With Congress back in session, renewable energy proponents are girding for a battle over legislation that could make or break the nascent solar power industry.
At stake in the energy bill now before Congress is the survival of a 30 percent investment tax credit that makes large-scale solar power plants a viable option for utilities under pressure to cut greenhouse gas emissions by obtaining more of their electricity from renewable sources. On the home front, a similar tax credit for residential solar installations is up for grabs as Congress tries to reconcile House and Senate versions of the energy legislation.
“There are at least eight or nine well-funded companies that are actually making great progress in developing large-scale solar,” says Joshua Bar-Lev, vice president for regulatory affairs for Oakland, Calif.,-based solar power plant developer BrightSource Energy. “I don’t know if any of them are going to be able to finance projects and get the permits they need without these tax credits.”
The solar companies and their allies in the utility industry and on Wall Street had been pressing for an eight-year extension of the investment tax credit. They also want to abolish a prohibition on utilities from taking advantage of the incentive if they invest directly in solar power plants. But since word hit the street that Congressional leaders were considering stripping out the incentives to speed passage of the complex legislation — catchall bills that will affect the fate of nearly every energy-related industry, from Big Oil to biofuels — solar proponents have been converging on the Capitol in an 11th-hour lobbying frenzy.
“Things are very uncertain at the moment,” says Chris O’Brien, an executive at solar panel maker Sharp who serves as chairman of the Solar Energy Industries Association, a trade group. “In recent years, we’ve seen a very sharp increase in corporate investment, project investment and financing for solar technology companies and solar projects. There’s great concern that the U.S. market continue to grow.”
Like other renewable energy sectors, solar has lived and died at the hands of tax incentives. In the 1980s a California tax break encouraged the construction of the state’s first utility-scale power plants by Luz International, founded by BrightSource’s chairman. When the incentives evaporated with the return of cheap energy that decade, the company’s business disappeared (though those Mojave Desert solar power stations continue to operate).
Global warming fears, renewable energy mandates imposed on utilities and a flood of venture capital has revived Big Solar over the past two years. The industry argues that longer term tax incentives must be put in place to ensure solar power plant builders have enough time to break into the electricity market and achieve economies of scale that will drive down the cost of green energy. This time around, the solar entrepreneurs have attracted the support of utilities like PG&E (PCG) and Edison International (EIX) as well as Wall Street titans like Goldman Sachs (GS) and Morgan Stanley (MS), both of which have invested in renewable energy companies. (Morgan Stanley, for instance, is backing BrightSource.)
“We’ve gone to Congress and talked to members about the need for multi-year commitments so we have certainty,” Rick Carter, PG&E’s director of federal government relations, told Green Wombat. “What we’ve seen over past couple years is stop-and-go with tax credits. If you have multi-year leads to build facilities, that doesn’t work.”
Take California, for example. Negotiations between a solar energy company and a utility over a power purchase agreement can last more than a year and it can take another three or four years to to obtain regulatory approval for a solar power plant, secure the site and then get the facility built and operating. PG&E, Southern California Edison and San Diego Gas & Electric (SRE) all have signed long-term power purchase agreements for solar power plants that will be financed and built over the next several years.
Given that the prime solar sites and potential economic payoff for Big Solar is in the sun-drenched West, companies like BrightSource have been targeting Congress members from western states. “We want both representatives and senators to see the benefit of this: price certainty, jobs, clean energy,” says Bar-Lev.
While the situation changes daily, action on the energy legislation is expected sometime in the next two weeks.
Green Wombat 
Pending Energy Legislation- *This legislation could change the World!
