A look at solar panel installation figures from 2008 show that there were twice as many residential solar installations installed last year than in 2007. The California Business Journal highlights the fact that

[a]pplications for rebates in the fourth quarter broke the record for most applications in a single quarter and most applications in a single month. There are 6,480 applications in queue.

This is good news for California installers, but it does mean that if you’ve been thinking about solar, you might want to act sooner rather than later. California’s solar rebate program is set up to scale back as the state’s solar 1940-MW solar capacity goal approaches; the more solar installations, the closer to the goal, the lower the rebate for home and business owners. With the current rebate structure in addition to the federal 30% tax credit, plus numerous auxiliary incentives offered by California, you can still save up to 45% on the cost of a residential solar system. Fill out our informational web form on GetSolar.com to see if solar makes sense for you.

Yesterday, the EPA released its Top 25 list of green power purchasers for 2008. Wells Fargo claimed the number one spot, buying 550 million kilowatt hours in certified renewable energy. This marks the first time in the program’s history that a private corporation topped the list. As outlined in the press release,

After Wells Fargo & Company, Whole Foods Market ranks second and the U.S. Air Force ranks third. The U.S. EPA ranks fourth, with Johnson & Johnson rounding out the top five. Newcomers to the list include Cisco Systems Inc., New York University, Carbonfund.org, the U.S. Department of Veterans Affairs, and Kohl’s Department Stores.

EPA’s Top 25 green power purchasers are buying more than 4 billion kilowatt-hours of green power on an annual basis. This is equivalent to the energy needed to power more than 350,000 average American homes each year.

The EPA Green Power Partnership encourages organizations to purchase green power as a way to reduce the environmental impacts associated with the use of electricity from fossil fuels and to diversify America’s fuel supply. The partnership is comprised of a diverse set of organizations including Fortune 500 companies, small and medium businesses, government institutions as well as colleges and universities.

(To see who else made the top 25, view the press release.)

Organizations that participate in the Green Power Partnership may meet EPA purchase requirements in a variety of ways: (1) Buying renewable energy credits (RECs), (2) Installing capacity for on-site generation (e.g., solar PV or on-site wind systems), (3) Buying utility green power products, (4) Implementing any combination thereof. Check out Wells Fargo’s EPA partner profile for more information.

It’ll be interesting to see how the program does this year. Given the deteriorating economy, I wouldn’t be surprised if companies scale back their purchases of green power. On the other hand, the premuims for qualified renewable electricity aren’t THAT exorbitant. Plus, no one wants to be seen backing out of a market that’s increasingly viewed as integral to securing America’s energy future and rebuilding our economy, do they? Doubts? Thoughts? Prognostications?

The first week of the new administration has provoked a flurry of speculation about the status and future of American energy policy, from the efficacy of a carbon tax to the structure of new clean energy incentives. It is certainly an exciting time for the world of renewables, solar in particular.

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.

So you’ve had a good solid week now of hearing about President Obama’s support for clean energy and what this means for the solar industry. At least, we’ve been chatting about it a lot on this blog and amongst ourselves at GetSolar.com. Yesterday, Adam drew our attention to the new presiden’ts speech announcing the revival of long-ignored CAFE standards, among other things. Schwarzenegger must be swooning. (The feds have been suppressing state-sponsored initiatives for greater fuel economy for years, a wall against which California has been gleefully flinging itself for some time.)

All this speculation has been nothing if not fun. And at last, there are some numbers to back up the general aura of feel-good surrounding clean tech at the moment. The New York Times reports that:

The single bright spot [in the overall investment picture for the close of 2008] was investment in clean-energy technologies. Investors put $4.1 billion into 277 clean-tech start-ups in 2008, 52 percent more than they invested the year before…Venture investors continue to favor solar energy and photovoltaic companies, which received $1.8 billion in 2008 — nearly half of the money that went to clean energy companies. 

