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KNOXVILLE—Solar power is a viable energy source for the nation, and its use is rapidly growing in the U.S. as federal incentives—similar to those that helped other energy markets to develop—are put in place.

That is the message of “Assessment of Incentives and Employment Impacts of Solar Industry Deployment,” a report commissioned by the Solar Energy Industry Association (SEIA).

The Howard H. Baker Jr. Center for Public Policy at the University of Tennessee, Knoxville, administered funding for the research and the report. The Baker Center is a nonpartisan institute devoted to education and scholarship concerning public policy and civic engagement.

The report was written by a five-person team that included Susan M. Schexnayder, a senior research associate with UT’s Department of Forestry, Wildlife, and Fisheries; Alexandra Brewer, a UT graduate student in political science and graduate research assistant at the Baker Center; David P. Vogt of Decision Commerce Group LLC and retired from Oak Ridge National Laboratory; Tom N. Yoder, of Ohio, a partner at Decision Commerce Group LLC and an independent research professional; and Edward J. Lapsa, an independent consultant from Knoxville.

“This report looks at solar in relation to other energy sources and finds that solar is on the path to becoming a mainstream source of energy for our nation,” said Matt Murray, director of the Baker Center. “In addition, the report pulls together data showing the solar industry’s great potential for the US economy—not only in the diversification of our energy supply, but also through job creation and global business opportunities.”

Murray said being involved with the production of this report is in line with the Baker Center’s focus on energy and environmental policy. The Baker Center is also administering the $700,000 SunShot Solar Initiative, a project looking at the regulatory challenges and non-technological barriers to solar adoption.

Report highlights

The report outlines a variety of benefits of solar energy, which include:

  • Its ability to reduce energy costs by providing much of the nation’s electricity needs during peak usage times;
  • Its potential to produce hundreds of thousands of jobs; and
  • Its tremendous export potential for solar manufacturing and materials.

Solar energy is readily available—especially during peak usage times—and, therefore, could provide a cheap energy alternative, the report states.

“As economic growth becomes ever more dependent on abundant and sustainable energy supplies, policymakers are working to enrich the portfolio of electricity-producing fuel sources with options like wind and solar power,” the report says. “Rooftop solar power alone would provide 20 percent of our electricity needs.”

Annual installed solar capacity has seen steady increases, especially in the past six years. It nearly doubled between 2009 and 2010 and was expected to double again between 2010 and 2011.

Long-term annual cumulative growth projections range from about 5 percent to 25 percent.

As the use of solar energy increases, the industry will grow as an economic force.

“The growing solar industry will be a boost to employment in the U.S., especially since the solar industry has historically produced more jobs per megawatt-hour than any other energy industry. Depending on the assumed growth rate, we estimate between 193,000 and 2.3 million total jobs.”

Likewise, the export potential for US solar manufacturing and material is also expanding with the rapid increase in solar use in Europe.

Role of federal incentives

Research shows that many American industries travel a somewhat bumpy path as they enter the mainstream of commerce.

Historically, it’s taken about thirty years for energy resources—oil, natural gas, hydropower, coal, etc.—to go from innovation to early adoption to rapid growth, and, finally, to majority adoption, the report notes.

“Each traditional energy sources has been developed with what might even conservatively be considered ‘significant’ government engagement, from market control measures for oil, to making pipelines available for natural gas, to building flood control dams that provide the fuel for hydropower, to states surveying their coal resources,” the report says.

In the days before the oil embargo, federal energy policy was either industrial policy or economic development policy meant to maintain competition, provide for national security, and promote economic development through tax incentives.

After the oil embargo, the federal energy policy got more focused, maintaining competition by deregulation; assuring worker safety, public health, and environmental quality; and providing for energy security by adding renewable energy options to the national portfolio.

The federal government currently provides incentives to every major energy production market, although reports of how much money the government spends on each vary greatly.

Federal incentives may aid in an energy resource’s production and refining, transmission, and distribution, transformation, or consumption. Effective incentives help remove specific barriers, level costs for private markets, and offer stability that help new technologies “cross the chasm” into mainstream use. Ideally, the incentives can decrease as the industry matures.

Fossil fuels, biofuels, and nuclear power have had significant federal engagement in the production, refining, and transportation steps.

Solar energy—because it’s widely available and doesn’t need to be transported—won’t need much federal investment in these areas.

Read the full report on the Baker Center website (pdf).

C O N T A C T :

Amy Blakely (865-974-5034,