Industry Views on the Effect of Proposed Budget Reductions on the Ability of the U.S. Photovoltaics Industry To Compete in Foreign Markets

The Solar Photovoltaic Energy Research, Development, and Demonstration Act mandated a 10-year, $1.5 billion program of accelerated research, development, and demonstration of solar photovoltaic energy technologies to lead to early competitive commercial applicability of such technologies. The long-term objective is to produce electricity from photovoltaic systems which is cost-competitive with utility-generated electricity from conventional sources. Lower cost photovoltaic technologies have been developed, but the current average price is still considerably higher than the Department of Energy (DOE) goal. The program includes both domestic and foreign market development and commercialization programs to make the systems more competitive in foreign countries where the cost of conventional energy sources is higher. DOE developed the International Market Development Program and the United States also participated in, or has under consideration, a large number of joint projects under bilateral international cooperative solar energy agreements. The 1982 budget would reduce the Federal expenditures on research and development and would completely eliminate the DOE International Market Development Program. It also proposed eliminating specific funding for the international agreements except for the U.S.-Saudi Arabia joint agreement. A GAO survey of firms indicated that those which are highly dependent on Federal programs foresaw more adverse consequences from the proposed funding reduction. Firms with primarily nongovernmental funding foresaw little or no negative consequences. Nearly all of the firms recognized the value of the Federal research and development programs in accelerating the development of the technology and viewed activities in foreign market development as important. Most of the firms felt that U.S. industry had received little benefit from the international cooperative agreements and that, although U.S. technology is still ahead of its foreign competitors, a reduction in the research and development budget might change the competitive position of the United States.