New Solar Feed-In Tariff Will Increase Sales

Yesterday we reported on Governor Schwarzenegger’s executive order that mandates a 33 percent renewable standard by 2020 for the state of California.

Not long after that news came out, research house iSuppli shot out apress release which stated that based on its research, installation ofphotovoltaic solar power systems in California are set to more thandouble in 2009, compared to 2008.

Despite a downturn in the global market, incentives from the stimulus are enabling this growth.

According to iSuppli, California installations are set to grow by120.1 percent, compared to a 26.9 percent decline for the entire globalmarketplace. The research firm also expects to see Californiainstallations hit 350 megawatts, compared to 132 megawatts across therest of the country.

Of course, 2010 and beyond is likely to be even more impressive if the California Public Utilities Commission institutes a new solar feed-in tariff – which could actually happen. With this revised feed-in tariff, higher prices would be guaranteed for solar. Theoriginal feed-in tariff that was initiated in 2008 only allowedcustomers to get the same price for their renewable power as utilitiespay for power from a gas turbine.

This new system would be similar to what has been used in Germany,which today is the market leader in solar. Oddly enough, Germanydoesn’t have anywhere near the solar resource found in California.

According to reports, such a feed-in plan would likely includepricing mechanisms that would create market-driven pricing. Certainlyhealthy competition in this space is a good thing for consumers.

If this new feed-in tariff happens, companies like SunPower(NASDAQ:SPWRA) and Suntech (NYSE:STP) will see a serious increase insales. And the state of California will see a serious increase in solarinstallations.



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