It’s too early to tell what the recession will mean for solar, but this is a good indicator that it won’t be anywhere close to a worst-case scenario.

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This is great news for every sector of renewable energy, from wind power turbines to hydroelectric dams. But this is a particularly great opportunity for solar, as this could encourage the construction of solar energy “plants” in deserts and similarly inhospitable terrain, while still allowing the power generated in these locations to integrate in with the existing power grid.

Moreover, this is a clear case where the federal government is best-suited to deliver this kind of service, with state finances ailing nationwide and the lack of capital or incentive for either producers or distributors of power to lay down the money for this kind of construction. In other words, this is a sensible policy with no real reason for ideological backlash, and with nothing but positive benefits for the growth of green energy and the nation’s transition away from fossil fuels. Great news!

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In Obama’s speech, he mentioned that “We are a nation that has seen promise amid peril, and claimed opportunity from ordeal. Now we must be that nation again. That is why, even as it cuts back on the programmes we don’t need, the budget I submit will invest in the three areas that are absolutely critical to our economic future: energy, healthcare and education. It begins with energy.” This is not merely a rhetorical flourish; it does appear as if renewable energy legislation is the first priority for the Democratic administration. Moreover, Congressional leadership seems to be on the same page: Speaker of the House Nancy Pelosi is providing strong indications that energy legislation will be a more immediate priority than even health care reform.

Obama’s specific request, outlined in his speech is that “this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest $15bn dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal and more fuel-efficient cars and trucks built right here in America.” The extent to which Obama is committed to making cap-and-trade legislation a reality, beyond merely calling for an effort to be made, is made even clearer by his incorporation of cap-and-trade revenues into his budget estimates for upcoming years. Budgets are tricky animals, and these stipulations can often be added for political purposes rather than realistic projections. But merely adding the estimate in puts political pressure on Congress to come up with a cap-and-trade plan that will generate meaningful revenues, as otherwise Obama has solid political cover for deficits and running off the budgetary rails. Moreover, his estimates are probably realistic.

Early speculation has overtaken even the drafting of this post, as the creaking engine of modern American governance begins to get moving on the issue. The plan President Obama is currently pushing has 2012 as the date that legislation will come into meaningful force, which is far later than we here at GetSolar would like but is nonetheless cause for modest excitement. Arguments over the cost of the legislation are going to pop up in all sectors, but the political momentum in and party make-up of Washington right now mean that these complaints will probably not be enough to stop the legislation. In other words, it looks safe to say that carbon reform is going to be a legislative reality in the near future.

The exact shape of the legislation that will emerge is, of course, unpredictable. In particular, now that cap-and-trade has won out over a carbon tax, issues such as the distribution of permits and the potency of the restrictions will be at the forefront. Nonetheless, note that these debates will implicitly accept such legislation as a settled question. Therefore, even if all does not go well through the process and ensuing debates, we will see the most meaningful climate change legislation ever passed into law by our government – and most meaningful by several orders of magnitude. And once carbon reform makes it through the pipeline, solar’s merit as an energy source is going to elevate it into the center of the national consciousness.

We’ll be following all of these developments here at the blog and on the site, from the hopeful to the worrying, so stick with us as we try to read the tea leaves for carbon reform in the upcoming months.

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All technical discussion aside, the San Francisco Chronicle has a great story about the assist the stimulus will lend to residential solar. Solar in the home will be a big growth area in the next few years, and it’s great news to know that the stimulus made it through the gamut of not one, but two trips through both houses of Congress, not to mention the attention of a president with significant clout. It’s a clear sign that there’s legislative weight behind the significant, large-scale carbon reform that will allow solar to break further into the mainstream.

For more great news, here’s the American Solar Energy Society’s letter to its subscribers on the stimulus:

Friends of ASES,

With the stroke of a pen President Obama has rewritten the future of solar energy.

Now signed into law, the American Recovery and Reinvestment Act provides billions in investments to increase the use of solar energy, promote energy efficiency, improve financing options and remove market barriers.

This legislation provides powerful investments to accelerate the U.S. towards a sustainable energy economy.

Key provisions of this legislation include:

* Solar and energy efficient improvements for federal buildings
* Solar water heating incentives, removing the $2000 cap on the 30% personal tax credit (excludes pools and hot tubs)
* Green-collar job training programs
* Ending the state and municipal ‘subsidized financing penalty’
* Smart grid investments
* Expanding research and development programs for renewable energy and energy efficiency

This legislation also funds solar and energy efficient upgrades for schools, solar grant alternatives to the investment tax credit, solar manufacturer incentives, and other historic investments.

