Solar-News
New Hampshire, U.S.A. --
The U.S. Department of Commerce on Thursday announced stiff anti-dumping tariffs of around 31 percent on crystalline silicon solar panels imported from China, leading to a new round of concerns on how the duties will impact the growing American solar industry.In its preliminary determination, the DOC set duties at 31.14 percent for Trina, 31.22 percent for Suntech and 31.18 percent for other Chinese solar manufacturers that chose to participate in the investigation. The companies that chose not to participate were hit with a 250 percent tariff. The tariffs will be retroactive and be applied to panels that were shipped from as far back as about the middle of February 2012.
A final determination must still be made, and the tariff rates can still be adjusted upward or downward. But the ruling gave an anxious industry a better sense of the implications of the trade case. And the numbers that came out were much higher than many expected.
Thursday's announcement was for anti-dumping tariffs and it was the second of two duties set by the DOC that directly stemmed from a trade complaint filed by SolarWorld’s American subsidiary. DOC officials will now confirm the information provided by the Chinese government and the Chinese manufacturers that chose to participate. Final determinations are expected to be made for both tariffs in late July, though an annoucement may not come until September.
In March, the Department of Commerce announced a preliminary determination that set relatively modest countervailing duties that essential measure the level of subsidies and benefits coming from the Chinese government to Chinese crystalline silicon panel manufacturers. The countervailing duties were applied on three levels: 4.73 percent applied to Trina, 2.9 percent to Suntech, and 3.59 percent to all others. That had been a welcome relief for many in the solar industry, especially the installers who have come to base their business models around low-cost panels. But the feeling was short-lived with the announcement of the countervailing tariffs, which will be added to the anti-dumping tariffs announced on Thursday.
The two together are certain to make Chinese solar panels much more expensive. The ruling could add about $0.30 a watt to the price of a panel. Chinese companies are expected to set up workarounds like tolling in which they send panels through another country, or even set up remote manufacturing facilities outside their country. Tolling is expected to add about $0.06 to $0.08 per watt.The Background
In a trade complaint filed in October, SolarWorld's American subsidiary and six other solar panel manufacturers claimed that Chinese companies are receiving an unfair level of subsidies from the Chinese government and that they are then dumping their products at below the cost of production into the American market. This, they contend, is stifling solar panel manufacturing in the United States. The case made by the Coalition for American Solar Manufacturing (CASM) has been folded into the growing political narrative that America must reclaim its ability to lead in the global arena of manufacturing and innovation.
On the other side, the Coalition for Affordable Solar Energy (CASE) says that the overriding goal is to make solar energy as competitive as possible. Low-cost Chinese panels have figured prominently in this race to make solar energy competitive with fossil fuels. Panel prices have dropped by 50 percent in just the past year, and that growth has spurred an installation boom that many in the industry feel is unsustainable if prices spike.
Industry Reaction
Jigar Shah, President of CASE: “Today SolarWorld received one of its biggest subsidies yet – an average 31% tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250% tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity. At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry.”
Rhone Resch, President and CEO of the Solar Energy Industries Association: "The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry. While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations. Importantly, disputes within one segment of the industry affect the entire solar supply chain — and these broad implications must be recognized. In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export. If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments."
Gordon Brinser, President of SolarWorld: "Today, SolarWorld and the many industry players who embrace the sustainable efficiency gains and price declines that come from fair competition can take heart that the U.S. government is standing up against Big China Solar,” said Gordon Brinser, president of SolarWorld Industries America Inc. and leader of the Coalition for Solar Manufacturing (CASM). “Commerce’s careful measures could help thwart China’s illegal drive to control the solar market and supplant manufacturers and jobs in America, the very country that invented, pioneered and innovated solar to today’s mainstream viability.”
Steve Ostrenga, CEO Helios Solar Works: "Commerce’s ruling in the SolarWorld case is a bellwether decision. It underscores the importance of domestic manufacturing to the U.S. economy and will help determine whether the country will be a global competitor in clean technologies or outsource them China. It is also critically important for thousands of U.S. workers.”
Andrew Beebe, COO of Suntech: “These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact."
Sen. Sherrod Brown, D-Ohio: "The Commerce Department’s decision today shows that trade enforcement matters, and is an important step towards combating China’s multiple, massive, and illegal trade violations. It’s been proven that China isn’t competing in the clean-energy marketplace — it’s cheating, and its unfair solar trade practices have already resulted in the announced the loss of thousands of good-paying U.S. manufacturing jobs. I applaud the Commerce Department for working to hold China accountable for its unfair solar subsidies and dumping practices. If we want to have a solar manufacturing industry, we need to utilize trade enforcement tools to combat the massive export subsidies other countries provide. This decision will help establish a fair and level playing field for American manufacturers, including the many solar manufacturers in Northwest Ohio.”
The Fallout
Many in the industry have been fretting that a steep penalty on Chinese panels would stifle the rate at which solar has been growing in the American market. New tariffs, they say, have the potential to derail the downward costs that have made solar a more appealing option to investors. As a result, the industry could see significantly less growth in the years ahead. And that means fewer American jobs.
Melanie Hart and Kate Gordon of the Center for American Progress refuted that notion this week, arguing instead that not challenging legal practices sets up a scenario in which China’s leaders will dictate not only the price of solar panels that dominate the open market, but they will also choose which types of solar technologies their government will support. This, they say, could lead to stunted growth in both installations and innovation.
“[O]nce Chinese companies drive out their competition from the solar manufacturing sector, they will immediately start raising prices to increase their profits and start to wean off of government subsidies,” they wrote this week. “We are currently seeing a similar pricing pattern in the global rare earths market. China has around one-third of the world’s rare earth supplies but controls 90 percent of the global market, primarily because lax regulatory oversight enabled Chinese companies to mine cheaply and price everyone else out of the market.”
In an op-ed penned for the Boston Globe, Tom Gutierrez, CEO for New Hampshire-based GT Technologies, wrote that the trade dispute has done little to help build a stronger American solar market. All it has done, he said, is force Chinese manufacturers to find new ways to enter the U.S. with their low-cost panels.
“Many Chinese manufacturers are simply redirecting their flow of products through other countries to avoid the US-imposed barriers, or in some cases the location of their production, and in all likelihood they will continue to provide the global market with competitively-priced solar panels,” he wrote. “This action by the U.S. government merely forced Chinese companies to find new ways to innovate in order to compete. In all likelihood the Chinese will be just fine. In fact, we may be transforming domestic Chinese players into more formidable forces by encouraging their global diversification and expansion. But what about the U.S. solar industry?”
The debate has extended far beyond the solar industry and has become a political lightning rod that has shaped some unexpected alliances. For an industry that depends on liberal-leaning policy support, the free market principles touted by the Coalition for Affordable Solar Energy have generally played strongest in conservative circles. Democrats, meanwhile, are pushing a “get-tough-on-China” strategy that threatens to undermine the low-cost goals of much of the industry. Just this week, two Democrats — Sens. Sherrod Brown of Ohio and Charles Schumer of New York — introduced a bill aimed at China that would exclude all foreign-made solar panels from a 30-percent tax credit unless the modules passed a threshold of domestic manufacturing. Read More
The U.S. Department of Commerce on Thursday announced stiff anti-dumping tariffs of around 31 percent on crystalline silicon solar panels imported from China, leading to a new round of concerns on how the duties will impact the growing American solar industry.In its preliminary determination, the DOC set duties at 31.14 percent for Trina, 31.22 percent for Suntech and 31.18 percent for other Chinese solar manufacturers that chose to participate in the investigation. The companies that chose not to participate were hit with a 250 percent tariff. The tariffs will be retroactive and be applied to panels that were shipped from as far back as about the middle of February 2012.
