How will the BP oil spill influence the U.S. solar energy industry?

Exploding oil rigger
Is BP's disaster an environmental 9/11?

It’s big, it’s bad and it’s ugly.  The BP oil spill fiasco is rapidly proving to be the biggest environmental disaster since… well, maybe since the dawn of human history.

The environmental and economic consequences of the spill are already proving dire.  And with 210,000 gallons of crude (at a minimum – some estimate are much higher) spilling into the sea each day, things can only get worse.  For many Americans it feels like a punch to the gut.

But the BP oil spill could turn out to be the wake-up call  – an environmental 9/11, if you will – that triggers real change in public sentiment and policy regarding energy and the environment.  A disaster of this scale will inevitably raise public awareness of the environmental consequences of energy use. While it’s unlikely that many Americans will be willing to give up the lifestyles they’re accustomed to, the gulf spill could be enough of a tipping point in public consciousness to cause more Americans to seriously consider the long-term consequences of their energy choices.

How will this affect the American solar industry?

Well, it may be too early to tell.  But here are a few possible consequences:

  • Rising energy prices. For the first time in recent memory, Americans are now more likely to oppose offshore oil drilling than support it.  And public concern over the safety of offshore drilling could result in legislation and restrictions on the practice.  Even some Republicans, such as governors Charlie Crist of Florida and Arnold Schwarzenegger of California, are beginning to believe that offshore drilling is not worth the risk.  The Gulf oil disaster could very likely influence legislators and regulators to limit offshore drilling and/or require safeguards that could raise its cost.  Either of these scenarios could contribute to rising energy prices.  Which, of course, makes the payback from solar much more attractive.
  • A stronger push for renewables. A May, 2010 poll by the PEW Research Center indicates that Americans overwhelmingly (73%) support increased funding for renewable energy, including solar, wind and hydrogen.  Federal and state renewable energy grants, tax credits and other incentives already abound.  But the spill may trigger even more generous incentives for renewable energy, as well as legislation requiring more energy to come from renewables – both factors that encourage growth in solar.
  • Greater public demand for solar and other renewable energy. The highly publicized BP disaster may get more people thinking harder about their own use of fossil fuel and its long-term consequences.  This could lead to  more demand for solar and other alternatives to fossil fuel – especially if prices and payback are favorable.  Given that solar currently supplies only a tiny fraction of the energy requirements of the United States, even a small uptick in demand for solar installations could result in hefty growth for the industry.

Next up: Will growth in demand for solar result in increased business for solar companies across the board?  What changes can we expect in the industry as a result?

Anne Michelsen is a freelance writer who helps Green and renewable energy companies enjoy increased attention and greater sales through dynamic sales copy and insightful content.

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