Get ready to rally around solar

The solar PV industry has a great story to tell but given energy retailers are proving a hard sell, the sector needs to get organised.

People love photovoltaic energy. Studies show that worldwide, 70 to 90 per cent of people favour solar PV energy over any other energy source. A poll conducted in the United States showed that nearly 80 per cent of Americans want their government to invest in renewables as a way to regain the manufacturing jobs it has lost to Asia over the past 20 years.

There is also strong support for solar because it is a technology that is constantly innovating and closely tied to other ‘sunrise industries’ such as electric vehicles and the smart grid.

The technology is doing its part; advances in efficiency and dropping panel prices mean that solar energy has become cheaper than conventional electricity in many markets around the world. Solar has become the only viable electricity source for billions of people living in severe energy poverty, and in parts of the developed world it has become cheaper than coal, gas and nuclear power. Many countries have set bold goals; President Obama has set 2020  as the year that solar must become cost competitive with conventional electricity. India plans to reach this goal by 2022, and certain markets in Australia have already attained this ‘grid parity’ price point.

You might assume this all means PV will soon start to take over a large swathe of electricity generation. Reality is a bit more complicated.

In most countries, electricity networks are owned or operated in close association with conventional electricity. Transmission and distribution companies tend to be captive to an old-school attitude – the engineering equivalent of group-think – that is biased against adopting photovoltaic and other renewables as a primary energy source.

That has to change. If PV is to deliver its full economic and environmental benefits, the solar industry needs to learn how to take on some powerful vested interests. The drive to reform competition in the electricity market needs to come from the solar power producers themselves, even if it means coming up against coal and gas companies.

For solar PV to become a major, global energy industry, it must organise itself like one. It must build soft alliances with advocates and make hard decisions about formal industry representation. It also needs to make hard decisions about how to structure its industry advocacy.

In the US, the solar sector is beginning to do this work, which is leading to mergers of old industry organisations as well as the initiation of new community-based organisations. In January 2012, the Solar Energy Industries Association (SEIA), the national solar trade association, merged with the Solar Alliance, the leading solar advocacy organisation. SEIA was founded in 1974 and had 1100 member companies, which it represented to the federal government in Washington DC. Solar Alliance had a more activist bent and was focused on the regulatory environment in the states.

This merger gives the new SEIA a stronger power base. It will continue to work the corridors of Congress but will now be more active in the states, which is where the electricity market is regulated, through the Public Utilities Commissions. Solar companies in the US believe that the merger will deliver the best of both approaches.

In Australia, we have a similar situation to America. While the federal Labor Government has legislated a good carbon price package, in negotiation with the Greens in the Senate, the states are actually the battle ground for grid parity.

As solar becomes price competitive with conventional electricity, the challenge is how to liberate the full market potential this creates. Solar has to break open the electricity industry to competition.

The intention is to gain increased political influence at all levels of government – local, state and federal – in order to accelerate growth in domestic and commercial markets.

Some companies have already begun this ‘campaigning’. For example, Suntech has installed solar on the Sydney Theatre Company building on beautiful Sydney Harbour, at the invitation of the Company’s Artistic Directors, Andrew Upton and Cate Blanchett. It is these kinds of soft alliances with cultural figures that allow influential people to play an advocacy role for PV technology.

More recently in England, Sir David Attenborough was joined by actors and artists at the launch of a wind facility at Glyndebourne opera, south of London. Glyndebourne is one of the world’s leading opera companies and it decided that the best way to offset its greenhouse emissions was to generate electricity.

Indeed, the good news is that PV is not just a brilliant technology that cuts the cost of electricity in a carbon constrained world, it is the key to addressing the threat of global warming. This gives PV companies a great, untapped reservoir of social power to draw on. It is an easy cause around which to organise.

Dan Cass started Dan Cass & Co in 2010 to provide lobbying and campaign services to renewable energy firms. He is a Director of Hepburn Wind, Australia's first community-owned wind farm.

This article originally appeared on the Suntech blog. Reproduced with the permission of the author.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles