- Mark McDowell
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Renewable Energy Industry Meets Challenges Head On
The renewable energy industry is facing serious challenges from competition subsidized by foreign governments and restrictive regulations on the home front. This was the consensus at the recent Solar Exchange East 2011, attended by academics, solar entrepreneurs, engineers, investors, supporters and government officials at the McKimmon Center at North Carolina State University in Raleigh.
Larry Shirley, director of the Green Economy program at the North Carolina Department of Commerce’s Energy Division, said that “Policies and incentives are the building blocks” for the solar industry. Participants generally called for an end to government preference for fossil fuels, while critics believe the traditional means of letting private investors and the market dictate the industry’s direction is the optimal policy.
“Subsidies are basically a waste of taxpayers’ money, a form of corporate welfare,” said Roy Cordato, the John Locke Foundation’s vice president for research and resident scholar and one of the critics. “These (renewable energy ventures) are grossly inefficient. If they weren’t, they wouldn’t need government subsidies.”
“This is a robust environment,” said Rick Myers, director of the Solar Vertical Market Management program for Siemens. “The U.S. solar market grew 67 percent, from $3.6 billion in 2009 to $6 billion in 2010. Solar electric installation In 2010 totaled 956 megawatts. There’s no doubt the U.S. government needs to get more involved in this effort from a policy standpoint. The solar panels are 50 percent of the cost for installation and these prices are going way down. The fact of the matter is the competition is extremely difficult in that area. It’s coming from the Pacific Rim and China.”
In a related move that boosts renewable energy, a U.S. Treasury Department grant program that pays for up to 30 percent of a solar project’s costs would add 37,394 jobs to the economy in 2012 has been extended for one year, according to the Solar Energy Industries Association (SEIA). The program, part of the 2009 economic stimulus package, was due to expire at the end of 2011 after an initial one-year extension was passed by Congress last December. A second extension will boost solar jobs by 12 percent as developers increase installations by 2,000 megawatts, or enough for about 400,000 homes. More than 100,000 Americans currently work in the solar industry, double the number in 2009, said Rhone Resch, SEIA’s chief executive officer. “Much of the jobs and industry growth has come out of that program,” Resch said. “The last thing the government should do in a fragile economy is eliminate a tax break that creates jobs.”
With the grant program, developers can obtain the equivalent amount in cash and write off assets more quickly. The solar industry has received more money from the grant program than any other renewable energy sectors with the sole exception of wind. “The (program) has been the most effective policy in driving economic and job growth in the past two years,” Resch said. “As we continue to slog through a sluggish economy, the tax equity market remains in a much smaller capacity than where it was in 2007.”
Writing for Renewable Energy World.com, Elisa Wood says that “We hear a lot about the job-building benefits of renewable energy when it draws manufacturers and developers to local communities. Less talked about are those who arrive well before the shovels, steel, factories and jobs. These are the green-energy entrepreneurs – the creative thinkers and risk takers responsible for the rise of clean energy ventures over the last decade. Others entering the industry are veterans of energy, finance, agriculture, telecommunications, high tech, science, transportation, construction, nanotechnology and commerce, all drawn by enormous opportunity, as the largest economies in the world spend an expected $2.3 trillion over the next decade to revamp industrial-age energy apparatus into cutting-edge technology. Green energy entrepreneurs emerge from throughout North America, Europe and Asia, but they tend to congregate in high-tech regions such as Silicon Valley, an area of California becoming as much about energy as it is the internet. ‘You can’t throw a softball around here without hitting another solar company,’ says Dan Shugar, one of the solar industry’s early pioneers and now chief operating officer of Solaria, a Fremont, CA-based company that makes silicon photovoltaic products.”