Solar Economic Incentives: Fragile as the Wind

March 5th, 2010

The solar industry applauded when the 30% federal tax credit was extended to 2016 and the legislation lifted the cap. The reason of course is that for all intents and purposes, the solar industry is just emerging and needs substantial support, and the stability in the incentives provides this support. But now one important part of this program, known as the treasury grant program, has been placed in jeopardy. Four senators released a letter in which they urged the Obama Administration to suspend this program until the legislation could be amended to allow only for clean energy projects “that preserve and create jobs in the United States.” You can read the full text of the letter here.  The abrupt fits and starts of incentive programs, and not just this federal program, only serve to stall the march to solar.

The Solar Generation

March 2nd, 2010

Buried on page 20 of our local paper was a news item “Students push solar for NCS.” The National Cathedral School may not qualify as you your average American school. (For those of you not in the know, NCS is a private school home to some of sons and daughters of the elite of the Nation’s Capital.) But what is going on at NCS may be a glimpse of what the future holds.

The article in the Northwest Current chronicles how NCS is now planning on installing 32 solar panels on a century old (read historical) building at NCS—due to the insistence and perseverance of two students at NCS, Charlotte Zimmerman and Christina Boulineaux. The two raised $20,000 and even interviewed solar contractors so that they could place these solar panels on NCS. They recognized that the future is in renewable energy, and they were not about to let the school administration avoid its responsibility to make the school an energy-friendly place. If we don’t start with renewable energy in the schools, then where should we start?

What these two women show the rest of us is that there are an increasing number of pockets of hope and excitement for the solar industry. The younger generation may not sit idly by as we waste yet another opportunity to push solar into the mainstream. They are busily equipping themselves to take on the energy burdens we left them as we developed our insatiable appetite for fossil fuels. That model is no longer sustainable and the younger generation is going to have to step up and pick up the pace for alternatives to fossil fuels.

Now 32 solar panels on one building is not going to make a big difference, but the idea behind distributed solar energy is that we will take one rooftop at a time. You add one rooftop and another and another, and soon you have enough solar energy to power an entire community. A developer in Florida is now creating a community for almost 20,000 homes that will run entirely on solar energy.  Earlier this month, legislation was introduced in the House to put solar on 10 million roofs in the next nine years. And if we cannot accomplish these relatively modest goals, then we should stand aside and let the students assume the solar mantle and push solar into the mainstream. They seem to know how to get things done.

ES6Q2X4J3WBD

All Solar Panels Are Not the Same

February 22nd, 2010

Ronald Reagan was once quoted as saying that, “A tree’s a tree. How many more do you need to look at?” I recently heard an interview with a major solar installer in California who similarly asserted that if you’ve seen one solar panel, you’ve seen them all. They are all about the same. But solar panels are not the same, and you may want to read SolarTown’s article Choosing Your Solar Panels: More than Meets the Eye to find out what distinguishes one solar panel from the other. Here is a brief primer on what you should look for and why at SolarTown we believe that you as the consumer should look into solar modules yourself before you purchase your solar energy system.

You may be putting something on your roof for 25-30 years, and you probably want a sense of confidence that you have selected a solar panel that is right for you and gives you that the best value for your money. Of course you should consult with your installer, but this is a decision that you will have to live with for a long time. We are not sure that all installers will tell you what your choices are so we have summarized some of the major differences between panels. Take a look at our article on Choosing Solar Panels comparing some of the leading solar panels that you may purchase either from us or another distributor.

Appearance Matters: All Solar Panels Do Not Look the Same

Start out with something that we understand well, which is the aesthetics. Now if your home has a flat roof and the panels will not be visible from the street, then you need not worry. But all too often, we have seen some beautiful homes on which an installer has thrown something up on the roof, destroying the appearance of the home. And it is not like you can simply take the solar panels down and start over.

There are at least two factors in the aesthetics of the solar panels that you select. First, the placement of the panels should fit well into the lines of your roof. You would think that this is an easy challenge, but especially as installers are getting started in the business, they don’t seem to pay much attention to how the contours of your roof line should dictate the configuration of your solar panels. Second, the appearance of the panels themselves can differ substantially. The color of the frames will differ. 

