Solar panels, Lights, and Fountains

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Our site is designed to educate about how grid parity, an important economic goal for solar power providers, will affect the future of solar power and the manufacturing of solar panels.

For the past few years companies that make solar panels have seen their stock prices go up as demand has increased. However, the credit crunch of 2008 made banks unwilling to lend money to corporations and caused many analysts to worry about the future of manufacturers of solar panels. During the ensuing stock market crash the Dow industrial stock market index fell by approximately 20 percent, but makers of solar panels saw their stocks plummet by as much as 30 percent.

Enterprises rely upon a steady flow of credit from banks to invest in solar energy so a squeeze in the credit market made investors worry about the future of solar power for businesses. In fact, investors also worried about demand of consumers who use home equity loans to finance conversions to renewable energy for residential power.

However, at the Solar Power International Conference in San Diego held October 16, 2008, makers of solar panels were bullish on their future. They projected optimism because they estimated that grid parity can be reached within eight years. Grid parity is the point at which the cost for 1 kW of solar energy is the same as 1 kW of energy from an electrical power plant. When that point is reached the industry will no longer rely upon the tax breaks extended by the United States government.

Currently tax breaks for solar producers are set to expire in 2016. Makers of solar panels will not be able to be competitive with electrical power plants if they do not reach grid parity before the tax breaks expire. If grid parity is not reached by 2016, business and residential power customers will have to pay more to use solar energy to power products like lights, fountains, televisions etc. As a result, purchases of solar panels and associated products will decrease.

At the convention in San Diego The Vice President of Solar Energy Solutions Group for The Sharp Corp. said in areas where electrical prices are the highest, grid parity could be reached within five years. Other executives were optimistic about reaching grid parity across the country because natural gas and coal prices cannot possibly go lower with increasing demand coming from China and India. This will hold true even there is a major economic slump all across the world.

In 2008 there was a 163 percent rise in coal prices which was caused in large part by foreign demand for US coal. Coal has usually been the cheapest form of power and now contributes to about half of all the electricity generated in the United States. As long as electricity prices stay high and grid parity can be reached, the future for solar panels remains bright.