The solar industry is at a crossroads. Over the last few years, the amount of solar electricity generating capacity has grown exponentially in the United States. This was due mainly to the Energy Bill of 2005, which provided a 30% Investment Tax Credit for commercial solar installations and a $2,000 federal tax credit for residential installations. These tax incentives coupled with generous state rebate programs, most notably in California and New Jersey, led to the installation of over 100 Megawatts of photovoltaic solar capacity over the last 2 years. Government incentives in Germany, Spain, Portugal, France, Italy and Ontario have been even more successful, and consequently, the companies that manufacture solar panels have seen their share prices soar. Investor interest in the renewable energy sector has driven the market capitalization of companies such as Sunpower (SPWR), First Solar (FSLR) and Suntech (STP) into the multi-billions. However, the United States’ Investment Tax Credit for Solar is set to expire at the end of 2008 and unless it is extended with the current Energy Bill, the U.S. solar market will grind to a halt.
1The House intends to vote on the energy bill on December 5. As a result of action taken by solar proponents over the past few weeks, the bill will include a tax title that includes the Solar ITC, as well as a Renewable Energy Standard (RES) title, a Renewable Fuels Standard (RFS) title and a car & truck fuel standard (CAFE) title. The tax title is what the Solar Energy Industries Association has been expecting – $17 to $18 billion in incentives, fully offset.
The House vote is expected to occur even if there is doubt whether the Senate has 60 votes to pass a similar package. If the Senate cannot garner 60 votes on the entire package, the expectation is that they will pass and send back whatever titles they can get 60 votes for. Both Democrats and Republicans are feeling pressure to act on energy legislation given the likelihood of oil topping $100 a barrel. The industry should be self -sufficient once this legislation sunsets.
What the Solar Industry Needs:
· Eight-year extension of the 30% business ITC under Section 48
· Six-year extension of the 30% residential ITC under Section 25D
· Elimination of the existing $2,000 limit on the 30% residential solar ITC under Section 25D
· Permit corporate and individual taxpayers to claim the ITC against the Alternative Minimum Tax (AMT)
· Elimination of the public utility exception to the ITC.
There are many compelling reasons to enact this legislation. Solar is a clean, renewable source of energy. There are no greenhouse gases produced as silicon converts photons from the sun into electric current. Extending the tax credits will spur a tremendous amount of job creation in the solar industry. It will also promote energy independence, provide lower and predictable energy costs and establish a sustainable way for the country to continue to grow. – John Moran johnflanaganmoran@gmail.com
1. Cited: http://www.Solarbuzz.com
Washington, DC, USA: Politicians React to Solar Industry Lobbying; More Needed
Pending Energy Legislation
The solar industry is at a crossroads. Over the last few years, the amount of solar electricity generating capacity has grown exponentially in the United States. This was due mainly to the Energy Bill of 2005, which provided a 30% Investment Tax Credit for commercial solar installations and a $2,000 federal tax credit for residential installations. These tax incentives coupled with generous state rebate programs, most notably in California and New Jersey, led to the installation of over 100 Megawatts of photovoltaic solar capacity over the last 2 years. Government incentives in Germany, Spain, Portugal, France, Italy and Ontario have been even more successful, and consequently, the companies that manufacture solar panels have seen their share prices soar. Investor interest in the renewable energy sector has driven the market capitalization of companies such as Sunpower (SPWR), First Solar (FSLR) and Suntech (STP) into the multi-billions. However, the United States’ Investment Tax Credit for Solar is set to expire at the end of 2008 and unless it is extended with the current Energy Bill, the U.S. solar market will grind to a halt.
1The House intends to vote on the energy bill on December 5. As a result of action taken by solar proponents over the past few weeks, the bill will include a tax title that includes the Solar ITC, as well as a Renewable Energy Standard (RES) title, a Renewable Fuels Standard (RFS) title and a car & truck fuel standard (CAFE) title. The tax title is what the Solar Energy Industries Association has been expecting – $17 to $18 billion in incentives, fully offset.
The House vote is expected to occur even if there is doubt whether the Senate has 60 votes to pass a similar package. If the Senate cannot garner 60 votes on the entire package, the expectation is that they will pass and send back whatever titles they can get 60 votes for. Both Democrats and Republicans are feeling pressure to act on energy legislation given the likelihood of oil topping $100 a barrel. The industry should be self -sufficient once this legislation sunsets.