The appearance of the solar cells will also differ. The monocrystalline panels, which are all black in appearance, can provide a solid color appearance. The polycrystalline panels, which generally are blue in appearance, are usually a blend of various shades. The monocrystalline panels are generally more efficient—and more expensive, but they may be worth the extra expense depending on your aesthetic preferences.  That is just for starters. There are many other considerations, which we outline in our learning piece, but let’s take a look at probably the most important metric in your selection: output.   

Output is King: All Solar Panels Do Not Produce the Same Output

You want your solar array to produce energy, and you would think that there would be an easy way to figure out how much energy will be produced. Think again.

External Factors:  There are the most obvious facts that will influence how much output you will generate from your solar array such as shading. If you have a 70 foot hickory tree in front of your house, don’t expect a lot of kilowatt hours to be produced in the summer time.

 Nameplate Rating Tells You Very Little: Just because the “nameplate” rating of one panel is the same as another does not mean that you will get the same output. You think that a 220 watt panel will produce 10% more than a 200 watt panel. Wrong! You will need to know a lot more about the panels, such as what the negative power rating is, and what the PTC rating is. Some states provide you with the incentives based on the expected output using PVWatts, a software tool that the National Renewable Energy Laboratory developed to permit non-experts to quickly obtain performance estimates for grid-connected PV systems.

Other states provide you with incentives based on the PTC rating. And you can use the expected output or actual output to figure out how many renewable energy credits you will earn. As an informed consumer, you will have to know this stuff. We do not want to be cavalier about this, but you are going to be making a very important decision, and all too often  which module you choose does not attract the attention and time that it deserves, considering that you will have to live with these panels for a long time to come.

SolarTown would like to steer you in the right direction. We have a solar engineer on staff who can help you make an informed decision. At the least, if you are serious about going solar, please take the time to look into these issues before you choose your solar panels.

Financing, Incentives and the Future Forward for Solar

February 5th, 2010

Renewable Energy Technology Conference

We attended the Renewable Energy Technology Conference (RETECH 2010) here in Washington, D.C. the last couple of days. I am sure that there will be much written about the conference that concentrated on strategic issues, finance and incentives for renewable energy.  The Conference highlighted many of the common challenges faced by renewable energy projects, regardless of whether they are solar PV, biomass, wind or geothermal. There were some recurrent themes at many of the sessions that I attended.

Government Plays a Leading Role

Government, whether we like it or not, has to play a leading role in supporting renewable energy technologies and projects.  We have always been on the cutting edge of developing technologies, but as the President of ACORE said at the opening plenary session, “the world is moving past us. Are we going to lead or be a follower?” And Google’s Dan Reicher suggested that we are losing the green energy race to China.

The paralysis in Washington hangs like a looming dark cloud over the horizon, and another speaker, John Geesman, the President of GreenEnergy War, suggested that if Congress were not able to lead, it should step aside and let the states take leadership.

Federal and State Incentives for Solar Energy

At one of the panels, this one devoted to federal and state incentives, Alan Nogee, the Clean Energy Program Director at the Union of Concerned Scientists, gave a particularly insightful analysis of the energy bills pending in the House and the one reported out of committee in the Senate. The basic charge is that both bills are riddled with so many loopholes that they amount to mere slogans. According to Nogee, the 15% goal for renewables in 2020, net of loopholes is actually 7.2 – 10.2%.

 He liked the House version, which sets a goal of 20% by 2020, but again the loopholes swallow the effectiveness of the bill. He thinks that the federal government should adopt a “real standard” of 25% by 2025 with no opt outs and no loopholes. According to the projections of the Union of Concerned Scientists, adoption of this standard would allow us to avoid building 50 new nuclear power reactors—that’s right, 50 nuclear power reactors. Now that sounds like a compelling argument.

The Administration is Allocating Huge Resources to the Renewable Energy Market

The administration’s representative at the conference, Kristina Johnson, Under Secretary at the Department of Energy, gave a long laundry list of accomplishments of the DOE—and indeed the accomplishments in the past year seem  to be impressive under the leadership of Secretary Chu, who has reinvigorated the Department.  According to Johnson, solar grew 40% in 2009, creating 18,000 new jobs. Under the FY11 budget just released, there is a 22% increase slated for the Department’s solar energy programs.  The Department is investing our federal resources into numerous “signature programs” – high risk but high impact programs. The Department takes very seriously the goal to reduce the US carbon emissions by 83% by 2050. Nevertheless, Johnson noted that China, South Korea and Japan are out investing the US 3 to 1 in renewable energy in the next three years, but “let’s not give up the fight; let’s not concede.”

