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Solar Fighting for Its Day in the Sun

Since the time of America's founding there has been a healthy debate over whether the federal government or state governments should play the more dominant role in a variety of public policy fields.

Energy policy is no exception, so I wasn't terribly surprised last week when it was announced that a group of solar cell manufacturers, including Evergreen Solar (Nasdaq: ESLR  ) , First Solar (Nasdaq: FSLR  ) , Kyocera (NYSE: KYO  ) , BP (NYSE: BP  ) , SunPower (Nasdaq: SPWR  ) and Suntech Power (NYSE: STP  ) , announced that they had joined forces to form the Solar Alliance.

Unlike the Solar Energy Industries Association (SEIA), a trade association working to expand the use of solar technologies in the global marketplace, the Solar Alliance will focus its efforts at the state level. The initial list of states to be targeted includes California, New York, Arizona, and Florida.

The significance of this event should not be underestimated. As I mentioned a while back, SEIA is fairly weak in terms of size, strength, and relative influence -- especially when compared with some of today's more dominant energy players.

To be sure, the oil, nuclear, and coal lobbies will remain powerful forces at the state level. That said, smaller solar is already receiving a good deal of political support at that level. In California, Gov. Arnold Schwarzenegger has enacted a Million Solar Roofs Plan. It's also gotten a boost in Arizona and Florida, where solar is more economical, thanks to those regions' sunny dispositions. The industry could begin to make serious state-by-state headway by focusing its efforts on states already receptive to solar.

While such progress may not be nearly as beneficial as the inclusion of generous solar subsidies at the federal level, it is, perhaps, a more practical political strategy. As I explained last month, current pending federal legislation is still just a bill and might well remain that way. Longer-term, if the alliance can help create a patchwork of generous state-level subsidies, it could help facilitate the adoption of a more aggressive and uniform solar policy at the federal level.

The creation of the Solar Alliance is yet another signal that the solar industry is growing and will be a political force to be reckoned with in the future.

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