Whether you are a frog or an environmentally conscious individual, it’s not easy being green.
After the record high oil prices of last summer, the shift to renewable energy seemed inevitable. Boosted by consumer demand mostly in Europe, solar energy company First Solar, the industry leader by market cap, posted increased third quarter net income of $99 million dollars up 115% from the same period a year earlier.
Had the economic crisis not happened the future would look, well, bright.
The renewable energy sector, which had received a boost from the recent passage of the federal investment tax credit, suffered a setback when the people of California, the largest potential market for the use of solar energy in the United States, defeated Propositions 7 and 10 which would have created new mandates for utilities and incentives for residents this past Election Day.
The rejection of the initiative does not bode well for solar energy companies, which hoped to sell solar panels directly to individuals and utility companies in the sun kissed region.
Even First Solar who just last week had announced a contract with California based SolarCity, a residential solar panel installer, will need to back out of or rescind from future agreements because the panels will still be too expensive for the average American consumer.
And what about Europe? First Solar’s sales in the European market also depend heavily on government mandates and incentives. And because of the demand in Europe, solar panel production improved in efficiency, quality and price. Perhaps Europe’s green initiatives alone will save the sector.
But without California, the solar energy companies can expect bleak stateside sales and flat profits from the U.S. business year to year. California, on the other hand, can expect weak job creation in areas that supports the industry.
Looks like the ultimate environmentally friendly energy source will continue to be powered by, natural gas and coal but not sunlight, for the foreseeable future.