In a sign that solar industry and its political allies are starting to flex some real power, the federal government reversed course Wednesday and announced it would continue to accept new applications to build solar power plants on government land while developing an environmental policy for assessing the projects.
Green Wombat had been off the grid on holiday the past week and so was surprised to log back on to find the mainstream media and blogosphere ablaze over the Bush administration’s supposed move last month to halt big solar power plant projects in California’s Mojave Desert and elsewhere.
“Citing Need for Assessments, U.S. Freezes Solar Energy Projects,” read the headline on The New York Times story about the Bureau of Land Management’s decision to temporarily stop accepting new applications for solar power plants until it studies the environmental impact of industrializing the desert. “How to strangle an industry,” proclaimed Grist, a respected green policy blog about the move. Solar executives and politicians meanwhile slammed the BLM and predicted dark days for renewable energy. “This could completely stunt the growth of the industry,” the Times quoted Ausra exec Holly Gordon.
Problem is, those stories were dead wrong: The feds did not freeze a single solar power plant project currently under review. What was left unsaid, or just briefly mentioned, was the fact that the BLM is continuing to process the 125 solar power plant proposals already in the hopper. Those lease applications cover nearly a million acres for solar power plants that would produce 60 gigawatts of electricity if all are built, which they won’t be. Those projects alone will keep companies like Ausra, BrightSource Energy, FPL (FPL) and PG&E (PCG) busy for years to come, moratorium or not.
“We don’t even like to call it a moratorium,” says Alan Stein, a deputy district manager for the BLM in California. Stein called me on my mobile just as I was about to step into a kayak at Elkhorn Slough near Big Sur. I had spent several months talking to Stein and other BLM officials while criss-crossing the Mojave with solar energy executives for a forthcoming Fortune story and he seemed taken aback by the tone of the media coverage.
But the higher-ups in Washington got the message. “We heard the concerns expressed during the scoping period about waiting to consider new applications, and we are taking action,” said BLM Director James Caswell in a statement. “By continuing to accept and process new applications for solar energy projects, we will aggressively help meet growing interest in renewable energy sources while ensuring environmental protections.”
The head of the solar industry’s trade group, the Solar Energy Industries Association, declared victory. But SEIA president Rhone Resch complained in a statement that, “BLM has only resolved half the problem. They have yet to approve a single solar energy project. Expediting the permitting process is the next step in developing solar energy projects on federal lands.”
He’s right that the process – which is intertwined with California’s extensive environmental review of projects in that part of the Mojave – takes far too long. But developing a desert-wide environmental policy is absolutely essential for huge power plants that in total would cover hundreds of square miles of a fragile landscape home to protected wildlife and rare plants. Otherwise, watch each individual project get bogged down in endless environmental challenges.
What really threatens the nascent solar industry right now is not the BLM. Rather it’s the imminent expiration of the 30 percent investment tax credit that all these solar energy startups and their investors – which include companies such as Google (GOOG) and Morgan Stanley (MS) – are depending on make Big Solar economically viable. Congress has failed several times in recent months to extend the tax credit, which expires at the end of the year. If only solar energy execs and their supporters in Washington could exert the same influence on recalcitrant Republicans as they have on the BLM.