What the Solar Industry Needs:
· Eight-year extension of the 30% business ITC under Section 48
· Six-year extension of the 30% residential ITC under Section 25D
· Elimination of the existing $2,000 limit on the 30% residential solar ITC under Section 25D
· Permit corporate and individual taxpayers to claim the ITC against the Alternative Minimum Tax (AMT)
· Elimination of the public utility exception to the ITC.
There are many compelling reasons to enact this legislation. Solar is a clean, renewable source of energy. There are no greenhouse gases produced as silicon converts photons from the sun into electric current. Extending the tax credits will spur a tremendous amount of job creation in the solar industry. It will also promote energy independence, provide lower and predictable energy costs and establish a sustainable way for the country to continue to grow. – John Moran johnflanaganmoran@gmail.com
1. Cited: http://www.Solarbuzz.com
Washington, DC, USA: Politicians React to Solar Industry Lobbying; More Needed
The more solar incentives the better .
solar is the only energy source for clean long term energy.
There is absolutely no reason not to pass this bill. Clean energy incentives for Americans is ABSOLUTELY the way to start making a change. EVERY HOUSEHOLD should feel the need to put solar panels on their roof, and legislation like this can help make it happen by making it cost-effective. At the same time, it relieves energy burdens on our power plants, strengthens the energy grid, and cuts down on ALL emissions.
I believe we should take all the tax breaks and Federal give-aways from the incredibly profittable Oil and Gas industry and give it to the excellent efforts of the Solar Industry. Exxon still bellies up to the pig trough even with $36 Billion in quarterly profits. It’s time for Big Oil to pay their own way…………
Oh,”for crying out loud”, CONGRESS, do the environmentally right thing for once and let solar energy utilities keep their current tax credit!
Won’t matter one way or another – solar energy isn’t even a drop in the bucket.
100 MW new solar capacity in 2 years is nothing. The nation currently has 1 TeraWatt (1,000,000 MW) of generating capacity.
If they really want to reduce emissions, they’d aim big and give tax incentives to nuclear.
What moran would suggest nuclear power – with all of its undisposable waste – solar and wind are the real deal – so wake up America and become a leader in something other than world hate (king Bush)- please wake up before we destroy our beautiful world
I would also like Congress to extend the tax credit. However, I have a question for J of Houston who said “EVERY.” How are people who live in apartment buildings supposed to comply?
There is one simple fact about green energy. If the government doesnt offer tax credits for it, no company will do it. So if Congress can loose its deep pocket oil friends then maybe we can actually do some good to making our country more independent from foreign oil. (Yes I know we dont produce electricity from foreign oil, but we can tax them anyways, and use electricity for things that are currently using oil such as vehicles).
Mike in Boulder,
Just one comment. It is a bit inaccurate to say that Exxon is incredibly profitable. They only make ~10% profits. Your comment is accurate in the sense that the numbers are correct, but they are not incredibly profitable.
If they really want to reduce emissions, they’d aim big and give tax incentives to nuclear.
As an Engineer, I am GROSSLY against this type of thinking. Anything that can happen, will happen. No matter how many safety protocols, if enough plants are built, there will be accidents. Nuclear accidents are too devistating.
How many rooftop shingles can we replace with solar panels? Solar power is fledgling. Imagine the innovation as money pours into the industry over the years. You have to keep all investment options open for invention because you never know which one will have a breakthrough.
Wait for the day where maybe even the top surface of roads and parking lots could be made of photovolatilic materials! Unless you push funds into research and development, there will never be another breakthrough. It is also important to note, oil companies are energy companies. They fully intend to take a bite of EVERY energy market they can find viable…that will include solar. So you may someday be getting power from a BP solar station. Get over it.
Tax incentives or not, solar is the answer:
“We are awash in energy (10,000 times more than required to meet all our needs falls on Earth), but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we’ll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we’ll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years. Almost all the discussions I’ve seen about energy and its consequences, such as global warming, fail to consider the ability of future nanotechnology-based solutions to solve this problem.” — http://www.kurzweilai.net/meme/frame.html?main=/articles/art0692.html
Did you see that Bush 41 now have a wind turbine. Did you also know that Laura Bush installed both Geothermal & Solar on their ranch.