You can read or search the text of this legislation (HR 1) here.

We applaud the incredible efforts of our colleagues at SEIA, Solar Nation, and the many passionate individuals throughout the solar community who added their voices of support in the weeks leading up to the signing of this legislation.

There’s still a long way to go, but this legislation provides a tremendous step forward that will help generate green jobs, reduce energy costs, tackle climate change and power the new energy economy for years to come.

With sincere thanks,

Brad Collins,
Executive Director,
American Solar Energy Society

Pretty exciting stuff. As a last note before I leave, I can’t emphasize enough that Adam’s right – as if you needed my reminder. Make yourself a fan of ours on Facebook. It’s a free way to spread awareness of the technology that is going to help us out in countless ways over the upcoming years.

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Needless to say, if this is not dealt with soon we could be looking at some troubling realities for well-funded state initiatives. California has been a leader in solar for some time. The California Solar Initative is the flagship, $2 billion program in the state. Also of note are some support programs that offer quite generous terms: find out about them at our own page.

The economic downturn is not only a national problem; at the state level, the situation can often be even worse. California has to work to facilitate a meaningful response or many of the programs that make California such a unique place are going to be in serious trouble.

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To be sure, from a solar perspective, this isn’t an ideal bill, but it was never going to be; our holy grail will be comprehensive carbon reform combined with a strong effort to nationalize incentives and tax credits that have proven successful at a state level. But I think the generally sunny picture for clean energy as a broad movement in this bill bodes very well for the prospects on other energy legislation. This is some of the most high-impact spending in the entire package, and some of the least likely to prove a bust. No matter the broader effects of the stimulus, this should be a success that we can point to in the aftermath.

If you want to take a look at the energy provisions of the stimulus bill for yourself, head on over to Pro Publica, which itemizes them under its “energy” heading. And keep your fingers crossed that the stimulus, when passed, can help the American economy off its quite scary path.

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The full text of this bill is not out yet, but the cuts appear to center around state governments, education, and health care. The Times writes that “the final deal slashed $35 billion from a proposed state fiscal stabilization fund, eliminated $16 billion in aid for school construction and sharply curtailed health care subsidies for the unemployed.” The merits of the overall package and the import of these cuts aside, this is not the best of news from a solar standpoint. As we’ve discussed previously, state fiscal situations are going to continue to play a massive role for the solar industry until federal carbon and energy reform legislation becomes a reality. In that environment, state budgets in crisis will reduce or stall tax incentives and other similar measures. As well, the lack of funds for school construction might well be a problem in reducing the possibility for green building projects and other integrations of solar; this is, however, more hypothetical. The problems at the state level are very real.

All that said, the stimulus package is a go, and that’s bigger news in all regards than the particular failings of this last round of negotiations. We’ll keep an eye on the legislation as it moves through its final stages.

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The document in question is 776 pages – check it out here as issued by the Senate Appropriations Committee, if you would like.
First, a sampling tour of some spending initiatives – not a thorough look, but an idea of the diversity of opportunities.

• $14,398,000,000 for “‘‘Energy Efficiency and Renewable Energy’’
• $50,000,000,000 as part of the “Innovative Technology Loan Guarantee Program”
• Clarifications to prior legislation that restrict a large amount of funds to “renewable energy systems” and “electric power transmission systems,” in particular those that will be completed by Sept. 30, 2012
• $4,000,000 moved towards federal green building projects
• As much as $24,000,000 in funds from the Department of Labor moved to renewable + energy efficiency-related jobs
• $494,362,000 allotted for military-related alternative energy projects

Second, tax incentives, obviously of critical importance for solar advocates.

• The extension of certain tax credits for anywhere from one to three years, pushing their expiry dates to cluster around 2013 rather than 2010…
• The strengthening of a number of provisions to re-emphasize the role of renewables
• $1.6 billion more in renewable energy bonds

This is an early look, and it’s tempered by the very real fact that the text on this bill could change. All the same, I think there’s a great deal to be happy about, particularly in the legislative wording and terminology on display in the second half of the bill. If you happen to notice a provision that you’d like to learn more about, or that you feel I’ve unfairly passed over, also, please don’t hesitate to let us know in the comments!

