Solar Companies and Utilities: Friends or Foes?

Written by Jennifer Kho

As the solar industry celebrates the passage of $18 billion in renewable-energy tax credits, a more overlooked portion of the package is also generating plenty of discussion among solar companies.

The bill signed into law earlier this month opens the credits up to utilities, which until now weren't eligible to receive the credits. And companies are trying to figure out just how that provision will impact the industry.

Julia Hamm, executive director of the Solar Electric Power Association, said that while the eight-year investment tax credit is an important win, the removal of the restriction barring utilities from taking advantage of the credits is the most exciting piece of the bill for her association.

"A lot of utilities do want to operate and own and they have the tax appetite [to take advantage of the tax breaks]," she said. "Now we have more options available -- owning is now an option. The more opportunities they have to incorporate solar into their general mix, [the better]. And this could be the option needed to make it a reality for them."

TheStreet.com TV: Solar Energy: Can You Afford It? (Video)

Julia Hamm of the Solar Electric Power Association tells Debra Borchardt that solar is striving to become more affordable for the residential market.

To watch the video, click the player below:

More utilities entering the solar industry could have myriad impacts.

Southern California Edison, which in July said it would use First Solar (FSLR Quote) panels for the first phase of its 250-megawatt commercial-rooftop project at a fully installed cost of $3.50 per watt, reportedly told Suntech Power (STP Quote) it is only willing to buy solar panels at more than 20 percent below average market prices, according to Dow Jones Clean Tech Insight (via The Wall Street Journal's Environmental Capital blog).

"It probably scales a large part of the industry to see that they have competitors willing to sell [panels] for so much lower than they are willing to sell them," Hamm said, adding that she can't fault the utility for wanting low-cost, clean power.