Senate Hearing Reveals Policy Priorities For Solar

With the U.S. commonly predicted to be the next big, booming market for solar, and the U.S. government pinning hopes for economic recovery on the job-creation potential for solar, the solar-friendliness of policies and provisions implemented by the federal government this year will undoubtedly help determine whether both sets of lofty expectations can be met.

At a recent hearing held by the Senate's Environment and Public Works Committee and Subcommittee on Green Jobs and the New Economy, high-profile solar company executives and government officials outlined the most crucial steps that the federal government must promptly take in order to ensure continued growth in the country's solar market.

Ken Salazar, Secretary of the Interior, noted that the installation of large-scale solar projects has created a major shift in operational tactics at the Department of the Interior (DOI). ‘For the first time ever, environmentally responsible renewable energy deployment is a priority at this department,’ he stated, according to prepared remarks released by the Senate.

Salazar stressed that the DOI, which oversees 20% of the U.S.' land, must expedite its processing of the 128 utility-scale solar project applications – totaling approximately 77,000 MW – that the Bureau of Land Management is currently evaluating. Renewable Energy Coordination Offices, project fast-tracking and the identification of 1,000 square miles in the West as Solar Energy Study Areas are expected to help maintain the momentum.

In conjunction with the Department of Energy (DOE), the DOI is also preparing for a release late this year of a Solar Energy Development Programmatic Environmental Impact Statement, designed to provide a ‘landscape-scale plan for siting solar energy projects on our public lands in the Southwest that have been identified as having the best potential for utility-scale solar energy development,’ Salazar added.

Robert Rogan, senior vice president at concentrating solar thermal (CSP) company eSolar, urged the Senate committee to help remove existing barriers to solar development both on and off DOI land.

‘Almost every solar project developer, especially CSP providers, has encountered significant obstacles in the environmental permitting process for both private and federal public lands,’ he pointed out. ‘We ask for your support in streamlining the environmental permitting processes to ensure these solar facilities are built on reasonable timelines.’

Complications associated with connecting completed solar facilities to the grid and transmitting the power produced also ranked as high priorities for the solar executives who testified. Rogan called for a ‘coherent national transmission network plan, including expedited permitting for new transmission lines that carry renewable energy.’

Existing transmission siting and interconnection rules developed several decades ago must be updated, agreed First Solar CEO Rob Gillette, who cited transmission constraints as one of numerous potential threats to the U.S.' solar energy deployment – as well as the job-creation benefits that go along with it.

‘Without a growing and predictable domestic market, the U.S. risks losing the global race for solar technology and associated green jobs and could be relegated to an importer of products developed and manufactured in other countries,’ Gillette warned.

To effect a positive policy outcome, the government must first extend the Treasury's Section 1603 cash-grant program, through Dec. 12, 2012, in an upcoming jobs bill, said Gillette, whose recommendation was echoed by other industry executives. The program is currently set to expire at the end of this year.

‘A defining feature of the Treasury grant program is that it vastly extends the pool of investors who are attracted to the stable, long-term return on investment that a utility-scale solar plant provides,’ explained Gillette. ‘The grant program also benefits the debt side of solar financing by lowering the cost of debt at a time when financing continues to be tight.’

Similarly, the DOE's loan-guarantee program, another financial backstop intended to mitigate the effects of the U.S.' still-shaky economy, must be extended to 2016, according to the solar executives who testified.

Gillette explained that this new timetable would better synchronize the program, which is set to expire in 2011, with the lengthy development timelines typical of the projects it supports.

‘Additionally, I strongly encourage the Senate to adopt the House's position on H.R.2847, which will allow for multiple DOE loan applications for a single technology,’ added eSolar's Rogan. ‘Currently, our development partner NRG can only access DOE loans for our New Mexico project, but cannot use DOE loan guarantees for either of our two California projects.’

Some of the other key policy issues highlighted in the Senate hearing, including a national renewable electricity standard and cap-and-trade mechanisms for curbing carbon emissions, are likely to have far-reaching effects across the solar market.

For residential and other small-scale solar installations specifically, Jeff Wolfe, CEO of solar distributor groSolar, suggested three actions to boost deployment and create jobs.

Wolfe first called for the Senate to approve the 10 Million Solar Roofs program, an initiative based on California's Million Solar Roofs program that was recently introduced by Committee Chairman Bernie Sanders, I-Vt. This initiative helps defray solar system costs for homeowners and small businesses.

In addition, Wolfe requested that the tax credit for residential solar installations be expanded to 50% of the cost of an eligible solar system.

‘Third, and last, is to open up the ability to finance smaller projects as part of the proposed Green Energy Bank,’ said Wolfe. ‘Giving large banks the ability to lend has not created within them the desire to lend.’

For each of these recommendations, Wolfe stressed the economic benefits for both the homeowner or small-business owner that purchases a system and the solar-sector workers involved with the manufacturing and installation of the equipment.

Annually, each megawatt of solar photovoltaic systems deployed in the U.S. creates 25 jobs, he noted.

‘Most of those jobs are impossible to send offshore, because they are on the ground and on the roof,’ Wolfe continued. ‘It's simply hard to install solar panels in this country unless you are in this country.’

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