Long Island Business News speaks with David Schieren about the Solar Industry

David Schieren in the new fully electric Chevy Volt

LIBN: Do you think today’s young people will be a sort of “Generation Green” who accept solar from the start?

David Schieren:  It’s part of your DNA. I was with an executive from the American Petroleum Institute. I said there’s one thing the oil industry should be worried about. I pointed to the mind. The mindset is shifting, especially with students. Sustainability is becoming part of the DNA. While we’re starting to make progress today, I think we’re going to see this as the renewable energy century. You have a mindset shift.

Click here to read the full interview.

Operation Solar Century

The Middle East is churning (for good cause this time) and oil prices are spiking.  What a shocker.  Isn’t this getting old already?  Oil price increases hurt the economy in the US and across the world. It’s effectively a tax hike on all consumers and businesses.  Just search “oil and recession” online and you will find an abundance of information about the correlation between oil price increases and the economic impact.  Here are just a few recent articles:

CBS Money Watch: Oil Prices and Recessions, 40 Years’ Worth
WSJ Article: Rising Oil Prices Raise the Specter of a Double Dip
NYT Times Article: Why the Disruption of Libyan Oil Has Led to a Price Spike

PROBLEM

What impacts economic growth?  Most agree that monetary policy (interest rates) and fiscal policy (taxes) are two of the most critical economic inputs.  Energy prices are probably in the top five.  What’s startling is that we have no control over the supply of such a critical economic input.  Imagine the US Federal Reserve, the entity responsible for setting monetary policy, were controlled by sovereign nations unbeholden to our national interests.  Who would stand for that?  Well this is what’s going on with OPEC.  A group of sovereign nations managing their assets to maximize revenue for their countries controls the price of the most important global commodity, and a top five variable that impacts the economy.  Since the majority of readily available global reserves reside within OPEC borders, its influence will only grow over time if current trends continue.  Furthermore, exogenous events such as revolutions, terrorist attacks and the like continue to pose a stark threat to supply.

Then consider the politics.  The US sends over $200,000,000,000 annually to OPEC.  Where are those funds going?  What type of regimes does this massive transfer of wealth support?  And while we don’t trade directly with Iran, our support of the global oil market enables that nation to sell its production at market rates. On the demand side, rising economic powers such as China and India have a seemingly insatiable appetite for petroleum and this new demand is contributing to surging prices.  We have fierce global competition for this vital resource.

It must be acknowledged that oil is only one component of the vast, complex and interconnected energy landscape.  Electricity is generated from diverse sources (oil continues to be a key fuel for power generation on Long Island).  But all fossil fuels have flaws, including severe environmental repercussions.  Natural gas is the cleanest burning fossil fuel, and increasing domestic supplies have helped keep the price of that fuel low.  Historically its price fluctuations correlated with oil but recently there is a divergence because of new supplies.  However, these new supplies have damaging environmental impact.  Take a look at this excellent piece in the NYT about the environmental challenges of natural gas drilling.

SOLUTION

Every day we grow more confident that implementing renewable energy and energy efficiency solutions is the answer to the energy challenge.

Take solar, our area of expertise.  Solar is a highly effective technology that we believe is going to dominate the 21st century energy landscape.  Today the technology works incredibly well and because of local, state and federal incentives it is a very smart investment to make by homeowners and businesses.

We are able to reduce or virtually eliminate many homeowners’ electric bills with the technology.  Businesses and non-profit organizations are reducing operating costs.  Fueling electric vehicles with solar energy is a home run.

Increased demand is leading to decreasing costs.  Incentives to go solar are still necessary but have been reduced gradually to promote market transformation.  One reason why solar is so promising is that costs should continue to come down over time, and incentives won’t be needed in the future.  Consider electronics such as computers and cell phones that are largely made of the same materials and manufactured in similar fabrication facilities.  Economies of scale have brought these technologies to the masses.

The potential benefits of solar from a macroeconomic point of view are profound.  Prices of this energy technology will come down over time.  Think about that.  Historically, energy prices have been volatile and risen over time, with occasional spikes that lead to economic misery.  Instead we have an energy technology that is going to come down in cost.  Replace uncertainty with certainty and all economic participants stand to benefit.

It is our theory that solar, other renewables, alternative fuels and energy efficiency will lead to dramatic economic growth, and growth in per capital income in the US and across the world.

Call To Action

It’s time to launch Operation Solar Century.  The goal of this operation is to make solar the dominant energy technology of the 21st century through strategic planning, smart policy and leadership.

We are grateful to solar advocates at LIPA, NYSERDA and in state and federal government, and numerous people and organizations for having the vision and determination to get us this far.  Because of these supporters we have a nascent but energized solar industry.

