Interview with Solar Energy Industries Association
SEIA expects the new Administration and Congress to support solar
The US House of Representatives recently passed the revised Emergency Economic Stabilization Act of 2008, which contains measures to extend the solar investment tax credit (ITC) by eight years.
But just before its clearance, the Solar Energy Industries Association (SEIA) had shared that the industry was witnessing losses.
The Association had said that there were losses every day in the wake of the credits being on hold. In fact, the Association also indicated that some 20 utility-scale solar power plants, many in California and together capable of producing power for a million homes, were at risk because of the uncertainty.
Now that the uncertainty is over, the Association is somewhat clear about the status.
"While we are monitoring the economic crisis and credit remains tight, we are optimistic that the eight-year extension gives companies the ability to move forward with their growth and expansion plans," SEIA spokesperson told CSPToday.com.
"Several companies have already made announcements about hiring (SunPower Corp.), new or expanded manufacturing (SolarWorld, Schott Solar, Ausra), and new installations or partnerships (Lakeland Electric in Florida, and Schott/SunEdison) in the US," pointed out the spokesperson.
Also, it is being highlighted that Barack Obama's historic election as President brings with it the likelihood of more government involvement in business and the reeling economy. Obama's energy plan is to put $150 billion into clean technology over a decade — an initiative that would create 5 million jobs. SEIA acknowledges it, too.
"Another important factor is the election of Barack Obama and several new clean-energy advocates on the hill like Senator Jeanne Shaheen from New Hampshire and Representatives Paul Tonko (NY-D21) and Kathy Dahlkemper (PA-D3). It looks very likely that the new Administration and Congress will be able to take more action that will support solar in the US market. In fact, our hope is that the fast-growing and popular solar energy industry can help lead our economy out of disaster, create good jobs and unleash investment to help bring the cost of solar down," added the spokesperson.
A study by Navigant Consulting released mid-September evaluated the economic impact of the eight-year extension. It reports that $232 billion in investment will be unleashed in solar and that the industry will drive the 440,000 permanent jobs in the US.
SEIA also spoke about other issues with CSPToday.com. Here is what the Association had to say:
CSPToday.com: It is acknowledged that there are 27 such utility-scale solar power projects totaling 5,400 megawatts of power in various stages of development. How do you assess progress made by CSP so far and what role do you envisage for SEIA going forward? What would you like to focus on an urgent basis going forward?
SEIA: We need long-term plans to expand and improve our ageing transmission infrastructure and we need to update it with smart-grid technology.
This will allow the industry to get solar power from high-resource areas like the Southwest to high population centers. We also need to fast-track review and approval of permits for environmentally friendly solar energy plants on federal lands.
CSPToday.com: A look at the investors in the 10 largest financings in Q3 suggests that cleantech companies are pairing venture financing with other funding sources to support their capital-intensive commercialisation initiatives. Six of the 10 top deals incorporated private equity firms, hedge funds and sovereign wealth funds as first time investors in the entity. With firms like SolarReserve closed one of the third quarter's top deals with a $140 million funding, how do you assess the sentiments among investors for CSP sector in the US?
SEIA: Certainly the environment with a stable tax policy now in place makes these investments more attractive.
CSPToday.com: Recently, a financial sector expert mentioned that in reality, the US is a far larger potential market. The fact of the matter is the US has chosen to use tax credits as its incentive mechanism. Therefore, "tax equity" effectively replaces project finance as the means bringing in lower capital for most projects. There are therefore limited opportunities for traditional PF as compared to European projects. How do you assess the situation?
SEIA: This mechanism has worked well in the US market for the last three years, however it is just a start.
In the future, we would like to see a national Renewable Energy Portfolio Standard with specific goals for solar, more government procurement of solar to meet its energy needs, and additional programs to stimulate market growth, domestic manufacturing and public awareness that solar works now.
CSPToday.com: There are opportunities related to integration of wind and solar with other resources to design a more efficient bulk Transmission System. What's your viewpoint regarding the same?
SEIA: We are working closely with our colleagues in the wind, geothermal and hydropower industries to coordinate our efforts and proposed appropriate policies and plans for transmission.
CSPToday.com: Talking of the industry, there are companies, which are focusing on setting up relatively large photovoltaic solar plants and "hybrid" energy center, coupling solar thermal technology with existing combined-cycle generation unit. How do you view such developments from the industry's perspective?
SEIA: The option to establish "hybrid" technology, coupling solar power with other energy generation is a great example of how flexible solar energy can be in meeting our nation's energy needs.
Solar on most homes is already a hybrid solution – backed up by the electric grid, natural gas or heating oil. Same with commercial installations. It makes sense to consider the same for utility-scale power generation.