They got their tax credits and yet they suggest we all buy oil to fill their pockets.
For gods sakes! Why aren’t people SCREAMING about this?!? How could they possibly give tax credits to oil and take them from solar? Though of it is evil in light of what we’re seeing environmentally. BigOil has had their day and they played VERY dirty, it’s time to dethrown them and tear them down kicking and screaming if we have to.
My intention is to get people worked up about BigOil (BO) and keep pointing the finger at those in congress who are voting against alt energy progress. If something shakes down as a result of that, then excellent. And by shakedown, I mean having the public totally primed so that when the right people at the top call these guys out or make any big moves against BO they’ll know they have the entire country very much behind them. If it were possible to hold BO accountable, that would be a most welcomed miracle, alas, Phillip Morris is still alive and killin’ and if we can’t nab them there’s no way we’ll nab BO. Essentially, my goal is to get the momentum going so that when the levee breaks it breaks hard and fast so that BO hits the ground hard (rightfully so) and we can them move quickly toward the correct energy sources with the urgency that is deserved. Also, to raise awareness to the point where BO will be so totally aware that we’re watching them very closely that they may think twice about various ill-conceived directions that they may try to wiggle towards.
Even with all the media about green there are many distractions, such as suggesting that we need to conserve energy, which is tip toeing around the elephant in the room and is missing the point of the source of the energy. The source is the source no matter how much we conserve- the source matters more than any other current focus. Most any other means to the end, while helpful, is still a distraction from the head of the snake where we should pinpoint our efforts right now until dealt with. After which, we can then move on to other steps. I believe we need this high degree of focus and effort because of the size and power of this beast and all that it will take to bring it down ASAP.
We don’t need to conserve, we need to change our energy sources and then we can use as much as we want without any pollution. Electric cars are great and we really need them, but unless we change the source of energy very quickly the cars will still be drawing from coal and oil. Ethanol and hydrogen and fuel cells might great for sometime in the future when they are practical, but for now they only distractions from the “Free Energies”- Water, Wind, Sun, Geothermal. These are limitless for all practical purposes and do not need a “Product” such as ethanol or hydrogen or biofuel- these are what I’m calling “Milker Energies”, stagnant physical energies that people can milk to the public for profit. They are difficult to expensive to manage and therefore more expensive the consumer. They are not also sustainable. The Free Energies and batteries are all that are needed. The sooner that people realize this, the sooner we’ll be able to all have them and be done with the ugly and very costly oil game.
All of the comments here are serious, and very encouraging. The discussion is rich, but I would like to add the perspective that the numbers are more serious than most people seem to realize, and the urgency of the issue of energy supply is far greater than any of us can imagine.
Discussing issues is invaluable, but discussing the seriousness of these issues is also a priority. Most people are not prepared to face the reality that we are approaching a twenty percent reduction in the population of earth if we do not successfully implement new energy solutions with the greatest possible speed.
Even if we do everything we can, the numbers are so unimaginable that we are going to face a reduction in population. It is time to make preparations for this emergency and prepare to lessen the pain and suffering of the masses.
The idea that solar energy is or can be only a drop in a bucket is disinformation.
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As long as people keep saying something can’t be done, it won’t be. Start being a voice for change instead of sticking your head in the sand of excuses why it won’t work.
Individual solar panel and cell manufacturers are looking at a gigawatt of manufacturing capacity withing a few years. Per company! Several gigawatts or even tens of gigawatts of solar capacity can be built per year and that isn’t even counting solar thermal power plants(which are more cost effective and relatively low tech). Nor does it include the possibility of more players in the PV field. And what about passive solar and solar water heaters which hardly anyone is talking about? These are extremely low tech.
