On March 21, 2012, President Barack Obama speaks after touring Sempra's Copper Mountain Solar 1 facility in Boulder City, Nev. (AP)
The re-election of President Barack Obama, who has been described by industry leadership as a "powerful ally" to the solar sector, and could be a boom to the solar industry.
The U.S. House and Senate also gained several staunch solar supporters in their ranks, favorably tilting the political balance - even as party control remained the same in both chambers. Several members identified by the Solar Energy Industries Association (SEIA) as core solar champions, including four Democratic senators winning re-election:
- Sen. Maria Cantwell, D-Wash.
- Sen. Dianne Feinstein, D-Calif.
- Sen. Debbie Stabenow, D-Mich.
- Sen. Robert Menendez, D-N.J.
John Stanton, vice president of government affairs at SolarCity, during a webinar sponsored by law firm Chadbourne & Parke said.
"For specifically solar-related outcomes, we couldn't have hoped for more in this election."
But when Obama, the House and Senate's solar supporters, and the rest of Congress return to work this month for a lame-duck session, many of the same political issues that have haunted the renewable energy industry will persist - especially if the same partisan gridlock that characterized Obama's first term carries over into the lame-duck session and into his second term.
Although solar professionals are not contending with an imminent tax credit expiration (as is the case in the wind industry), plenty of challenges await. The results of Election Day and current events are also expected to bring potential new opportunities for favorable legislation.
All in all, here are five vital post-election political issues to watch:
Looming fiscal cliff
With the threat of sequestration growing closer, Congress will make addressing the fiscal cliff a top priority.
Jonathan Weisgall, vice president of legislative and regulatory affairs at MidAmerican Energy Holdings explained.
"There is a tremendous imperative from the business community to act on the fiscal cliff because of the enormous impact it's having."
For the solar sector, the effects of Congress' attempts to back away from the cliff could be multi-faceted: First, if tax extenders are taken up as part of this work, a production tax credit extension - with or without a commence-construction provision - or other tax incentive changes could result, said Rhone Resch, president and CEO of the Solar Energy Industries Association, during a separate post-election webinar sponsored by SEIA.
Meanwhile, the fiscal cliff's dominance in Congress' work over the next couple months and beyond could also shut out discussion of any other issues, thus preventing energy bills or other pro-solar legislation from being considered.
Panelists at both webinars were uncertain whether Congress will immediately undertake dramatic action - including immediate tax reform - or put off any meaningful agreement.
"What we'll see during the lame-duck session is some sort of down payment toward a grand bargain and an agreement to do tax reform in the near future," predicted Joseph Mikrut, a partner at Capitol Tax Partners.
Relief from anti-renewables rhetoric?
In recent years, some members of Congress and affiliated political action committees have unleashed increasingly aggressive attacks on renewable energy - particularly solar energy - as critics of the Obama administration's investments in the sector sought to paint such spending as wasteful and even politically corrupt.
Stanton remarked that the industry has seen a recent shift from many Republicans from espousing an "all of the above" energy strategy to "isolating and alienating" the renewable energy portion of that strategy. However, such efforts largely failed to resonate with voters, as support for solar remained strong among voters of all political stripes.
Now that the election has ended, some newly elected members who actually support solar but were forced to hold back their views during the election may be able to safely come forward and help advance pro-solar legislation in Congress, Resch said.
Even so, the overall politicization of renewable energy may be slow to fade. The creation of such programs as a "green bank" - within the realm of legislative possibility a few years ago - would now be unlikely following "all the Solyndra bashing and the House passage of the No More Solyndras Act," Stanton said.
Status of the investment tax credit
Although the investment tax credit (ITC), currently in place through 2016, could hypothetically face an early termination - possibly under tax reform passed by Congress as part of its fiscal-cliff attack plan - panelists on both the Chadbourne webinar and the SEIA webinar expressed confidence that the credit will remain safe.
Weisgall pointed out that history is on the ITC's side; no tax incentives in decades have seen termination before their sunset dates. Additionally, according to Resch, although some members of the House of Representatives may seek to eliminate a range of renewable energy tax incentives - including the ITC - the president and Senate will provide a legislative safety net against the actual passage of any such measures.
He said.
"I am confident the ITC will be protected through 2016."
However, the solar sector must accept that the ITC will eventually end - and must begin work now on a plan for coping with that reality. Richard Glick, vice president of government affairs at Iberdrola Renewables said.
"It would be foolish for any technology receiving a credit not to plan for that," "We all know they're going to get phased out."
Carbon tax?
Obama and his Republican challenger Mitt Romney did not discuss climate change during their election-season debates. But with recent natural disasters and the election of some environmentally minded new members of Congress, the issue of tackling climate change has gained new momentum lately - to the possible benefit of the solar sector.
Resch noted.
"We're really shifting to a whole new generation of pro-solar, pro-renewables senators who truly understand that climate change is a serious issue and that we are a solution technology."
With regard to the necessity of mechanisms for fighting climate change, Congress may have reached a "new level of reality," added Glick. This stance, he said, broadly strengthens the clean energy agenda.
