01/23/2012 04:32 pm ET

Colorado's Solar Industry Faces Transition: Renewable Energy Quotas Are Met, Subsidies Decrease

Is the sun setting on Colorado's renewable energy sector? Has the wind left our sails? Can we conjure more stale metaphors for renewable energy that relate to the industry's possible contraction? The answers are maybe, perhaps, and one emphatic yes.

The last decade in Colorado has seen a trio of legislative efforts increasing renewable energy production in the state. Amendment 37, passed in 2004, originally set a quota of 10 percent green energy supply in the state by 2020. This quota was upped to 20 percent in 2007 with HB 1281, and then 30 percent with HB 1001 in 2010 (This brief history neglects finer points of the legislation, including rebate amounts and quota distinctions between Xcel and smaller energy cooperatives).

A handful of state and federal subsidies, loans, and rebates have also eased Colorado energy companies down the renewable path, but as energy quotas are increasingly met, industry experts fear withering public investment will lead to a broad decline in the state's appetite for more.

Some insiders believe Colorado has reached a "plateau" where outside incentives for renewable energy production decrease and -- despite public desire for more supply -- market forces conspire to restrict further growth. Ned Harvey, COO of the Rocky Mountain Institute, a Snowmass-based energy consultancy, points out that although "modules are getting cheaper and cheaper and cheaper... as far as we can tell, we've seen no real reduction in process cost."

"The landscape will be more challenging for renewables," said James Newcombe, director of electricity practice at RMI to the Denver Post.

Despite an emphasis on streamlining process to cut costs, technological innovation in solar still holds promise: three Colorado roofing contractors were recently approved to be the first in the nation to sell solar shingles -- a roofing material developed by Dow Chemical. The technology allows homeowners to produce energy on a small footprint, with an emphasis on ease of installation.

Future industry growth may rely more on increased efficiency working with utility companies and local governments than on a decrease in the price of solar equipment. With the advent of new business models such as community-owned solar cooperatives, Colorado's renewable energy sector may well be primed for a decrease in process cost and with it, increased growth.