And stock-market hounds are rapaciously tracking the slight uphill gains of solar stocks since the inauguration. There was a slightly more wistful note in the blogosphere though: Google’s Public Policy Blog wondered if Obama might reinstate Jimmy Carter’s brief love affair with solar hot water panels on the White House. The panels were only up for a couple of years before the Reagan decided he’d had quite enough of that particular statement, thank you very much, and the panels eventually ended up on a New England college campus. If Obama were to install solar panels at the White House now, we would hope he’d look at photovoltaics as well as at solar thermal. He’s already shown he has a gift for flair.

The President’s comments from yesterday on cars, climate and clean energy, courtesy of The White House Blog. It will be interesting to see how these issues — particularly those relating to federal climate legislation — are debated among states, a grouping that displays a wide range of resources, interests and capabilities. I foresee some pretty serious wrangling over policy specifics. Regardless, for now there’s cause for optimism among solar-power enthusiasts.

Here’s the press release:

“This moment of peril must be turned to one of progress,” President Barack Obama said this morning, as he signed his first two Presidential Memoranda aimed at getting us on the path to energy independence.

In what he called “a down payment on a broader and sustained effort to reduce our dependence on foreign oil,” President Obama directed the Department of Transportation (DOT) to establish higher fuel efficiency standards for carmakers’ 2011 model year. The standard, known as Corporate Average Fuel Economy (CAFE), was established in 1975 in the wake of the Arab Oil Embargo.

The second memo paves the way for California and more than a dozen other states to raise emissions standards above and beyond the national standard. They’d asked to do so before, but the Bush administration had denied the request.

“Instead of serving as a partner, Washington stood in their way,” President Obama said. “The days of Washington dragging its heels are over.”

Before he opened his remarks, President Obama took a moment to address the new raft of bad economic news of the past few days — including job cuts at Microsoft, The Home Depot, and Sprint/Nextel.

You can read President Obama’s full remarks here.

As you may know, residents (and businesses) can take a 30-percent federal tax credit when purchasing  solar PV systems. You also may know, however, that reading about tax rules is about as much fun as watching silicon degrade, molecule by molecule. Luckily, the freshly amended investment tax credit (ITC) is fairly straight forward. It provides a tax credit worth up to 30 percent of total system costs, with no dollar amount cap. But what, exactly, is a tax credit? And how is it different from a tax deduction?

[DISCLAIMER: I am not a tax professional. In fact, I know very little about federal tax laws. The closest I come to the stuff is via TurboTax, each spring. In sum, you'd be a fool to assume that this post should be taken as tax advice. It should not be taken as such, and its accuracy is not guaranteed. Contact a tax attorney if you want legal advice on your tax situation.]

Anyway, the short answer is that a tax credit reduces your federal tax liability directly. Subtracted from your tax liability (taxes owed), it’s taken after all other reductions are made. A tax deduction, by contrast, provides tax relief in a more oblique manner. Tax deductions are subtracted  from gross income, yielding taxable income — the basis from which your tax liability is calculated. An example sheds some light:

For simplicity, assume that this year you have an income of $100,000 and are in the 30 percent tax bracket. Come April 15th, 2010, you’d owe the feds $30,000 (ignoring deductions and other factors that affect your taxable income).

Now, imagine that in 2009 you install a solar PV array costing a total of $30,000. Under current ITC rules, you’d be permitted to take a 30-percent tax credit worth $9,000 (30% x $30,000 = $9,000). Since it’s a credit, you’re permitted to subtract this amount directly from your tax liability: $30,000 – $9,000 = $21,000 in taxes owed, thanks to the ITC.

