Solar Progress on Capital Hill
As Congress begins debate on the Climate Bill, those attending Solar Power International 2009got an update on solar progress in Washington. The 11:00 am session onissues that affect everyone in the industry was surprisinglyunder-attended. Perhaps that reflects a dazzling exhibition hall andour perennial frustration with Congress.
John Lushetsky, head of the Department of Energy’s solar programtold an audience of about 250 that the DOE commitment to solar willrise from $175 million in 2009 to $320 million in 2010. Of that,$149.5 million will be directed toward PV. In addition, DOE willadminister stimulus funds totaling $50 million in 2009 and again in2010. They will also guarantee up to $40 billion in commercial andutility-scale loans.
The importance of $40 billion inguarantees cannot be overstated. Construction credit and solardevelopment funding is in short supply. Banks still in the game areannouncing commitments of less that $100 million per portfolio.
The DOE believes that thedeclining cost of solar will equal the rising cost of fossil energy byabout 2015 and could comprise 10-20% of US electric output by 2030. Many would like to see 30% by that date, but new policy at the DOE is avery positive step.
A slide deck from a similar presentation is available at http://files.eesi.org/lushetsky_051409.pdf
DOE and the Treasury are issuing checks for 30% of the cost of a solar project, There is no limit on the size of the project. Keith Martin of Chadbourne & Parke (law)told the session that 276 applications were filed for grants throughearly September. To date, payments totaling $1.2 billion (Treasuryfunds) were paid to 70 renewable energy projects.
This program is essential tocommercial and utility-scale solar. Until the close of 2008, solarprojects were financed, in part, through the Investment Tax Credit(ITC). As the recession deepened, Congress provided the option of acash grant in place of a tax subsidy. In a recession, few need taxbreaks.
Kate Johnson, Washington representative of the Sierra Club,is working toward a national Renewable Electric Standard (RES) in theClimate Bill. It would require at least 20% of US electricity beproduced from renewable sources by 2021. The Sierra Club is fightingefforts to dilute the standard from 20% to 12% or lower.
Katie Cullen of SC Partners LLC has an interesting job. She advises solar developers and, like Keith Martin, works withCongress to write solar legislation. Initiatives include extending the30% DOE Cash Grant program, lengthening the time horizon on the DOEloan guarantees, and extending a 50% bonus on depreciation of solarpower assets (tax break).
If you’ve followed thedevelopment of utility-scale solar projects in the southern deserts ofthe US, you know that the permit process can be costly and timeconsuming. Cullen supports a provision that gives the Federal EnergyRegulatory Commission authority grant approval for solar projectsrejected at the state level in 180 days or less.
Other issues include nationalstandards for net metering, connecting solar to the grid, andencouraging federal agencies to sign power purchase agreements (PPAs)with independent wind and solar power generators.
Jim Presswood of the Natural Resource Defense Councildescribed important provisions that NDRC is working to include in theClimate Bill or other energy legislation. Perhaps most important is aprovision to fund renewable energy deployment (construction ofrenewable power facilities) by channeling pollution allowance funds(carbon pollution allowances) to renewable energy developers. NDRC isworking to get a 35% “carve out” for renewable deployment.
During Q&A, the audienceexpressed concern on several issues including the time and costinvolved in Environmental Impact Report (EIRs) for solar projects andFeed-in Tariffs (FiTs). Many were surprised to learn from John Stanton, general council for the Solar Energy Industries Associationthat SEIA’s board is undecided on a national FiT, but might supportFiTs at the state level. Kate Johnson added that a renewable electricstandard was more important at this point in time.
Though I read dozens of solarnews reports each day, I was surprised by the progress made on ourbehalf, but also the extent to which industry organizations andindividuals were influencing (and sometimes writing) public policy tobring about a renewable energy future.
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