Saving Oregon’s Solar Industry

Nick Engelfried

Saving Oregon’s Solar Industry

Rep Bailey at the solar rally

On Wednesday about eighty people rallied on the steps of the Oregon capitol to make a simple request of our legislators: don’t let Oregon’s solar industry go down the drain. While much of the rest of the economy has faltered, Oregon’s solar sector has continued to grow and add jobs, thanks to consistent support from the state government. Programs like the Business Energy Tax Credit (BETC) and Residential Energy Tax Credit (RETC), while not perfect, have allowed solar and other renewable energy technologies to take root, grow, and thrive.

Yet there’s a real danger this success could be crippled if state legislators don’t increase the funding set aside for BETC and RETC in the 2011-2013 budget. We’re not talking here about the kind of moderate cuts which even the best state programs can expect to experience during a budget shortfall. The cuts on the table are truly draconian, and would reduce BETC and RETC to a shadow of their former selves.

According to Solar Oregon, the current version of the House budget-in-progress would slash funding for BETC from over $300 million per biennium to just $2 million. RETC would be reduced to $1 million, down from $34 million last biennium. These cuts would hit not just solar, but energy efficiency, wind, and other clean energy projects. This is the sort of thing that stunts a growing industry, discourages job growth, and convinces renewable energy companies to locate elsewhere.

Fortunately there’s still time for legislators to save BETC and RETC, and throw renewable energy industries a much-needed lifeline. In doing so they can ensure Oregon continues to chalk up renewable energy success stories: like SolarWorld’s decision to hire 350 additional workers in Hillsboro last year, and Pendleton’s successful bid to become the “most solarized city in the Northwest” by taking advantage of state programs to help homeowners reduce energy costs by putting solar systems on their roofs.

(Read on below the jump)

Success stories like these wouldn’t have been possible without state programs like BETC and RETC. That’s not to say these programs are perfect. I tend to agree with the good folks at Oregonians for Renewable Energy Policy (OREP), who argue the best way to encourage solar and other renewable power is to implement the type of feed-in tariff system that’s seen runaway success in places like Germany and Ontario.

But until a feed-in tariff system is fully implemented, BETC and RETC are what the solar industry has. That’s why members of OREP, Solar Oregon, Energize Oregon, and many of Oregon’s most important renewable energy companies spoke out at Wednesday’s rally for continued funding for BETC and RETC. That’s why renewable energy champions like Representative Jules Bailey, who also spoke at the rally, are fighting to keep funding for solar programs in the budget. That's why on Wednesday a group of University of Oregon students came up from Eugene to explain why solar programs are important for young people now entering the job market.

With the right support—needed to help renewables compete with the highly subsidized fossil fuel industries—solar and other renewable power projects can continue to thrive in Oregon, creating jobs and preventing layoffs. But if BETC and RETC are allowed to go unfunded, you can expect to see solar industry leaders looking to other states to locate and hire workers. Legislators must find a way to keep these programs running, and protect the success story that is renewable energy in Oregon.

Comments

  • (Show?)

    It's okay to have a scale back. But this goes too far and undermines Oregon's efforts to become a strong clean energy leader.

    Meanwhile, to my knowledge, we haven't reformed the much more costly home mortgage deduction. Or the half-million-dollar capital gains exemption for home sales ($353 million in 09-11).

    If we're worried about how to pay for the RETC and BETC in the long term, there's a new IMF report out reminding us that the US gets less income from environmentally-related taxes than any other OECD country - less than half the average, and less than a quarter than the leader Turkey. Food for thought.

  • (Show?)

    It would be really nice to see the Pilot FIT program expanded to the point where it could replace the BETC and RETC. IMO a full FIT program would really be the ticket to expediting solar energy across the state, but their are still hurdles for land use permits as far as larger scale solar development goes.

  • (Show?)

    Ah the renewable energy economy or the welfare economy is what I like to call it. ;)

    Perhaps the solar industry should spend less money on lobbying politicians to give generous handouts. Perhaps it should stand on its own merit if it wants to succeed.

    It is pretty sad when this state cares more about sending millions off to solar energy companies instead of providing basic government services.

    Let's promote renewable energy via freedom not force!

    http://cascadepolicy.org/news/2010/10/27/renewable-energy-via-freedom-not-force/

    • (Show?)

      Internalize the externalities from dirty fossil fuels and we might have a deal!

      To be clear: which services do you consider "basic government services"?

      Me, I think helping fight the climate crisis, something that is projected to decrease our GDP 5-20% (report from the London School of Economics) might be worthwhile.

