by, in some cases, up to 20 percent. That's significant."
For San Diego-based Allied Sun Technologies, the rising cost has caused the
company to raise its own prices.
"We are necessarily having to charge more for our solar generating
systems," Weintraub said. "There are no other solutions. So some
people are waiting, some people are paying more and some people aren't having
their solar systems installed anymore. Some customers are forced to postpone
their installations for months and months because of the panel shortage."
Troy Strand, the president of Independent Energy Solutions, said that Europe
simply offers better incentives, which means an increase in demand.
"The current demand for product is greater than what we are given as a
supply," said Troy Strand, Linda Strand's husband. "It's a moneymaking
proposition over there. They have very strong solar energy incentives."
Weintraub agrees.
"I think it is clear that places other than North America are now
receiving the lion's share of solar panels," Weintraub said.
Troy Strand said that in Germany, the incentives, which are based on the
performance of the system, were greater than in California, where the incentives
are based on the number of watts per system.
"For every kilowatt an hour that the system generates, you would get
paid," he said. "They get 70 cents for every kilowatt an hour that is
generated. Traditionally speaking solar energy systems become cost effective
between 20-30 cents a kilowatt. For 70 cents, that is huge."
One reason for the European solar energy boom is that in Europe, the cost of
energy is much higher than in the United States, Troy Strand said.
"Our cost of energy is a better rate than over there," he said,
adding that many Europeans have turned to solar energy to mitigate the rising
energy costs.
But while Independent Energy Solutions has felt the impact of a decrease in
the supply of solar panels, the ability to do business has not been
significantly affected, he said.
"We have a strong relationship with Kyocera," Troy Strand said of
the solar panel manufacturer. "We are very thankful. If we didn't, we would
be in line with everybody else."
But Vickie Gowey, owner of Clean Power Resources, Inc., a Powaybased
installer of solar energy systems, said that making sure her company has panels
has become a continuing problem.
"Solar energy panels are getting harder and harder to come by,"
Gowey said. "Overseas, they are giving the customer a lot more money. They
have so much demand for the panels because they have the government supporting
it so much."
Gowey said she is working with new manufacturers in hopes to build
relationships that will allow her more access to panels, but that in the
meantime she is trying to keep inventory on hand.
The demand for solar panels has significantly grown worldwide putting a pinch
on the supply everywhere, said Tom Dyer, vice president of marketing and public
affairs for Kyocera Solar, which is based in Scottsdale, Ariz.
"This year in 2004 we sold twice as many panels as we did in 2003 and in
2005 we should double again," Dyer said. "All the manufacturers are
increasing their capacity. But even as we produce as much as we did last year we
still aren't putting out enough."
Kyocera opened an existing production facility in Mexico in hopes of easing
the production demand, Dyer said.
"We are scheduled to be at 35-megawatt capacity by August," he
said. "We believe by September we will see some easing of the
situation."
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