We were just informed that Pasadena Water & Power (PWP) will be substantially lowering its solar rebate rates for non-residential customers effective December 1, 2011.
The new rebate rates will be as follows:
That works out to a 39.3% drop for commercial and a 25.6% drop for non-profit/government installations.
Residential rebate rates will remain at $2.00/Watt (EPBB) and $0.302/kWh (PBI).
Rebate applications that are deemed complete by PWP on or before November 30, 2011 will qualify for the present rebate amounts. However, it is impossible to guarantee that a rebate application will be deemed “complete” upon submission so potential clients are advised to get their rebate applications on file as quickly as possible to avoid losing out on the higher rebate amounts.
Next Wednesday, November 2, 2011 at 10:00 a.m., the Los Angeles City Council will debate LADWP’s proposed Feed-in Tariff (FiT) program proposal. Among other issues to be discussed will be the City Attorney’s opinion on whether the “competitive bidding” scheme that LADWP is proposing during the 6 MW demonstration phase of the FiT program is consistent with statutory requirements.
The hearing will be held at City Hall, in the John Ferraro Council Chambers, 200 N Spring Street, Room 430.
We will update this post as we learn more. You can read our prior reporting on the LADWP FiT program here.
(Hat tip, CLEAN LA Solar Coalition.)
Hard on the heels of our posting about the importance of proper solar policies, the Solar Energy Industry Association (SEIA) today released a report showing the potential for additional job growth in the solar industry simply by extending the section 1603 Treasury Grant program. This is an important policy development and Congress should extend the program through 2016.
First some background - the section 1603 Treasury Grant Program (TGP) is an alternative to the 30% investment tax credit for solar. The tax credit allows a commercial client to receive a credit on their income taxes for 30% of the cost of installing a solar power system. However, not all potential clients can use a tax credit of that size (or at all) since their taxable income may not be that great. Moreover, in many commercial transactions, financial partners are often brought in to support the project through a power purchase agreement and again, the revenue may not be sufficient to make the tax credit attractive.
The TGP simplifies that process by allowing commercial clients to apply directly to the treasury for a grant of 30% of the system cost, regardless of their tax appetite. Moreover, the grant can be applied for upon project commissioning, meaning the payment is received possibly well in advance of receiving the corresponding tax benefit.
The SEIA report - prepared for them by EuPD Research - outlines several significant advantages from extending the TGP. In particular:
A one-year extension of the 1603 Treasury Program through 2012 would have the greatest impact on economic activity in 2012 and 2013, as well as enable growth through 2016 as projects complete construction and come online.
- An additional 37,000 jobs would be supported by the solar energy industry in 2012, a 12% increase over baseline.
- The additional cumulative capacity installed (2012-2016) would be about 2,000 megawatts over baseline, enough to power 400,000 homes.
A two-year extension of the TGP commence construction deadline through 2013, would yield 1,000 additional jobs in the solar energy industry in 2013, a 16% increase over baseline, and would result in 3,600 megawatts of cumulative additional capacity installed from 2012 through 2016.
A five-year extension of the TGP to coincide with the term of the investment tax credit would support an additional 114,000 jobs in the solar energy industry in 2015, a 32% increase over baseline, and would result in 7,300 megawatts of cumulative additional capacity installed from 2012-2016. A predictable five year policy framework will generate an environment that fosters industry growth larger than the potential year-to-year extensions and would create sustained momentum for the industry.
Here is what that would mean graphically:
Sadly, what should be a straight-forward policy decision that produces good, American jobs, reduces pollution and increases domestic energy production will no doubt face a stiff fight in Congress this Fall.
Still, as the industry prepares to meet at the annual Solar Power International Conference in Dallas next week, it is time for solar advocates to lace up their work boots and push back against those who would gut our industry just as we are starting to make a real difference - and isn’t making a difference why we got into this business in the first place?
We recently came across some analysis of future energy trends depicted in the International Energy Outlook 2011 published by the U.S. Energy Information Administration (hat-tip to the folks at Climate Denial Crock of the Week). What struck us was how a simple change in U.S. tax policy will have a potentially devastating impact on the solar industry in this country.