Federal Incentive Landscape Still Changing

SolarTown has been evaluating various financing mechanisms to release some of the potential of solar energy. The business community in general and particularly the energy industry prefer to operate in a stable regulatory environment, and the extension of the income tax credit to 2016 has injected some stability into the market, but other programs are more precarious, and as one lawyer on a panel suggested, the “cliff in tax benefits is coming.” I assume that he was referring to the grant in lieu of the credit, which from a dollar standpoint has fueled the growth of the wind industry in 2009. But these grants are scheduled to end in 2009, and as one DOE official indicated, the Administration has not taken a position on their renewal—leaving again a vacuum. There are proposal to shift responsibility to the IRS, but for the time being there is considerable uncertainty about whether this program will survive, be modified or will end.

The credit markets and investment community frozen after the financial downturn in 2008-09 are now coming back to the market. But financing is still a huge challenge, and not just because of a difficult lending environment, but because many lenders simply do not understand the technology or the incentives that may accrue to a project, such as rebates or renewable energy credits.

State and Local Programs for Solar Energy

Many state programs have activated the renewable energy market. The renewable energy standards now found in 29 states and the District of Columbia have provided significant support for renewable energy, and without these programs, few utilities would move forward with renewable energy. And the solar carve-outs have targeted and given a real boost to the solar industry.

Many of the speakers spoke passionately about new programs that have emerged in the past few years. The BerkeleyFirst program, an elegant solution, under which the homeowner puts the cost of the solar system on his or her property tax assessment, has been embraced throughout the country. These programs, known as Property Assessed Clean Energy or PACE programs are now in 16 states and over 300 cities throughout the country. Of course, the city needs to finance these programs by issuing a bond, but more cities have been willing to issue a bond.

Some of the speakers also spoke glowingly about the other major trend in support for renewable energy in general and solar in particular: the feed-in tariff.  The gold standard in feed-in tariffs of course has been Germany. Apparently some city officials went to Germany to view firsthand the German solar miracle and adopted the approach. Gainesville, Florida was one of the first cities in the US to pass a FIT with exceptional results as more PV was installed in Gainesville than in the rest of Florida.  A city official from San Antonio, New Mexico was on the same study visit to Germany and in August 2009, San Antonio also passed a feed-in tariff.

New Financing Product from SolarTown

The US is a laggard in solar and falling further behind. The leader in solar, Germany, added 20 times more solar in 2009 than the leading state in the U.S., California. We at SolarTown are now working with our strategic partners to develop a financing product to help jumpstart some solar projects in 2010. We hope to have news to share in the coming months.

Sun Ovens Donations For Haiti

February 5th, 2010

We received the following appeal for assistance from Paul M. Munsen  of SUN OVENS International, Inc. SolarTown encourages you to support this appeal.

Much progress has been made in the efforts to expand the use of Sun Ovens to Haiti. On January 28, 2010, two large Villager Sun Ovens, 160 Global Sun Ovens, 200 cardboard solar cookers and 2,000 Water Pasteurization Indicators (WAPIs) were shipped. In addition, arrangements are underway for 297 Haitian made Global Sun Ovens from the assembly plant in Lambert, Haiti to be distributed to families left homeless by the recent earthquake.  A shipment of parts to reopen the assembly plant is scheduled for February 8. 
 
A partnership has been initiated with Bright Hope International, a NGO which has been working in Haiti for more than 15 years. The majority of the Sun Ovens will be distributed to families living in a tent city which has sprung up at a garbage dump in Port au Prince. Bright Hope is currently providing food and medicine to 429 families at this location. Some of the ovens will also be used in tent cities in Pignon, which is 79 miles north of Port-au-Prince and has doubled in size from 35,000 to 65,000 people in the past two weeks. I will be traveling to Haiti in early February to assist in the distribution and training.  Bright Hope plans to send additional shipments to Haiti of food, medicine and Sun Ovens throughout the month of February.
 
With hundreds of thousands of Haitians homeless and living in make shift tent camps the need for Sun Ovens is immense. Most of the tent camps and are using charcoal to cook. The smoke in these camps strains the health of women and children who are all ready malnourished and dehydrated. 
 
