Barack Obama's inauguration speech yesterday was remarkable for many things. But he selected the strongest language on climate change and the need for sustainable sources of energy he's ever used as president, invoking passion and conviction perhaps not even seen in his 2008 campaign days.
“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,” he said. “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.
“The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries; we must claim its promise.”
While the audience might not have been convinced enough about the need for action on climate change to cheer these sentiments as much as others, policy advocates and businesses in the clean energy industry would have been cheered themselves.
Before the election, many people working in solar publicly claimed they expected business as usual regardless of the political colour of the man in the Oval Office. But a change in administration from blue to red would have unsettled the industry and stoked policy uncertainty, a consistent antagonist in US clean energy.
What exactly Obama's second term will mean for the solar industry is not yet clear. Republican dominance in the House of Representatives could spell doom for any new policy of significance. But in the absence of any specifics, the mood music coming from the White House is certainly a complementary accompaniment for a healthy industry.
Overtures for optimism include recent remarks from Obama on action on climate change, and even if the fundamental policies won't change, the personnel pursuing those policies will be very different.
“We do not expect any significant enhancements to the government’s support for the solar industry given the grim fiscal situation and difficulties coming to a consensus in Congress,” said stock analysts Trefis soon after the election.
“However, we believe the re-election will mean that current policies stay the course, improving overall confidence in the solar sector. The president’s re-election would also mean that Energy Secretary Steven Chu, a Nobel Prize winner who is also a strong advocate of renewable energy, will continue in office.”
Chu brought a huge amount of credibility to Obama's $90 billion contribution to renewable energy through the stimulus programme. But strong rumours have been percolating for months that Chu will soon step down.
Washington website The Hill speculates that possible successors include Centre for American Progress founder John Podesta, a former Clinton chief of staff, and deputy Secretary of Defense Ashton Carter; former Michigan Governor Jennifer Granholm and Stanford University professor Dan Reicher. CNN's range of possible replacements include Jim Rogers, the feisty chief of Duke Energy, the largest utility in the US, and Cathy Zoi, who served under Clinton and Obama before joining Silver Lake, a Silicon Valley venture capital firm.
We already know who the deputy at the DoE will be. Jonathan Pershing has played a crucial role at the State Department in international climate talks under special envoy Todd Stern, who infamously locked horns with Chinese negotiators at Copenhagen in 2009. Pershing has an equally hardball reputation as his boss; skills that will be useful in dealing with the Congressional deadlock over progress on climate policy.
Interior Secretary Ken Salazar has already said that he will step down in March having made great strides to accelerate solar development on public lands. During Salazar's tenure, 34 renewable energy projects have been approved with a combined 10.4MW capacity. The most recent announcement set aside 2,250 acres for the Agua Caliente Solar Energy Zone, part of a new fast-track system for projects in six western states.
Another indirect benefit could be felt by the solar industry thanks to Obama's stated ambition of reducing the $4 billion a year taxpayers hand over to big oil companies, a long-standing bugbear of the president's.
On the launch of a new report from the Pew Charitable Trusts last week, Jim Castelaz, founder and CEO of Motiv Power Systems, which makes electric power systems in California, said:
“Subsidies for conventional fossil fuel energy sources served us well in the past. But today, these subsidies are artificially shaping the market, at a time when global climate change and the health effects of particulate air pollution are becoming more difficult for society to ignore. To truly advance into a cleaner economy, the reductions of fossil fuel subsidies can even the playing field for renewables and clean transportation options. We owe it to our children to give clean energy options a fighting chance.”
Furthermore, Obama is expected to increase regulation in the fossil fuel industry. Subsidy reductions together with increases in regulation will serve to level the playing field for renewables.
As Nancy Pfund at DBL Investors noted last year: “Having to tell the EPA that you're about to frack is seen as an intrusion in the natural gas industry. Whereas if a solar operator doesn't tell you when they're pulling a weed out of a farm that they're developing, if they don't have an iron clad record of what they're doing, they're out of business.
“Solar operators have grown up in an era where everything they do has to be environmentally measured and there are all kinds of costs associated with that. And yet natural gas is still not subject to that same rigour and there is a double standard.”
For now, that's good news and we will know more details on the direction that the Obama administration's incoming team will take at the state of the union address.
But what is clear for now is that a more concerted push behind clean energy policy is required. The Pew's report, Innovate, Manufacture, Compete: A Clean Energy Action Plan indicated that many in the industry believe that a clean energy standard would help bolster growth as federal subsidies decline and state mandates reach their targets.
While Washington celebrated yesterday with traditional pageantry, a smaller inauguration party was underway somewhere in the White House garden. Bo Obama, the nation's “First Dog”, apparently powered up his own party [http://rooftoprevolution.tumblr.com/] with solar panels on his kennel roof in an effort to “beg” the president to install panels on the White House. Even if Bo doesn't get his way, it's a nice bit of marketing for Danny Kennedy's Sungevity (and Bo's pretty cute, too).