A final determination must still be made, and the tariff rates can still be adjusted upward or downward. But the ruling gave an anxious industry a better sense of the implications of the trade case. And the numbers that came out were much higher than many expected.
Thursday's announcement was for anti-dumping tariffs and it was the second of two duties set by the DOC that directly stemmed from a trade complaint filed by SolarWorld’s American subsidiary. DOC officials will now confirm the information provided by the Chinese government and the Chinese manufacturers that chose to participate. Final determinations are expected to be made for both tariffs in late July, though an annoucement may not come until September.
In March, the Department of Commerce announced a preliminary determination that set relatively modest countervailing duties that essential measure the level of subsidies and benefits coming from the Chinese government to Chinese crystalline silicon panel manufacturers. The countervailing duties were applied on three levels: 4.73 percent applied to Trina, 2.9 percent to Suntech, and 3.59 percent to all others. That had been a welcome relief for many in the solar industry, especially the installers who have come to base their business models around low-cost panels. But the feeling was short-lived with the announcement of the countervailing tariffs, which will be added to the anti-dumping tariffs announced on Thursday.
The two together are certain to make Chinese solar panels much more expensive. The ruling could add about $0.30 a watt to the price of a panel. Chinese companies are expected to set up workarounds like tolling in which they send panels through another country, or even set up remote manufacturing facilities outside their country. Tolling is expected to add about $0.06 to $0.08 per watt.The Background
In a trade complaint filed in October, SolarWorld's American subsidiary and six other solar panel manufacturers claimed that Chinese companies are receiving an unfair level of subsidies from the Chinese government and that they are then dumping their products at below the cost of production into the American market. This, they contend, is stifling solar panel manufacturing in the United States. The case made by the Coalition for American Solar Manufacturing (CASM) has been folded into the growing political narrative that America must reclaim its ability to lead in the global arena of manufacturing and innovation.
On the other side, the Coalition for Affordable Solar Energy (CASE) says that the overriding goal is to make solar energy as competitive as possible. Low-cost Chinese panels have figured prominently in this race to make solar energy competitive with fossil fuels. Panel prices have dropped by 50 percent in just the past year, and that growth has spurred an installation boom that many in the industry feel is unsustainable if prices spike.
Industry Reaction
Jigar Shah, President of CASE: “Today SolarWorld received one of its biggest subsidies yet – an average 31% tax on its competitors. What’s worse, it will ultimately come right out of the paychecks of American solar workers. Fortunately, these duties are much lower than the 250% tax that SolarWorld originally requested. This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity. At the same time, CASE recognizes that today’s decision is ‘preliminary.’ Between now and a final decision before the end of the year, there are many issues that will be addressed and whose resolution would lead to a significantly lower tariff. CASE will continue to fight SolarWorld’s anti-consumer and anti-jobs efforts to ensure a better result for America’s solar industry.”
Rhone Resch, President and CEO of the Solar Energy Industries Association: "The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry. While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations. Importantly, disputes within one segment of the industry affect the entire solar supply chain — and these broad implications must be recognized. In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export. If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments."
Gordon Brinser, President of SolarWorld: "Today, SolarWorld and the many industry players who embrace the sustainable efficiency gains and price declines that come from fair competition can take heart that the U.S. government is standing up against Big China Solar,” said Gordon Brinser, president of SolarWorld Industries America Inc. and leader of the Coalition for Solar Manufacturing (CASM). “Commerce’s careful measures could help thwart China’s illegal drive to control the solar market and supplant manufacturers and jobs in America, the very country that invented, pioneered and innovated solar to today’s mainstream viability.”
Steve Ostrenga, CEO Helios Solar Works: "Commerce’s ruling in the SolarWorld case is a bellwether decision. It underscores the importance of domestic manufacturing to the U.S. economy and will help determine whether the country will be a global competitor in clean technologies or outsource them China. It is also critically important for thousands of U.S. workers.”
Andrew Beebe, COO of Suntech: “These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact."
Sen. Sherrod Brown, D-Ohio: "The Commerce Department’s decision today shows that trade enforcement matters, and is an important step towards combating China’s multiple, massive, and illegal trade violations. It’s been proven that China isn’t competing in the clean-energy marketplace — it’s cheating, and its unfair solar trade practices have already resulted in the announced the loss of thousands of good-paying U.S. manufacturing jobs. I applaud the Commerce Department for working to hold China accountable for its unfair solar subsidies and dumping practices. If we want to have a solar manufacturing industry, we need to utilize trade enforcement tools to combat the massive export subsidies other countries provide. This decision will help establish a fair and level playing field for American manufacturers, including the many solar manufacturers in Northwest Ohio.”
The Fallout
Many in the industry have been fretting that a steep penalty on Chinese panels would stifle the rate at which solar has been growing in the American market. New tariffs, they say, have the potential to derail the downward costs that have made solar a more appealing option to investors. As a result, the industry could see significantly less growth in the years ahead. And that means fewer American jobs.
Melanie Hart and Kate Gordon of the Center for American Progress refuted that notion this week, arguing instead that not challenging legal practices sets up a scenario in which China’s leaders will dictate not only the price of solar panels that dominate the open market, but they will also choose which types of solar technologies their government will support. This, they say, could lead to stunted growth in both installations and innovation.
“[O]nce Chinese companies drive out their competition from the solar manufacturing sector, they will immediately start raising prices to increase their profits and start to wean off of government subsidies,” they wrote this week. “We are currently seeing a similar pricing pattern in the global rare earths market. China has around one-third of the world’s rare earth supplies but controls 90 percent of the global market, primarily because lax regulatory oversight enabled Chinese companies to mine cheaply and price everyone else out of the market.”
In an op-ed penned for the Boston Globe, Tom Gutierrez, CEO for New Hampshire-based GT Technologies, wrote that the trade dispute has done little to help build a stronger American solar market. All it has done, he said, is force Chinese manufacturers to find new ways to enter the U.S. with their low-cost panels.
“Many Chinese manufacturers are simply redirecting their flow of products through other countries to avoid the US-imposed barriers, or in some cases the location of their production, and in all likelihood they will continue to provide the global market with competitively-priced solar panels,” he wrote. “This action by the U.S. government merely forced Chinese companies to find new ways to innovate in order to compete. In all likelihood the Chinese will be just fine. In fact, we may be transforming domestic Chinese players into more formidable forces by encouraging their global diversification and expansion. But what about the U.S. solar industry?”
The debate has extended far beyond the solar industry and has become a political lightning rod that has shaped some unexpected alliances. For an industry that depends on liberal-leaning policy support, the free market principles touted by the Coalition for Affordable Solar Energy have generally played strongest in conservative circles. Democrats, meanwhile, are pushing a “get-tough-on-China” strategy that threatens to undermine the low-cost goals of much of the industry. Just this week, two Democrats — Sens. Sherrod Brown of Ohio and Charles Schumer of New York — introduced a bill aimed at China that would exclude all foreign-made solar panels from a 30-percent tax credit unless the modules passed a threshold of domestic manufacturing. Read More
Despite 2011 having been a particularly challenging year for PV cell and module manufacturers, new small-scale module manufacturing facilities continue to be implemented, especially in emerging markets. In some cases, these companies/facilities are either aligned to local government policies or are implemented purely as diversification strategies. Other examples are joint-ventures between private and government entities. Such JV's are intended to represent "national" centers-of-excellence to serve domestic or regional market demand.The fact that these facilities continue to receive government support would suggest that many policymakers remain fixated on domestic solar manufacturing, despite the chronic oversupply that currently exists within the upstream segment of the PV value-chain. Moreover, many of these projects are funded as a means of local "job creation," despite the fact that modern module fabs are not particularly labor intensive compared to downstream PV system requirements.
