California solar firms are finding photovoltaic panels hard to come by, and the shortage is expected to last until the European winter makes it difficult to install units on German rooftops, according to numerous industry sources. The reason, they say, is that Germany?s recently reauthorized renewable energy law has pushed demand for photovoltaic modules through the roof, so to speak, outstripping production capacity and enabling manufacturers to fetch top dollar in the northern European nation (<i>Circuit</i>, May 18, 2004). ?A lot of manufacturers have dedicated their production there,? said Ron Kennedi, general manager for Sharp Electronics Solar Systems Division, one of the biggest producers. ?Some of the manufacturers do not have enough product to go around.? As a result, wholesalers and installers are waiting to take delivery and after years of steady price declines are paying a bit more for photovoltaic modules. Kennedi characterized the recent uptick in prices as a stabilization, but a June price survey by the solar market analysis firm Solarbuzz shows that U.S. prices are up 2 cents a watt over last month to $4.96/watt peak capacity, compared to $6.77/watt in Europe. Under the German renewable energy law, utilities there must purchase solar power produced on the rooftops of homes and businesses for 69.4 cents/kWh. California utilities must pay the retail power rate, which ranges on average from 12 to 14 cents/kWh. California rebates in investor-owned utility territories were set at $3.80/watt capacity in 2003 and are to decline by 20 cents/watt every six months (<i>Circuit</i>, May 14, 2004). ?Beginning in March, we started seeing a tightening of module supplies,? said Anoosh Mizany, president of Solar Depot, a wholesaler in Petaluma. ?It?s gotten worse. There seems to be a bottleneck in manufacturing.? Summer is the key installation period, said Mizany, and manufacturers have been working around the clock to meet demand. ?All our plants are working at full efficiency,? said Sarah Howell, corporate communications director for BP. The company has four solar plants. BP Solar is able to meet the demand of its current customers, said Howell, but may consider adding production lines if the high demand for photovoltaic modules continues. ?Most shortages are vacuums, and they will get filled,? said Kennedi, who noted that Sharp Solar has been working ?full shifts? and will be opening a new production line at its Memphis, Tennessee, plant by October. Worldwide, the company is in the midst of increasing its annual manufacturing capacity from 248 to 315 MW with other new production lines at its plants in Shinjo, Japan, and Wrexham, Wales. Installers say that Kyocera Solar, Inc., is quoting September delivery for modules orders, said Tor Allen, director of the Rahus Institute in Martinez. The shortage, he said, is manufacturer-specific. Nevertheless, many California installers are scrounging for modules and paying up to 10 cents more per watt when they can find them, according to Barry Cinnamon, president of Akeena Solar in Los Gatos. ?We?ve sold jobs at a certain price and can?t pass that along to the customer,? said Cinnamon. In other cases, the only way the company has been able to complete jobs is to change the type of modules it ultimately installs after entering into sales agreements. Some installers cannot obtain modules at all and have resorted to calling other installers to see whether they have extra panels. ?We?ve been getting a lot of calls,? said Cinnamon. Retaining California?s leading role as a solar power generator will require stable incentive programs, said Allen of the Rahus Institute. Rebates are declining, and the state?s solar tax credit is set to expire at the end of the year. The California Energy Commission is considering a possible restructuring of the state?s incentive programs, including switching to the German model. Any recommended changes are expected to be outlined in the 2004 update of the state?s Integrated Energy Policy Report, which is due in November.