US solar industry rolls up its sleeves for new dawn

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Now the election bunting has been taken down, the real work begins in preparation for Barack Obama's second term as US president. Renewable energy companies across the country breathed a sigh of relief. But does his landmark victory mark a new dawn for solar?

Rhone Resch, Chief Executive of the Solar Energy Industries Association (SEIA), gave prospects of another stint for Obama in the White House a warm welcome. “Since President Obama took office, the amount of solar powering homes, businesses, and military bases has grown by 400% – from 1,100MW in 2008 to more than 5,700MW today,” he said. “As we recover from the recession, America needs plentiful and diverse energy resources, including solar, to power our economy.”

We're unlikely to see anything substantial until after Obama's inauguration. Some are hoping for progress with the appointment of Democrat Oregon Senator, Ron Wyden, to Chairman of the Senate Committee on Energy and Natural Resources. But as the fevered discussions about a national carbon tax have shown, now is the time to write your wish-list — even if Congress will ultimately spike your dreams.

Obama took quite a lot of stick in his first term for pinning job growth to his economic stimulus. And although organisations like the SEIA  will point to an industry that employs 119,000 Americans at 5,600 companies, the Obama administration's numbers fell short of expectations.

But that might change, at least at the state level, with the likes of California switching focus to distributed generation (DG). Governor Jerry Brown after all has an ambitious target of 12GW of DG by 2020 and describes the state's 33% Renewable Portfolio Standard as a floor, not a ceiling.

Dustin Mulvaney, Assistant Professor of Sustainable Energy Resources at San Jose State University, is no advocate of utility-scale solar, which has stolen the megawatt limelight in recent years. DG yields more jobs per megawatt than utility scale, he said.

“The advantages of DG far outswamp the advantages of high insolation desert installations. A lot of the project developers I've been speaking to are going a bit smaller with their next round of projects.

“Job growth appears to be happening at least in the installation side of things. It seems there is a lot of opportunity there and particularly as we start to develop more local DG that's really where all the job growth is.”

An added bonus for the DG route would be to bring energy concerns into homes and businesses, Mulvaney added.

“Ultimately, solar is not going to save us. We need to change our behaviours significantly to be able to curtail our carbon emissions, and more out of sight, out of mind electricity generation doesn't really help the problem.

“Like the local food movement was about bringing people closer to the food they eat, people seeing and understanding the relationship between a PV system and electricity consumption will get people to reflect. Consumers can get a better sense of what it takes — say three PV panels to power a microwave.”

Lisa Belenky, Senior Attorney at the Center for Biological Diversity, would also like to see a ramping down of large-scale solar stranded out in the desert, often in fragile habitats.

“The real question is: what is our goal. If our goal is to shift towards a renewable energy economy, then we want to do it in the smartest way and the way that's going to be the most enduring. Nature conservation and energy efficiency cannot be left behind.

“We can't solve that problem by just building other types of giant utility power plants; the answer is to integrate it into our lifestyles, to make our houses more efficient, to use less energy per capita and use it more efficiently and certainly not to waste energy.”

The Bureau of Land Management's blueprint to standardise applications for utility-scale solar permits in Arizona, California, Colorado, Nevada, New Mexico and Utah is a step in the right direction, she said. But it's pointless to add clean electricity generation only to watch the energy leak away from homes built “like Swiss cheese”, she added.

However, the utility sector is here to stay and will continue to take the largest market share for some time to come. But its profile will change from mega-projects stranded from population centres to large and mid-size projects closer to load.

Sheldon Kimber is the Chief Operating Officer at Recurrent Energy, which is the primary solar developer for Sharp. The San Francisco-based company focuses on projects in the 20MW range and may well have hit a sweet spot in project size, with contracts signed for 600MW.

“We think of ourselves as power development folks on the wholesale side of the meter to provide power to utilities. It matched up with some very advantageous development opportunities to apply for interconnection in California as long as you didn't exceed 20MW.”

Kimber describes himself as the closest thing to a Republican you're likely to find in granola crunching, tree hugging northern California. If you see his name on the programme for an industry event, I strongly recommend that you head to his panel discussion to listen to his outspoken but very thoughtful views.

But before the election last week, he told me that that a Romney victory would have been disastrous for the solar industry.

“I've made an effort to really understand what the energy policy of a Romney administration might look like and why they've gone out of their way to leave their options open or not publicly put down renewable energy. They've not cut them out of the equation totally but clearly don't seem to be making it the centrepiece of any kind of energy policy.

“That's a bit frightening. It really misses a huge opportunity from a very pro-business standpoint.”

Leader of the House, John Boehner, has already told the Republican Party to step into line to agree a way forward to avoid the “fiscal cliff, though he has tried this before, and failed. But agreement on anything, even the real colour of white, though a refreshed bipartisanship after Republicans failed to force Obama into single term presidency, would be a welcome reprieve.

Kimber reckoned that some solar advocates only had themselves to blame.

“The whole idea of this partisanship of solar is silly. I don't understand why renewable energy is a liberal thing and not a conservative thing,” he said.

“It's only that way because the way in which some advocates of renewable energy have gone about advocating has turned it into a partisan game. From what is being said publicly Obama's team has spent more time focused on renewable energy and would be the clear choice for furthering renewable energy in this country.”

Good policy at state and federal level, along with an extension of the Investment Tax Credit beyond 2016 would be extremely helpful for the industry, he said. But upstream vendors also need to do their part, Kimber added.

“The market price right now is what it takes to do solar and as the upstream business consolidates and comes together what it really needs to make peace with is the fact that it needs to continue to find ways to do things at least cost.

“[Some people think] we can make a smaller cottage industry where we take premium prices and go after premium markets — that can't happen. The only path forward is to realise that there's tremendous scale and opportunity but we've got to remain at these really low prices and become even more competitive.

“They are very difficult decisions right now given the fiscal situations, but the will power to push solar forward is really what we're going to rely on in the next two years. The biggest opportunity is just the scale of the market. Everyone in solar needs to see themselves as a member of the electric power industry with $350 million of sales to end-users. That opportunity is massive.”

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