A row between China and the United States over imports of cheaper solar products won't be the sector's death-knell but will ultimately speed innovation and cut costs, a top U.S. renewable energy official said.
Seven U.S. solar manufacturers last month asked the Obama administration to impose duties of more than 100 percent on China solar imports, which they said were unfairly undercutting U.S. prices and destroying American jobs.
"It's inevitable. It had to happen. I don't believe that in the long run it does anything more than accelerate the pace at which we need to generate new technologies," said Dan Arvizu, director of the National Renewable Energy Laboratory in Golden, Colorado. NREL is part of the U.S. Department of Energy.
"From the perspective of the clean-tech sector, it's not a death knell to the trend or growth of the industry. It's a rough spot," Arvizu said in an interview on Friday at the Singapore International Energy Week.
The controversy comes at a sensitive time in U.S.-China trade relations, which are plagued by U.S. concerns over market access in China, Beijing's treatment of intellectual property rights, and raging debate over the value of China's currency.
The U.S. group that filed the complaint said aggressive dumping of solar products and huge subsidies from the Chinese government have distorted the global market and cost the U.S. industry thousands of jobs.
Arvizu said while the Chinese had been successful in building a vast solar industry and helped drive down global costs, government patronage could not last.
"I don't think that over the long haul you can continue to subsidize at those levels. I think the next generation (of technologies) will take over and there will be new wave of market competitiveness."
A weak global economy and excess supply of solar panels has hurt producers globally and pummelled share prices.
U.S. solar companies SunPower Corp and First Solar Inc said on Thursday they would slash spending and drive down costs amid the steep drop in prices for their panels.
NREL helps develop clean energy technologies from solar to wind, green buildings and biofuels with the aim of reducing the risk for private investors.
Offshore wind, next-generation geothermal and wave and tidal power remained promising but still costly, Arvizu said. Energy efficiency was an easy win. "The easiest thing to do is make the building code acknowledge energy usage. It sounds pretty obvious. We don't do that," he said.
He said the current solar bubble could help drive development of new generation solar, such as ink-jet printing solar cells on to a flexible surface, which does not need high pressure or temperatures and could cut costs.
NREL is already trialling ink-jet production, with the cost to build a large-scale plant around $2 per watt of production capacity. But Arvizu said it could take another decade of further development and scaling up trial manufacturing plants.
Arvizu said the recent bankruptcy of U.S. solar firm Solyndra after it received a $535 million government loan guarantee underscored that there were always risks in fostering and trying to commercialise some technologies.
The failure of Solyndra, which had close ties with NREL, has become a political embarrassment for the administration of President Barack Obama, which had championed the loans as a way to create "green energy" jobs.
A second recipient under the controversial Department of Energy loan programme, energy storage firm Beacon Power Corp , filed for bankruptcy late last month.
But Arvizu said most of the investment bets under the $35.9 billion energy support programme were viable. So far about $25 billion of the programme's loan portfolio had been finalized.
He expected the controversy over Solyndra to speed laws to scrap the programme in favour of a more independent Clean Energy Development Administration.