Such manufacturing "support" policies are being implemented globally. For example, within South America, there are manufacturing facilities with capacities of 5-20 MW being developed in Brazil. In Argentina, national and state funds are being made available in an attempt to create a domestic PV value-chain to satisfy up to 0.5 GW of installations over the next decade. In the Caribbean region, several islands have proposed tax policies to stimulate domestic PV manufacturing. For example, project developers in Jamaica are required to invest in manufacturing facilities as a prerequisite to securing PV project activities.
Across Africa, countries such as Algeria, Nigeria, and Tunisia are utilizing state-owned energy firms to develop manufacturing facilities to serve domestic electrification projects and regional off-grid system demand. Ethiopia and Kenya also have domestic module manufacturing facilities that are owned by partnership ventures between foreign and domestic companies. While some of these facilities are currently operating at low capacity utilization levels, they are producing PV modules, albeit courtesy of state support. Some recently-installed manufacturing lines are being configured to serve the growing demand for off-grid systems, from small to large-scale.
However, each of these domestic firms must still compete with large-scale international manufacturers. Therefore, it remains somewhat unclear if they can survive in the absence of state funding or when multinational firms start to expand into what were previously regarded as niche PV markets.
Domestic module manufacturing is also prevalent in more developed countries, in particular Canada. In Ontario, the Green Energy Act has enabled the creation of a robust domestic PV supply chain in just three years. In fact, the initiative has proved so popular that some Ontario-based PV manufacturers now find themselves at a competitive disadvantage, even within their own local market. By the middle of 2012, there will be over five times the amount of module capacity required to meet projected demand.
Another knock-on effect of the recent surge in small-scale domestic PV module manufacturing has been the creation of a new addressable market for PV equipment suppliers. Indeed, at a time when PV equipment spending is going through a prolonged downturn, any new market opportunity can be viewed as a positive development. Today, most PV module equipment suppliers are actively pursuing small-scale module fab builds to compensate for the absence of turn-key module line orders from countries such as Spain and Italy.
It remains likely that some form of local module manufacturing will be installed within all regions exhibiting PV market growth. However, with vertically-integrated multinational firms now aggressively targeting emerging PV regions, there is a distinct possibility that small-scale module manufacturing will only survive within niche markets that offer the security of local subsidies or domestic incentives.
Ultimately, all manufacturing must follow the global industry’s declining module ASP trajectory, with production costs at any stage of the value-chain being low enough to provide positive operating margins. With small-scale manufacturers dependent on upstream supply of c-Si cells, their ability to control costs will be challenged by the GW-scale vertically-integrated fabs of tier 1 industry-leaders. Thus, domestic incentives will provide a limited window of opportunity for small-scale manufacturers to gain a foothold in their local markets, potentially by partnering with downstream project developers to offer a value-added proposition.
Michael is an analyst for Solarbuzz. He covers primary research and analysis concerning the photovoltaic industry.
This article was originally published at SolarBuzz Analyst Blog and was republished with permission.
Image: Monika23 via Shutterstock Read More
Such manufacturing "support" policies are being implemented globally. For example, within South America, there are manufacturing facilities with capacities of 5-20 MW being developed in Brazil. In Argentina, national and state funds are being made available in an attempt to create a domestic PV value-chain to satisfy up to 0.5 GW of installations over the next decade. In the Caribbean region, several islands have proposed tax policies to stimulate domestic PV manufacturing. For example, project developers in Jamaica are required to invest in manufacturing facilities as a prerequisite to securing PV project activities.
Across Africa, countries such as Algeria, Nigeria, and Tunisia are utilizing state-owned energy firms to develop manufacturing facilities to serve domestic electrification projects and regional off-grid system demand. Ethiopia and Kenya also have domestic module manufacturing facilities that are owned by partnership ventures between foreign and domestic companies. While some of these facilities are currently operating at low capacity utilization levels, they are producing PV modules, albeit courtesy of state support. Some recently-installed manufacturing lines are being configured to serve the growing demand for off-grid systems, from small to large-scale.
However, each of these domestic firms must still compete with large-scale international manufacturers. Therefore, it remains somewhat unclear if they can survive in the absence of state funding or when multinational firms start to expand into what were previously regarded as niche PV markets.
Domestic module manufacturing is also prevalent in more developed countries, in particular Canada. In Ontario, the Green Energy Act has enabled the creation of a robust domestic PV supply chain in just three years. In fact, the initiative has proved so popular that some Ontario-based PV manufacturers now find themselves at a competitive disadvantage, even within their own local market. By the middle of 2012, there will be over five times the amount of module capacity required to meet projected demand.
Another knock-on effect of the recent surge in small-scale domestic PV module manufacturing has been the creation of a new addressable market for PV equipment suppliers. Indeed, at a time when PV equipment spending is going through a prolonged downturn, any new market opportunity can be viewed as a positive development. Today, most PV module equipment suppliers are actively pursuing small-scale module fab builds to compensate for the absence of turn-key module line orders from countries such as Spain and Italy.
It remains likely that some form of local module manufacturing will be installed within all regions exhibiting PV market growth. However, with vertically-integrated multinational firms now aggressively targeting emerging PV regions, there is a distinct possibility that small-scale module manufacturing will only survive within niche markets that offer the security of local subsidies or domestic incentives.
Ultimately, all manufacturing must follow the global industry’s declining module ASP trajectory, with production costs at any stage of the value-chain being low enough to provide positive operating margins. With small-scale manufacturers dependent on upstream supply of c-Si cells, their ability to control costs will be challenged by the GW-scale vertically-integrated fabs of tier 1 industry-leaders. Thus, domestic incentives will provide a limited window of opportunity for small-scale manufacturers to gain a foothold in their local markets, potentially by partnering with downstream project developers to offer a value-added proposition.
Michael is an analyst for Solarbuzz. He covers primary research and analysis concerning the photovoltaic industry.
This article was originally published at SolarBuzz Analyst Blog and was republished with permission.
Image: Monika23 via Shutterstock Read More
Western Wind and Lord Electric will install 20 of Satcon’s Prism platforms. Image: Satcon
Financials
SATC
NASDAQ
0.320
-0.011 (-3.29%)
4:00PM EDT
Satcon will supply 30MW of its Equinox Prism Platform to Western Wind and Lord Electric. The inverters will be installed at a solar power park in Puerto Rico, the company has announced.
Western Wind and Lord Electric will equip the PV project with 20 of Satcon’s 1.5MW Prism platforms. The park is the second largest solar power project in Puerto Rico to date. Read More
Financials
SATC
NASDAQ
0.320
-0.011 (-3.29%)
4:00PM EDT
Satcon will supply 30MW of its Equinox Prism Platform to Western Wind and Lord Electric. The inverters will be installed at a solar power park in Puerto Rico, the company has announced.
Western Wind and Lord Electric will equip the PV project with 20 of Satcon’s 1.5MW Prism platforms. The park is the second largest solar power project in Puerto Rico to date. Read More
Solar manufacturers and installers face the same challenge as many business owners: How can a company make time for media outreach as part of their overall marketing strategy? With so many other tasks vying for our time and dollars, making connections with the media, which is one of the best forms of free publicity, is often forgotten about. Why?Local installers without a large PR and marketing staff simply don't know where to begin. Or maybe they submitted a few pitches to the bigger markets and, after being ignored, decided publicity efforts weren't worth the time. Or maybe they just feel that promoting to local and regional markets — places like your local Patch site or print newspapers — doesn't yield enough eyeballs to make it worthwhile.
