A rare bright spot appeared on the horizon for the beleaguered American solar industry yesterday when the U.S. Army launched an ambitious initiative to build large-scale renewable energy projects on its land.
The Army is looking to generate 2.1 million megawatt-hours of renewable energy a year from projects on its millions of acres of land in the United States (E&ENews PM, Aug. 10). Given the concentration of bases the service has in the sun-drenched Southwest and its experience with the technology, solar will likely make up a significant portion of that, service officials said.
And U.S. companies won't be competing with their often-cheaper Chinese counterparts for the Army's business, thanks to a provision in the fiscal 2011 defense authorization (E&E Daily, April 14).
That's good news for an industry that saw three major companies file for bankruptcy in recent weeks as Asian competitors dominate the market (Greenwire, Sept. 6).
Assistant Secretary of the Army Katherine Hammack said the Army's demand could kick-start a new round of innovation in the American market.
"Certainly there is some turmoil in the solar industry," Hammack said. "We are confident that what we're doing is going to spur innovation and it's going to spur production in the United States."
Her office is not just looking at current technologies, and Hammack said she hopes the project will provide the sort of impetus for nascent renewable energy technologies that other military projects did for GPS and the Internet.
Ken Zweibel, director of the Solar Institute at George Washington University, said the new initiative could be a well-timed boost for U.S. industry.
"That's really great news for solar installers here and solar manufacturers here, which are under a lot of pressure," he said.
The United States does not have a large manufacturing base, though, said Swami Venkataraman, a utilities analyst at the rating company Standard & Poor's.
"That's not a negligible amount, of course, and companies will be happy to have this customer," he said, "but it's not so massive that it's going to completely change the complexion of the U.S. solar manufacturing industry in terms of reversing or even stemming the flow of manufacturing to Asian locations."
The Army's project is spurred both by a desire to become less reliant on the civilian grid and an expectation that traditional energy will become increasingly expensive.
"We know that there are growing challenges to the Army's energy supply and the nation's energy supply," Hammack said. "It's also fiscally prudent in the current fiscal situation that the nation is in."
Venkataraman said the initiative, which the Army is looking primarily to third-party financing to fund, could help the service rein in costs at a time when defense spending is facing intense scrutiny.
"The Army is coming in at a time when prices are at historic lows. Solar power has become quite cheap, and in many states, solar companies are able to provide power at prices that are lower than the local utilities," he said. "It's possible the Army may be able to not only encourage solar, but they may be able to save money comparable to their existing utility bills."