      • (Show?)

        Although current climate science has shown that the world has warmed approximately 0.6° Celsius (1.1° Fahrenheit) during the past century, half of this warming occurred before human carbon dioxide emissions could have been responsible. Humankind undoubtedly has some influence on the planet; however, the magnitude of that influence is certainly up for debate.

        Alarmists such as yourself and many others on Blue Oregon have unjustifiably asserted that human-produced carbon dioxide is the main cause for current global warming; yet carbon dioxide is not the most influential greenhouse gas, and humans only contribute a mere 3.2% of overall carbon dioxide in the Earth’s atmosphere.

        The ill-informed hysteria over climate change is truly fueled by climate models of dubious quality that attempt to replicate all of the complex processes of Earth into a simple mathematical model. These models do not capture the complexities of feedbacks such as cloud formation and aerosols, and they should not be solely used to guide public policy that drastically alters our current way of life.

        The truth is that the science of climate change is far from settled and there exists no consensus on the causes, effects, or future of climate change.

        Despite the uncertainties, alarmists like yourself feel that we must act now in order to “save” the planet. However, there are three important questions to consider before implementing drastic public policy to “combat” climate change:

        Is the current warming atypical of Earth’s history?

        How much influence does human emitted carbon dioxide have on global temperatures?

        Will global warming be a net benefit or a net cost?

        If the current warming is not out of the norm, then alarmism fears and drastic action are unnecessary and may cause more harm than good. If human influence is negligible, then our attempts to “adjust” the global thermostat will be futile and undoubtedly very costly. If slightly higher temperatures would be a net benefit for humankind, then an attempt to reverse global warming would be an unwise objective.

        Even if a significant hazard exists, there is no telling if public policies will be effective in altering global temperatures or if the costs of these policies outweigh the projected benefits.

        • (Show?)

          Todd,

          I first need to point out that my post was about the economic and jobs benefits of the solar industry, not climate change, so your comment here is a bit off-topic. But whatever. If you're looking for the evidence that climate change is occurring and human activity is the primary cause, check out the findings of some of the world's major climate research bodies. Try NOAA at http://www.ncdc.noaa.gov/indicators/ and the UK Met Office at http://www.metoffice.gov.uk/climate-change/policy-relevant/evidence

          In your comment above, you basically ask rhetorical questions and make some general assertions without citing a single study or backing up your claims with one fact we readers can verify. That's not how science works. By assuming that the degree to which humans contribute to climate change can be determined by the fraction of carbon dioxide in the air attributable to human activities, you also suggest that you don't understand the climate very well. Don't take my word for it: please do check out NOAA and the Met Office. If you have a problem with their findings, maybe you should try submitting your brilliant arguments to a peer-reviewed science journal.

          And really, let's stay on-topic. I've written about climate change before and probably will again: can you save your denier stuff until then?

          • (Show?)

            I will certainly save my climate realist information till then. :)

            I do realize the post was about using legislators to funnel more taxpayer money towards the solar industry!

            • (Show?)

              Great. And again, I look forward to seeing your climate "realism" appear in a peer-reviewed scientific paper sometime soon.

            • (Show?)

              How much does that thinktank pay you, "Todd"? I'd point out how fake your FB account is, but your company would just shut it down and start up another one.

              • (Show?)

                Fake eh? Ha ha ha. Yes, you got me. I have created a fake facebook page. You are right. The comments and interactions with my family and my fiancée on the page are all faked. Also, the photos of me are just staged so that it gives the appearance of a personal page. It is all just an elaborate ploy to trick people on Blue Oregon.

                And....you caught me! Darn now I will have to start over! Ha ha ha!

      • (Show?)

        To state that somehow spending millions on solar energy in the state is going to in any way lower global temperatures is outlandish.

        I honestly do not know even why I am commenting on such a ridiculous assertion....

        If you had read the link it is not that I am against renewable energy. I just believe differently than you do on the subject. You believe in taking money through government force to fund projects you subjectively find desirable. I advocate for voluntary solutions that advance technologies according to market demand.

        FORCE versus freedom.

        • (Show?)

          Todd, fighting the climate crisis is like voting. Lots of smaller actions add up.

          Do you vote?

          And as I stated, if the market were actually a full market, with externalities included, I might be interested in having a conversation. But it's nothing like that.

        • (Show?)