Now we must work together to promote the next generation incentive structure that can drive massive solar growth by providing long term visibility to the industry, and also be smart for ratepayers.  Both objectives can absolutely be achieved with the same policy.  New York has much to gain by taking a leadership role on this issue.  Stay tuned to learn about specific legislation that you can support.

Within time solar will achieve grid parity, at which point it will be competitive with the grid without subsidies.  To get from here to there we need smart policy and political leadership.  Decisions made today will have great consequence for economic well-being of our state, the nation and the world.  With the right leadership, solar will continue to be a wise investment for homeowners and businesses today, and over time will require fewer and fewer incentives to provide the same great economic benefit.

Now we must take the next steps to solidify our gains and make solar the dominant energy technology.

By working together, the 21st century will become known as the Solar Century.



LIPA Restarting Solar Rebates: Possibly December 1st

On November 23, 2010 Governor Paterson announced  that $15 million has been allocated to the Long Island Power Authority (LIPA) for residential and large-scale solar energy projects.   $8.3 million will go directly to LIPA’s Solar Pioneer program that provides rebates for residential installations.  Strong statements of support by numerous political leaders in New York indicate the growing significance of solar energy to the state.  Please see the Press Release below for further details.

With a fresh injection of funds, we expect  that LIPA will restart the solar program on December 1^st, most likely at $1.75 / watt up to 10 kW for residential customers.  We will notify you as soon as we hear official details.  Please stay tuned for further information.

Official Press Release

http://www.state.ny.us/governor/press/11232010-15MillionFederalStimulusFunds.html

Affordable Solar Electric via Feed-in Tariffs?

The National Renewable Energy Lab (NREL) reports that feed-in tariffs are responsible for 75% of solar photovoltaic and 45% of wind projects worldwide.  Feed-in tariffs (FITs) require utilities to pay per kilowatt-hour to purchase electricity from renewable energy generators.  They enable stable and reliable pricing, and small generators and large plants have an equal opportunity to compete. Countries in Europe, especially Germany, France, and Spain, have used feed-in tariffs to greatly increase renewable energy production because of their increased cost-effectiveness.  For example, California receives 70% more sunlight for producing solar energy than Germany does, though the latter installs 15 times as many solar electric systems per year due to the effective use of FITs.

Generally, green markets in the United States lack strong federal support, and instead, progressive states like California create markets and regulations that eventually spread to the rest of the country.  Though many states have established FITs before, institutional resistance, too high or too low pricing, and bureaucracy have rendered them virtually ineffective. California is again taking the lead and has recently proposed to launch a new variation of the tariff.  In California, investor-owned utilities will be required to purchase electrical energy from renewable generators that are 1MW-20MW in size.

New York recently pushed a bill for FITs on Long Island, but it did not pass. The Long Island Power Authority (LIPA) already awards large rebates (up to half of system cost!), and the 25% New York State and 30% federal tax credits have already made solar systems incredibly cost-effective.  We can only hope that pushes for cost-effectiveness like the FIT can get the United States on par with our European friends.

Long Island Power Authority Reduces Solar Rebates Once Again

When I first came to EmPower Solar as a lowly intern in June of 2009 (don’t worry, now I’m full time, with a degree), the Long Island Power Authority (LIPA) was paying solar system owners $3.50 per watt of electric power capacity installed as part of its Solar Pioneer Program.  That means the utility could literally pay you $35,000 – half the total cost – for a typical 10kw residential system.  This is not including federal and state tax credits, which can further reduce the cost to owners.

I came back to EmPower full time upon completing my degree earlier this summer, when rebates were down to $2.00.  After a few weeks, we got word that the rebates were going down even further, and might even dry up for the rest of the year! Luckily that didn’t happen, but rebates have officially been lowered to $1.75 per watt for up to 10kw or $17,500.

What does this mean for homeowners who want to go solar? Well, fortunately system costs have gone down as well.  It’s a typical effect of supply and demand: demand for solar panels have skyrocketed in the past few years nationwide, so industry kicked up production and took advantage of economies of scale.  It’s still a great time to go solar, as rebates tend to stay somewhat proportional to system cost.  But it is likely that utility rebate funding will indeed dry up in the near future.  This is a tribute to the success of the program – and the awesome fact that Long Islanders are supporting the clean energy mission – but the money won’t be available forever.  If you are at all considering going solar, now is the time.  Solar panels are cost effective anyway, but you don’t want to miss the chance to have LIPA pay a large chunk of your system cost and reduce the payback by a few years.  Given the speed at which rebates have been dropping, there is no predicting how long they’ll last.

See for yourself a rebate update on LIPA’s Solar Pioneer Rebate Block Guidelines Site website.  If you follow some links to the rebate block graph, you can see the rate at which the rebates are being dispersed.

And to read a Newsday article on LIPA’s rebate status, click here