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.

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.



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

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.

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



The current rebate is $2.00/watt (up to 10KW) for a residential solar electric system.  That means LIPA will potentially pay up to $20,000 of the system cost!  However, it is possible that the LIPA Rebate will run out in the next two weeks and there are no guarantees that rebates will be available in the future.

The chart below was taken from the LIPA webpage:

This graph shows that as of August 6, 2010 the Solar Pioneer Rebate (which is the Residential program) is almost gone.  There are only 200 KW left for the year – that’s only 20 residential systems for all LIPA customers!  Just to give you some more insight, in the last three weeks the block went from 500KW to 800KW.  Within the next couple of weeks, the Solar Electric Rebate will likely disappear for the rest of the year.

If you would like to proceed with a solar electric system, there’s no time to waste if you want to secure these rebates.  Please call our Sales Manager, Joe Cordes, at your earliest convenience at 516-286-1477 and we can get you started.  We will have to submit your Rebate Application before they close the program for new applicants!

Invest with confidence. Act now.

Schieren: Reasons to take a shine to solar power

By David Schieren

Long Island’s and our nation’s current energy paradigms are not sustainable. Every day we buy about $1 billion of oil from other countries, some of which are hostile to America. Every day, air pollution from our fossil-fueled power plants creates serious public health problems, including increased asthma rates, cardiac issues and premature deaths. Every day we wait for BP to plug the Gulf oil leak as we helplessly witness the destruction of wildlife and the livelihoods of thousands of Americans.

A renewable energy economy is the solution. A renewable energy economy will stabilize future energy prices, create jobs and increase domestically supplied energy while decreasing imports. A renewable energy economy will create a more prosperous, healthy and civil world for ourselves and future generations.

Locally, there is a pressing need to bring new energy sources into our power mix. Renewables, including solar energy, are beneficial for all Long Islanders. Solar rebates and tax incentive programs not only benefit those who choose solar energy systems for their homes and businesses, but also are good for all ratepayers. Here’s why:

As grid electricity prices continue to go up because of volatile and increasing fossil fuel prices, solar prices are coming down. Electric bills have consistently increased in recent years while solar costs have decreased at a rate of nearly 4 percent a year since 1998, a trend expected to continue. Many industry experts predict solar energy will achieve “grid parity” (the moment when solar electricity costs the same as traditional electricity) within the next five years. Through net metering, excess solar capacity is sold back to the Long Island Power Authority resulting in significantly lower bills for the solar user and a supply of clean, low-cost power for the other ratepayers.

There is much more than meets the eye regarding the value of solar output. The true market price of electricity fluctuates during the day, even though customers pay a constant rate. The real-time price of electricity spikes during sunny hot summer days, which is exactly when solar power works best. LIPA benefits from bringing more solar online because it reduces this peak demand, which has great economic benefit to the utility.

In addition to the direct economic advantages, solar energy boosts overall grid reliability because it puts a cap on surging demand on hot summer days. Remember the 2003 blackout? Richard Perez at the Atmospheric Sciences Research Center at SUNY Albany states that if as little as a few hundred megawatts of solar energy had been online throughout the Northeast, the blackout could have been avoided.

The socioeconomic gains of renewable energy are enormous. Solar does not release particulates or carbon dioxide into the air, leading to significant health benefits. Solar can be used to fuel electric vehicles and help reduce our insatiable reliance on foreign oil. Renewable energy and energy efficiency-related jobs cannot be outsourced overseas. The green industry can be a powerful force for reviving Long Island’s economy and that of our nation.

In the near future, solar, wind and other renewables won’t need incentives to be economically viable, but for the moment they are a necessity. Currently before the state Legislature is the New York Solar Industry Development and Jobs Act of 2010. This legislation would create a solar renewable energy credit market where solar owners would receive a SREC for every megawatt-hour of electricity produced; utilities would be required to purchase SRECs based on a certain percentage of their electricity sales. This would move solar away from a rebate structure and create market-driven incentives for individuals and organizations to install them. Whether or not this legislation passes, it is clear that the price of solar is coming down, and because of its many benefits, Long Island, New York and the United States should continue to aggressively invest in renewable technologies.