Here is a graph that we have derived from the IEO data which shows the projected growth in installed solar generating capacity based on existing government policies for the US, Europe, Japan and China. (IEO’s total predicted solar capacity worldwide by 2035 is 119 GW.)
The first thing we noticed is that the US - the blue line in the graph - takes off in 2008, stays ahead of both Japan and China until 2017 when China shoots past us, and stays largely flat thereafter. Flat, as in dead, moribund, kaput! Meanwhile, Europe leads everyone, but sees its explosive growth scaled back dramatically in 2013. Even China’s growth is projected to flatten out after 2020. Indeed, only Japan shows significant growth after 2017, tripling its installed capacity from 9 to 27 Gigawatts by 2032.
We will leave it for others to comment on what is happening elsewhere, but here in the U.S. the obvious reason for the enormous reduction in growth after 2016 is the expiration of the 30% federal investment tax credit for solar installations. Indeed, the U.S. growth rate from 2008 to 2017 is just under 27%! But under the existing law’s sunset provision at the end of 2016, the overall projected growth rate from 2005 to 2035 is only 8.8%, with nearly all of that front-loaded.
Which has us wondering, what might happen if the U.S. were to retain its existing tax credit for solar installations indefinitely? After all, federal tax subsidies for the fossil fuel industries have been in place for a very long time so it only seems fair to give the new kid on the block a similar benefit. Here’s the chart again this time showing the U.S. with a long-term tax subsidy in place, but with somewhat moderated growth, declining from the ~27% depicted before to just 20%.
Wow - let’s hear it for compound interest! A stable U.S. tax policy for solar investment, even with a moderated growth rate, could lead to this country more than doubling the EIA’s present-policy prediction for worldwide solar by 2035! Put another way, under such a policy and growth rate, the installed U.S. solar generation capacity would be roughly one-fourth of the present U.S. total capacity of just over 1 TW.
All of which is just another reminder that policies matter and choosing leaders with the vision to support such policies is a very important piece of building a future where solar and other renewables can move us away from polluting energy sources.
Does the Solyndra failure mean, as some would assert, that the entire DoE loan guarantee program is a scam that puts taxpayer dollars at undue risk? Hardly. The vast majority of the projects approved under the program present very little risk to taxpayers. So why don’t people know that?
We came across a couple of items today that seem to put this in some perspective. The first was a story on NPR that outlined Republican opposition to the loan program even though 16 of the 28 projects that it supported already have in place long-term energy sales contracts - making them nearly risk free. Nevertheless, Rep. Cliff Stearns (R-Fl), now opposes the program entirely (although he backed it when it originated during the Bush Administration) and he believes that we simply “cannot compete with the Chinese” in solar panels and wind turbines.
Here’s the entire story - it is worth a listen:
By way of contrast, the second piece that came to our attention today is from Rhone Resch, head of the Solar Energy Industry Association (SEIA). Resch was sending out an update to the SEIA membership - Run on Sun is a proud SEIA member - sharing with them a blog post he received from Dan Pfeiffer, Communications Director at the White House. Drawing a clear distinction from Rep. Stearns, Pfeiffer cited Energy Secretary Steven Chu’s admonition over this past weekend:
The United States faces a choice today: Will we sit on the sidelines and fall behind or will we play to win the clean energy race? Some say this is a race America can’t win. They’re ready to wave the white flag and declare defeat… Others say this is a race America shouldn’t even be in. They say we can’t afford to invest in clean energy. I say we can’t afford not to.
It’s not enough for our country to invent clean energy technologies – we have to make them and use them too. Invented in America, made in America, and sold around the world – that’s how we’ll create good jobs and lead in the 21st century.
Secretary Chu is absolutely right and it should be a matter of pride for all Americans that we not only compete, but that we win this competition. After all, Solyndra notwithstanding, we are competing successfully right now. Consider:
The solution to our problems is not to throw up our hands in despair and slink from the playing field. Rather, it is time to redouble our efforts and make the sort of investments that will really help our manufacturers - and installers, thank you - thrive.