California's US$13bn budget deficit might be dwarfed by the US$15.6 trillion black hole on the US federal balance sheet that is sucking up all hope of continued national support for solar after 2016. But from Sacramento to Washington, publicly funded support for clean energy appears like a luxury rather than a necessity to many policymakers.
News from other regions and manufacturers has not exactly created a glowing picture of the industry either. LDK Solar became the latest this week to add to the portrait of gloom in manufacturing after it announced a 5,000 reduction in employees not long after First Solar announced a 30% cut in its workforce.
As Tea Party activist austerity campaigns leach into mainstream politics, the downstream solar industry is also pondering an uncertain future – at least until after November's elections.
Carrie Cullen Hitt, vice president of state affairs for the Solar Energy Industries Association, said: "We are in a time of change in the solar industry both with national and state level policies across the US. I'm certainly experiencing it in all the work that I do: with different policymakers in the last election, changing times in the solar industry and obviously the larger macro-economic picture has resulted in a different view point in many of the states that we work in and how policymakers approach our issues."
But solar optimists are attempting reclaim territory from the budget austerians and counter that the market will continue to flourish, even in the absence of state and national government support – but only if the industry makes itself future proof.
Danny Kennedy, the Australian founder of solar lease company Sungevity in Oakland, California, said that the message was clear to the installers and developers downstream: reduce costs to keep the public and consumers on side.
"We're trying to address the post-recession American reality with a few basic approaches to lower our costs. But whatever we can do to squeeze customer acquisition costs, our installation costs, our capital costs in financing our systems through third party leases.
"The hardware guys are doing their bit and we have to do our bit with the sales and finance business that we're in.
"The opportunity is great; we're all growing gangbusters, the cost curve is on our side, we've got some allies in government.
"[But] it is naive to think we will get the relatively free ride we've had. We were an interesting alternative to date. We're now getting significant enough to be an annoyance. We're the mosquito that's been biting earlobes to be swatted away. But we need to use our muscle."
Wade Crowfoot, California Governor's Office of Planning and Research said there were lots of reasons to be cheerful for the solar industry if it used its muscle creatively to overcome some serious challenges.
"We're very bullish on what's happening in the solar market both in California and nationally. We're actually feeling like a lot of progress is being made on the renewable energy front."
California's solar installations have doubled in the past year, the state Renewable Portfolio Standard for 2010 had been reached and was on track to meet its 2020 goal and the state already had 1GW of distributed generation, he pointed out.
But much of the growth of solar in California was largely down to ratepayers funding programs like the RPS, California Solar Initiative and Net Energy Metering, rather than taxpayers.
"There's no doubt there's increased sensitivity around public investment and costs," he said.
"When we talk about a cuts-only environment in California, a lot of the resources that are used as incentives come from ratepayers. We're dealing with a fundamentally different budget when we're talking about renewable energy. We use very little of our general fund to fund solar. We recognize that there is a finite source of resources from the ratepayers and we're focused on keeping those in line while continuing to drive demand."
But he said that balance was needed and developers themselves needed to "simplify and amplify" the message that a solar market creates jobs, consumer choice and advantages to the grid benefits.
"There is a cuts-only environment in state governments at large in terms of procurement programs. Those entities that are not interested in the growth of solar say now is not the time, let's push this off five years down the line when the economy is better. That is an argument we have to deal with in California."
Strategic action was crucial to counter this argument, he said. "When someone comes to us to talk about a project, whether it's 250MW in the desert or a series of rooftop installations, we're less interested in the number of MWh produced than jobs. Policymakers in California are fundamentally focused on employment."
Amid job layoffs in other parts of the value chain, installation and project development in the US were sectors that have seen huge growth to more than 100,000 in the solar industry.
That figure is not far off the numbers employed in the US coal industry and could grow to an estimated 1-2 million over the next decade, said Kennedy.
Policymakers often get hung up on manufacturing, but there were three times as many jobs created after the PV panel left the factory gates, he added.
Getting projects off the ground was a bureaucratic headache that created a barrier to "boots on the roof", he said.
"We're still spending ridiculous amounts of money per watt on back-office paper shuffling. I don't mean to be rude about it but bluntly when you're operating in dozens of different utility territories and hundreds of authorities [have] jurisdiction over our rooftop projects, you have to manage those with this insane variability that's just like brain damage. The crazy quilt of American rules and regulations means we have more people working on that stuff than we do on the boots on the roof.
"If we can reduce [permitting costs] that would reduce costs by .25c per watt - that's a boon to the market and us when the rebates have gone away."
California's government was also attempting to do its bit to reduce costs for the developers by streamlining the permitting process, updating the state building codes to create standards for solar installations and updating the interconnection process, said Crowfoot.
"Our interconnection permitting process was not intended for hundreds of hookups a year from renewable energy companies," he said. "It was envisioned to facilitate a central station model where a new permit would be approved once every couple of years. So we have a problematic and irrational system that doesn't connect to our procurement process."
As the upstream industry contracts, budget purse strings tighten and ratepayers' pockets bottom out, is all this legislative and regulatory effort worth it?
Brennan Louw from ClearSky Advisers based in Toronto, said that it is possible to continue to grow a solar market in an era of tightening state budgets. The trend lines of the increasing cost of electricity going up as costs of solar going down are not going to change, he said.
"State level support is an essential driver of PV in the US and makes or breaks markets across the country.
"There is huge potential - Germany had 24,800MW installed at the end of last year – that represents 32% of peak load in that country. If the US were to get to even half of that 16% we'd be looking at an incredible market opportunity of well over 100GW.
"The challenge [will be] for stakeholders, in particular developers and manufacturers, to identify these opportunities as they emerge."