The video below by SolarOne does a great job of explaining how the SREC market would work and all the benefits it would bring to NY.

Click here to view the embedded video.

Some important points are:

• Create about $20 billion in economic activity in the state
• Residential and commercial size systems would benefit
• 140x increase in New York solar capacity by 2025
• Low cost: only about 39 cents extra on each month’s electric bill

This legislation needs to get voted on by June 21 when the Summer legislative break begins.  Take action and let your representatives know that you support the Solar Industry.

The solar industry on Long Island has undergone dramatic changes over the past 9 months.  Last November, LIPA was providing solar electric rebates of $3.50/watt for residential and commercial clients.  On March 1, a new rebate structure was instituted, which created set rebate reductions based on the number of rebate applications.  In this new structure, the first megawatt of applications received $2.50/watt, the second megawatt received $2.25/watt, and the third megawatt received $2.00/watt.  We are currently in the fourth traunch which allocates $2.00/watt for 1 MW of residential installations, and $1.75/watt for 1 MW of commercial and non-profit installations.

Although rebate reductions are a strain, they bring many positive things to light.  In just 3 months, more than 3 MW of solar rebate applications have been submitted.  There is clearly a demand for solar on Long Island.  LIPA’s Solar Pioneer Program has helped to make Long Island one of the best solar locations in the U.S.  But this also demonstrates the need for a consistent and predictable incentive structure.  It is challenging for consumers and business to plan and make decisions when net system costs can change so suddenly.

That said, there are many alternatives to a rebate incentive structure.  In the New York Assembly and Senate, bills have been introduced to create a solar renewable energy certificate (SREC) market in the state. An SREC market is what New Jersey used to successfully grow its solar industry.  For every set amount of energy produced, a solar system owner would receive a SREC (in New Jersey, owners receive an SREC for every 1 megawatt hour of energy produced).  Utilities would be obligated to purchase SRECs based on a certain percentage of the electricity they sell each year.  New Jersey has seen SREC prices usually between $500 and $600.  This means an owner with a 10 kW system, which produces approximately 12,000 kWh per year, would acquire about 12 SRECs in one year.  These 12 SRECs would in turn have an expected market value of between $6,000 and $8,400.

The New York solar industry should unite behind a common incentive structure to bolster the industry statewide.  The SREC legislation could be a great opportunity to further catalyze the solar market.  However, if this is not the best option for New York, than everyone in the industry should work together to advance quickly an effective alternative.

What are your thoughts?  Do you think SRECs are the way to go or is there a better option?

Last week the NY Times reported that NYC conducted a laser analysis of the city to create a useful geographical map.   The laser system used is known as Lidar, from light detection and ranging.  In April, over the course of nine 6-hour nighttime flights, a plane equipped with Lidar collected data on the city which would allow the rendering of a detailed 3D map.  This map will help identify wetlands and flat and pitched roofs, among other things, which would enable the city to determine which neighborhoods are more prone to flooding, which areas need more trees, and estimate the solar potential of different buildings.  [Above is a picture taken during one of the nighttime flights.]

The map has yet to be produced, but its benefits will be numerous.   While New York City receives plenty of sun light, it has unique conditions which limit its solar potential.  Tall buildings shade nearby roofs; roofs house equipment like heating and cooling systems as well as water and cell phone towers which reduce usable solar space; many ratepayers who rent are not able to take advantage of solar incentives which usually go to building owners; and historic building preservation codes can restrict or prevent construction of solar structures.  A detailed solar potential map will ease the identification of the best locations for solar.

NYC is taking action on other fronts to encourage its solar market.  New York is one of the Solar America Cities – a group of 25 cities in partnership with the Department of Energy committed to increasing the adoption of solar technology.  NYC has set the goal of installing 8.1 MW of photovoltaic energy by 2015.

The price of installation in the city remains high and the permitting process can be lengthy.  The solar map will be a good step forward in catalyzing solar in the city.  However, there needs to be continued focus on bringing down the costs of installation, streamlining the permitting process, and developing creative ways to finance solar projects which make them more accessible to everyone.

Check out the Solar Bill of Rights to learn more about practices and policies that will help to grow the solar market.