It's no wonder; some of the so called "experts" have been so wrong over the last twelve months, they have lost their bearings on what is right. Late last year, we predicted panel prices would drop, and even when most industry experts continued to doubt it, we also predicted the ITC would be renewed in '08 (see November '08 Op-Ed).

Today panel prices are down over 20% and the ITC has given us unprecedented visibility into solar incentives for the next 8 years.

The truth is not all the recent news is bad and in fact some of the latest developments in solar have created some of the best news of my over 20 years in this industry. While we are looking at 2009 with a mix of hope and trepidation, the "concern" or "trepidation" we look forward with are mild terms for what many fear is coming in this New Year for traditional industries.

However, "hope" and "opportunity" are what the solar industry has to offer, and opportunity and growth is what we intend to deliver.

To re-cap '08, Premier Power had a number of firsts:

One of the first and largest "Solar Share" utility programs in the nation (over 1 MW in size) which allowed utility customers to opt into a SMUD program to purchase their energy from a solar source.

Integration of the nations largest bi-directional trackers that turned "brown fields" (contaminated property) into green energy producing land.

Record revenues and continued profitability (profitability is not a first; in fact we have been profitable for over three years in a row).

Even as of year end, Premier was working around the clock to meet demand and kick off the New Year with momentum.

Yet, with the media's prevailing fixation on "doom and gloom" even seemingly good news is twisted to the negative.

The top industry analysts and financial writers now lament the drop in solar panel and silicon prices as if the entire solar industry is made up of "upstream" panel suppliers and silicon producers without considering the positive implications these cost reductions have on grid parity and ongoing growth in other areas of the solar industry.

For solar developers and integrators the reduction in module prices is improving margins and increasing the number of viable solar projects. More over the commitment of the new administration to a green infrastructure is already showing signs of creating unprecedented demand in 2009 and beyond.

In 2007, the average RFP we encountered in the US was under 1 MW. In 2008, numerous multi-MW projects were in play. Leading into 2009, we are now seeing an increasing number of projects in the 10's and 100's of MW's.

Further solar projects are benefiting from a series of shifts; first in the decreased costs of labor and materials, second in the national commitment to growing a green infrastructure, and third, as counter intuitive as it sounds, in financial markets perspective relative to risk and return.

As for the decreased costs of labor and materials, the unfortunate failure in the housing and construction market provides a readily available work force, skilled in construction that is able and willing to meet growing demand for solar build outs.

Steel, aluminum and other commodity prices that make up our balance of systems cost are more favorable than any time in the last four years.

As for the nations commitment, long before President Obama or the latest renewal of the ITC, over 40 states had put in place renewable energy standards that were mandated to be achieved or exceeded by 2010 to 2012.

Despite all the noise and excitement solar has created to date, the industry has not even begun to scratch the surface of the demand that will be created for the next five to ten years and beyond as a result of these mandates.

As for project finance, many analysts have said that project finance has all but dried up. Wrong again, in fact we believe 2009 and 2010 will create a project finance boom. In 2007 and 2008 when we met with project financiers we could tout two solid and compelling facts about solar project finance in the US.

First for municipal and state projects we could claim limited or virtually no capital risk, and second we could offer solid rates of returns that would be paid out annually for over 20 years in annuity type structures.

In what is one of the great ironic moments of last year, we literally had fund managers scoff at us stating that "our lack of capital risk and low double digit rate of return (unlevered)" could not compete with the "risk and return profile of their highly leverage, government backed CMOs" and the like.

Obviously their "lack of concern" for capital risk was a major mistake, and as a result their expected rate of return has gone the opposite direction. Now in '09 our model of project finance creates the perfect salve for a badly burnt market.

Our proposed project fund consisting of European installations with federally backed feeding tariffs and US installations that are expected to include utilities, municipalities and other infrastructure can offer annual annuity like payouts over 20 years secured by local and foreign governments with double digit yields.

Then there are the facts, and plain old common sense that should be used to quash the simply bad information that seems to circulate around the solar market place. Many people seem to think solar lives or dies with the global warming argument or oil prices. Solar is not tied to oil cost, as most of our actual home heating costs are tied to coal not oil.

Even a slight reduction in coal use or increase in carbon taxes greatly favors us and in this fight solar clearly wears the white hat. Further solar is the right choice regardless of your position on global warming.

When energy is abundant in nature and being delivered directly to your home or business it simply makes sense to capture that energy and use it where distributed; this is how solar works. As energy costs rise and solar becomes less expensive broader adoption is taking hold.

People argue that solar cannot survive without subsidies. While solar is subsidized so is the oil industry and farming. In fact many major industries have required subsidies to scale to the point that they can be made cost effectives for the masses.

As with other subsidized industries, as solar gains broader adoption the cost will continue to decrease and innovation and efficiencies will increase its output; as this happens subsidies will be less important.

The bottom line is that a number of things remain consistent in every financial market melt down and the pundits are becoming the most consistent performers of all; their buy at the high and sell at the low recommendations are starting to run in predictable cycles.

In 2000 it was Marry Meeker and the tech bubble, and now it is a new crop of experts. But despite the whipsaw reactions of analyst recommendations, the underlying industries continue to perform. Just as tech and the internet continued to deliver exciting new changes that improved our lives, despite what the market was doing on a daily basis, Solar and new energy sources will do the same.

The truth is there are a series of factors favoring Solar and the green infrastructure future:

1) Solar is passive and has a proven 25 year plus track record of reliability and safety.

2) Solar energy costs are dropping and national energy rates have been rising on average 6% per year for the past 20 years.

3) As a result of state and federal mandates solar is positioned for exponential growth in '09 and the coming years.

As you look at this economy and the new administrations plans for the coming years consider this. When people think back over history and recall the great industrialist names of the 1900s, names such as Carnegie, Morgan and Rockefeller, they must realize how these individuals made their money during the "recessions" and "depression" of their times; Infrastructure.

They built the rail roads and steel foundries and energy industries that we needed to drive our nation forward. Today we are building a new infrastructure, an energy infrastructure that will make us less dependant of those dynasties and governments that don't like us very much and put more of our energy needs back under our own control.

As we build our new infrastructure new fortunes will be made, freedom secured and opportunities created. This is what we believe '09 has in store for solar and we hope you will choose to join us.

We certainly do not want to dismiss or ignore anyone's pain during these troubling times, but when considering how we are going to make our way through today's challenges, think back to great industrialists of this nation's past.

If possible we would encourage you to opt out of the recession and join in on the solar revolution. In '09 the good solar operators - the profitable ones, will continue to grow and succeed. See you in the Sun.

Related Links
Premier Power
All About Solar Energy at SolarDaily.com

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