BECOMING YOUR OWN POWER COMPANY
In the Renewable Energy industry, as in life, everything seems to come full circle. Back during the Carter administration, when tax rebates were available for renewable energy, Big Oil companies jumped on the renewables bandwagon in the hopes of controlling its course. Companies like Atlantic Richfield and Phillips Petroleum ramped up their own photovoltaic manufacturing and marketing operations to cash in on the expected demand. They quickly became the only game in town.
This meant the oil industry, by controlling a large chunk of the renewable energy equipment supply, also had some measure of influence over the renewable energy industry. I don’t believe they ever thought renewables would offer any real competition but I also believe they didn’t want to take any chances. Being invested in the industry meant they had some control over just how much competition renewables would offer to conventional energy supplies. The government had sanctioned the concept and the energy giants didn’t want to be left behind...just in case.
Then came the 80s and the Reagan administration and the renewable energy landscape changed dramatically. The tax rebates were canceled and the renewable energy industry was being written off as yesterday’s dream. As the perceived threat of competition waned so did the oil industry’s interest. One by one the companies scaled back their PV production, sold their facilities or just went out of the renewables business altogether.
But the demand just wouldn’t go away. Even as the government support faded away the public support remained steady, not great by any means, but solid enough to provide a viable market for the companies that remained. Companies like Trace began to produce ever more efficient inverters at ever lower prices, small wind generator companies kept plugging away at design improvements and the remaining photovoltaic manufacturers searched out broader commercial markets to support their production.
With the advent of the 90s the pace of change and growth began to pick up. Trace came out with a solid line of low-priced inverters, the cost of PV panels dropped below $10 per watt of generating capacity and the industry saw the benefits. With the introduction of cheaper inverters it became possible to build a system that could operate standard AC equipment. The image of a lifestyle run on car batteries, DC lighting and hard to find DC appliances began to change. As more people accepted the idea of providing their own power sales began to increase and technological advances came more quickly.
Trace became the first company to offer a viable sine wave inverter at a reasonable price. It was not perfect by any means but it filled the bill for most people’s needs. It also pushed the price of other non-sinewave inverters even lower, opening the market to even more people.
Interest in renewables also began to spread overseas. Companies from England to Japan began to produce renewable equipment. Emerging markets in the third world, which had little, if any, existing energy infrastructure, saw renewables as a way to get power to remote villages and facilities. This increase in demand for the products pushed production up again.
Even with this increased demand prices continued to fall. Photovoltaic panels got larger and more efficient and the price per watt of generating capacity dropped below $6.
What is even more interesting about this is that while solar energy products are getting top dollar in foreign markets, the competitiveness of the American market is keeping our prices the lowest in the world. Even with the lower prices (and smaller profits) our market is still the biggest and most prestigious in the world, and Big Oil is starting to realize that.
British Petroleum has entered the American market this year with a vengeance. The CEO of the company (as I mentioned in an earlier article) has pledged to increase their solar business from $100 million/year to $1 billion/year over the next ten years. They now sell and manufacture PV panels as well as complete systems through their new plant in Fairfield, CA. The oil industry is back in the game again but as a real player this time.
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