With roughly a month to go before a key U.S. solar incentive is set to expire, a familiar phenomenon is emerging once again: a rush to install projects, according to Gigaom.
Solar panel makers Suntech Power and Trina Solar both noted a surge in sales for the current quarter during conference calls with analysts to discuss earnings last week. The incentive is a cash grant that covers 30 percent of a project's cost and is set to end at the year's end. Congress created the incentive in 2009 as an alternative to a 30 percent investment tax credit.
Project developers can claim the cash grant much sooner than the tax credit which, by the way, won't expire until the end of 2016. The money comes in handy when lining up loans isn't easy. The prospect of extending it is unclear, but the solar industry's main trade group, Solar Energy Industries Association, remains hopeful that a last-minute extension will happen.
Meanwhile, many solar equipment makers are expecting to increase shipment to customers who want to get in line for the grant before it disappears. The program rule requires projects to start construction before the year ends (and be completed by 2016) in order to claim the grant.
"We see a strong pulling demand due to the potential cash grant change, and we expect at least 50 percent sequential growth in shipment in Americas in the fourth quarter," said Andrew Beebe, Suntech's chief commercial officer, during a conference call.
Beebe also noted that while Suntech executives are optimistic about the grant program's survival, "We think we will thrive either way. Everyone is prepared to go back to an (investment tax credit) world."
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