Solar CEOs see light in U.S. energy bill

Solar industry CEOs said they expect to be able to expand significantly in the U.S. if an extension to tax credits is included in the final version of an energy bill from Congress.

The entire industry could grow, said Roger Efird, president of Suntech America, in a conference call.

"The 2007 energy bill, with its 30 percent investment tax credit and no cap gives us the opportunity over the next eight years to expand our markets from a few states to most of the states, to create hundreds of thousands of new jobs and to help reduce our nation's carbon footprint," he said.

San Francisco-based Suntech America is a unit of Wuxi, China's Suntech Power Holdings (NYSE: STP), the world's third largest solar cell manufacturer.

But foreign companies could look elsewhere if the incentives fall through. The current system is set to expire in 2008 without an extension.

Santiago Seage, CEO of Spanish concentrated solar company Abengoa Solar, said, "The companies leaving this market will invest elsewhere, not only Japan and Germany. In CSP there are many countries now worldwide that are approving or extending the equivalent of the ITC. So, we would go and invest somewhere else, which would be unfortunate."

Abengoa Solar is a subsidiary of Seville's Abengoa, one of Spain's largest engineering and construction companies.

Take a look at an Abengoa solar plant under construction in Spain >>

The conference call, with executives from four solar companies, was organized by the Solar Energy Industries Association, or SEIA, which is lobbying Congress on the energy bill (see What's next for the energy bill?).

An eight-year extension of the 30 percent business investment tax credit, or ITC, is only included in the House bill. Attempts to get it into the Senate bill were blocked, but it is included in a package approved by the Senate finance committee.

Rhone Resch, president of the SEIA, said solar has gotten a lot of help at the state level (see The lobby not on the Hill).

"It's interesting that states have really led with policy with respect to clean energy, yet when you look at the nuclear industry and the fossil fuel industries, they've really enjoyed federal policy, which creates, obviously, national markets. And we're looking to change that," said Resch.

The solar market in the U.S. is still very small compared to Europe, coming in at about 1/6 the size of the market in Germany, according to Resch. He said Germany created a long term incentive for solar about five years ago, resulting in 45,000 new manufacturing jobs in the country.

That's pretty good for a place that gets an average amount of sunlight equivalent to Anchorage, Alaska.

"You can imagine if solar does well and works well in Germany, just think how spectacularly it'll work here in the United States," said Resch.

The lead time needed in the development of solar power is a major factor in the SEIA's push for the extension. The group said large scale plants can take three to six years to be completed.

Tom Werner, CEO of San Jose, Calif.-based SunPower (Nasdaq: SPWR), said, "The level of incentive that the investment tax credit that we're encouraging to be part of the energy bill would cost less than $1 billion over eight years. And when you compare that to the government support for coal, or oil, or nuclear, it is a tiny, tiny amount of money, and yet Americans, given the choice, would choose solar over all of those options."

Barry Cinnamon, CEO of Los Gatos, Calif.-based installer Akeena Solar (Nasdaq: AKNS), sees a big boost in workers for his company if the ITC is approved, potentially rising to thousands from the current 200 employees.

Even Suntech, which already has three factories in China, and a fourth on the way, plans to expand in the States. Efird, who said the company could add 1,000 manufacturing jobs over the next few years in the U.S., said Suntech is in discussions with three different states and has begun looking at sites for new plants.

Cleantech developments making news in the past 24 hours

• Generating energy underwater from good vibrations
• Indian companies order 300MW in wind power
• Beijing meets "blue sky days" target early
• Finland, Vietnam launch fish fuel project

View the last week of cleantech developments here | Subscribe to full feed