Obama plan could boost U.S. solar energy development: Gartner

Stamford, Conn. - As president, Barack Obama could usher in a new era of solar energy development in the United States, but he will face economic difficulties that might be a barrier to more expensive renewable initiatives, according to a research director at Gartner, Inc.

James Hines, a lead Gartner analyst on solar energy technologies, said the U.S. has the potential to overtake Germany as the largest photovoltaic market within a few years.

However, he noted that demand for solar energy remains dependent on government subsidies because it costs more than conventional forms of electric-power generation. The new U.S. administration could help encourage investment in solar energy projects if it succeeds in implementing some of its plans, which is more likely with the Democrats' expanded majorities in both houses of Congress.

This increased emphasis on renewable energy and the extension of the 30 percent investment tax credit for solar projects, which passed last month, could finally help realize the nation's “vast potential for solar energy,” he added.

According to Hines, President-elect Obama's alternative energy plan, called New Energy for America, could have a significant impact on the U.S. solar industry. The plan's provisions include:

• A federal renewable portfolio standard (RPS) that requires 10 percent of electricity consumed in the U.S. to come from renewable sources by 2012.
• A $150 billion investment over 10 years in research, technology demonstration, and commercial deployment of clean energy technology.
• Extension of production tax credits for five years to encourage renewable energy production.
• A cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions.

Economic snags There are potential barriers to New Energy for America, Hines noted. The new presidential administration will face a difficult economic situation that could curtail the plan, and expensive government programs will be hard to enact as a recessionary economy cuts into tax receipts.

"It is likely that the RPS will be passed during 2009, which will provide a strong boost to U.S. demand for solar energy,” Hines predicted. “The other provisions, which require significant spending or tax incentives, might have to wait until the economy starts to recover.”

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