Saturday, February 23, 2013

Dear Mr. President

Hello Mr. President
I joined the Navy in 1996 to learn about nuclear power. After the Navy I went on to work at XYZ Power Plant in my home town. A few years later I got married, moved to 123 and found a job operating hydroelectric power plants. I'm a skilled power plant operator. I watch numbers, listen to my equipment and try to keep things working.
Despite my conventional experience my passion is solar power - photovoltaics specifically. I've watched the solar industry grow from a 1 GW per year market in 2004 to a 32 GW market in 2012. That growth wasn't driven by US policy - it was driven by European and Chinese policy. I know the US can do better.
The problem with solar policy in the US is that state and federal governments are blindly supporting the technology with money instead of engineering. If you are in Germany, Belgium, the Netherlands, the UK, France, Italy, China or Australia you can buy a PV system for X. The same system in the US will cost you 2X. The difference in costs between the US and the rest of the world is policy engineering.
Better Policy looks like...
1. The US needs to fix the ITC. This will save the government billions and encourage healthy competition within the industry. I personally think we should start phasing the ITC out in steps ASAP but we could also put into place price caps on the ITC benefit. Either way should work. Note that the ITC for wind already has a price cap so you could use that as a reference if you decide to go that way.
2. The states need to curtail the use of variegated support policies and, within reason, harmonize their support. Louisiana and Florida for example hand out support money based on a budget - once that budget is exhausted (day 1) the industry goes into hibernation until the next budget. That's not good engineering. We need policies engineered to work all year long.
3. FERC needs to issue an order mandating that all US utilities set a Value of Electricity Tariff (VET) for solar backfeed. This will establish a price benchmark that can be used to build contracts between utilities and individuals and/or businesses installing PV. We need this price benchmark. If you have a value based price benchmark it makes policy engineering a whole lot easier.
4. Focus first on the states that matter. States with high electricity prices, congested networks and plentiful sunshine in that order.
5. The All of the Above rhetoric doesn't work. Focus on the best of the above. As far as renewables go there's wind and solar and that's it.
6. Halt the duties on Chinese solar products. They are counterproductive.
7. Most of all. Don't throw money at the problem. Reduce the problem. Can we make the product tax free? That's better than offering a tax credit on a taxed product. Can we minimize/eliminate registration fees? Where can we reduce hassle? What do we need to grease to make things easier. Use carrots and sticks, bribes and bricks to get everybody on board.
I know I've used a lot of jargon here but I hope some of this gets through.

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