The cost of each Sun Oven with two pots and WAIPs is $199. Donations of any amount will be greatly appreciated.  Checks should be made payable to:
Friends of Haiti Organization PO Box 222 Holland, OH  43528 (Please note the donation is for the Sun Oven project.)
 
Credit card donations can be made through the Sun Oven website. Donations will be forwarded to FOHO and FOHO will issue a receipt by mail. Click here to donate. FOHO is a 501C3 nonprofit organization so all donations will be tax deductible. 100% of the donation will go directly to sending Sun Ovens to Haiti no administrative expenses will be deducted. Thank you for your interest and support.

Solar As Lifeline: Victims Facing Years off the Grid

January 28th, 2010

We all mourn the loss of life in Haiti. The numbers are staggering. Possibly as many as 200,000 people died in the earthquake.  And for the roughly 2 million who remain homeless, the challenges are just beginning. Rebuilding will take many years—and that is just to restore Haiti to the impoverished mess that it was before the earthquake.  As assistance pours in, many opportunities arise to help people with basic needs by going solar. For those living without electricity in Haiti and elsewhere, solar can be a lifeline.

Look at the broad range of solar products available on the market today, or peruse our site. Solar freezers and fridges provide refrigeration for food. Solar lights can light up the streets. Aid workers who need to plug in their computers can use portable solar module. Solar water pumps can filter the water to make it drinkable. Solar ovens can cook the food. Why use kerosene when you have solar.  And even a low cost passive solar water heater can provide hot water.

Solar as a solution in developing areas is not a new idea—just  that when a disaster as big as the Haiti earthquake occurs, it crystallizes the benefits of solar. Government officials from these countries are beginning to take notice. They are less interested in reducing their carbon footprint as they are in getting basic necessities to their citizens.

We were pleased to host a representative from the World Bank earlier this month. Some World Bank visitors coming to Washington, DC want to take back to their home countries various solar products because local sourcing of many of the products that SolarTown carries is not a possibility. If they can pack up a solar module and take it on the plane back to their home countries, then that is all for the good. We hope to see more of these officials in our offices and explain to them the benefits of solar.

The market for solar in these developing countries is immense. Remember that as many as 2 billion people live in a world without electricity. If you have seen a glimpse of the earth from outer space showing where the lights are, Europe is lit up—and most of Africa is dark. Take a look at this photo showing a map of the world at night. Those people who live in the dark are utterly cut off from the rest of us. Access to electricity is a luxury that few in the developing world can afford.

Earth at Night

Earth at Night

A recent article in the New York Times cites statistics from the Alliance for Rural Electrification in Brussels that 44 percent of the population of the developing world lacks access to electricity. Solar panels can light up a city without the major capital costs required to build infrastructure for utilities.

Views of our world from outerspace show the disparities between the haves and the have-nots, but if you want to see what this means at a local level, you will have to visit a village in Sub-Saharan Africa–or visit Mongolia, one of the most sparsely populated countries in the world. 

If a picture speaks a thousand words, then please take a look at this photo taken by one of SolarTown’s friends who was recently in Mongolia. The solar panel gracing this Mongolian ger can connect this family with the outer world. The panel on the ger is a window through which this family can connect to modern conveniences that we in the developed world take for granted. 

Solar Panel on a Ger in Mongolia. Courtesy of Halshka Graczyk.

Solar Panel on a Ger in Mongolia. Courtesy of Halshka Graczyk.

Solar energy is just beginning to gain traction as a viable alternative to fossil fuels.  For some solar energy users, solar is an economic decision. They can actually reduce their utility costs by adopting solar energy. Or they can bring electricity to remote areas such as mountain cabins without the cost of hooking up to the grid.
 
For others, solar is a good way to reduce one’s carbon footprint. They are consciously trying to reduce the harm that we are causing to the environment.
 
And still for others, solar is a lifeline.
——————————

For solar projects in developing countries, see the Solar Electric Light Fund (SELF).

For donations to Haiti, see Partners In Health.

The Linguistic Version of Y2K: The Two Thousand Ten Meltdown

December 23rd, 2009

This is our final blog entry of the year, actually of the decade. You would be hard pressed to find anyone who could have predicted the various fits and starts of the renewable energy market, let alone the explosive growth towards the end of the decade for the solar industry.  But my prediction is that we are poised for continuous substantial growth at least through the next six years.

