Will Congress Give Renewable Energy The Support It Needs?

Between innovative technologies and years of subsidies, the cost of wind and solar power has dropped dramatically–almost to the point where these industries are close to delivering cleaner electricity at prices competitive to fossil fuel generated power.

It’s important to note, though the renewable energy industry is close to offering competitive rates, they’re not there yet and wind and solar companies are telling congress they can’t be truly competitive without a few more years of government support. With Obama giving their efforts a boost by proposing a package of tax credits for renewable power and manufacturers, you would think we’d be well on our way to aiding these industries.

Unfortunately, there is little enthusiasm for renewable energy subsidies in Washington. Concerns about the overall deficit and tax payer’s losses on the Solyndra debacle have marred images of pouring billions into the renewable energy industry.

The wind and solar industries argue that there is less risk with the tax breaks they are seeking–tax credits wouldn’t be handed out willy nilly, but taken only by businesses that are already up and running–leaving taxpayers less likely being stuck subsidizing a drowning company. These tax breaks would create jobs while increasing domestically produced, clean energy. The renewable energy industry isn’t hiding the fact without new breaks, they will be forced to scale back production and eliminate jobs in an already starved economy.

Federal incentives have helped renewable energy use to almost double, said Obama while at Buckley Air Force Base in Colorado in an effort to support clean energy projects as a way to help foster energy independence and employment. A one year extension of the 1603 tax grant (a program which allows renewable energy companies to get 30% of the cost of a new project back as a cash grant once completed), would create 37,000 solar jobs in 2012, according to EuPD Research.

Lobbyists for both the wind and solar industry are pushing for tax breaks to be passed quickly, and are trying to tack on an extension of the payroll tax cut as well (taxes paid by employees and self employed lowered from 6.2% to 4.2%), as it is coming to an end in February.

Of course it’s all up in the air what Congress will actually decide. It may end up that Republicans will use the recently postponed Keystone XL oil pipeline as a bargaining chip to approve the renewable energy credits. Which would be crafty, and most likely not appreciated by the renewable energy sector and environmentalists alike, but that’s a different story.

As it is, oil’s been subsidized for almost a century, getting $41 billion annually, with renewables ranging about $6 billion–and trust me that has not been going on for a century. It’s time to stop sinking money into a fuel supply that’s diminishing, and focus on tax breaks to increase renewable energy that will lessen our foreign fuel dependence, bring manufacturing back to the states, create jobs, and focus on getting energy from a source that’s not environmentally destructive.

Though support for subsidies is dwindling, it’s important that energy tax breaks be granted to wind and solar companies to even the playing field between renewable energy and fossil fuels. Until it is, renewable energy won’t make any headway.

The Lesser of Two Evils

I’m always torn between what I think should happen, and what I think could actually work. It’s a tricky situation to be in as a part of the solar industry, and as a personal advocate for the environment.

In reading articles on reactions to Obama’s State of the Union Address (specifically one in the Huffington Post) I find once more, I’m torn.

President Obama clearly laid out his energy agenda in Tuesday’s SOTU Address, “We don’t have to choose between our environment and our economy,” he said, setting the tone for his energy and environmental plans.

By planning to expand domestic drilling, Obama is aiming to keep energy production and jobs at home, and emphasized the importance of breaking the U.S.’s dependence on foreign oil. Though he acknowledged that we only have 2% of the world’s oil reserves, and we need an “all-of-the-above strategy that develops every available source of American energy”, I’m concerned that we could potentially be implementing a policy that leaves us stuck between a rock and a hard place.

As Frances Beinecke, president of the Natural Resources Defense Council said, “Home-grown sources of energy certainly are preferable to imports, especially from unstable regions of the world.”

Expanding domestic drilling may indeed be the lesser of two evils, as we don’t have a system set up to run, even partially, on renewables. But by continuing to use natural gas as a main source of fuel, we may be perpetuating the same fossil fuel mindset we’ve held for the past century, instead of concentrating on expanding clean energy that we can use indefinitely.

And though I’m sure Obama meant it in a reassuring manner, his statement that we have enough natural gas to last American’s for almost one hundred years, isn’t exactly comforting to me. Are we going to be dependent on natural gas for the next one hundred years until every last drop has been put to use in our energy intensive society? Even in one hundred years, will we have implemented green energy on a large enough scale that we can survive without having to return to the dark ages when we couldn’t have every light on in the house and each plug occupied powering our X-boxes, laptops, cell phones, iPods, tables, and menagerie of other devices?