          Excuse me Todd, not just "millions" but more like "340+ million!" Now I'm not a math whiz, oh wait, I am, just using round figures based upon what the article said I would conclude that so far every newly created job has cost the state right around 1 million dollars each. Not bad, but certainly nothing like the price point the federal governments stimulus plan was able to achieve of $266,000 per job allegedly created (or saved). I should mention that if we were Japan and not Oregon both of those figures would require entire towns to fall on their swords or jump out windows out of shame and honor

    • (Show?)

      Todd,

      As I pointed out in my post, renewable energy needs support right now because it is competing with the highly subsidized fossil fuel industries. Beyond that, I find it interesting that you first criticize solar industry "welfare," then urge the government to put more money to "basic services." Aren't many of these services a form of welfare?

      Also, I'd call supporting creation of good jobs a pretty important service of government. How will anyone benefit if SolarWorld has to lay off the hundreds of employees they hired last year because BETC and RETC went unfunded?

      I'm curious what these "basic services" so much more important than job creation could be. Please tell me more.

    • (Show?)

      I am in total agreement with Todd! Let's cut all subsidies to solar companies.

      ...and while we are at it, let's cut the tax subsidies to oil and gas companies (a piddly $3.8 BILLION, or roughly ten times the awful drain of those evil solar companies), and let them stand on their merits too.

      ...or, since we are arguing Federal Budget here, we could so something really radical, and shave 1% off the military budget, and save $68.5 billion.

      But, hey. Tax subsidies as a form of social/market engineering is near to socialism, and that is tantamount to killing babies, right?

    • (Show?)

      That's just plane ludicrous. NO ENERGY SOLUTION WOULD WORK WITHOUT GOVERNMENT SUBSIDIZATION! If you want to be true to your words, stop buying nuclear, coal, and oil power now!

  • (Show?)

    Whoa, The most important statement in this post is "Oregon’s solar sector has continued to grow and add jobs, thanks to consistent support from the state government." Yes--millions and millions of dollars worth, more than could ever be recovered for taxpayers.

    I really never thought I'd see another call for reloading BETC, perhaps the most notoriously squandering tax giveaway agency in Oregon state government history. (At least I hope there's never been one worse.) Still, I'm not surprised to see the pic of my Rep. Bailey out there pleading for more. I intend to ask him if there has ever been a tax credit proposal for private business that he has not supported.

    To call now for more taxpayer subsidy of solar is to admit that even as mature as it is, the solar industry will never make it in the marketplace on its own. Shouldn't we give it a chance?

    • (Show?)

      Patrick, while your faith in the solar is nice, the truth is it has not become a mature technology yet and does still a form of government support. You're also forgetting that the fossil fuel industries (much, much more mature than solar by any definition) continue to receive government handouts they don't need. Fossil fuel subsidies don't seem to be going away, so in the meantime solar needs support.

      With so many jobs on the line, I don't see any benefit in a sudden cutoff of almost all funding for renewable energy projects. We'd risk losing one of the few bright spots in our state's economy. This is about jobs that put food on people's tables, here - not some kind of luxury.

      • (Show?)

        I believe that fossil fuels should not receive subsidies either. Two wrongs never make a right. Let’s pull back layers of government without trying to use government to “solve” a government-created problem. Subsidies need to be understood better. They need to be standardized to understand the true level of subsidies for different energy forms. For an energy source that barely exceeds one percent of electricity output in the U.S., wind subsidies are $23 per megawatt hour (solar is on the same level). This is around 60 times that of the $0.44 per megawatt hour that go to the foundation of US electrical power output, coal. It is 100 times the $0.25 per megawatt hour that go to natural gas. Coal and natural gas account for over 70 percent of US electrical power supply.

        Luckily, Oregon has a perfect case study to determine whether green jobs will reverse our unemployment trend. Spain is considered one of the leaders in expanding the renewable industry and promoting a green job agenda. A Spanish economic study was released recently that assessed the impact of government spending on job creation-more specifically, green job creation. Using two different economic methods, the authors found that for every green job that the government manages to finance, 2.2 jobs will be destroyed. Thus, pursuing green job creation may very well be counterproductive.

        If the Oregon legislature wants to create jobs, the focus should be on creating a market environment that is conducive to job growth by lowering the tax burden on both corporations and individuals.

        • (Show?)

          Todd,

          Thanks for clarifying your position. I can now see that you are one of those "free market at any cost" folks who believe the solution to every problem is to get rid of taxes, de-regulate, and cut government services. You're certainly entitled to this point of view, though it has always seemed a bit strange to me. I happen to believe job creation and providing services for those who aren't millionaires are good things.