A recent #SolarChat, a bi-monthly Twitter chat I host, turned this perception on its head. With guest panelists Carter Lavin, business development manager of the Solar Marketing Group, and Jessica F. Lillian, editor of Solar Industry Magazine, we explored the most effective media outreach tactics, shared tips to get the attention of journalists and bloggers, and gained incredible insight about the state of solar in the mainstream media.
Thinking Local
It became apparent that solar supporters have a strong voice. Although we're not (yet) getting headlines on the front page of the New York Times, smaller local and regional media outlets are, in fact, open to sharing solar stories. Of course, we have to pitch them in the right way with a catchy headline, strong lead, and slant toward human interest.
Several participants in this recent #SolarChat discussion noted that local reporters are always thrilled to receive “feel-good” solar stories. We should not underestimate the power of the local media when it comes to spreading the word about solar. Many small voices create a strong force. Just look at the power bloggers today; many are as well respected and some more widely read than traditional journalists. The power of “citizen journalism” is sweeping the world across every industry, and the solar industry is no different. It's time to take advantage of it.
Focus on the Positive
Let's face it: The solar industry isn't necessarily the mainstream media's darling. That's not surprising, since it’s an emerging industry going up against strong lobbyists from the coal and oil industries that influence the larger news outlets. Money talks — ad dollars are the language of TV and print journalism. Many mainstream media outlets have given ample coverage to the few “solar failures,” but solar advocates know that's not where the real solar story lies.
What can we do? Of course, we can and should counter solar misinformation by writing letters to the editor with facts and data — the truth is on our side!
But we're big enough to take a pro-active stance, as well. It's time to switch out of the reactive mindset, merely countering the negative stories, and go after the local media that's within our reach and eager to hear the truth about solar. Solar is helping lower-income families and school districts afford the electricity they need. Solar energy is saving middle-class Americans hundreds on their electric bills. Solar power is creating jobs, and it's creating a brighter future for us all.
Together, we can make a huge difference. The momentum #SolarChat has gained in less than a year is a huge example of many “small” voices (you can’t get much smaller than 140 characters) impacting hundreds of thousands of followers. What if every solar installer and manufacturer aimed to have a story placed in their local paper and on their Patch site? What if everyone in the industry connected with just one lifestyle blogger with a large mainstream audience and placed a guest post there? What if every solar professional took the opportunity to speak at a local school about the benefits of solar and career opportunities in renewable energy?
The viral effect of these placements and appearances can rival anything big coal and oil lobbyists can throw out there; we can debunk myths and spread “solar stories” that will inspire consumers to action.
Harnessing the power of the local media to spread the word about solar is similar to installing a solar PV array on your own home to harness the sun's power for electricity. Why pay for something (whether it's publicity or electricity) that you can get for free when you know how?
So, tell us: How will you take action in the media?
Image: Cienpies Design via Shutterstock Read More
A recent #SolarChat, a bi-monthly Twitter chat I host, turned this perception on its head. With guest panelists Carter Lavin, business development manager of the Solar Marketing Group, and Jessica F. Lillian, editor of Solar Industry Magazine, we explored the most effective media outreach tactics, shared tips to get the attention of journalists and bloggers, and gained incredible insight about the state of solar in the mainstream media.
Thinking Local
It became apparent that solar supporters have a strong voice. Although we're not (yet) getting headlines on the front page of the New York Times, smaller local and regional media outlets are, in fact, open to sharing solar stories. Of course, we have to pitch them in the right way with a catchy headline, strong lead, and slant toward human interest.
Several participants in this recent #SolarChat discussion noted that local reporters are always thrilled to receive “feel-good” solar stories. We should not underestimate the power of the local media when it comes to spreading the word about solar. Many small voices create a strong force. Just look at the power bloggers today; many are as well respected and some more widely read than traditional journalists. The power of “citizen journalism” is sweeping the world across every industry, and the solar industry is no different. It's time to take advantage of it.
Focus on the Positive
Let's face it: The solar industry isn't necessarily the mainstream media's darling. That's not surprising, since it’s an emerging industry going up against strong lobbyists from the coal and oil industries that influence the larger news outlets. Money talks — ad dollars are the language of TV and print journalism. Many mainstream media outlets have given ample coverage to the few “solar failures,” but solar advocates know that's not where the real solar story lies.
What can we do? Of course, we can and should counter solar misinformation by writing letters to the editor with facts and data — the truth is on our side!
But we're big enough to take a pro-active stance, as well. It's time to switch out of the reactive mindset, merely countering the negative stories, and go after the local media that's within our reach and eager to hear the truth about solar. Solar is helping lower-income families and school districts afford the electricity they need. Solar energy is saving middle-class Americans hundreds on their electric bills. Solar power is creating jobs, and it's creating a brighter future for us all.
Together, we can make a huge difference. The momentum #SolarChat has gained in less than a year is a huge example of many “small” voices (you can’t get much smaller than 140 characters) impacting hundreds of thousands of followers. What if every solar installer and manufacturer aimed to have a story placed in their local paper and on their Patch site? What if everyone in the industry connected with just one lifestyle blogger with a large mainstream audience and placed a guest post there? What if every solar professional took the opportunity to speak at a local school about the benefits of solar and career opportunities in renewable energy?
The viral effect of these placements and appearances can rival anything big coal and oil lobbyists can throw out there; we can debunk myths and spread “solar stories” that will inspire consumers to action.
Harnessing the power of the local media to spread the word about solar is similar to installing a solar PV array on your own home to harness the sun's power for electricity. Why pay for something (whether it's publicity or electricity) that you can get for free when you know how?
So, tell us: How will you take action in the media?
Image: Cienpies Design via Shutterstock Read More
Walmart has accnouned the installation of solar arrays on 27 of its Massachusetts stores. Image: Walmart
Walmart will install PV panels on 27 of its 50 stores in Massachusetts, the company has announced. The projects will generate a total of 10.5MW and, according to the Boston Globe, are currently in the engineering stage.
Greenskies Renewable Energy will own, operate and construct the installations, selling the energy to Walmart. This is not the first solar installation for Walmart; in September 2011, the company announced plans to install solar panels on 60 Californian store roofs. Read More
Walmart will install PV panels on 27 of its 50 stores in Massachusetts, the company has announced. The projects will generate a total of 10.5MW and, according to the Boston Globe, are currently in the engineering stage.
Greenskies Renewable Energy will own, operate and construct the installations, selling the energy to Walmart. This is not the first solar installation for Walmart; in September 2011, the company announced plans to install solar panels on 60 Californian store roofs. Read More
They say nothing can get done in Washington, D.C. on the issue of clean energy, which has become a political lightening rod over the last year. With Congress at a high watermark of partisanship, accusations abound on Capitol Hill that American energy efficiency and renewable energy technologies and the policies that support them are job killers and a money-wasting hoax on taxpayers. And yet, there's reason for optimism about energy innovation in this country. Why? Because the most powerful force in the world, the U.S. military, is mobilizing on a clean energy mission — and I believe they're going to win this war.While Congress fumbles, the Department of Defense (DoD) has identified our fossil fuel dependence as a national security threat which exposes our country to increased vulnerability both at home and abroad. The Army, Air Force, Navy, and Marines have all set aggressive goals — lower energy demand, utilize new renewable fuel sources, and develop energy generation, storage, and transmission technologies — that will allow military installations to function more reliably and expeditionary forces to perform more effectively. Not only that, but the DoD has unequivocally determined that climate change is a “threat multiplier” that will heighten geopolitical instability, resource conflicts, and humanitarian disasters around the globe — stretching the capacity of our Armed Forces to respond. Accordingly, not only is the military dedicated to improving energy performance and diversifying energy sources, it is specifically committed to developing low-carbon technologies.