We’ve been talking about passive solar since the seventies and no one listened. It’s as simple as proper home siting and a few design modifications such as a heat sink to capture the suns heat. Heating water is even simpler. Sailors use black plastic water bags temporarily hung in the rigging to provide hot showers at sea. It’s so simple a 3rd grader could figure it out.
Solar Energy is the future, so let’s give it a chance to succeed for the good of our country. Let’s not squander this opportunity and let other nations lead in the technological developments. The State of Arizona alone receives enough solar energy each year to power the entire US energy needs. It only takes about 400 square miles (20 mi x 20 mi) to power Arizona’s electrical needs. The energy simply needs to be tapped.
Although silicon is the most prevalent, there is a world wide shortage of polysilicon supply and it takes too long to manufacture plants that produce it. Furthermore, the production process is expensive, although the costs are coming down over time. Silicon is only one solution in the solar energy picture.
Thin film technologies such as Cd-Te, CIS, CIGS, etc. are not dependent on silicon and show great promise, although at much lower efficiencies. However, since there is enough solar energy out there, isn’t the cost per KW more relevant? This is why companies like First Solar (FSLR) are so successful, because their production costs are much lower than traditional methods.
Concentrated PV also shows significant promise by using far less PV material. The sunlight is concentrated either through lenses or concentric mirrors (typically 50:1 ratio) to a gallium arsenide or other material. This has shown a potential for even lower cost per KW produced.
The point is, let’s not pull the rug out from under these companies and individuals who are doing good work to secure our energy independence. We should be able to use energy without feeling guilty of polluting our environment. These companies cannot sustain their R&D if our governments won’t support their efforts.
People, let’s speak up to our leaders and make sure the alternative energy incentives are in place. The potential market is huge, and the US needs to be a leader in this development. Let’s give our innovative companies a chance to solve this energy problem.
Personally, I think the government is going about it in the wrong direction. I say get rid of the solar tax credits but impose higher taxes on energy from dirty fossil fuels. This way, all renewable energies essentially get a credit, higher energy prices would hopefully get people to conserve more, and theoretically, some other tax could be lowered because of the extra money the government would collect from taxing fossil fuel energy. Everybody wins.
What we need to do is write our congress(wo)men. Anyone have contact information? Gather it and send it to everyone you know, asking them to spare the credits. There is nothing like a flood of millions of constituents to get the Congress’ attention.
Patrick on we don’t need to conserve. Are you willfully funny? Do you know anything about the 2nd law of therodynamics? Do you want people in other parts of the world to continue to starve because we in the USA are consuming a disproporation amount of energy? Wake up. Read Small is Beautiful. Find out why the Japanese (and now other Asians) are making all the electronics these days. They understand that conservation is always a law of nature to be followed or ignored at your own peril. Car companies like Toyota and Honda, coming from cultures of conservation, are burying GM and Ford who still have not kicked the SUV/Hummer mindlessness which thought that conservation was an option.
Ricky, if all energy comes from Solar and wind then why do we need to conserve energy, what is it harming? We need to stop burnig oil, that’s what is warming the atmosphere
Hi John. I wrote such an article the other week. Please see http://greenwombat.blogs.fortune.cnn.com/2007/11/29/solar-showdown-in-congress/
Lets get real, OK we need to start somewhere I agree. But $2000 in credits won’t do that. Most states (the aggressive ones) are half of that. I think it would be safe to say most all of us would like to put brakes on the rising cost of energy. But the average Joe doesnt $16000 sitting around. that’s the base cost for a semi functional grid connected system. I don’t know about you, but I need CASH. Any idea that has the word tax associated with it in any way, is a fools way out. We recently built a home here in southern AZ as efficient as we could possibly afford, but between the feds, state, local Utilities, and developer red tape, there was no way we could afford a kitchen and a solar system. We opted for the kitchen. To the wealthy green folks, I may appear cheap and not as concerned as i should. But to those others like my self who spend hours looking for ways to afford the front money to GREEN UP, lets hit our congress with truth about why this incentive never took a deeper hold.
Why is GOING GREEN only for those who can financially afford not to be????