Though I remain torn, I am happy with this statement Obama made. I hope sets the actual path our energy policy will take:

“We have subsidized oil companies for a century. That’s long enough,” Obama said. “It’s time to end the taxpayer giveaways to an industy that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these new jobs.” 

 

 

 

Solar Wars

Solar wars might not be terribly riveting to the average American, but it’s definitely something solar manufacturers and installers are keeping tabs on.

An invasion of inexpensive solar panel imports from China are sparking mixed reviews from the U.S. solar industry. On the one hand, parts of the industry say the cheap panels are creating a solar boom in the states. On the other hand, panel manufacturers are concerned because its hurting their businesses, and want a tariff attached to the imports.

SolarWorld’s Gordon Brisner argues that China’s threatening SolarWorld’s underlying principles, “to build products here in America, for America’s community, for America’s energy independence, and really leave the world a better place.”

By flooding the market with cheap panels, Brisner argues it’s contributed to the collapse of some U.S manufacturers. Brisner has petitioned the U.S. Department of Commerce and the International Trade Commission to tie tariffs to Chinese panels to level the playing field.

Though most people agree that American panel manufacturers have indeed been harmed by Chinese imports, it remains to be seen whether or not there’s any illegal activity occurring–in which case a tariff would be justified. “Dumping” refers to a foreign producer selling a product in the U.S. at a price that is lower than the cost of production, or subsidizing panel manufacturers so they can sell below the average price.

A tariff would indeed rise the price of solar, causing concern with the Coalition for Affordable Solar Energy  (CASE) who says higher prices will hurt solar installers–whose numbers outweigh the number of U.S. manufacturers.

Kevin Lapidus vice president of SunEdison and worker at CASE argues that we’ve just gotten to the point where solar’s reputation of being too pricey for regular people is being let go, and imposing a tariff will set the industry back by years.

Though some people who go solar are interested in buying American made (like SolarWorld), most are just looking for the best price. With Chinese panels running about 10% cheaper, they’re a popular choice.

Imposing a tariff could come with potential consequences, a trade war with China, higher panel prices hurting installers, a ripple effect throughout the solar industry if there are less installations. But is establishing a “made in America” industry worth it?

A big push behind solar energy (and renewable energy in general), is not only to be less fossil fuel intensive, but to stop importing foreign oil. Establish energy independence.

Of course, I think some solar is better than no solar regardless of where it comes from, but aren’t we contradicting ourselves a bit if our aims are to achieve energy independence if we’re importing solar panels from a foreign country? Would it be worth it to pay a slightly higher price for solar panels if it meant keeping jobs and manufacturing at home instead of abroad, if it meant actually achieving energy independence instead of shifting our dependence to another country?

Over the next few months, the federal government will decide if China is playing by the rules, or if a tariff on Chinese panels should be imposed.

 

The Creation of a Unified Solar Front

Last week the Solar Energy Industries Association (SEIA), the national trade association for the solar energy industry, announced its merging with The Solar Alliance, a state focused group allying solar manufactures, integrators, and financiers and establishing solar policies and programs at the state level. The Solar Alliance will now be operating under the SEIA brand in order to present a unified solar front in all state level matters regarding the solar industry.

As president and CEO, Rhone Resch commented, “The solar energy industry is expanding and it is critical for SEIA to mirror this growth and put our resources and expertise into developing state policy that expand markets for solar energy.”

SEIA has also been establishing collaborative relationships with a handful of state and regional SEIA chapters to create partnerships (though independent entities) to bring to the table additional resources that mirror SEIA’s goals.

Resch added, “The focus on state-level policy allows SEIA to speak as the voice of the solar industry in all government arenas.  We have important work to do to ensure solar energy has access to energy markets across the country and that solar is cost competitive in all 50 states. This is a major step in that direction.”

By presenting a unified front, SEIA is hoping to address policy issues ranging from international trade, to extending the 1603 Treasury Program while targeting state policies including net metering, and addressing barriers for grid interconnection and permitting.

Hopefully this merger will work to remove the barriers that have kept solar from becoming a mainstream form of renewable energy by strengthening the industry at not only state levels, but federal as well.

Germany’s Renewable War Path

Photo Credit: Smart Planet

Germany’s on the war path to be the most accomplished practitioner of renewable energy. They’re not only thinking of ways to become less reliant on fossil fuels, but actually implementing them (a novel concept, right?).

The Efficiency House Plus is a prototype unveiled by officials in Berlin. This home isn’t only built from recycled materials, but is energy-efficient, and self-sustaining–complete with an electric charging station for EVs. A family of volunteers will be chosen to stay in the house for 15 months to show that energy efficient, sustainable homes can (and do) exist in real world applications.

