Technology Spotlight: What’s Happening with Solar?

Tom Johnson | August 15, 2011 | Energy & Environment
The solar sector needs to strike a balance between supply and demand, and end-market intervention

There is a lot of debate about the state’s solar energy sector, a market that has been seen prices for solar renewable energy certificates (SRECs) drop dramatically in recent weeks. That has led some to call for the state to intervene in the markets to stop the drop in spot market prices. Others have welcomed the plunging prices as a sign that solar energy is becoming more competitive with conventional forms of power. To get a take from an industry insider, NJ Spotlight interviewed Chris Robine, chief executive officer of SPG Solar, a California-based company that has built three megawatts of solar capacity in this state.

NJS: What is going on with the solar market here?
Robine argued the drop in the prices for SRECs is simply a sign that there’s an oversupply of certificates. It really comes down to supply and demand, he said. There is still very good valuation out there, but it is a very volatile market, he argued.

NJS: Why is that?
His company has a wide range of solar applications, including ground-mounted, rooftop and even floating solar panels that are used at wastewater treatment facilities. His view is that there is a lot of opportunity to help towns, businesses and sewerage authorities drastically reduce their energy bills by installing solar systems at their facilities.

NJS: What about the people who talk about the high cost of solar?
Robine argues solar is on a trend to achieve grid parity over the next few years, saying technology improvements continue to drive the price down. “What we’ve seen is a significant drop in the price of projects as we see the advance in technology.”

NJS: What do you think of the draft energy master plan’s recommendation to site new solar installations on brownfields and landfills?
His company put a three-megawatt solar system on a Superfund toxic waste site in California, so he thinks there is a big opportunity out there to redevelop land that has lain fallow for many years. Robine notes there is more than 15 million acres of brownfields in the U.S. If all were redeveloped for reuse through solar installations, it could provide up to 3 million megawatts of solar power to the country.

NJS: Some people have argued the state needs to intervene to provide more certainty to investors in the solar sector, a move that they say would halt the steep drop in prices that is unsettling the market.
Robine conceded floors on the price of SRECs might create financial certainty, which he argued is absolutely critical to the solar industry moving forward. Over the long run, however, he said the solar industry needs to strike a balance between supply and demand, and avoid interventions in the marketplace.

NJS: At the end of the year, a lucrative tax cash incentive will expire for the solar sector. What impact will that have on the industry in New Jersey?
It depends on the business model of the company, according to Robine. He argued it would not have an impact
on some solar businesses, which do not rely on the cash incentive, but it could winnow the number of companies competing in the solar market in the state.