"It's hotter than it's ever been," said Clayton Handleman, President of
Heliotronics, which specializes in solar energy data acquisition and
displays systems that are specifically marketed for educational purposes.
Handleman cited natural gas as one big factor for the exuberance around
solar. Even before hurricanes Katrina and Rita threw exorbitant energy
costs onto every newspaper's front page in the nation, the costs for
energy, particularly natural gas, have been rising up to remarkable
levels. In the face of these natural gas prices and tight supply, solar
looks particularly good because it provides the majority of its power
during peak hours when natural gas for power generation is most
constrained.
It's fitting too that this year's conference, presented by the Solar
Electric Power Association (SEPA) and the Solar Energy Industries
Association (SEIA), is taking place in Washington, DC. Market-based energy
factors like natural gas prices played a critical part in adding another
factor to the rosy outlook for solar: the first federal solar incentives
in almost two decades.
Included in this summer's federal energy bill is a two-year investment tax
credit (ITC) of 30 percent, effective January 1, 2006. These two years are
too short a window for solar module manufacturers to make giant production
increase commitments but it's enough to buoy the market and possibly buy
the solar industry enough time to secure a longer-term extension on those
credits. And since few lawmakers want to vote against a tax credit, which
can be viewed as being pro-tax, it's always easier to extend a tax credit
than it is to secure one in the first place.
The fact the energy bill was almost exclusively crafted by, and passed by,
the Republican majority in Congress has served to shift the public's
perception of solar, says Handleman.
"Republican support just gives solar more creditability," Handleman said,
referring to the aging stereotype that solar energy advocates are all
liberal democrats. Moderate republicans, he says, are becoming some of the
solar industry's strongest supporters. Furthermore, there's increasingly
little political cost for lawmakers to be supportive of renewable energy
and, in many respects, there's a host of advantages.
As a clear example, it was Senator Lamar Alexander (R-TN) who played the
leading role in securing the 30 percent ITC in the energy bill. Although
staunchly against wind power, Alexander's support for renewable energy,
particularly solar, has helped to dissolve the old partisanship that used
to characterize support for renewable energy on Capitol Hill.
And the nation's top Republican, President George W. Bush, signed the
energy bill into law at the Department of Energy's Sandia National
Laboratory under the backdrop of large Concentrating Solar Power (CSP)
dishes. While arguably a staged photo opportunity, the signing of the
energy bill under these solar dishes sent a clear signal of support for
solar.
Coincidence or not, the solar dish photograph was in fact a foreshadowing
of things to come as much of the buzz at this year's show has been
directed specifically at the broad array of CSP approaches. Although
mostly limited to areas of very high sunlight like the American Southwest,
CSP offers the promise of large, commercial scale power projects that
traditional rooftop solar photovoltaics simply cannot match.
Julia Judd, Executive Director of SEPA (the conference co-sponsor), said
she took a quick look in all the conference rooms within the first few
minutes of them starting on Thursday afternoon and found the CSP room
"completely packed." There hasn't been a CSP project since the early '80s
SEGS plants were built in California, yet there's a flurry of new interest
in the promising field. And backing this up, says Judd, is that surveys of
the conference's 1050-plus attendees showed 67 percent interest in PV, 46
percent interest in CSP and 44 percent interest in solar thermal hot
water. Considering the practically nonexistent role that CSP has played
the past few years Judd found it noteworthy that interest in CSP eclipsed
solar thermal hot water.
And there's good reason for that. Just in the past few months a slew of
new CSP projects have been announced. Arizona-based Stirling Energy
Systems (SES) is the new poster child for CSP having secured huge power
purchase agreements (PPAs). The first one with Southern California Edison
is a 20-year PPA for a 500 MW project with an option to expand to 850 MW.
A second deal unveiled only weeks ago is a similar 20-year PPA, this time
with Pacific Gas & Electric, for the output of a separate 300 MW plant
with options for an additional 600 MW. These projects are enormous in
scale -- enough to eclipse all the installed capacity of solar that has
ever been installed in the US, by many factors. Other projects from
SolarGenix Energy, RWE Schott Solar, and International Automated Systems
are also slated for construction.
SES executives, however, are not sitting content on their PPAs. They've
joined the chorus of support that is being echoed loudly at this year's
solar conference; that the federal tax credits available for the next two
years must be expanded in order to allow the industry to make the
longer-term commitments necessary to really grow and become a major energy
industry.
"An extension would provide a strong impetus for further development of a
robust industry that will support thousands of jobs and generate
significant tax revenues for rural America," said Bruce Osborn, CEO of
Stirling Energy Systems.
Rhone Resch, Executive Director of SEIA, will play a key role in pushing
lawmakers on both sides of the aisle into supporting the credit extension.
He says Americans are "struggling with record energy prices, and that
Washington is looking for solutions."
"Now the solar industry has come to Washington to present one solution,"
Resch said.
