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As Dow Jones reports, consolidation or mergers are likely to be next for the solar manufacturing business.

In order for the U.S. solar manufacturing industry to have even a semblance of global prominence, let alone dominance, lawmakers, who are currently juggling energy independence with oil supply security, acknowledge the necessity of market consolidation.

Let’s face it: for international companies, U.S. solar is not a viable option right now. Solar barriers like efficacy, dependability, pace of deployment, and transmission availability are causing problems for even U.S.-based companies.

Solar manufacturers may be able to give the same level of workmanship, life-span guarantees, and service solutions to solar systems currently enjoyed by the traditional energy business if they integrate tiny solar and startup companies.

As Michael Liebreich of New Energy Finance puts it: “If NRG purchases 100 megawatts of solar energy, it needs the certainty that system failures will be addressed by an experienced maintenance crew in a timely and affordable manner under an ongoing contract maintained and operated by the same company for as long as it is in operation. Few solar cell producers are currently at that place, according to Liebreich, and just a few more will do so in the coming years.

According to Deloitte Consulting’s Phil Schneider, international investment in U.S. solar requires a wide range of incentives, not the least of which are tax breaks provided by the federal government. It’s important to note, however, that reliability and serviceability are still major factors.

How convinced are international investors that the United States is a ‘excellent foundation’ for the emergence of solar in the United States? A lot of faith, based on Schott Solar’s new manufacturing facility in Albuquerque. Over the course of a decade, this plant is expected to grow to 800,000 square feet and employ 1,500 people.

Acme Group, an Indian solar power firm, just leased one gigawatt of eSolar’s CSP technology. The leaders in the solar industry, however, are eSolar and First Solar. First Solar recently acquired solar installer Turner Renewables and purchased a 10% stake in another solar installation, SolarCity.

What about the small solar companies? Because of the slump in natural gas prices (which has decreased by 80% since the summer of 2008), which has led to cheaper manufacturing and more manageable (if not delightful) home heating bills, many solar companies are struggling with high inventories, deflated revenues, and the perception that solar has reached and passed its peak in the United States.

A 60 percent drop in the World Solar Energy Index during the same time period suggests what Liebreich calls a “Solar and wind vs gas” link. Solar, according to Liebreich, cannot and does not compete with oil. As gas costs rise, solar becomes more viable, and the field is ripe for solar mergers and acquisitions, which may and should be considered as the natural progression of a new market getting established.

It is estimated that the number of solar panel producers in the United States is around 60, with an additional 20 firms involved in solar peripheral parts listed on the website of the United States Energy Information Agency (batteries, parabolic collectors, etc.). There are an equal number of solar startups that are either too new or involved in a technology that is too obscure to be mentioned in the mainstream media.

That’s not to suggest that the future isn’t bright, but it is. Solar energy harvesting devices must pass three key criteria before they can ever be considered viable on a commercial scale: they must be tested in the field and proven to be long lasting, efficient in collecting solar energy, and cost-effective.

With the current recession serving as a testing ground for solar, winners and losers alike can learn from one other. Overall, the solar industry is headed for a reorganization, and may the best team emerge victorious.