Issues for Pro-Renewable Candidates

Please feel free to hand this to federal, state and local candidates who are running for election. This might get their policy staff to include some of these policies in their position papers. -- Scott Sklar

Market Status -

The United States is relinquishing its global technical leadership in renewable energy technologies because of uneven treatment of these industries in assisting RD&D, removing arcane market barriers, applying tax incentives that favor clean emerging technologies than preserving the status quo for older, polluting technologies. Even with these ongoing impediments, the US industry has grown in double digits per year over the last seven years due to international and country programs and specialized programs within US State governments and local communities. Sales of biomass, geothermal, solar and wind are increasing as well as waste heat and fuel cells.

Political Status -

Clean domestic energy and distributed generation only get attention by policymakers when there is massive outages due to human error or harsh weather, concerns about homeland security and maintaining critical infrastructure, or issues relating to curtailing pollution from regulated emissions, potential regulated emissions such as mercury or carbon which causes climate change. The Bush Administration unveiled a Hydrogen Initiative which is a carrier and does not have to be made from clean resources and a Clear Skies Initiatives that relies on totally voluntary commitments on reducing climate change emissions but lacks accountability and public monitoring. Moving the US and global economies to cleaner, domestic resources takes political will as did establishing roads, air travel, the Internet, computer protocols, and a host of other technological innovations that has revolutionized economies and made the world a better place.

Key Policy Issues -

• Interconnection - arcane laws have been allowed to stand to prevent simplified and safe interconnection of clean renewable and distributed energy technologies to connect to the electric grid at the consumer-side of the meter, at the distribution and substation part of the electric grid, and along interstate electric transmission lines. These obstructions were similar to those imposed by telephone companies to keep other telephones and switchboards off their communications grid before competitive practices were mandated by the courts. Thirty-six states have passed laws for net-metering at the consumer-side of the meter based on IEEE 1547 standard from the professional organization that builds technical consensus on safety. Built these state rules still differ, many states have no enforcement mechanisms and manufacturing costs are still high because equipment and systems must be built differently in each state. Federal government through legislation and rule making at the Federal Energy Regulatory Commission (FERC) must remove these obstacles.
• Tax treatment - the US subsidizes mature energy companies with mature technologies in mature markets costing US taxpayers billions per year. This does not include other subsidies such as waiving pollution laws, black lung benefits, nuclear waste storage and protection, and military policing or shipping lanes, pipelines, power plants, and waste storage. An existing Production Tax Credit exists for wind energy and some types of biomass electricity which has pushed wind power in a market trajectory that has made it a multibillion dollar industry in the US alone. An investment tax credit exists for commercial uses of solar and geothermal that is at such a low level it has not expanded markets as rapidly as wind. Legislation to expand the Production Tax Credits to include ALL renewables such as biomass, geothermal, incremental hydropower, photovoltaics, wind and solar thermal, AND increase the Investment Tax Credit for small wind, photovoltaics and solar thermal as well as fuel cells and combined heat and power and waste heat -- must be passed if the entire US industry is to not be overpowered by our overseas competitors. How ironic that the US who created and commercialized most of these clean energy technologies is now importing many of them because of our erratic support and lack of government commitment.
• Procurement and lending - The federal government is the largest user of energy in the world and the largest owner of buildings in the world, so when our overnment moves, the markets follow. Goal setting and public reporting of targets by agency is critical. Rewards in regard to budgets should be made to those gencies that meet targets. Procurement guidelines need to be issued so that life-cycle costing based on 80% of the energy systems' anticipated functioning life be accepted for financial calculations, since higher capital cost applications without fuel have a different calculus needed to show financial benefit that fuel-reliant technologies.
• Renewable Energy Portfolio Standards - As federal law requires our banks to set-aside reserves in a prescribed portfolio, policies have been established in over 10 states to require a certain percentage of energy generation come from domestic renewable energy. This is a good national policy that should be made "the law of the land" as long as States are given leeway to add-in waste heat or buy allowances from other states so that this energy requirement can flow naturally. Also, the Portfolio Standard must insure that a real portfolio of resources are used thus limiting any resource to 25 percent of the total generation requirement.
• Opening up existing federal loan programs - Existing programs run by the Federal Government have uneven support to clean energy and they need to be redirected to be more open to consumers: Farmers Home Administration (FmHA), Rural Utility Service (RUS), Small Business Administration, VA Loan Program, and Fannie Mae. Only RUS has been proactive, and you cannot even locate the programs at Fannie Mae established for this purpose.
• Public education - The federal government has been effective through programs like EPA's Energy Star program to create consumer awareness and voluntary compliance for energy efficient products from computers to refrigerators to air conditioners. Similar programs for voluntary decision- making, access to federal and state programs, and consequences for not switching to more cleaner and efficient technologies is a critical component to facilitate the market.

Key Market Issues -

• At US Department of Commerce offices, US industry liaison must be educated and directed to help clean energy US businesses in export and project development contacts
• With 2 billion people (1/3 of the earth's population) without electric power and the US leading in the technologies, USAID Missions must be directed to make energy a priority and renewables, waste heat, and clean distributed energy a development funding priority
• US Executive Directors at the multilateral institutions such as The World Bank, The Global Environmental Facility, International Finance Corporation, World Health Organization, InterAmerican Development Bank (and its Multilateral Investment Fund), United Nations Environmental Program, United Nations Development Program and US liaisons with the International Energy Agency and the Organization of American States must request reports on program development and status for facilitating sustainable renewable energy businesses and projects within the Mission of these agencies to which the United States gives considerable funding.

Prepared on September 2003 by:

Scott Sklar
President
The Stella Group, Ltd.
1616 H Street, N.W., 10th floor
Washington, D.C. 20006
202-347-2214 Fax 202-347-2215
E-mail: solarsklar@aol.com

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