Secretary of Defense Leon Panetta asserts that all of these initiatives are for one purpose only. “By changing the DoD energy posture, America will have a military that is better able to project and sustain forces around the world to meet any challenges to the nation’s security and interests of the American people.”
Through my work with Environmental Entrepreneurs, I’ve had the privilege to meet with many of the Pentagon’s energy leaders executing this clean-energy mandate, and also to work alongside a number of retired military officers to advance these initiatives. I can say without reservation that these are the best allies the clean-technology sector could have.
DoD brings formidable assets to this mission. Armed services installations encompass more than 28 million acres of land. DoD plans to install at least 3 GW of renewable-power generation on these bases — the single largest commitment to clean energy in the U.S. It manages more than 2.2 billion square feet of building space for which it is seeking to greatly improve energy and resource efficiency performance. As a massive consumer of fuel (using nearly 2 percent of the nation’s total), and unwilling to sustain the enormous budgetary burden of volatile fuel prices, the military is seeking alternative transportation technologies for its vehicles on bases, as well as its aircraft, ships, and combat vehicles. It is evaluating every aspect of its operations, from energy demand in base housing to the batteries that soldiers carry to battle, and pinpointing where next-generation technologies can improve the nation’s security.
And the military is prepared to invest in these technologies. The Pentagon is requesting $2 billion in fiscal year 2013 for energy improvements to DoD installations and expeditionary operations, with a view to both short and long term results. In many cases these investments will produce huge savings on energy costs.
In the absence of a cogent national energy policy, the military’s actions add up to a national demand signal like no other in the United States today. Because the military is both a strategic (and relatively patient) investor and a huge customer for new energy technologies, DoD’s energy mandates are providing an innovation pull function that holds massive promise for economic growth and job generation in the private sector.
Perhaps most important of all, the military is creating a roadmap for American civilian society, as each vulnerability that the Pentagon has identified with regard to energy security applies at least as much to the general population. From undependable fuel supplies and prices to vulnerable power grids and inefficiencies in our homes and businesses, these liabilities pose an insidious threat to the resilience and strength of our economy and reduce our ability to compete in global markets.
And yet, some in Congress are prepared to sacrifice national and economic security for a partisan agenda. With a visceral disdain for clean energy, or perhaps with an overly robust relationship with the fossil-fuel industries, they are challenging the motives behind the Pentagon’s clean energy initiatives and threatening to withhold funding to carry them out.
Now is the time to speak out in defense of DoD’s clean energy initiatives. The annual National Defense Authorization Act is currently being hammered out in both houses of Congress. The House Armed Services Committee has already passed their version of the bill which includes provisions to prohibit the military from investing in and deploying low carbon renewable fuels. The Senate Armed Services Committee will take up the bill on May 22nd. Whether you’re an employee, a business owner, or an investor in the clean-energy sector, call your representatives in Congress, especially those who sit on the Armed Services Committees, and tell them to support DOD’s clean energy initiatives. Tell them that those initiatives will help you grow your business and create jobs. They need to know you are watching what they do on this and will hold them accountable. Your voice will have more impact than you imagine.
Civilians from across the political spectrum should step up to defend the military’s clean-energy agenda. Uncle Sam really does need you.
Image: Robert Adrian Hillman via Shutterstock Read More
Secretary of Defense Leon Panetta asserts that all of these initiatives are for one purpose only. “By changing the DoD energy posture, America will have a military that is better able to project and sustain forces around the world to meet any challenges to the nation’s security and interests of the American people.”
Through my work with Environmental Entrepreneurs, I’ve had the privilege to meet with many of the Pentagon’s energy leaders executing this clean-energy mandate, and also to work alongside a number of retired military officers to advance these initiatives. I can say without reservation that these are the best allies the clean-technology sector could have.
DoD brings formidable assets to this mission. Armed services installations encompass more than 28 million acres of land. DoD plans to install at least 3 GW of renewable-power generation on these bases — the single largest commitment to clean energy in the U.S. It manages more than 2.2 billion square feet of building space for which it is seeking to greatly improve energy and resource efficiency performance. As a massive consumer of fuel (using nearly 2 percent of the nation’s total), and unwilling to sustain the enormous budgetary burden of volatile fuel prices, the military is seeking alternative transportation technologies for its vehicles on bases, as well as its aircraft, ships, and combat vehicles. It is evaluating every aspect of its operations, from energy demand in base housing to the batteries that soldiers carry to battle, and pinpointing where next-generation technologies can improve the nation’s security.
And the military is prepared to invest in these technologies. The Pentagon is requesting $2 billion in fiscal year 2013 for energy improvements to DoD installations and expeditionary operations, with a view to both short and long term results. In many cases these investments will produce huge savings on energy costs.
In the absence of a cogent national energy policy, the military’s actions add up to a national demand signal like no other in the United States today. Because the military is both a strategic (and relatively patient) investor and a huge customer for new energy technologies, DoD’s energy mandates are providing an innovation pull function that holds massive promise for economic growth and job generation in the private sector.
Perhaps most important of all, the military is creating a roadmap for American civilian society, as each vulnerability that the Pentagon has identified with regard to energy security applies at least as much to the general population. From undependable fuel supplies and prices to vulnerable power grids and inefficiencies in our homes and businesses, these liabilities pose an insidious threat to the resilience and strength of our economy and reduce our ability to compete in global markets.
And yet, some in Congress are prepared to sacrifice national and economic security for a partisan agenda. With a visceral disdain for clean energy, or perhaps with an overly robust relationship with the fossil-fuel industries, they are challenging the motives behind the Pentagon’s clean energy initiatives and threatening to withhold funding to carry them out.
Now is the time to speak out in defense of DoD’s clean energy initiatives. The annual National Defense Authorization Act is currently being hammered out in both houses of Congress. The House Armed Services Committee has already passed their version of the bill which includes provisions to prohibit the military from investing in and deploying low carbon renewable fuels. The Senate Armed Services Committee will take up the bill on May 22nd. Whether you’re an employee, a business owner, or an investor in the clean-energy sector, call your representatives in Congress, especially those who sit on the Armed Services Committees, and tell them to support DOD’s clean energy initiatives. Tell them that those initiatives will help you grow your business and create jobs. They need to know you are watching what they do on this and will hold them accountable. Your voice will have more impact than you imagine.
Civilians from across the political spectrum should step up to defend the military’s clean-energy agenda. Uncle Sam really does need you.
Image: Robert Adrian Hillman via Shutterstock Read More
The report is part of Lux’ Research Sustainable Building Materials service. Image: Public domain image
Research service company Lux Research has recently published its “Painting a Green Future: Opportunities in Sustainable Architectural Coatings” report as part of the Lux Research Sustainable Building Materials service. The report focuses on the US$53 billion architectural coatings market and the sustainability of coating technologies.
The report states that with the growing acceptance of green building standards, such as LEED and NZEB, energy efficiency and sustainability are becoming important key features for architectural coatings.
The Lux analysts established a Lux Sustainability Grid. This sustainability grid evaluates technologies on three levels: environmental impact, energy efficiency and resource efficiency, which, in combination, create a ‘sustainability value’. Compared with the ‘technical value’ analysts are able to determine which architectural coatings are most likely to impact the market.