Talk of a carbon tax, in particular, has increased, especially because budgetary pressures may lead lawmakers to look for new sources of revenue. Ultimately, however, the Chadbourne panelists pinned the chances of seeing such a measure passed at approximately 20% to 25%.
New leadership in Congress
Finally, solar advocates will need to learn some new faces at top posts in multiple branches of the federal government.
- The Senate - Sen. Ron Wyden, D-Ore., described by Resch as enthusiastic and energetic, will now chair the Senate's powerful Energy and Natural Resources Committee. Sen. Lisa Murkowski, R-Alaska, will remain ranking member. Sen. Max Baucus, D-Mont., will stay at it his post as chair of the Finance Committee, which will see an influx of new members from both parties.
- House of Representatives - Remains controlled by Republicans, Democrats likely gained enough seats to sit on more key committees, Resch noted. This shift in political balance could have an effect on the development of solar-related legislation.
Obama's cabinet will also see a shake-up. In addition to the departure of Treasury Secretary Timothy Geithner, whose replacement has yet to be named, and according to Resch, the president is also rumored to lose several cabinet members with integral roles in the solar sector:
- Steven Chu, Energy Secretary.
- Ken Salazar, Interior Secretary.
- Lisa Jackson, Environmental Protection Agency Secretary (may also depart).
Most solar professionals will not have the opportunity to interact with high-level cabinet replacements, but their local representatives can be more easily accessed.
Carrie Cullen Hitt, vice president of state affairs at SEIA, said that educating those lawmakers on the benefits and current cost status of solar energy will be an important task. Hitt said.
"We've had few dramatic changes, but the fact is that we have a lot of new legislators. It is absolutely critical - whether or not you have a new legislator - that you and your team introduce yourself to them."
Resch agreed.
"Make sure they know they have a solar company in their district."
COMMENTARY: The Obama Administration’s ongoing energy efficiency goals cross several sectors. Since October 2009, the Department of Energy and the Department of Housing and Urban Development have jointly completed energy upgrades in more than one million homes across the country. For many families, these upgrades save over $400 on their heating and cooling bills in the first year alone. Through the President’s Better Buildings Challenge, the Administration is working to improve the energy efficiency of commercial buildings by 20 percent by 2020. The Administration has also partnered with manufacturing companies, representing over 1,400 plants, to improve energy efficiency by 25 percent over 10 years. If this performance were achieved by the entire U.S. manufacturing sector over the next decade, savings in total energy costs could exceed $100 billion.
Safe and Responsible Domestic Oil and Gas Production
Domestic oil and natural gas production has increased every year President Obama has been in office. In 2011, American oil production reached the highest level in nearly a decade and natural gas production reached an all-time high. In addition, in response to theDeepwater Horizon oil spill in the Gulf of Mexico, the Obama Administration has launched the most aggressive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history to ensure that our nation can safely and responsibly expand development of offshore energy resources. The Administration is also taking steps to ensure we can safely develop our vast supplies of domestic natural gas.
Increasing American Energy Independence
Since President Obama took office, America’s dependence on foreign oil has decreased every year. In 2010, the United States imported less than half of all oil consumed – a first in 13 years. In fact, net imports as a share of total consumption declined from 57 percent in 2008 to 45 percent in 2011 – the lowest level in 16 years. In the last year alone, we have cut net oil imports by 10 percent – a million barrels per day.
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Effect Of Home Installation of Solar System
Take a look at statistics for the impact a modest 2.5kw solar power system can have over its lifetime:
- 300 barrels of oil not produced.
- 270,000 miles not driven.
- 1,100 lbs of acid rain emissions not discharged.
- 550 lbs of smog emissions not produced.
- 220,000 lbs of greenhouse gases not emitted.
The above are just the savings from a single home equipped with a modest solar power system.
Here’s another way to think about it: installing a 2.5kw solar power system is equivalent to planting 500 trees. Solar energy is a renewable, clean alternative to fossil fuels. Yes, you can help save the environment with a solar panel system!
