By: Matthew K. Norris, Contributing Writer to MyEnergySolution.com
There are signs in the marketplace that solar power is building tremendous momentum. Investment dollars are really pouring into solar companies. According to data compiled by Mercom Capital Group, total VC funding for solar in the U.S. was $169 million for 11 transactions in the third quarter 2010, down from $922 million for 18 transactions for the second quarter of 2010. Such a slowdown was inevitable, however even with the decrease in overall dollars into solar, investment continues to remain strong.
In addition, increased investment by Chinese banks is helping U.S. solar prospects. There was $20.7 billion in 12 disclosed funding deals, mostly loans and credit given to Chinese manufacturers by Chinese banks. Some of beneficiaries of those financings include LDK Solar, JA Solar, Yingli and Solarfun...all companies with a strong U.S. presence. These transactions will only help drive solar panel costs down and create better value for U.S. solar consumers.
A couple notable investments for the third quarter include a $65 million equity raise by Solaria and a $21.5 million equity raise by SolarCity, both U.S. based companies. One of the biggest transactions in the U.S. solar industry was Sharp’s acquisition of Recurrent Energy for $305 million. These recent transactions are only the tip of the iceberg for the U.S. solar market. A recent report by Solar Energy Industries Association (SEIA) and GTM research estimates growth in installed solar capacity in 2010 to increase 114% over 2009. SEIA and GTM provide a baseline forecast that projects 944 megawatts of solar electric capacity (composed of 866 megawatts of photovoltaic solar and 79 megawatts of concentrated solar) will be installed in the U.S. this year. These two research groups also have a more aggressive estimate that shows installed capacity to increase to 1.13 gigawatts, a 156% increase.
All this activity in the U.S. solar market also bodes very well for job creation. The Solar Foundation, a nonprofit solar education and research organization, reports that solar jobs will grow 26% in the next year, adding 24,000 net new jobs by August 2011. There are currently 93,000 solar jobs in the country. In addition, the public has begin to show tremendous support for the solar industry in the U.S. A survey by the Schott Solar shows that 94% of Americans support the development and use of solar energy. Furthermore, 80% of those surveyed support the reallocation of federal funds to renewable energy industries from fossil fuels. This support is also bipartisan with 92% of Republicans and 98% of Democrats supporting the increase use of solar energy.
These trends demonstrate that the importance of solar as a primary source of renewable energy will increase over the next few years. As investment dollars flow into the industry and the installed capacity grows, there will be tremendous opportunities for those companies and investors to profit from solar energy.
Matthew Knox Norris is currently a Finance and Project Manager with Spindrift Partners, Inc., focusing on the bidding, development and management of U.S. government-leased properties. Prior to this, he was a member of the Executive Finance Development Program at Thermo Fisher Scientific where he was responsible for developing strategies to improve customer profitability and operational performance for the Fisher Healthcare business unit. Mr. Norris has an MBA from The University of Texas at Austin and a B.A. in Economics from Claremont McKenna College.