Among the report’s findings are seven distinct technologies that incorporate established green credentials like elastomeric cool roofs, paint recycling and low-e coatings, with six of them placed in the so-called ‘win-win’ quadrant. Further, thermally responsive coatings (coatings that turn from white to black) have not yet become mainstream but have a very high potential. Solar paints, on the other hand, have been developed already but still have a very low efficiency (2%), compared to the efficiency of solar PV (13%-15%).
“Sustainable coatings technologies reduce the energy, resource, and environmental impact of paints and coatings, but often get confused with ‘greenwashed’ unsustainable alternatives,” Aditya Ranade, Lux Research Analyst and lead author of “Painting a Green Future: Opportunities in Sustainable Architectural Coatings”, commented. “Sustainable coating technologies are moving beyond low volatile organic compound (VOC) content to include advances in additives like surfactants and coalescing agents, as well as energy-impacting coatings like cool roofs and even solar paints.” Read More
Research service company Lux Research has recently published its “Painting a Green Future: Opportunities in Sustainable Architectural Coatings” report as part of the Lux Research Sustainable Building Materials service. The report focuses on the US$53 billion architectural coatings market and the sustainability of coating technologies.
The report states that with the growing acceptance of green building standards, such as LEED and NZEB, energy efficiency and sustainability are becoming important key features for architectural coatings.
The Lux analysts established a Lux Sustainability Grid. This sustainability grid evaluates technologies on three levels: environmental impact, energy efficiency and resource efficiency, which, in combination, create a ‘sustainability value’. Compared with the ‘technical value’ analysts are able to determine which architectural coatings are most likely to impact the market.
Among the report’s findings are seven distinct technologies that incorporate established green credentials like elastomeric cool roofs, paint recycling and low-e coatings, with six of them placed in the so-called ‘win-win’ quadrant. Further, thermally responsive coatings (coatings that turn from white to black) have not yet become mainstream but have a very high potential. Solar paints, on the other hand, have been developed already but still have a very low efficiency (2%), compared to the efficiency of solar PV (13%-15%).
“Sustainable coatings technologies reduce the energy, resource, and environmental impact of paints and coatings, but often get confused with ‘greenwashed’ unsustainable alternatives,” Aditya Ranade, Lux Research Analyst and lead author of “Painting a Green Future: Opportunities in Sustainable Architectural Coatings”, commented. “Sustainable coating technologies are moving beyond low volatile organic compound (VOC) content to include advances in additives like surfactants and coalescing agents, as well as energy-impacting coatings like cool roofs and even solar paints.” Read More
The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or
the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy,
spelling or grammar.Another year, another wringing of the hands over tax credits and incentives for clean technology.
Lobbyists and vendors in the U.S. are once again singing the blues, calling for continued and expanding government investments in clean technology. At the same time, political challengers continue their Solyndra hootenanny, raking the current administration for how it spent hundreds of millions of taxpayer dollars.
One can’t help but wonder whether it’s time for a different tune when it comes to government involvement in cleantech.
Perhaps conversations about policy support should be less about giving more taxpayer money to prop up the space, and more about elected officials setting long term market stability and enabling the private sector to deploy capital to assume risk in cleantech.
Why? First, some background…
Down with Incentives
Every time U.S. tax credits for renewable energy development come up for renewal, the cleantech sector cringes at having to once again “play chicken” with whichever administration is incumbent at the time.
The U.S. Production Tax Credit (PTC), which provides a 2.2-cent per kilowatt-hour benefit for the first ten years of a renewable energy facility's operation, was born in 1992. But it’s had a hardscrabble life, clinging to life support after seven one and two-year extensions bestowed alternately by Republican and Democratic Congresses. Neither major American party has been willing to show long term incentive support for renewable energy.
The PTC for incremental hydro, wave and tidal energy, geothermal, MSW, and bioenergy was extended until the end of 2013. But the production tax credit for wind expires at the end of 2012. And that’s got wind lobby groups girding up. In a recent statement, American Wind Energy Association (AWEA) CEO Denise Bode cited a study suggesting Congressional inaction on the PTC “will kill 37,000 American jobs, shutter plants and cancel billions of dollars in private investment.” The same study suggested extending the wind PTC could allow the industry to grow to 100,000 jobs in just four years. Expect this battle to simmer all summer.
The unpredictability around cleantech incentives is taking its toll. “The U.S. is hitting a brick wall with the cessation of benefits,” remarked John Carson, CEO of Alterra Power, on the subject at a recent cleantech investment conference I co-chaired in Toronto. He wasn’t happy, and do you blame him? Nobody likes living hand to mouth. But that’s what happens when you rely on credits and incentives like the PTC or its loved and loathed counterpart in the U.S., the Investment Tax Credit (ITC).
And then there are the cleantech subsidies provided by the American Recovery and Reinvestment Act of 2009 (ARRA), which are now winding down.
If it feels that clean technology vendors and lobbyists are spending an undue amount of energy and resources chasing such subsidies worldwide, they likely are.
Up with Mandates and Standards
Rather than funding and administering subsidies to help the clean and green tech sectors find their footing, a case could be made that governments should focus on passing aggressive policy mandates, standards and codes.
Instead of using taxpayer money to make technology bets, regional and national governments could focus on passing laws, including broad brush stroke ones like the renewable portfolio standards in the U.S. that mandate a certain percentage of power from renewable sources by certain dates, and then step back and let the private sector figure out how to deliver. Or mandate change more granularly—for example, that coal power plants need to meet certain efficiency or emissions standards by certain dates, and, again, let the private sector figure out how. (Ironically, if there were more public support to actually clean up coal power instead of simply disingenuously parroting, beginning in 2008, that “there’s no such thing as clean coal” and throwing up our hands because environmental ads told us “clean coal doesn’t exist today”—and if that translated into political will and a mandate—cleaner coal power could exist today. Yes, there’d be a penalty on the nameplate capacity of plants’ output, but there’d also be billions saved in health care costs. But we digress.)
Taxpayers should take their politicians to task for trying to play venture capitalist, i.e. by investing their money in trying to pick winners (a la Solyndra) in complicated markets. Professional venture capitalists themselves, who focus on their game full-time, barely pick one winner in 10 investments.
Drawbacks of Incentives
How could government grants, loans, tax credits and other subsidies possibly be bad in cleantech? Free money is good, right? Here’s a list of drawbacks to these incentives, some of them not as obvious as others:
They can go away and cause market disruption – to wit, the points earlier in this article.
The existence of loans and grants silences critics – Few speak out against pots of free money, because they might want or need to dip into them in the future.
Incentives favor only those willing to apply for them – and therefore are often missed by companies working on disruptive, fast-moving tech, or who are focused on taking care of customers’ needs.
Criteria are often too narrowly defined – Criteria for incentives often favor certain technology (solar photovoltaic over other solar, or ethanol over other biofuels), and as a result, lock out other legitimate but different approaches.
Picking winners means designating losers – Recipients of government grants or loan guarantees get capital and an associated halo of being an anointed company. Those that don’t are comparatively disadvantaged.
Not the best track record – Incentives go to companies best staffed to apply for and lobby for them. And those aren’t necessarily the companies that could use the capital the most effectively, e.g. to compete in world markets, or create the most jobs.
What Governments Could and Should Be Doing
In the cleantech research and consulting we do worldwide at Kachan & Co., we’ve come to believe that governments are best focused on activities to create large and sustained markets for clean technology products and services.
Doing so gives assurance to private investors that there will be continued demand for their investments—one of the most important prerequisites to get venture capital, limited partners and other institutional investors to write large checks.
Given that objective, governments should, in our opinion, pursue:
Setting mandates and standards – e.g. the amount of power generated from renewable sources, new targets for fuel efficiency, green building or other dimensions.
