Rising to Meet the Energy Challenge

As Americans we don’t shrink from challenges, we embrace them.

Inthe 19th century, we united the nation’s economy with the firsttranscontinental railroad.

In the 20th century, we powered theSouthwest with the largest hydroelectric power station in the world. Werecognized that these challenges were not merely about laying track orbuilding a dam, but about securing the future of our nation.

The question of how we will create, store and use energy is thegreat challenge of the 21st century. It threatens our economy, oursecurity and our planet. By rising to meet this challenge, we’ll helppreserve our planet, reduce our dependence on finite, foreign sourcesof energy and create hundreds of thousands of American jobs. Like thechallenges of the past, the solution will depend on government,industry and citizens working together.

As the world’s largest supplier of solar photovoltaic manufacturingequipment, Applied Materials is working towards solutions. Our strategyis to bring significant change to the industry by enabling lowercost-per-watt solutions for solar cell manufacturing-with the goal ofmaking solar a more meaningful contributor to the global energy supply.

Make no mistake: Confronting our energy challenge requiresinnovative solutions and bold policy, just as the Pacific Railway Actof 1862 and Boulder Canyon Project Act in 1928 laid the foundations forthe transcontinental railroad and Hoover Dam.

President Barack Obama proposed such policy on the campaign trail,calling for a renewable electricity standard that would require 25% ofour nation’s electricity to be obtained from renewable energy, such assolar and wind, by 2025. While ambitious, this practical goal can bemet with today’s technology and labor force.

Earlier this summer, the House of Representatives passed theAmerican Clean Energy and Security Act. The bill takes some importantsteps in the right direction. It recognizes the need to generate energyclose to where it is used—so-called distributed generation—and providesincentives that would increase large-scale deployment. But by allowingcompanies to meet targets through energy efficiency rather thanrenewable generation, the bill significantly reduces the 25% renewablerequirement. The Senate is considering a bill that reduces therenewable energy requirement even more.

We owe it to American consumers and workers to do better.

Critics of renewable energy claim that a strong renewableelectricity standard will mean higher prices and less reliableelectricity. But those allegations simply are not true.

Requiring energy companies to produce 25% of their electricity fromrenewable sources will lower, not raise, electricity prices–nearly 8%on average according to a March study by the Union of ConcernedScientists. Solar energy is most cost-effective in the peak afternoonperiod, when the sun is shining, air conditioners are blasting anddemand is highest. This peak period of demand is the most difficult forutility companies to service and the most expensive. Solar iscost-competitive with fossil fuels for peak demand in such places asHawaii, California and New York. Also, renewables can help meet therising demand for peak energy with inexpensive solutions, makingrenewable energy more, not less, reliable.

Experience shows that increasing scale also reduces costs. For eachdoubling of solar installations worldwide, the cost of solar energy hasdeclined by nearly 20%. Because there is no fuel cost associated withrenewables like solar and wind, they help reduce price volatility.Fossil fuels are inherently volatile as supply and demand ebbs andflows. Natural gas prices, for example, may be at record lows today,but just last year they were at record highs.

Finally, a significant renewable energy requirement of 25% also willcreate billions of dollars in economic investment and almost 300,000new American jobs in manufacturing, construction, operations andmaintenance by 2025, according to the Union of Concerned Scientists.That study also estimated a $263 billion boost to the American economythrough new capital investment for renewable energy technology.

We can meet our goal of 25% renewables by 2025 with a practical,gradual approach that sets interim targets along the way, starting with6% by 2012 and then building up to 25% by 2025. Meeting such short-termgoals will help us achieve our long-term goal by helping fuel growth,investment and innovation in this sector and ensuring a smoothtransition for utilities, businesses and consumers.

It wasn’t easy completing the transcontinental railroad orconstructing the Hoover Dam. Both took foresight, political will andconfidence in the American people. But we persevered, and both effortspay dividends to this day. What will our generation do that will beremembered in 50 years? How will we use this moment, this recession,and this inflection point to change the future? Adopting a meaningfulenergy bill requires the same vision and confidence, and like pastinitiatives, would pay both immediate and long-term dividends toAmerican workers and consumers. What better time than now, as the worldprepares for the United Nations climate change conference inCopenhagen, for the United States to once again lead the way inconfronting the pressing challenges of our time? As we know from ourhistory, it’s the American way.



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