The first goal of this sustainable house is to produce twice as much energy needed by a family of four. The average American household uses about 958 kilowatt hours per month (11,496 kWh/year), according to the Energy Information Administration. Since the general Germany population seems to be more energy conscious, I’m going to guesstimate their energy usage at about 583 kilowatt hours per month (~7,000 kWh/year). At 14,000 kWh a year, the house can produce even more energy than used by the average American household!

There is a second underlying goal which I think is important to point out, and that is that the house uses solar, as well as energy management techniques to not only power the house, but provide enough energy for EVs, or to be sold back to the grid. Solar and energy management strategies aren’t new concepts–it’s important to show people that the technology to achieve a sustainable house is readily available to put in to practice now. It’s already possible to live like this; it’s not a Utopian dream of the future. The Efficiency House Plus will set the bar for efficiency measures that can be implemented by the masses.

The Efficiency House Plus not only has charging stations, but the volunteer family will be able to drive an EV from Germany’s four leading car manufactures (including Audi and BMW) for three months each.

As the Federal Minister of Building, Dr Peter Ramsauer, put it they’re keeping with the idea, ‘my home is my filling station’. With such strong support from auto manufacturers, the government, and the public, the Energy Efficiency House Plus will indeed meet the “fuel” needs of the EVs and the home’s energy needs, while showing the world that energy efficient homes can do more than be a topic of conversation; they can produce enough energy for our vehicles and potentially enough energy to return to the general grid. In the previous post, I mentioned how important cooperation is to achieve renewable energy goals, and The Efficiency House Plus shows once again, that Germany has a knack for getting things done, even while juggling political, industry, and public interests.

And who wouldn’t want a house that could power your car?

Feldheim Leading The Third Industrial Revolution

Have you ever heard of Feldheim, Germany? I hadn’t til this morning. But this tiny village nestled in rural eastern Germany is the site of a revolution. Eyes from the U.S. to Japan are watching to see if Germany’s dream of having a country powered entirely by renewable energy can become a reality. Feldheim’s certainly got the hang of it, as their village of 145 residents runs solely on solar, wind, and biogas.

As it is, Germany has the most ambitious renewable energy goals with legislation passed in June to have the country produce a third of its power from renewables within the decade, and 80% by 2050. And unlike some countries, their goals are coming to fruition: Germany passed the 20% mark of renewable generated power–seems like they’re well on their way to getting to 1/3 in the next ten years–that’s more than can be said for some countries and their renewable energy “goals”.

Expanding renewables involves a cocktail of resources from government subsidies, investment incentives, and a willingness from taxpayers. Taxpayers who help shoulder the burden support research, investment, and subsidize the production and consumption of renewable energy. This allows people who have invested in renewable energy to sell energy back to the grid for above market prices, and they can break even. Some critics say this is unfair to the taxpayer, which is why a precious balance must be maintained between the federal government and the private sectors, to avoid having the task of expanding renewables placed solely on the taxpayer’s dollars. As Germany readily realizes, they’ll have to shell out billions of dollars to update its grid and infrastructure.

In addition to a cocktail of financial support, a mixture of actual renewable energy sources is used in Feldheim (solar, wind, and biogas) to not only provide electricity, but jobs. No one in Feldheim is unemployed, compared to neighboring villages which have up to 30% unemployment, and our own California which has tapered its unemployment rate to about 11.3% according to the Employment Development Department.

Creating employment is key in driving the transformation to renewable energy. The creation of jobs will encourage investment and innovation from industries and that in itself will help boost employment. Germany has already employed 370,000 people (doubled from 2004) and is projecting solid growth in the renewable energy sector in the next decade. According to the Department of Energy, the U.S. in comparison has about 100,000 people working in the renewable energy field.

Germany’s field is ripe for the picking as far as renewable energy expansion and should be looked to as an example to strive towards. Germany has been able to achieve what seems impossible in most places: cooperation between the industrial sector, political policies, and (perhaps most importantly) a heightened sense of ecological sustainability within the general public. Germany could be the first country to initiate what’s been termed “The Third Industrial Revolution”; the ability for countries to move away from fossil-fuel based societies towards renewable energies and still maintain growth and profitability.

Even though Germany as a whole hasn’t reached its goals yet, the country, the industries, people like the residents of Feldheim, are taking pointed steps to leading the way in the renewable energy revolution. It seems wise that carbon heavy countries like the US should emulate their strategies.