Financial Innovations and Falling Prices Lead to Solar Growth

2012 was a very productive year for solar and 2013 is looking just as promising. Between a wide variety of financing options and falling costs, solar is becoming even more readily available to anyone who wants it.

An increase in third party solar leasing programs gives potential solar customers more options to go solar, especially if they’re not in the financial position to go with a purchase. Solar leasing allows customers to–at zero or low upfront cost–have solar installed on their homes. The monthly lease payment and utility bill with solar are less expensive than your utility bill without solar.  Since utility rates are only projected to go up, this means substantial savings over time.

Solar Savings

Customers also have the choice of a Power Purchase Agreement (PPA) in which case the customer pays for their energy at a set rate (per kilowatt hour). In either case, with third party financing, the risk for the customer decreases as they don’t have to shoulder the responsibilities that come with ownership (maintenance, monitoring, insurance, and production guarantees).

These financial innovations are part of the reason why total installed solar capacity reached 1,992 MW in 2012 with 684 MW occurring in the third quarter alone–118 MW of which being residential installations.

The growth of the solar industry can also be attributed to costs dropping almost 40% in the past two years. Though this has been beneficial to consumers, the price drop comes in part from an increase in global oversupply which has created problems for the US solar manufacturers who’ve had trouble competing with unfairly low prices.

But despite quarrels over the oversupply, solar in the US is still growing and responsible for adding 13,872 jobs in 2012 according to the National Solar Jobs Census report. Currently, there are more than 119,000 workers employed in the solar industry, a 13.2% increase since 2011.

Between financial innovations and falling costs, solar is becoming even more accessible to families, businesses, and a wide range of other applications including utility scale projects and military installations.

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Renewable Energy Fact Sheet

It’s fairly easy to make renewable energy look like a pipe dream, and misguided attacks on clean energy is doing just that: making renewables look too costly, too sporadic; not merited because it’s not competitive with fossil fuels, or that it won’t create jobs.

These petty strikes against the renewable energy industry don’t even remotely mesh with what we know is true about clean energy, and Think Progress recently published an article pointing out what you really need to know about the value of renewable energy.

1. Clean energy is competitive with other types of energy: Renewable energy is affordable now. Not tomorrow, not next year. Now. Even with the price of natural gas being inordinately low, these cheap prices are unsustainable, like any nonrenewable resource,  supplies will dwindle, and prices will rise. But renewable is staying competitive: with the help of bigger turbines, and increased reliability, some wind developers are signing power-purchase agreements in the 3 cents a kilowatt-hour range, which is far cheaper than any other new power source. The same industry maturity is occurring in solar with California solar developers signing contracts for power costing less than that of a natural gas plant.

2. Clean energy creates more jobs than fossil fuels: Renewable energy job creation outstrips fossil fuels 3 to 1. Not only does the renewable energy sector create more jobs, they create better jobs: twice as many medium to high credentialed jobs are being created in the clean energy economy with wages being about 13% higher, and almost half of these jobs employ workers with less than a four year college degree. Aside from these facts, the clean energy industry is actually growing by a rate of 8.3% which is more than can be said about the overall economy.

3. Clean energy improves grid reliability: Yes, it’s true that if the wind isn’t blowing or the sun isn’t shining then power isn’t going to be generated. But, that doesn’t mean that renewable energy isn’t a viable option for large scale power production. For instance, predictability of wind power would be easier to manage if there was more of it and energy could be delivered without interruption to the grid. Any additional costs for backup generation would be small (less than 10%) and would have little to no effect on consumer power costs.

4. Fossil Fuels have gotten 75 times more subsidies than clean energy: From 1994-2009 the fossil fuel industry received $446.96 billion in subsidies where as in that same time frame renewable energy received $5.93 billion. A study showed that in the early years of the fossil fuel industry, oil and gas producers received federal subsidies making up one half of a percent of the budget. This amount may seem small, but compare that with the one tenth of a percent of federal spending that’s used for renewables. If more subsidies were dedicated to renewable energy instead of the fossil fuel industry, clean energy would become even more cost effective than it is now.

Renewable energy could be an engine for economic growth and a pathway into a sustainable future, but false information that undervalues its potential could really set up road blocks. It’s important to realize the merit behind renewable energy, not only is it affordable and cost effective, but we can make it reliable on a large scale while creating jobs and with more investments from the federal government, we can more forward into a clean energy future.

The Urgency For Innovation

Innovation is an interesting word. It means introducing something new or different. Depending on what side of the political line you live on, innovation will most likely mean something drastically different than on the other side of the line.

To some, innovation means unconventional gas, tar sands, oil shale. These people most likely believe global warming is a myth, and may even be under the impression that Obama is pushing a “phony theology” on the American people.

On the other hand, innovation means finding new sources of clean, sustainable forms of energy. This group is most likely concerned with maintaining finite resources and keeping atmospheric greenhouse gas levels at bay.

Of course, depending on what side you’re standing on, the other seems to be in the wrong, but in either case the word “innovation” is becoming a source of contention. At present one innovation Obama is being assaulted over is research on algae-based biofuels.

Algae-based biofuels are like any other biofuel whose energy is made from biological carbon fixation. Unlike some biofuels, like bioethanol, which needs a lot of prime land space, algal fuels grow quickly and thrive in any type of water from seawater to sewage. A recent study by the Pacific Northwest National Laboratory reports that the use of algal-biofuels could replace as much as 17% of U.S. oil imports. With exorbitantly high oil prices and energy security looming, it seems the natural progression of innovation is to invest money into researching the plausibility of algal fuels. Unfortunately, now Republican’s are launching an attack on this “goofy gas”, touting Obama’s $14 million offer towards “weird” algal fuel research.

While the cost of renewable energy (wind, solar, biofuels) is dropping, the technology to improve extraction of fossil fuels is improving. Now, instead of retiring oil fields or strip mined mountains, we’re able to suck every last drop of oil from the ground and dig for every last kernel of coal. Necessity fuels innovation. And right now the urgency to make a drastic shift to a non-fossil fuel based society doesn’t exist.

Even if there was urgency to switch from conventional sources of oil to renewables, supplies of tar sands still exist and are considered innovative enough to some, leaving clean energy pushed to the side once more. The fact the clean energy isn’t being associated with the need to deter the impacts of climate change–not to mention that climate change isn’t being mentioned at all–isn’t putting enough weight on how important clean, renewable energy is to our future.

In the past, necessity has spurred innovation. Right now we’re not forced to come up with an energy source on the fly, but at the same time that seems to be deminishing research of potential [innovative] fuel sources outside of fossil fuels. Somehow, we need to create an urgency to switch from fossil fuels to renewable resources, investing money into all sources, no matter how “weird” they may be.

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.” 

 

 

 

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?