Improving codes and other regulations – making building codes more stringent could drive energy efficiency, green building and smart grid investment.
Building the talent pool
Stabilizing the economy
Fostering political stability
Commitment to infrastructure projects – including water, transportation and grid.
Building showcase projects – regions wanting to foster local cleantech can do as Abu Dhabi has done with its Masdar initiative, as Saudi Arabia is now doing with solar, or as China has done with hundreds of green development zones; in doing so, all three of these countries have sent strong signals to large corporations and investors that they view clean technology as strategic.
Rolling back so-called perverse government subsidy support today of the fossil fuel industry, including direct and indirect subsidies.
Cities as Test Beds of Policy Innovation
Interestingly, cities are emerging as petri dishes of progressive cleantech policy, and are increasingly where such innovation is taking place.
For instance, Barcelona has established that large companies need to create as much as 30% of their power from solar thermal technologies. The city of Berkeley, California pioneered what is now known as Property Assessed Clean Energy (PACE) financing, wherein property owners are able to pay for energy efficiency and renewable energy improvements on their property taxes. This month, Phoenix, Arizona introduced what it calls the largest city-sponsored residential solar financing program in the U.S. And New York City is taking the lead in residential demand response by trialing a program to curtail the consumption of 10,000 room air conditioners at times of high demand.
Given the world’s current financial malaise, and especially in light the Occupy momentum globally, I’m surprised more folks aren’t questioning how their governments spend their money in cleantech. Because, as described above, there are other arguably more effective ways elected officials can help usher in a cleaner, greener future than throwing around billions in incentives.
After all, how much fun would a pristine planet be if we’re all destitute because governments have crumbled under crushing debt?
This article was originally published here. Reposted by permission.
A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. The company publishes research on clean technology companies and future trends, offers consulting services to large corporations, governments and cleantech vendors, and connects cleantech companies with investors through its Hello Cleantech™ programs. Kachan staff have been covering, publishing about and helping propel clean technology since 2006. Details at www.kachan.com. Dallas is also executive director of the Clean Mining Alliance.
Image: mistydawnphoto via Shutterstock Read More
the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy,
spelling or grammar.Another year, another wringing of the hands over tax credits and incentives for clean technology.
Lobbyists and vendors in the U.S. are once again singing the blues, calling for continued and expanding government investments in clean technology. At the same time, political challengers continue their Solyndra hootenanny, raking the current administration for how it spent hundreds of millions of taxpayer dollars.
One can’t help but wonder whether it’s time for a different tune when it comes to government involvement in cleantech.
Perhaps conversations about policy support should be less about giving more taxpayer money to prop up the space, and more about elected officials setting long term market stability and enabling the private sector to deploy capital to assume risk in cleantech.
Why? First, some background…
Down with Incentives
Every time U.S. tax credits for renewable energy development come up for renewal, the cleantech sector cringes at having to once again “play chicken” with whichever administration is incumbent at the time.
The U.S. Production Tax Credit (PTC), which provides a 2.2-cent per kilowatt-hour benefit for the first ten years of a renewable energy facility's operation, was born in 1992. But it’s had a hardscrabble life, clinging to life support after seven one and two-year extensions bestowed alternately by Republican and Democratic Congresses. Neither major American party has been willing to show long term incentive support for renewable energy.
The PTC for incremental hydro, wave and tidal energy, geothermal, MSW, and bioenergy was extended until the end of 2013. But the production tax credit for wind expires at the end of 2012. And that’s got wind lobby groups girding up. In a recent statement, American Wind Energy Association (AWEA) CEO Denise Bode cited a study suggesting Congressional inaction on the PTC “will kill 37,000 American jobs, shutter plants and cancel billions of dollars in private investment.” The same study suggested extending the wind PTC could allow the industry to grow to 100,000 jobs in just four years. Expect this battle to simmer all summer.
The unpredictability around cleantech incentives is taking its toll. “The U.S. is hitting a brick wall with the cessation of benefits,” remarked John Carson, CEO of Alterra Power, on the subject at a recent cleantech investment conference I co-chaired in Toronto. He wasn’t happy, and do you blame him? Nobody likes living hand to mouth. But that’s what happens when you rely on credits and incentives like the PTC or its loved and loathed counterpart in the U.S., the Investment Tax Credit (ITC).
And then there are the cleantech subsidies provided by the American Recovery and Reinvestment Act of 2009 (ARRA), which are now winding down.
If it feels that clean technology vendors and lobbyists are spending an undue amount of energy and resources chasing such subsidies worldwide, they likely are.
Up with Mandates and Standards
Rather than funding and administering subsidies to help the clean and green tech sectors find their footing, a case could be made that governments should focus on passing aggressive policy mandates, standards and codes.
Instead of using taxpayer money to make technology bets, regional and national governments could focus on passing laws, including broad brush stroke ones like the renewable portfolio standards in the U.S. that mandate a certain percentage of power from renewable sources by certain dates, and then step back and let the private sector figure out how to deliver. Or mandate change more granularly—for example, that coal power plants need to meet certain efficiency or emissions standards by certain dates, and, again, let the private sector figure out how. (Ironically, if there were more public support to actually clean up coal power instead of simply disingenuously parroting, beginning in 2008, that “there’s no such thing as clean coal” and throwing up our hands because environmental ads told us “clean coal doesn’t exist today”—and if that translated into political will and a mandate—cleaner coal power could exist today. Yes, there’d be a penalty on the nameplate capacity of plants’ output, but there’d also be billions saved in health care costs. But we digress.)
Taxpayers should take their politicians to task for trying to play venture capitalist, i.e. by investing their money in trying to pick winners (a la Solyndra) in complicated markets. Professional venture capitalists themselves, who focus on their game full-time, barely pick one winner in 10 investments.
Drawbacks of Incentives
How could government grants, loans, tax credits and other subsidies possibly be bad in cleantech? Free money is good, right? Here’s a list of drawbacks to these incentives, some of them not as obvious as others:
They can go away and cause market disruption – to wit, the points earlier in this article.
The existence of loans and grants silences critics – Few speak out against pots of free money, because they might want or need to dip into them in the future.
Incentives favor only those willing to apply for them – and therefore are often missed by companies working on disruptive, fast-moving tech, or who are focused on taking care of customers’ needs.
Criteria are often too narrowly defined – Criteria for incentives often favor certain technology (solar photovoltaic over other solar, or ethanol over other biofuels), and as a result, lock out other legitimate but different approaches.
Picking winners means designating losers – Recipients of government grants or loan guarantees get capital and an associated halo of being an anointed company. Those that don’t are comparatively disadvantaged.
Not the best track record – Incentives go to companies best staffed to apply for and lobby for them. And those aren’t necessarily the companies that could use the capital the most effectively, e.g. to compete in world markets, or create the most jobs.
What Governments Could and Should Be Doing
In the cleantech research and consulting we do worldwide at Kachan & Co., we’ve come to believe that governments are best focused on activities to create large and sustained markets for clean technology products and services.
Doing so gives assurance to private investors that there will be continued demand for their investments—one of the most important prerequisites to get venture capital, limited partners and other institutional investors to write large checks.
Given that objective, governments should, in our opinion, pursue:
Setting mandates and standards – e.g. the amount of power generated from renewable sources, new targets for fuel efficiency, green building or other dimensions.
Improving codes and other regulations – making building codes more stringent could drive energy efficiency, green building and smart grid investment.
Building the talent pool
Stabilizing the economy
Fostering political stability
Commitment to infrastructure projects – including water, transportation and grid.
