Permission to use this reprint has been granted by the publisher Financier Worldwide.

The future of solar energy in the US appears uncertain. With investment tax credits set to expire in 2016 the solar industry may lose the tax subsidies that have been one of its main engines of growth. The tax equity investor base for solar energy projects may disappear if Congress broadly closes tax deductions in order to raise revenue. The barren prospect for the future of the solar energy industry reflects a bleak past. Efforts to create utility scale projects using parabolic trough technology failed owing to difficulties posed by the technology. Photovoltaic panel technology may be more practical, particularly in opening the way for distributed solar projects, but its image has been marred by the well-publicised travails of the solar panel manufacturing industry in the US and other countries. A trail of bankruptcies over the past two years has left the solar industry with a flighty reputation. The solar winds appear to be blowing in the wrong direction, particularly when one considers the historically low cost of natural gas.

And yet solar energy remains compelling, particularly as uncertainties about the long-term environmental impact of fracking technology foment a steady drumbeat of opposition to cheap natural gas. Demand for distributed solar technology, already strong, will continue to grow with the aid of renewable energy mandates at the state level. Those renewable portfolio standards require a certain percentage of renewable energy in a state’s overall energy supply. As an example, California enacted in 2011 a law requiring the use of 33 percent of all electricity consumed in the state by the year 2020 to be generated from renewable energy sources. Despite the challenges in the solar panel manufacturing sector, the silicon-based technology of solar panels has proven to be reliable and scalable. Solar energy indubitably helps advance the public policy goals of environmental sustainability and energy independence. It appears aligned with the policies of the second Obama administration.