What would things look like if the feds offered a 30-percent tax deduction instead of a credit? The outcome is not as promising. As noted above, tax deductions are taken before arriving at taxable income, which is then used to determine your tax liability. In our example, that would look like this:

$100,000 – $9,000 (30-percent tax deduction) = $91,000 (this is your new taxable income, ignoring all other deductions)

$91,000 x 30% = $27,300 in taxes owed

Clearly, the tax credit provides stronger incentive for residents (and firms) to invest in solar PV systems. In our example, the credit would save you $6,300 when compared to the hypothetical tax deduction. Further clarity is provided by this simple post from the Financial Web,

Tax credits can be more valuable than deductions, although somewhat more difficult to qualify for. Let’s assume, for example, that you owe $1,000 in tax. For the purposes of this illustration, you are eligible for either a $1,000 tax deduction or a $1,000 tax credit. Which would you choose? Well, the deduction, when subtracted from your gross income to get your taxable income, will only decrease the tax you owe by about $10. The tax credit would be subtracted directly from the tax you owe, which would mean that you owe no tax at all.

I hope this post provides some clarity on these topics. If you’ve got any questions or suggestions, please don’t hesitate to contribute.

Finally, the Solar Energies Industry Association (SEIA) provides a number of useful resources on the ITC and other federal initiatives.

With this week’s inaugural festivities, there’s been a lot of buzz in the news about who was at what party. One of the most buzz-worthy parties was the Green Inaugural Ball whose guest of honor drew dreamy-eyed admirers by the hundreds. While Wyclef Jean was there, I’m not talking about him–I’m talking about Al Gore. Host Gore, and a couple of the most influential renewable energy figures in the country–Denise Bode, CEO of the American Wind Energy Association, and Rhone Resch, president & CEO of SEIA–hung out and talked shop on the green carpet for a while. The party itself was full of chatter about climate change legislation, what the economic downturn means for solar, and all sorts of other really fun things that you talk about at parties.

What seems to be happening is that it’s suddenly way cool to be involved with renewable energy on Capitol Hill. Consider the last administration’s treatment of climate change and insistence on using our fossil fuel resources to the last drop: this is a sea change for Washington. And the Obama administration, not even 48 hours after the inauguration, approved $20 billion in tax credits & other incentives for renewable energy as part of Obama’s economic stimulus package. (Yesterday, in related news, Adam talked about how Washington is reconsidering the ITC in favor of direct grants.) So he’s willing to put his money where his mouth is, concerning renewables–if you were holding your breath, I think you can let it out now.

See US News & World Report

In October 2008, President Bush signed into law the The Energy Improvement and Extension Act of 2008. The act extended, through 2016, the corporate and individual Investment Tax Credit (ITC). It also removed the cap that had previously prevented homeowners from taking more than a $2,000 credit when purchasing a solar PV system.

Now, in the face of a crumbling economy, Congress may consider transforming the credit into direct payments from the federal government. As reported by Greentech Media,

Language in the draft stimulus bill making its way through Congress calls for turning the investment tax credits that solar power developers rely on into direct payments to investors for the next two years, observers of the bill say.

“On a short term basis – 2009 to 2010 – solar projects will have a Department of Energy program in place to provide for grants to be paid within 60 days up to the eligible tax credit amount,” Chris O’Brien, head of North America market development for Swiss solar equipment maker Oerlikon Solar, said. There is no cap on the amount that can be paid out, he added.

Such payments would clearly provide a boost to the solar sector. As it stands now, there is little demand among investors for the 30-percent credit. Again, here’s Greetech media relaying the sentiments of Rhone Resch, President of the Solar Energy Industries Association, which he expressed back in November 2008:

“The investment tax credits available for solar are a very effective tool when you have the tax credit appetite. When that tax credit appetite starts to decrease, which we’ve seen literally over the last 60 days or so, they become less useful.”

For a while, the setup worked brilliantly: tax equity investors — like AIG, Wachovia and the now-defunct Lehmen Brothers — would provide cash to solar developers in exchange for the tax credit, which they would then use to offset their tax liability. Unfortunately, the arrangement has hit a snag. It’s no secret that 2008 was a rough year for the financial sector. Since few (if any) such banks and investors posted profits, none had a need for the credit. And with the S&P down almost 6 percent on the new year, 2009 isn’t looking much better. As goes January, so goes the rest of the year…

So, hence the current push in Washington to make the 30-percent ITC “refundable” — that is, to put cash directly in the hands of solar developers. Seeing that the solar sector will likely need between $10 billion and $12 billion to keep up growth through 2009, we can understand why Andrew Beebe of Suntech Power suggests that, “the industry really needs this.” Whether Congress will put future American taxpayers on the line for yet another stimulus initiative is anyone’s guess. In the interim, all we can hope is that the solar sector will end 2009 in a stronger position than where it began.

