Washington, D.C. [RenewableEnergyAccess.com] This week, Rhone Resch, the executive director of the Solar Energy Industries Association (SEIA), testified before the House Energy and Air Quality Subcommittee to make a case for the industry’s place in the upcoming debate over what’s sure to be an expensive, broad, and most-likely contentious, national energy package.
Over a decade has passed since a comprehensive package of U.S. federal energy legislation emerged from Congress and was signed into law. Last fall, the House passed a package known as H.R. 6, but reconciliation with the Senate ruptured over issues of the gas additive MTBE, drilling in the Arctic National Wildlife Refuge (ANWR) and the overall cost of the bill’s many subsidies to American taxpayers.
Because of their varying views on these and other energy issues, legislators from both sides of the aisle will once again be embroiled in debate over an energy package — and again, everyone with a stake in energy will be part of the lobbying crescendo that’s already underway.
Representing the over 20,000 employees in the U.S. solar industry, Resch was a part of that effort. Other panelists included representatives from a wide spectrum including the Union of Concerned Scientists and the Nuclear Energy Institute which is calling for a new phase of nuclear power plant development.
This year’s energy package will use last year’s bill as a starting point. And like last year’s bill, Industry sources predict that favors to the traditional coal, oil, gas and even nuclear industries will likely dominate the final outcome, but further concessions to the clean energy industries may be necessary for the bill to gain enough support to pass. There is an effort this year for proponents of the package to not put forward a bill as divisive to both sides of the aisle as the package was last year. Resch’s testimony is both a crucial part of ensuring the solar industry’s demands are voiced and a sign of a somewhat more inclusive process leading up to Congressional debate on the bill’s final outcome.
Resch called for some very specific items. The first major issue for solar that needs to be addressed at the federal level is a national standardization for interconnection of solar equipment with electric utilities. Currently a patchwork of different state and utility-based policies are holding back many solar developments.
“Solar prices — and those of all distributed generation, from fuel cells to small wind turbines — are artificially inflated by this patchwork, which requires the industry to custom design, test and certify a system for each new state or utility requirement,” Resch said.
He compared this to consumers having to use a different phone or have a specific adapter for every state in the U.S. Manufacturers, particularly on the solar inverter end, are forced to accommodate for this patchwork and solar as a whole misses out on entire markets.
“This regulatory redundancy is choking the industry, and we need a single, nationwide procedure,” Resch said.
Another utility-based impediment that could be corrected through national standards is that some utilities will sometimes hold small solar electric systems up to the same expensive and drawn-out regulatory requirements that commercial-scale power plants are subjected to.
SEIA also represents the solar thermal industry, a small, but particularly effective means for homes and businesses to save energy. Since solar collectors just apply to hot water, the industry won’t be affected by any overhaul of interconnection standards. But there’s one area where the Federal government could easily give the technology a boost: expanding the Energy Star program to solar thermal.
“Energy Star is very successful for developing the market for a product,” Resch said. “If you have an Energy Star product label, you’re granted access to large commercial distributors. The program has really moved the residential market with respect to appliances.”
Both the interconnection standards and Energy Star expansion are essentially revenue neutral, which will look better to legislators debating what makes it into the final package. What will be a harder sell — but stands a chance to really move the solar market — are direct cash incentives like are offered in Germany and Japan where solar is booming.
Currently the Federal government offers a 10 percent credit for commercial solar installations, and as it stands, the energy bill (H.R. 6) from last year would establish a 15 percent residential credit. But these policies, while a step in the right direction says Resch, are not going to make much of a difference.
For photovoltaics, SEIA is calling for a tax incentive of $3.00 / Watt for systems below 10 kW, and $2.00 / Watt above that, decreasing at 5 percent per year. For solar hot water, they are requesting a smaller incentive – $15.00 per thousand Btu / day performance rating, declining by $1 per year.
And for concentrating solar power (CSP) power plants, SEIA is asking for the current Production Tax Credit (PTC) for wind to be expanded to CSP plants, and to allow developers to take advantage of the government’s Investment Tax Credit in addition to the PTC.
The solar industry’s stellar worldwide growth has shed a bright light on the technology as both a means to a cleaner, more diverse energy mix, but also as a new economic and jobs engine — an angle which is particularly important in today’s lackluster job market. Resch said the solar industry creates more jobs than any other energy industry; roughly 32 jobs per MW, compared to six for wind power and three for natural gas plants.
Last year’s failed energy package, crafted and lobbied for by the Bush Administration, largely left solar in the shadows of the entrenched fossil fuel, and nuclear industries. Nuclear, in fact, could be one of the major subsidy winners if an energy bill is passed this year.
“The well-funded nuclear industry has done a great job in developing support from the Bush Administration, and now with (UK Prime Minister Tony) Blair, but the reality that they still need to overcome is that their facilities are near impossible to site, extremely long in permitting and construction, and frankly, I don’t think much has changed since the 1970s and 1980s when a lot of projects were abandoned and pushed onto the ratepayer without one electron being produced,” Resch said.
The same fossil, and nuclear-friendly dynamic isn’t likely to change in this next attempt by the Republican majority to pass an energy package. But with that stronger majority, there’s a good chance a comprehensive package will pass instead of stalling as it did last year. And robust solar policies could play a pivotal role in the bill securing the votes needed for successful passage.