As we bid farewell to the decade, I could not help but think about the beginning of this decade and the predictions of doom and gloom as the Y2K threat loomed large. I admit that as this decade started, I was not a solar enthusiast as I am today. When it is below zero outside, even on a clear day, you do not think about solar energy–although you should. Just ask the folks in Ontario.

As we approached the New Year ten years ago, I was more concerned about what we were going to call this decade. I remember that this attractive undergrad stuck her head out of the window and shouted something that almost completely eluded me. “I’m a double-O!” I was walking my dog and had on an old college sweatshirt. It took a few moments before I realized that she was referring to her graduation year. I knew then that we were in for a challenging linguistic decade.

The Y2K threat came and went without the damage predicted by so many. I spent New Year’s with my family and in-laws in St. Petersburg, Russia. The only bombshell on that New Year’s Eve was the President of Russia’s resignation, and quick anointment of his young successor, the relatively unknown Prime Minister Vladimir Putin.

The year would become known in English as “The Year 2000,” although it is quite unclear why anyone would bother placing the redundant “year” in front of 2000. We certainly have never called any year “The Year,” – not 1900, although I confess that none of the historians I consulted were able to tell me with confidence how the Year 1000 was known. Other peoples do not suffer through this linguistic angst. Russian speakers are consistent, referring to every year by its numerical designation followed by the word “Year.”

And our problems only just started with the Year 2000. For most of the decade we struggled with the names for the years. Most used the “full name” for the year. Thus, Bush was inaugurated in two thousand one, and Obama won the election in two thousand eight (even so some tried to insert the incorrect and pretentious “and” between thousand and eight.)

As the decade has been winding down, our ideological purity has given way to economy of words. Although jarring to my ear, a minority have begun to bastardize our year by calling it twenty-o-nine. No other language economizes the zero with an o, but that should not surprise us when everything fast and economical reigns supreme in our daily lives. Time is money, as they say. Woe to the historians who will have to talk about the 2000’s, the two thousands, or possibly worse, the incoming decade of the two thousand tens.

Most news media gallantly maintained their linguistic purity throughout most of the decade, talking about two thousand ten, and the upcoming election in two thousand twelve. The bond traders were never convinced. They always sold twenty-fifteen bonds, never two thousand fifteen bonds. But as 2010 approaches, and the decade winds down, few can resist the economical twenty-ten. The die was cast by the song “In the Year 2525 (Exordium and Terminus).” The lyrics pointedly did not refer to the year “two thousand five hundred twenty five” – it would never have made it to number one on the billboard charts in one thousand nine hundred sixty nine.

As this year comes to a close, we bid to you, a year filled with the sun, and look forward to the New Year of new solar possibilities.  But as much as I would like to greet two thousand ten, I know that when the cork on the champagne is uncorked on New Year’s Eve, we will welcome the New Year, twenty ten.

News Flash: The World Is Flat

December 9th, 2009

Despite overwhelming scientific evidence that global warming can be explained only by human malfeasance, naysayers continue to posit self-serving explanations for climate change. A provocative editorial entitled the “Copenhagen Climate Scam Conference” in the conservative Washington Examiner nakedly states that the “case for global warming is based on junk science.” Take Sarah Palin’s editorial in the Washington Post today that “But while we recognize the occurrence of these natural, cyclical environmental trends, we can’t say with assurance that man’s activities cause weather changes.”

The New York Times reported on the unequivocal findings of the World Meteorological Organization that this past decade was one of the warmest on record. As the secretary general of the organization was quoted as saying, this past decade was “warmer than the 1990s, which were warmer than the 1980s, and so on.” How much more evidence do we need? Does the lobster thrown into a pot of cold water on the stove need to commission yet another study before it is convinced that something is awry as the water temperature around it is getting uncomfortably hot?

Everyone is talking about the leaked e-mail messages from the University of East Anglia, which, to put it mildly, caused some damage to the environmental movement. The effort to raise public awareness of the danger of inaction to deal with global warming was dealt a serious blow. When you have see the words “trick” and  “hide the decline,” sure you can explain away that some of these messages are a decade old, or that they were taken out of context, but the damage was done, and for the last week, they have changed the agenda.

