Southern California Edison (EIX) Could Give Solar Industry a Big Boost

In what is likely to be the biggest expansion of renewable power, Souther California Edison (EIX) plans to put solar panels on warehouse roofs. The move is expected to provide about 250 megawatts of power — all of it from renewable energy. Such a plan would be expected to accomplish two things:

  1. Reduce the cost of solar power.
  2. Expand the market for solar power.

Unfortunately, the solar industry is lukewarm toward the project, citing concerns that the project would turn the California utility into a monopoly. Since the project will be financed for those who pay Southern California Edison for their power, start-ups are concerned that they will be muscled out. After all, they can’t access that kind of regular cash flow for funding.

But, even though some in the solar industry are upset about the move, they are at the same time admiring. The Green Wombat reports on the response of some in the solar industry:

‘Even though this program is kind of taking bread out of our own mouth, the demand for solar will keep going up,’ says Mark McLanahan, senior vice president of corporate development at MMA Renewable Ventures (MMA), a San Francisco firm that finances commercial solar arrays.

‘What they have announced is extremely visionary,’ McLanahan tells Green Wombat. ‘It’s game changing and opens up whole new realms of what solar can do. That’s exciting.’ On the other hand, he says, ‘It’s certainly possible that a young, growing industry that is pretty fragmented could be hurt by this rather than helped.’

Of course, not everyone will be as left out as MMA. First Solar (FSLR) is tapped to supply the 33,000 solar panels that EIX needs to complete its first project.

And the point is that this expansion of solar power use could mean good news in general for the solar industry. It raises awareness of what can be done and provides a model that could make solar power scalable and supportable. For now, the project is still awaiting state approval.

Now if only we updated our outdated power infrastructure . . .

Disclosure: I do not own EIX, MMA or FSLR.

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