Feed-in-tariffs are a controversial subject in the US where the energy industry likes to pretend that free market economics applies to this sector. You might expect clean energy antagonists to baulk: “Let the government set the price for electricity — are you crazy? Let the market decide.”
But even clean energy protagonists are divided about the true value of FiTs in sustainable markets: “Set the mandated rate too high and we'll have a Spanish boom and bust scenario on our hands. We don't want that.”
Set it too low, and nobody will want to invest. Palo Alto's Clean Local Energy Accessible Now (CLEAN) programme still has its full 4MW of capacity available and has extended its deadline.
Added to which, tariffs also sound a bit like the dreaded ‘T’ word — taxes. So attempts to introduce them at the distributed commercial level have required a creative rebranding to the dramatically under-descriptive CLEAN programmes designed by the Clean Coalition.
But the truth is that in most states, the US electric power industry is more regulated and restrained from price hikes than many other strategic sectors of the US economy, like, for example, the healthcare service. But that's a different story…
At the Clean Energy Conference in Las Vegas earlier this month, a new voice was unexpectedly added to the chorus of American advocates of feed in tariffs. Fresh from a trip to the Ivanpah solar thermal power plant, former President Bill Clinton drew a sharp intake of breath from his rapt audience when he said, “A Deutsche Bank study showed that Germans netted 300,000 jobs from FiTs and their commitment to solar power. A few weeks ago the Germans generated 22GW from the sun in a country where the sun shines on average the same as it does in London and any US state except Alaska.”
Aside from breaking the news in the sun-drenched western US that Alaska enjoys only marginally more sun than London, the former US president has been no slouch since he left the White House almost 12 years ago.
The Clinton Global Initiative has done some fantastic work both additional to business as usual for everything from water to waste, while carving out a leading edge where businesses would otherwise fear to tread, such as the US$500 million energy efficiency retrofit in the Empire State Building.
But Clinton seems to be picking up a head of solar steam, and will also headline at Solar Power International later this year.
In between conference keynotes, Clinton has found the time to read reports from the Congressional Research Service detailing “every single programme federal government had in clean energy or energy efficiency”.
“We only get 11% of electricity from renewable energy — 8% of that from hydro. If we keep going we might get to 14% by 2035.
“I almost retched [when I read that] when the European target is 20% by 2020. Germany is already over it and other countries are and they are all doing fine.”
Thanks to “protosocialist” incentives introduced under Governor George W Bush, Texas now gets 25% of electricity from wind “on a good day”.
SolarWorld and its supporters will have been uplifted by Clinton's comments on Chinese trade aggression which caused Solyndra to collapse, he said.
“The  loan programme is not bad. It's just that the only problem with having a loan programme is it's vulnerable to what happens after you make the loan in other countries. So the Chinese came in with US$32 billion of energy subsidies for solar power. Solyndra had found a different design but they cost more than twice as much to make and didn't double the efficiency. So they had to get to huge volumes before they could bring the price down enough to be bearable.
“It just became inconceivable and they packed it in. We can have this debate about which incentives work best and I think tax credits are always good in this area. [But] we're still going to be way behind what our European competitors are doing and the Chinese are doing.”
Clinton's CGI has been active in Haiti, the poorest country in the Caribbean with “the highest electric prices in the world”, he said.
“All of these countries have to import oil to generate electricity at exorbitant prices that no-one in the US would pay,” he said, before eliciting the second sharp intake of the audience's breath when he cited “US$0.36-US$0.50 per kwh.”
With NRG Solar, CGI installed solar panels at a new hospital in Haiti. “It's now the biggest solar building in the Caribbean,” he said.
But he said that the news from the US was brighter than most Americans knew.
“Almost no Americans know that last year America surpassed China in aggregate investment in clean energy.
“Chinese subsidies were greater than ours but because of venture capital in Silicon Valley we invested US$56 billion, more than the Chinese did, in building a clean energy economy.
“In 2008 and 2009, at the beginning of this terrible meltdown because of public and private investments, clean economy sectors grew almost twice as fast as the overall economy.
“We need more people to know that European countries with the strongest economies coming out of the financial crash are those with the strongest commitment to sustainable economics.”
Although solar was the “low hanging fruit” in the US, one of the biggest obstacles to mass adoption of residential solar was from mortgage providers, Fannie Mae and Freddie Mac, the mortgage providers who were taken over by the federal government during the subprime crisis in 2008.
Fannie Mae and Freddie Mac effectively shuttered the Property Assessed Clean Energy, or PACE programme which allowed homeowners to pay back loans for solar systems through their property tax.
“They're trying to stop this. Ed DeMarco [the acting head of the Federal Housing Finance Agency] doesn't want to be writing mortgages and he doesn't want PACE financing on property taxes on the theory that takes precedent over the mortgage. But it's really not true if you think about it. If you retrofit a home in Compton, California, which has the highest mortgage foreclosure rate you actually add to its value dramatically by cutting the cost of operating it.
“The government should get out of the way. The Fed government should say we have no objection to PACE financing. Congressman Steve Israel from New York had a bill to try to encourage property tax financing that will help but the main thing we need is for the federal government to drop its objections.”
“He just inherited the job when the Bush appointee left the job and Congress refused to replace anybody else,” he shrugged.
Clinton stopped short of praise for the 44th president of the US. But he did admit that getting anything done in Washington was harder now. Success during his tenure was easier because they were not as broad ranging as the loans programme, he said.
“We did have bipartisan support partly because we were doing discrete projects in discrete areas that had discrete benefits.
“When Obama got elected we were in a terrible mess, he wanted clean energy to be part of the revival of the American economy and American manufacturing.
“Republicans decided that they would try to get a 2010 replay of 1994, which is exactly what they got. If we just say no to everything, they'll blame him, think there must be something wrong with him, that he's too far to the left. The same thing happened to me.
“Then you had the rise of the super PACs and they were funded by a lot of people who had clear economic interests in yesterday's energy economy.”
But optimists should manage their expectations should Obama win a second term, he said. “After this election, if the president is re-elected and whether the Republicans hold their majority or not, both houses will be quite close. If you want to do anything big, if you can't do it in the budget, you've got to have 60 votes in the senate because they'll filibuster.”
Clinton said there were two keys to releasing the deadlock that paralyzes Washington: cooperation and winning votes from the tattooed electorate.
“We'll have more cooperation because the fever will have passed, he won't be up for re-election and maybe people will start thinking instead of viscerally trying to tear the house down.
“Our diversity is important. Differences of opinion are important. No one is right all the time, a broken clock is right twice a day. All of us are living between those two extremes. If your purpose is to reach an agreement then disagreements are exceedingly valuable because they give you a better outcome. If your purpose is winner takes all, then your disagreements are paralyzing and doom you to fail.
“We are going to have to become a stakeholder society again. It's the only thing that works.”
Clinton said that he had met a man that day working on the Ivanpah project with “impressive tattoos.”
“We ought to have a tattoo test,” he said. “The more people with impressive tattoos who advocate green energy and understand what it does for a country's economy, its independence, the more we're going to have success in DC.”