U.S. and Worldwide Solar Energy Statistics
| Solor Engery Statistics |
Data |
| Average solor panel size needed to power the average home |
600 sq ft. |
| Average cost of installing a 600 sq ft solar system |
$55,000 |
| Solar energy share of global energy consumption |
0.7 % |
| Average annual growth rate of global solar engery capacity |
102 % |
| Amount of solar energy that hits the earth each year |
8.2 Million Quads |
| Total quads currently used by the entire globe annually |
400 Quads |
| Percent of earth that would need to be covered with solor panels to power it |
0.0005 % |
| Barrels of oil saved annually by all solar energy users |
75 Million Barrels |
| Tonnes of carbon dioxide saved annually by all solar energy users |
35 Million Tonnes |
| Coutnries with the most installed solar energy in MW |
MW |
| Germany |
9,785 |
| Spain |
3,386 |
| Japan |
2,633 |
| United States |
1,650 |
| Italy |
1,167 |
| Czech Republic |
465 |
| Belgium |
363 |
| China |
305 |
| France |
272 |
| India |
120 |
| U.S. Solar Energy Production Statistics |
2009 |
2000 |
1990 |
| Number of U.S. manufactures |
13 |
11 |
12 |
| Solar panels shipped |
10,511 |
7,948 |
3,645 |
| Price per square foot |
$1.94 |
$2.09 |
$2.90 |
| U.S. Photovoltaic Solar Production Statistics |
|
|
|
| Number of U.S. manufactures |
101 |
21 |
19 |
| Shipments |
1,282,560 |
88,221 |
13,837
|
Source: U.S. Energy Information Administration, Ecoworld - July 26, 2012
U.S. Solar Energy Boom in 2012
So far, 2012 is turning out to be a very good year for solar power in the U.S. According to a new report just released by GTM Research and the Solar Energy Industries Association, 742 megawatts of new solar power came online in the 2nd quarter of 2012. This is up from 512 megawatts in the 1st quarter and represents a more than doubling of the amount of solar power installed in the 2nd quarter of 2011. In fact, the 742 megawatts of new solar just installed is more than the amount of solar installed in all of 2009.
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U.S. Solar Industry Shows Strong and Steady Growth
- The U.S. now has over 5,700 MW of installed solar electric capacity, enough to power more than 940,000 average American households.
- The utility scale segment drove the U.S. market in Q2, with 477 MW of installated solar electric capacity. Eight states had 10 MW or more of utiltiy-scale installations.
- The residential PV market continued to show steady, incremental growth. There was 98 MW of residential installations in the second quarter of 2012, up 42 percent over Q2 2011 installations.
U.S. PV Installations by Quarter (in MWs) by Quarter - Q1 2010 through Q2 2012 - SEIA - Sep 2012 (Click Image To Enlarge)
Costs Reductions Continue To Make Solar More Affordable
- The average cost of a completed PV system dropped by 33 percent in the second quarter of 2012 compared to the second quarter of 2011.
- Since the beginning of 2010, the average cost of a PV system has dropped by more than 46 percent.
- The average price of a solar panel has declined by 51% since Q1 2011.
- While these price drops are beneficial for the end user, the sharp fall in prices, driven in part by a global oversupply, has put a serious strain on solar manufacturers worldwide.
Blended Average PV System Installed Price Per Watt by Year - 1998 through First-Half 2012 - SEIA/GTM Research - September 2012 (Click Image To Enlarge)
Solar Energy Is A Job Creator
On November 2nd, 2012, The Solar Foundation announced that the U.S. solar industry employs 119,016 Americans. This figure represents the addition of 13,872 new solar jobs and a 13.2 percent employment growth rate over the past twelve months. During the same period, employment in the overall economy grew at a rate of 2.3 percent* (according to the Bureau of Labor Statistics), signifying that 1 in 230 jobs created nationally over the last year were created in the solar industry. The increasing value of solar installations has injected life into the U.S. economy as well. In 2011, solar installations were valued at $8.4 billion, compared to $6 billion in 2010.
Released on November 2, 2012 by The Solar Foundation: the National Solar Jobs Census 2012 reports 119,000+ U.S. solar jobs this year (Click Image To Enlarge)
Solar Energy Disadvantages
- Photovoltaic solar panels require a lot of sunlight during the day to operate efficiently, so production of solar energy is limited within certain preferred geographic areas of the U.S.
- Photovoltaic solar panels are still expensive and on a cost-per-watt basis are the highest when compared with other alternative sources of energy.
The Obama Administration has been steadfast in its support of renewable energy as a way to reduce our dependency on foreign oil and reduce greenhouse gases. Although the Administration has been criticized for providing Department of Energy loan guarantees to several solar startups, including Solyndra (which declared bankruptcy in 2011 and spent all of the $500 million loan guaranteed by the U.S. government) and BrightSource Energy ($1.4 billion loans), the administration prefers a more balanced energy policy. This policy will rely on increasing domestic oil production, decreasing imports of foreign oil (including blocking a pipeline that would transport oil from Canada to Ohio), investments in clean coal technology (a misnomer, if there ever was) and providing tax incentives for wind and solar energy. These initiatives resulted in the reduction of 1 billion barrels in foreign imported oil between 2010 and 2011.
In spite of the resistance to renewable energy by Conservatives and anti-environmentalists, the October 2012 surprise of Hurricane Sandy slamming into the east coast of the U.S. with a vengeance, has sent shivers among scientists, environmentalists and the public alike, and people are suddently beginning to ask the question: Is global warming really here? According to many scientists, rising ocean temperatures along the eastern seaboard, could result in even more violent storms and hurricanes. Given the change in mood concerning global warming, I have a feeling that it Congress would be taking a tremendous gamble if it did not increase incentives to increase investmet in more wind and solar energy.
Courtesy of an article dated November 8, 2012 appearing in Solar Industry Magazine an article dated July 26, 2012 appearing in Statistic Brain and the The White House's Securing American Energy
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