Congress Needs to Take a Shine to Solar

Momentum to create domestic sources of renewable energy is growing. But to make it catch fire nationwide, Washington must pass legislation

by Travis Bradford

Are traditional energy utilities casting a shadow on solar power? Nationwide, nearly one megawatt (1,000 kilowatts) of new solar energy capacity is being installed per business day. Yet it's not happening uniformly across the country, not even in many states where sunshine is abundant or where the nation's fastest population growth is driving more demand for all kinds of electricity.

Take Arizona. With nearly 300 days of sunshine a year, Arizona leaders put in place legislation that requires traditional utilities to generate 15% of their electricity from solar and other renewable energies. Despite such clear legislative mandates, the state's utility regulator, the Arizona Corporation Commission (ACC), is considering rules that may stifle the deployment of solar systems in one of the nation's sunniest states. The ACC's proposed rules for supplying extra solar power to the local utility's electrical grid would effectively discourage a large retailer or even a smaller business from installing more than 100 kilowatts of solar panel capacity on its property. That's because there would be little payoff for that business in selling any more than 100 kilowatts of unused electricity produced during off-peak hours for that business. With such a cap, only businesses with very small physical buildings will consider deploying solar, and most of the effective solar demand will go unmet in Arizona.

Bogged Down by Rules

Why, despite its legislated goal to increase the use of renewable energy, would Arizona prevent its own solar industry from doing business within its borders? This is just one example of the exceedingly complex state-by-state rules governing not just interconnection, but the accounting for the electricity supplied to that grid by would-be solar producers and the rates they're paid for it. This complexity effectively deters businesses and home owners from installing solar power-generation systems. This, in turn, hurts demand for solar-energy service providers such as Sun Edison and solar panel makers such as BP Solar, First Solar (FSLR), and Evergreen Solar (ESLR).

In June, the U.S. Senate had a chance to speed the deployment of solar energy. Yet, in a surprising compromise on the federal energy bill, the Senate abandoned a provision to encourage nationwide deployment of most forms of renewable energy. Bowing to lobbying pressure and the political realities of compromise, the Senate jettisoned a comprehensive $32 billion package of incentives that would have dramatically improved the prospect of solving our nation's addiction to fossil fuels. These incentives for clean energy were to be paid for by reductions in subsidies given to oil producers.

The Senate's failure to truly support solar is highly disappointing. Yet the momentum toward creating cheaper, cleaner, and domestic sources of vital energy from renewable sources continues to grow. The prospect—and demand—for future renewable energy legislation still exists. However, the raw political power displayed by fossil fuel producers during the energy bill debate adds new urgency to the discussion of how to create rules and incentives that strengthen the commercialization of renewable energy. Those decisions will define our future as we grapple with accelerating energy, economic, security, and environmental challenges.