It’s been a WHILE since posting and for that I apologize. There’s been a lot of cool (and time-consuming) stuff going on here. Like this, and this. We’re also in the process of setting up our largest internal test site to date, in Southern California. Info to be posted once it’s available.
What I wanted to talk about: today’s the last day that the OPA is accepting feedback on its Feed-in Tariff Program, and even though it’s late in the game, I thought I’d share one of our recommendations.
It’s definitely not the most pressing program change that’s needed. Sitting in on CanSIA’s Small, Large, and Manufacturer Working Groups, I can appreciate that it probably doesn’t even fit on the top 30 of the pressing issues that the Program Review is set up to address. Even for us, a Domestic Content grid for CPV is something we want to see posted before this.
But, if you’re thinking long term, and for policies that could work beyond the Ontario border, here’s a modest suggestion:
Disclaimer: all credit for this idea comes from Glen Schrader, of Bright Ray Solar, our distributor in Ontario. Glen’s a smart guy, and he’s based in Guelph – being removed from the everyday-running-around that happens at 30 Ordnance probably also helps to see the big picture.
Recommendation: Allocate a portion of FIT contracts for new, innovative renewable technologies.
- Along with timely decisions on Domestic Content rules, allocating a portion of FIT contracts for new technologies lowers the barriers to entry that exist for them. Local markets are easiest to develop and new technology companies can use them to establish credibility.
- There is considerable value to new technology companies locating in the province, including IP, high-tech jobs, and the potential for export. New technologies should in principle also offer increased efficiencies, lower costs, higher peak-use generation, or added capabilities such as energy storage.
- These new technologies don’t necessarily have to be invented here, but they should be primarily developed here – and this itself could attract companies to start up here (like us, who chose to locate here for a number of different reasons).
- A carve-out for new technologies ensures that grid capacity will exist for these technologies, which take more time to reach high market penetration.
- Other incentives could also be considered to encourage project developers and/ or customers to deploy new technologies. The Province may be best suited to determine the correct policy response, but these could include rate adders (for generation whose key feature is not lower costs, i.e. energy storage, peak-use generation), or accelerated approvals.
Ontario will find it tough (not saying impossible) to compete with China on the cost of manufacturing traditional silicon solar panels. Policymakers already realize the need to play to the province’s strength for innovation – be it in efficiencies, costs, energy storage or time of day generation. In the way it was set up, the FIT program essentially guaranteed rates for generation projects using technology developed in 2009 – what we need is rates, and other policies, for 2015 technology.
As always, your thoughts welcome.
We’ve uploaded a few new pics to our Flickr page, mostly updated images of the Sun Simba and some other prototype images. This one is my favourite:
Third Generation Sun Simba HCPV Prototype - Much more advanced prototypes coming soon.
Also, the new Provincial Budget just came out. Some of the Infrastructure investments, “Growing the Green Economy” measures and Innovation and Manufacturing measures seem good, but it’s to really tell how some of these measures will play out. Fingers crossed. The budget overview is online, and I’m especially interested in the various Jobs of Tomorrow investments, the improvements in electrical transmission capacity and the smart grid investments (along with the FIT Rates).
Very busy as we get ready for Solar Power International 2008 next week, but a couple of things caught my eye that were worth passing on.
Possibly the most useful link I’ve stumbled across lately, How Electric Power is Measured in Watts. I’ve seen this explained before, but this explanation is simple and easy to understand, without sacrificing accuracy.
Second, if you’re as obsessed with the US election as I am, and reading this blog, you might be interested in this: Obama And McCain’s Energy Plans Compared In Detail to Help Voters in the Fall. I’m resisting the urge to editorialize.
Energy, unsurprisingly, is turning into a major election issue in the US this year. With the latest round of ads with the two candidates hitting each other over energy, it seems like a good time to start talking solar politics.
Over the next few months I’ll be summarizing various legal and political issues regarding solar, including tax incentives, legal requirements for renewable energy, political platforms on energy and solar and generally trying to summarize events in solar politics.
But, to start, let’s look at the two new Energy policy ads in the US:
Obama’s Energy Ad
Also, here’s the the link to NewEnergyForAmerica.com they give at the end of the ad.
McCain’s Energy Ad
As it pertains to solar, Obama mentions the German national renewable energy plan that began in 2000 and which made Germany the clear world leader in energy (50% of all the world’s solar power is implemented in Germany). So it’s encouraging that it’s being talked about. It doesn’t have to just be solar (or even mostly be solar) but a real focus on renewable energy has to be the cornerstone of any realistic energy policy.
Coming soon, an analysis of Obama and McCain’s Energy and Environmental Policies, especially as they pertain to solar.
Oh, and for the record, we’re Canadian, so we don’t get to vote and so I’m really not interested in taking sides – they’re both proposing positive changes to National Energy policy, and personally I don’t think either are progressive enough or committed enough to breaking US dependence on oil and coal. (Not that Canada is much better.)
The Investment Tax Credit is the major US Federal incentive for Solar Energy in the US. The most basic description of it would be that it’s a 30% tax credit on the installation of a Solar Power system. The credit is worth up to $2000 for individuals, and with no cap for businesses provided they have sufficient tax liability. It’s currently valid through to the end of 2008, and is up for renewal right now.
But, it’s completely bogged down in partisan politics and it’s starting to look like it’s not going to go through (article dated Sunday, July 20, 2008). Basically, the Republicans want to kill it more than the Democrats want to save it. While at Intersolar 2008, almost every speaker raised the importance of the ITC to the US Solar Energy Industry. The general consensus was that without it, solar would grow in the US but slower, and with European and other non-American Solar Energy companies pulling further ahead of their American competitors.
Here are some articles and analysis that summarize different view points rather well:
Finally, a quote from Dr. Fred Morse, senior adviser of U.S. operations for Abengoa Solar, from this Greentech Media Q&A.
Q: Many companies expect a one-year extension to pass before the renewable-energy tax credit expires at the end of the year. Will that be enough to keep CSP moving forward?
A: A one-year extension is of zero value. It takes about four to six years to get a CSP plant sited, permitted, built and up and running. The [investment tax credit] only applies when the plant comes online. And, if you want to finance the plant today, the banks … won’t finance the project unless the [credit] will be there when it’s needed.
So what does all of this mean for the solar energy industry in general? Well, it looks bad, but the reality is that it’s “less good”. Basically, even without the ITC, analysts predict a record year for Solar in California and the rest of the US, if it passes with the 8 year extention that Democrats want, then it will be a banner year. Or put another way, it weeds out the mediocre projects and the mediocre companies. Solar investment will still be in the Billions this year and more solar farms will be built this year than last year.
Signs of a booming industry example:
- Q1 2008 Solar Investment is already 30% over Q1 2007 – Source Cleantech.com
- States are moving in to fill the funding gap, especially California and parts of New England
- Electricity is expected to double in price in the next five years while Solar energy prices continue to drop.
Not to say that the Solar Tax Credit isn’t essential for many US companies and many solar projects, but the industry in general is doing great.
More details available from the Solar Energy Industry Association (SEIA Solar Tax Credit pdf file) and if you’re trying to do research and want as thorough a description as possible, check the Database of State Incentives for Renewables & Efficiency’s (DSIRE) Federal Incentives Page.
Posted in Energy, Solar Industry, Solar Investment, Solar Power
Tagged Fred Morse, Intersolar, Investment Tax Credit, ITC, Solar Industry, Solar Politics, Solar Power, US Solar Industry