Last week, I attended the Solar Energy Focus Conference of the Solar Energy Industries Association for the Maryland, Virginia and DC region. The conference, once sparsely attended, is now a requisite stop for anyone in or getting into the solar industry in this region, from financiers to entrepreneurs, to contractors to government officials.  Professor John Byrne of the University of Delaware, known for his work on the Intergovernmental Panel on Climate Change, which shared the Nobel Peace Prize in 2007 with former Vice-President Al Gore, gave the keynote address.  And guess what controversy he felt compelled to address during his keynote? At the same time that he was exhorting the conference attendees to do more because the “existing system is unsustainable . . . both environmentally and economically,” he still had to spend time talking about the email messages. He exasperatedly talked about the fact that these messages were taken way out of context and did not change the basic fact that the ice melts in Greenland, more than in 10,000 years, are not so easily explained away.

When the world believed that the Earth was flat and that the Earth revolved around the sun, there were also many naysayers, who fervently held to their views despite mounting evidence to the contrary.  Copernicus suggested the heliocentric theory of the universe in 1515 but, possibly afraid of the wrath of naysayers, did not publish his theory until 1543, shortly before his death. And even decades later in 1600, Giordano Bruno was burned at the stake for, among other things, teaching that, oh my goodness, that the Earth revolved around the Sun.

Reasonable minds can and will differ on the solution to the problem, but denying that the pot is getting hotter will not lead us to good solutions. Let us concede that the world is round, that the world is getting hotter, and let America show the leadership required to mold a solution.

Solar Towns All Over America

December 1st, 2009

OK, the residential solar market did not exactly explode in 2009 as many had hoped in 2008 when the price of oil was approaching $150 a barrel. The world economic crisis, lack of financing, cheap oil, constrained governmental budgets all contributed to a less than lackluster year as measured by the expectations that were set in a rosier time a year earlier. Nevertheless, there are some bright spots and probably the brightest of them all is that as prices for solar panels have come down, and the landscape for economic incentives has stabilized, the solar industry has hit mainstream and more importantly, Main Street.

Cities and towns all over America are examining their carbon footprint and coming up with ideas of how to promote renewable energy in general and solar energy in particular. Solar energy is no longer the domain of some raving lunatics way off the grid. A major impediment has been financing of these solar energy systems, but creative solutions are being developed.

I like the idea of solar rooftops because it shows an individual commitment to renewable energy.  It is well and good for consumers to leave it to the utilities to utilize solar energy, but that is for all of us homeowners a bit of a copout. Yes, I admit that I am one of those without a solar panel or solar collector on my roof. We have a great southern exposure on our roof that is perfectly shaded by two 70-year old maple and hickory trees. I am convinced that I should not be deterred. There are some exciting new solar technologies that may work produce even in low light conditions.

There are those who are deterred by the aesthetics of solar photovoltaic panels on their roof. I think that the Solar Decathlon showed some dynamic designs for solar homes that would convince even the staunchest opponent.

We are now coming into the holiday season, and so of course many of you are not apt to plunk down $20,000 for some solar panels.  We understand, but wanted you to know that when you are thinking to buy a green gift for your family or friends, there are some terrific solar gifts that will brighten the holidays.  We have come up with a list of some of our favorite solar gifts to fit every budget. Take a look at them in our learning article entitled Solar Gift Ideas: Gifts that Keep on Giving. You will find some of our solar gift suggestions for charging your cell phone or laptop, or if you want to start with a solar garden, why not buy some of our solar lights. And some folks love the solar oven, which you can take camping or on a picnic. There are ways to start on your solar journey besides placing a solar array on your roof. This holiday season is a good time to start.

The Lights Go On For Government Incentives for Solar Energy

November 11th, 2009

The march to solar energy is on – and the United States has a lot to do to catch up with some other countries that are leading the way. Although there are those would like to think that the desire to reduce one’s carbon footprint is sufficient to convince Americans to go solar, the experience in other countries shows that only cold hard cash, and not the sun’s rays, will convince consumers to leave their fossil fuel lives behind.

Solar Energy Miniscule Part of Our Energy Portfolio in the US

Recent reports trumpet the dynamic growth in the solar industry, but the efforts are paltry compared to the potential of solar energy. According to the Energy Information Administration, renewables represent just 7% of the energy consumption within the United States – and solar represents just 1% of the renewables. You do the arithmetic: 1% of 7% is not much and the United States will have to make tremendous strides to make solar a staple of energy consumption. Even a goal of 1% of our energy portfolio from solar energy will be elusive without extensive government support.

