It seems that the solar business is recession proof. California’s residential and commercial rooftop solar installations more than doubled in 2008 according to the California Public Utilities Commission.

The month of December, during a time when the states unemployment rate hit 9%, a huge number of applications were filed to partake in California’s $3 billion solar rebate program.

While most people were pinching pennies and holding back from buying big ticket items, the solar industry wasn’t feeling the pinch; the fourth quarter surge of applications is proof of that. Cutting down on greenhouse gas emissions wasn’t the only reason why Californians were suddenly rushing in their applications; in 2009 rebate incentives for solar systems under the California Solar Initiative will be less rewarding. On top of that Congress had lifted the $2,000 cap on the federal tax credit on solar arrays in October, stating that homeowners and business could take a 30% tax credit on systems installed after December 31st. So, during that time in 2008, between the tax credit and the state rebate, your solar system price tag was cut in half.

During the first two years of the California solar Initiative program we saw more solar installations than in the previous twenty five years. And, due to the tax rebates, $5 billion went to private investment in solar projects, which opened up a new horizon for the renewable energy industry. Those dollars helped create solid solar companies and thin-film solar companies.

Though the number of applications for solar surged during 2008 the future is being looked upon with careful eyes. California regulators are hopeful that 2009 will continue at a good pace but they’re also concerned that, due to the shaky economy, some pending projects may get cancelled. The current dropout rate is 15%.

For some reason there is a much higher demand for solar energy for Northern California than in Southern California – in fact, Northern Cal has installed twice the megawatts of solar than Southern Cal. Some think the reason may be the differences in electricity pricing and/or the fact that Northern Cal has older, more established solar companies who have the experience and connections. Another reason Northern California is going solar at a much faster rate could be due to the 6.5% price increase that PG&E wants to impose. All in all, applications for commercial arrays in the PG&E area rose 71% between April and December 2008, yet they decreased by 23% in Southern California’s Edison’s territory. One small service area in San Diego, San Diego Gas & Electric’s territory, saw residential applications triple.

A good lesson in recession proofing – get into the solar business and reap the benefits of new economic opportunities.

Photo credit: docentjoyce

Links:

http://greenwombat.blogs.fortune.cnn.com/2009/01/29/solar-surges-in-california-despite-recession/
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Posted on March 11th in Solar News by Beth.