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If all that sounds pretty complicated, keep in mind that I’ve simplified it a great deal, and that I don’t even really understand how truly complicated the situation is. This is a big thing happening at a scary time. Most of the country’s most intelligent and competent people, as well as many of the country’s least intelligent and competent people (and this goes for the entire spectrum), are waging a war of ideas, politics, and policy over an extremely complex set of legislation. News sources right now can’t even agree on the size of the package, as it has gone through a number of drafts and will see still more changes in upcoming days. In this environment, anyone who says they actually know what the final bill will look like is lying or an idiot. But the reason the debate has hit such a fervor pitch is that a set of very real issues are at play: the political futures of the two national parties, the influence of the new administration, the nature of the state’s role in our national economy, the government’s finances, and, most importantly, the economic health of the United States for the next few years. The cuts and amendments and compromise proposals that are forming the tidbits of Internet age news cycles are going to make an enormous difference for a long way down the road. And the fortunes of solar could not be more tied to a great deal of these fundamental concerns.

For the upcoming week, we will continue to give you a look at the local initiatives, industry news, and technological innovations that are shaping the solar landscape far from the nation’s capital. But we’re also going to do our best to track the day-to-day evolution of those provisions of the stimulus package that will have an impact on solar. And this is for two reasons. One, to keep an eye on an incredibly important piece of legislation for both the country and the industry. And two, to have a record of the ups and downs of solar’s fortunes as the legislation takes its final shape. With that record, we can look back in the coming months and see what worked and what didn’t in the negotiating process and have a set of lessons to apply whenever solar has to work its way again through the federal grind. If we pay attention, we can learn a great deal more about who the real allies in government are for the solar cause, what kinds of legislation are most likely to survive sharply partisan debate, and the places where we can make strides.

To kick things off, here is, as of today, a list of those provisions of the stimulus that could affect solar which were cut in the compromise worked out early in the weekend by a group of Senate Democrats and Republicans. I’ve excerpted it from the Democratic-leaked list obtained by CNN (read it all here). It is, like everything else in this process, provisional, but it gives a good idea as to where support for solar is sagging in the legislative process.

• $3.5 billion for energy-efficient federal buildings (original bill $7 billion)
• $100 million for National Institute of Standards and Technology
• $200 million for National Science Foundation
• $1 billion for Energy Loan Guarantees
• $16 billion for school construction (a great opportunity for green building contracts)
• $3.5 billion for higher education construction (ditto)
• $40 billion for state fiscal stabilization (includes $7.5 billion of state incentive grants)

I would point to this last one as the source of greatest concern. More later in the week, but the fiscal situation at the state level is intimately tied to the fortunes of solar, solar incentives, solar tax credits, and other energy initiatives, and until we get comprehensive green legislation at the federal level this is where the action is.

Stay with us, readers. And watch closely.

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It is worth nothing, however, a tendency on the part of Americans – myself included – to view energy innovation and the embrace of clean power as a Western phenomenon, motivated largely by a desire to break the stranglehold of third world – particularly Middle Eastern – oil. In the meantime, however, the Persian Gulf is not sitting back on its heels, and is paying quite a bit of attention to the opportunities in clean energy. This is not trivial investment, either, according to a fascinating New York times report. To cite one example, the $15 billion in money going towards renewable energy innovation in Dubai from only one of its emirates (states, essentially) could be on par with the equivalent public investment in the entire United States for the near future. It’s a staggering reminder of the wealth and savvy of energy interests in the Gulf.

The obvious question to ask is whether this represents the kind of token investment that big companies or magnates often engage in; tobacco companies funding anti-tobacco campaigns to dodge lawsuits, American oil companies putting money into hydrogen cars they hope will never work, etc. From most indications, this isn’t the case. Instead, the beneficiaries of Middle Eastern oil resources are attempting to lay the groundwork to seize a significant chunk of the next big energy pie.

What’s the end-implication for an American citizen? On the positive end, this investment can only help fuel improvements in solar technology; grants to American universities and even non-stateside technical research will improve and increase the suite of options that will eventually be available to an American consumer. Competition with foreign investment, as well, could spur American efforts to try to take a lead in the global green transition.

This could, however, be a perilous situation if the United States does not aggressively seek to own its energy destiny. The twentieth century – and the beginning of the twenty-first – has in many ways been a story of curtailed options and negatively influenced decisions surrounding a lack of control over the course of our own energy position. If America chooses to rest, stall, and delay on green energy initiatives, and fails to aggressively expand and strengthen its renewable energy market, Americans could find themselves again outpaced by foreign-owned firms, technologies, and energy sources, placing us into a rather counter-intuitive but all-too-familiar position of energy subservience despite cleaner surroundings. In other words, while the example of forward-thinking energy policy on the part of Middle Eastern oil is inspiring, if it fails to inspire real action then the country could miss out on one of the major benefits of its coming energy revolution; we might find the new boss is the same as the old boss.

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