We lag far behind other countries in which solar and other renewables have already assumed a prominent place in state policy to build a less fossil fuel dependent future. In Germany, for example, the leading solar country, 5.0 gigawatts of solar electric power has been installed, compared to 1.5 gigawatts in the United States. Germany’s adoption of solar energy is not shabby for a country whose capital is about the same latitude as that of Edmonton, Canada.

New technologies and higher cost of electricity and gas push parts of the country to grid parity, the point at which the unsubsidized cost of solar energy is equal to or less than traditional electric power. Nevertheless, the major driver to building the solar industry is government support, or as some may call it, government intervention. This intervention may take the form of government incentives and mandates, carrots and stick.

Renewable Portfolio Standards

State governments have set goals and even mandated utilities to generate a certain portion of their power from renewable energy. Under its renewable portfolio standard, for example, New York set a goal of 25% of their power from renewable energy by 2013. By executive order, California adopted standard requiring utilities to obtain as much as a third of their power from renewable energy sources by 2020. At the federal level, under the original version of the proposed Waxman-Markey American Clean Energy & Security Act, which is now pending before the Senate, 20% of the power in the US would have to be generated by renewable energy by 2020—which is exactly the same as required by the European Union’s directive on the use of energy from renewable sources. The bill originally introduced in the House has been substantially watered down and will likely be further watered down before it is eventually passed sometime next year.

State and Federal Economic Incentives Substantial

Economic incentives from the federal, state and local governments, as well as some local utilities have generated renewed interest in the solar industry and some say that there has never been a better time to go solar. Here in the US, we have generally relied on credits and rebates. The federal government removed significant limitations on the federal credit late last year and has now extended the 30% credit for solar energy projects through 2016, without any cap on the amount, creating a stable regime of incentives at the federal level for the next seven years.

States have offered a variety of incentives to entice homeowners and businesses to go solar. Some of the largest incentives are in New York and California, which pay up to $2-$5 per kilowatt. An average PV system can cost $30,000-$50,000 and have a capacity of 4-6kW. The federal credit and state rebates with local utility incentives can combine to offset more than 60% of the cost of the installation.

Feed-In-Tariffs Gaining Some Traction in the US

The European countries have used a very blunt – and effective device to promote solar energy through what are known as feed-in-tariffs. Feed in tariffs guarantee a fixed rate at which the utility will pay through the life of the system. The guaranteed rate of return can be as high as 8%, not too bad when compared with a current certificate of deposit 60 month rate of 2.7%. These feed in tariffs made Spain look like a free for all – until the rates were revised significantly downward and the solar market in Spain tanked with the end of the generous subsidies. Earlier this year, Vermont became the first state in the US to enact a feed in tariff. As the U.S. Department of Energy aptly notes on its website, “The difficulty with any feed-in tariff is to set a standard offer rate for each technology that meets the goal of encouraging renewable energy deployment without providing an excessive profit to the system’s owner.”

Financing a Solar Energy System Still Elusive

Even with this support, financing a solar array on one’s roof looms often as an insuperable hurdle. Even if $25,000-$30,000 of the overall cost of $40,000 for the installation will ultimately be paid back to the homeowner, someone still needs to advance the money. This is a tidy chunk of change to expect the homeowner to come out of pocket for as long as 18 months. In a survey that we administered to installers in five states, the installers listed lack of financing as the number two reason—behind the expense of the installed cost of the system—for consumers to defer the decision to go solar. Consequently, some of these government incentives remain theoretical more than practical without financing.

The City of Berkeley, in California has responded with a creative financing solution by offering financing that will be repaid through annual real estate tax assessments for 20 years—which survives any transfers of the property. The program is in its pilot phase but offers one creative approach to financing, although it is not likely to be adopted widely.

Mandated Solar Standards Should be Adopted

We need to rationalize our system of incentives. Nothing better gets the adrenalin running—and the lobbyists busy—like a mandated standard such as fuel efficiency standards, which when accompanied by government-supported research and development dollars produce enduring results. Modest feed in tariffs offer a good alternative to rebates, but when they are overly generous, they promote a boom and bust cycle. Credits only work for those who have a tax liability. And financing still remains a substantial obstacle. But without significant government support, solar modules will remain useful only on the International Space Station—and not on our rooftops where they belong.