          As to your case study from Spain, I can't address it because you don't cite a source I can follow. Would you mind giving me a link?

          • (Show?)

            I'll be interested in Todd's opinion in a few years when dwindling coal and petroleum supplies drive those prices up and up and up.

            I would also like to point out that sunlight and wind do not appear to be running out, or at least not for a few billion years, at which point the Earth will be inside the sun, and it really won't matter much anyway.

  • (Show?)

    Nick, I want solar to succeed and become a successful industry in our state--and yes, partly because it will provide good jobs.

    But I believe that in the present state budget crisis we are in a zero-sum game. Rep. Bailey gives tax revenues to private solar companies that he hopes will someday create jobs. The loss of those revenues in turn reduces the budget for essential existing jobs in the state--teachers, state patrol officers, you name it. Why would my state representative do that? Please tell me if I am I wrong about this.

    • (Show?)

      Patrick, I have to take issue with your saying legislators hope the solar industry "will someday" create jobs. The fact is solar is creating jobs in Oregon now. As I mentioned in my post, SolarWorld in Hillsboro hired over 300 workers last year. At Wednesday's rally in Salem, one speaker described how Solarize Pendleton (a project made possible by state solar energy incentives) have helped re-vitalize the Pendleton economy. These are just a couple examples of what the solar industry is doing for Oregon.

      Now of course, each time the industry hires someone that means one less person or family seeking unemployment support from the state. And each new solar business that takes root in Oregon is another business that will be paying taxes to help fund state programs. Oregon is currently one of the most attractive states for solar, but that won't last long if we eliminate (or nearly eliminate) programs like BETC and RETC. If these industries pull up stakes, we'll lose not only jobs but a valuable source of tax revenue. This revenue in turn helps pay the salaries of teachers, state parol officers, etc.

      That's why I believe in the urgent necessity of preserving BETC and RETC for another biennium. That doesn't mean the programs are perfect: as I noted in my post, I'd like to see them replaced by a feed-in tariff system eventually. But for now BETC and RETC are what we've got, and cutting those programs would mean ceding Oregon's place as a leader in solar. That's not a win for anyone.

      • (Show?)

        Nick, that's really good news about those solar jobs--though perhaps I could use it as evidence that solar is spreading its wings and flying on its own.

        I was referring to deals like Mayor Adams, BETC, and I forget who else just made to provide tens of millions of tax dollars to startup SoloPower, whose CEO, Tim Harris, has made no legal commitments to stick around long enough to produce the promised 481 jobs. I'm sure you know that recently the NY Times reported on a solar company that had a similar startup giveaway in Mass. and left for China after two years.

        I'd feel better if executives had to make legal commitments and most of all if the state became a shareholder--the same a private investor. Then I think I'd say to a solar CEO, let's make a deal. But not with BETC's notorious track record of uncontrolled and unsustainable giveaways that already reach far into future state budgets.

  • (Show?)

    Okay Todd, so tell us, who is paying you to say this because no one tells the truth for free?

    • (Show?)

      One has only to look at the recently created and empty facebook account he uses to realize that "Todd" is in fact being paid to say these things.

  • (Show?)

    I like how this conversation is progressing - one thing for certain BETC and RETC are expensive. They've done a lot to spur a renewable energy industry in Oregon, which is good, but there are alternatives models that are cheaper and more efficient.

    A program gets little attention in Oregon is the Tradable Renewable Energy Credits (TRECs) program in New Jersey. Every time a resident or business installs solar panels and generates 1MW of energy, they can sell a credit to a business that pollutes beyond an accepted threshold. As a result, New Jersey is now the #2 producer of solar energy in the United States (Oregon is #11). To learn more, please visit this link: http://www.njcleanenergy.com/renewable-energy/programs/solar-renewable-energy-certificates-srec/new-jersey-solar-renewable-energy.

    Also, Oregon needs a real Feed-In-Tariff program. The one we have now I call the Feed-In-Joke. We definitely need get past the pilot stage and allow consumer or third-party owned Power Purchase Agreements (PPA) to sell solar generated electricity directly to utilities at market rates. Perhaps we can combine this with a TRECs program. To learn more about launching a real FIT program, please visit: http://www.oregonrenewables.com/index.html.

    • (Show?)

      We cannot allow the Oregon PUC to continue cutting FIT rates as they did in 2010: http://www.sustainablebusinessoregon.com/articles/2010/09/new_rates_set_for_oregons_feed-in_tariff_program.html.

connect with blueoregon