Thoughts on Solar

Those of us involved in solar in sunny Southern California generally think that we have it pretty good.  The climate is just about perfect for solar - and by that I mean the political climate, every bit as much as our abundant sunshine.  From the Governor, to the legislature, to the CPUC and the CEC, generally those forces support the growth of not just solar power in general, but distributed, on your own rooftop solar in particular.  But we become complacent at our peril - both to the jobs of those in the industry as well as the investment value of all of those solar installations out there.

A recent story from Columbia, South Carolina brought this peril to mind.  As portions of the state edged closer to the existing 2% cap on net metering installations, the legislature was working on a compromise to lift the cap,  allowing more residents the opportunity to install solar and take advantage of net metering.  The utilities had other ideas - from the Greenville News:

Deep-pocketed power companies outspent the solar industry nearly $3 to $1 as part of an intensive lobbying effort during an S.C. legislative session that included efforts to curb rooftop solar’s expansion in the state.
Electric utilities spent nearly $523,000 from January through May to hire more than three dozen lobbyists to advocate for them at the State House as lawmakers decided what to do about solar incentives.

Yikes.

The result of all that lobbying?  The effort to lift the net metering cap was defeated - and local solar companies are going to be laying off employees (if not closing altogether) while affected residents will either have to forego solar, or find it far less financially viable.

We delude ourselves if we think that it can’t happen here.  Utility lobbyists are in Sacramento just as they are in Columbia, and the recent forced change to net metering 2.0 in SCE territory is a reminder that our progress is not guaranteed.

Which brings me to the Solar Rights Alliance.  We have written about this important organization before, and will do so in the future.  But I wanted to use this post to show how we are putting our money where our mouth is.  Starting today, we are modifying our solar installation contracts to provide an opt-in checkbox for new clients to be signed up for the Solar Rights Alliance, with Run on Sun making a donation in their name to help support the important work of organizing solar clients statewide.

We are never going to be able to match the money coming from the utilities and their allies.  But what we do have is tens of thousands of happy solar owners all across the state.  If we can organize even a fraction of them, we will be able to speak directly to policy makers and let them know that the value of installed solar power systems must be protected.  That is a fight that we need to take on, and the Solar Rights Alliance (along with our wonderful trade association, CALSSA) is key to winning that fight.

Today is a great day for solar! The uncertainty around the ITC (federal solar tax credit) is finally over and we can all rest assured that the solar industry will not fall off a cliff come December 31, 2016! 

You may have heard the big news about the bipartisan passing of the year-end budget deal to effectively not shut down the government for one more year. But you may have missed the news that they also passed a 1.1 trillion dollar omnibus spending bill including the extension of many tax credits. Guess which exciting tax credit was included?? That’s right, the solar ITC and other renewable energy tax credits were included in HR 2029. The spending bill is the result of a deal between party leaders. The unfortunate cost of the five-year extension (and other Democratic priorities) is the lifting of the 40-year-old oil export ban and a series of permanent tax cuts. 

This morning HR 2029 passed the US House of Representatives (316-113) and the US Senate (65-33). This means that the Omnibus funding bill goes to the President for his final signature, which he has already agreed to do. This is a great day for the solar industry, living-wage American jobs, the growth of clean power and all the policy advocates out there fighting to extend the ITC. 

Here are the details regarding the new extension of the solar tax credit:

• 3 year extension of the ITC at 30% extending until December 31, 2019
• Step down to 26% in year ending December 31, 2020
• Step down to 22% for year ending December 31, 2021 
• Each year that a step down occurs has a start construction clause 
• Continued 10% ITC for each year after…indefinitely? 

“We commend members of Congress in both parties for taking this bold step and we look forward to delivering on the promise that this policy now offers all Americans. Thanks to the ITC, solar energy will add 220,000 new jobs by 2020, and with this extension, the solar industry can achieve its pledge of employing 50,000 veterans. Clean solar energy will cut emissions by 100 million metric tons and replace dozens of dirty power plants.

Importantly, in the follow up to the Paris accord, this establishes the United States as a model for the reduction of greenhouse gases. A five-year extension of the ITC will lead to more than $133 billion in new, private sector investment in the U.S. economy by 2020. And much of this growth will come from small businesses, which make up more than 85% of America’s 8,000 solar companies.

Solar power in this nation will more than triple by 2020, hitting 100 GW. That’s enough to power 20 million homes and represents 3.5% of U.S. electricity generation.”

Today we celebrate the progress our country  has made. We know the tax extension will only serve to help more and more property owners take advantage of all the benefits of solar energy. Happy Friday and Happy Holidays everyone!!

Two weeks ago I included the looming 2016 expiration of the federal Solar Investment Tax Credit (ITC) as one of the “Top 5 reasons you shouldn’t wait to go solar“. The 30% ITC rebate for residential and commercial solar projects is slated to drop to 10% for commercial projects (effectively stopping utility-scale solar growth) and to zero for residential projects (making going solar much less feasible for many homeowners). I mentioned that the likelihood of an extension is far from certain given our partisan federal ‘climate’.

Then…on Monday the White House released President Obama’s fiscal budget for 2016. To my delight the budget includes:

1. Boosting clean energy funding to $7.4 billion;
2. The Clean Power State Incentives Fund allocating $4 billion to encourage states to exceed the minimum requirements for cutting emissions; and
3. The permanent extension of the solar Investment Tax Credit!

The $7.4 billion figure is up from the $6.9 billion proposed in Obama’s fiscal 2015 budget, a 7.2 percent rise, and over the $6.5 billion actually passed by Congress for this year. The extension of the ITC and further state incentives to reduce emissions would be immensely valuable to keep the ball rolling in the solar field. Given that solar is booming - providing over 170,000 living-wage jobs and eliminating over 13 million metric tons of harmful CO₂ emissions in 2014 alone - it makes sense to continue to incentivize. 

However, it may come as no surprise to hear that some lawmakers have said they plan to block the President’s budget priorities entirely. An article in Politico titled “Republicans: Obama Budget ‘Laughable’” cites many congressional Republicans disdain for the budget.

“Obama’s budget is a retread of past proposals that died instantly on the Hill.”
Senate Finance Committee Chairman Orrin Hatch (R-Utah)

The website www.gop.gov cites the singular case of Solyndra as definitive evidence to oppose funding clean energy…despite also claiming to support job growth. (See here as to why Solyndra just doesn’t matter.) With Republicans now controlling both the Senate and the House of Representative, this party line opposition will be a serious challenge to overcome.

Even with the President himself in favor of extending the ITC, and improving funding to support clean energy, the fate of federal support for the solar industry is still quite uncertain.

Watch this space.