Building showcase projects – regions wanting to foster local cleantech can do as Abu Dhabi has done with its Masdar initiative, as Saudi Arabia is now doing with solar, or as China has done with hundreds of green development zones; in doing so, all three of these countries have sent strong signals to large corporations and investors that they view clean technology as strategic.
Rolling back so-called perverse government subsidy support today of the fossil fuel industry, including direct and indirect subsidies.
Cities as Test Beds of Policy Innovation
Interestingly, cities are emerging as petri dishes of progressive cleantech policy, and are increasingly where such innovation is taking place.
For instance, Barcelona has established that large companies need to create as much as 30% of their power from solar thermal technologies. The city of Berkeley, California pioneered what is now known as Property Assessed Clean Energy (PACE) financing, wherein property owners are able to pay for energy efficiency and renewable energy improvements on their property taxes. This month, Phoenix, Arizona introduced what it calls the largest city-sponsored residential solar financing program in the U.S. And New York City is taking the lead in residential demand response by trialing a program to curtail the consumption of 10,000 room air conditioners at times of high demand.
Given the world’s current financial malaise, and especially in light the Occupy momentum globally, I’m surprised more folks aren’t questioning how their governments spend their money in cleantech. Because, as described above, there are other arguably more effective ways elected officials can help usher in a cleaner, greener future than throwing around billions in incentives.
After all, how much fun would a pristine planet be if we’re all destitute because governments have crumbled under crushing debt?
This article was originally published here. Reposted by permission.
A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. The company publishes research on clean technology companies and future trends, offers consulting services to large corporations, governments and cleantech vendors, and connects cleantech companies with investors through its Hello Cleantech™ programs. Kachan staff have been covering, publishing about and helping propel clean technology since 2006. Details at www.kachan.com. Dallas is also executive director of the Clean Mining Alliance.
Image: mistydawnphoto via Shutterstock Read More
New Hampshire, USA --
Sinking revenues and shrinking policy support may be causing a bit of a haze on the renewable energy horizon, but there's plenty of sunshine trying to peek through if you look hard enough.There’s no doubt that everything from solar to biofuels are under assault from legislative halls to the comment boards. And while there are still gains being made, they’re not always evident.
As the renewable energy industry faces another tumultuous week with hearings on Capitol Hill, a highly awaiting trade ruling by the Department of Commerce and intense debate across Europe, we thought we spend the day wrestling up some of the other developments that could bear fruit once the clouds pass.
CSP Cost-Cutter
Concentrating solar power (CSP) has struggled to keep up with the rapidly falling prices of PV, making the technology a hard sell to investors.
But what if CSP could find cost gains that increased capacity, cut costs and made it more competitive on price with PV? That’s the hopes for 3M’s Renewable Energy Division and Gossamer Space Frames, which have teamed up to design a parabolic trough technology that they say sets a world benchmark for solar concentration and could ultimately reduce the installed cost by 25 percent. The companies say they achieve the new highs in capacity and new lows in costs by combining 3M’s Solar Mirror Film 1100 with the designs of Gossamer Space Frames.
The demonstration facility is fully operational in Daggett, Calif., at the Sunray Energy facility, which is owned and operated by Cogentrix Energy. The new system, which had its ribbon-cutting ceremony in early April, began operating in October 2011 and provides a peak of approximately 275 kw of electricity. A second project using the system design is underway in a separate location and project commissioning is scheduled for June.
The National Renewable Energy Laboratory (NREL) has verified performance of the system, measuring an optical accuracy of more than 99 percent. Read More
Sinking revenues and shrinking policy support may be causing a bit of a haze on the renewable energy horizon, but there's plenty of sunshine trying to peek through if you look hard enough.There’s no doubt that everything from solar to biofuels are under assault from legislative halls to the comment boards. And while there are still gains being made, they’re not always evident.
As the renewable energy industry faces another tumultuous week with hearings on Capitol Hill, a highly awaiting trade ruling by the Department of Commerce and intense debate across Europe, we thought we spend the day wrestling up some of the other developments that could bear fruit once the clouds pass.
CSP Cost-Cutter
Concentrating solar power (CSP) has struggled to keep up with the rapidly falling prices of PV, making the technology a hard sell to investors.
But what if CSP could find cost gains that increased capacity, cut costs and made it more competitive on price with PV? That’s the hopes for 3M’s Renewable Energy Division and Gossamer Space Frames, which have teamed up to design a parabolic trough technology that they say sets a world benchmark for solar concentration and could ultimately reduce the installed cost by 25 percent. The companies say they achieve the new highs in capacity and new lows in costs by combining 3M’s Solar Mirror Film 1100 with the designs of Gossamer Space Frames.
The demonstration facility is fully operational in Daggett, Calif., at the Sunray Energy facility, which is owned and operated by Cogentrix Energy. The new system, which had its ribbon-cutting ceremony in early April, began operating in October 2011 and provides a peak of approximately 275 kw of electricity. A second project using the system design is underway in a separate location and project commissioning is scheduled for June.
The National Renewable Energy Laboratory (NREL) has verified performance of the system, measuring an optical accuracy of more than 99 percent. Read More
Since the beginning of 2012, China Sunergy has shipped 22.32MW to Bulgaria. Image: China Sunergy
Financials
China Sunergy has announced that it has supplied the Bulgarian Yerussalimovo solar park with 5MW of VP modules. In total, China Sunergy has shipped 22.32MW of panels to Bulgaria since the beginning of 2012, exceeding the company’s 18MW shipments to Bulgaria in 2011. The panels were sold to Mitsubishi and Helios Power acted as installer of the modules.
Stephen Cai, CEO of China Sunergy, commented: "We have built up a very large market share in Bulgaria. Our 18MW in shipments last year comprised nearly 32% of this market which, according to the latest Solarbuzz report, totalled about 57MW in 2011. The Bulgarian market is forecasted by the same report to increase to 2.7 times last year's level, to 152MW, in 2012. We hope to continue to maintain 30% market share this year, even considering the tripled market size. Bulgaria is a great example of high potential emerging markets for China Sunergy, and we believe we can build on the solid relationships we have there to sell more in the future."
The Bulgarian government introduced FiTs in 2006, right before joining the European Union in 2007. Hydro-electric and wind power projects were soon followed by solar projects. Solar power has been used to meet the energy demand that wind alone could not offer and the Bulgarian solar industry has since experienced a rapid growth. More large-scale projects are expected to be developed. Read More
Financials
China Sunergy has announced that it has supplied the Bulgarian Yerussalimovo solar park with 5MW of VP modules. In total, China Sunergy has shipped 22.32MW of panels to Bulgaria since the beginning of 2012, exceeding the company’s 18MW shipments to Bulgaria in 2011. The panels were sold to Mitsubishi and Helios Power acted as installer of the modules.
Stephen Cai, CEO of China Sunergy, commented: "We have built up a very large market share in Bulgaria. Our 18MW in shipments last year comprised nearly 32% of this market which, according to the latest Solarbuzz report, totalled about 57MW in 2011. The Bulgarian market is forecasted by the same report to increase to 2.7 times last year's level, to 152MW, in 2012. We hope to continue to maintain 30% market share this year, even considering the tripled market size. Bulgaria is a great example of high potential emerging markets for China Sunergy, and we believe we can build on the solid relationships we have there to sell more in the future."
The Bulgarian government introduced FiTs in 2006, right before joining the European Union in 2007. Hydro-electric and wind power projects were soon followed by solar projects. Solar power has been used to meet the energy demand that wind alone could not offer and the Bulgarian solar industry has since experienced a rapid growth. More large-scale projects are expected to be developed. Read More