President Barack Obama

Hardly a minute into his inaugural address, the 44th President of the United States of America said: “each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.”

From the beginning of his campaign for the presidency, Barack Obama has evinced strong support for a shift away from traditional energy sources. His energy platform called for a RPS comprising these main goals:

• an investment of $150 billion over 10 years in clean energy, with the aim of spurring huge private sector growth
• 10% of our electricity to come from renewable sources by 2012, and 25% by 2025
• reduction of greenhouse gas emissions by 80% by 2050 through the use of a cap-and-trade system.

Ever since the young, ambitious, and totally unexpected Senator Obama started to make a serious bid for the Democratic nomination, supporters have been drawn to his energy and enthusiasm as much as to his politics. He seems to have the power to truly inspire people, a rare quality at any time and one that this country needs. Markets respond to confidence, after all. We can use this as an analogy for renewable energy in this country, even: a market that has been suffering from lack of confidence (and serious lack of investors) for years is suddenly receiving an influx not just of dollars, but also of hope.

In his inaugural address, President Obama went on to list many of the problems this country is facing right now and that need rectification. He placed emphasis again on renewable energy, specifically referencing solar power this time. As wonderful as it was to see a presidential candidate talking a good game about renewables, it’s something else entirely to hear our new President reaffirm his commitment to energy diversity by treating the subject with the same eloquent optimism he offers to health care, unemployment, and education. By including this in his inaugural address he made himself officially accountable for following through on his promises. And perhaps more importantly, he gave us all a reason to hope for real change in the coming years of his first term in office.

We will harness the sun and the winds and the soil to fuel our cars and run our factories…All this we can do. All this we will do.

- President Barack Obama, January 20, 2009

Barack Obama, 44^th president of the United States, will in a couple of hours’ time deliver an inaugural address already responsible for drawing what could be the largest crowd in Washington’s history. Yet this is an inauguration whose significance, as we well know, lies beyond the famed eloquence of its speaker. With one million to three million spectators estimated to appear for the swearing-in ceremony and prepared to endure freezing temperatures, long security checkpoints and congested public transportation at 4 a.m., the inauguration itself is of course the centerpiece of the ceremony, the moment of the transfer of power from old to new, formally solidifying the shift in ideology, execution and style. If I sound misty-eyed, I can’t help it.

Here in London, while the atmosphere is incomparable to the giddy jubilation of D.C., and no star-spangled banners flap in the wind (although this may change come nighttime), no newspaper worth its ink is without a front-page story on the inauguration, or at least a guide to the best spots to celebrate the swearing-in of America’s new commander-in-chief. Famous wax museum and London institution Madame Tussauds even inaugurated its own Barack Obama in advance. (Guess where I’ll be this afternoon? Yeah, I’m cool.)

Celebrations in D.C. began Sunday, with concerts from Bruce Springsteen and Beyoncé and appearances from Jamie Foxx and Denzel Washington. Tonight, the party culminates in legions of inaugural balls, two of which have assumed the banner of greenness, offering organic food, carbon offsets and the like. And why shouldn’t they celebrate? While he by no means has eschewed traditional forms of energy, President Obama has assembled a Cabinet and administration of officials with a mixed (but generally supportive of renewable energy and concerned about climate change) bag of energy credentials—a more comprehensive survey is forthcoming. Margaret has an excellent post here about the implications of the Obama administration for solar and renewable energy by looking at President Obama’s promises through the history of solar legislation in America, while Adam takes a brisk and funny look at the Green Inaugural Ball. (And apparently, Al Gore is hosting his own green ball as well.)

Although it’s still morning in the States, here in Europe it’s already past noon. Here’s to a whirlwind four years ahead!