As one of its final acts, the 2006 congress approved many gifts for its top political supporters. One of these was a $4.9 billion care package for the coal industry to help defray health care costs for coal workers by coal companies and is not the only direct monetary subsidy given. This is the same coal industry, that along with many others, scream like stuck pigs that the renewable energy industries cannot supply electricity at “market” price and depend far too much on government subsidies.  $4.9 billion amounts to a gift of $16.00 from every man, woman and child in the US!

This corporate welfare was given to the coal industry to help offset costs at the front end of the coal usage cycle. But what about the back end? Every year thousands of people (children are the most affected) get sick or die from pollutants put into the atmosphere by coal burning power plants. Who pays for that? The folks who are making the money from selling you the electricity namely the coal industry or the utilities? NO. That money comes from you and me and the government.

The nuclear industry is never far from the government tit as well. I recently spoke at an exclusive event for important clients of a large law firm. The theme of the event was the future of energy production in the US. I was the only solar spokesperson and followed representatives from two of the largest nuclear companies to the podium. Their message was that not only was nuclear power safe and affordable but it did not depend on government subsidies like those expensive renewable fuel technologies, to achieve grid parity. The truth is that the Energy Act of 2005 provides that the federal government will pay all the court costs and settlements necessary for the nuclear industry if there is an accident. That provision potentially saves these companies Jillions in defrayed costs and makes their bottom line look so much better. Of course my fellow speakers did not inform our audience of that incredible gift.

Though I won’t go into detail, the oil and gas industry reaps a bountiful harvest of pork every year from our government. It is not an accident that we pay less for gasoline than the people in Canada and Mexico, the countries that provide us with the bulk of our imported oil. And who pays for the clean up? As you can see subsidies come in many forms but it all boils down to money given an industry by the government and/or the people. Face it, ALL FORMS OF ENEGY PRODUCTION IN THE US ARE SUBSIDIZED.

Yes, the solar industry receives subsidies from federal and state governments for R&D and market enhancement. But this amount is only a fraction of what the black and brown power technologies get. And there is no clean up or pollution for present and future generations to pay for and deal with. Not to mention energy security.
So when people say that solar and other renewable technologies are too expensive let them know that it is too expensive NOT to use green power technologies.

1839
Nineteen-year-old Edmund Becquerel, a French experimental physicist, discovered the photovoltaic effect while experimenting with an electrolytic cell made up of two metal electrodes.

1873
Willoughby Smith discovered the photoconductivity of selenium.

1883
Charles Fritts, an American inventor, described the first solar cells made from selenium wafers.

1887
Heinrich Hertz discovered that ultraviolet light altered the lowest voltage capable of causing a spark to jump between two metal electrodes.

1904
Hallwachs discovered that a combination of copper and cuprous oxide was photosensitive. Einstein published his paper on the photoelectric effect.

1914
The existence of a barrier layer in PV devices was reported.

1916
Millikan provided experimental proof of the photoelectric effect.

1918
Polish scientist Czochralski developed a way to grow single-crystal silicon.

1927
Albert Einstein formalized the Photovoltaic Effect, the theory of creating electricity from sunlight.

1955
Bell Laboratories develops the first solar electric modules, soon to be used on space satellites, to power radios which transmitted signals back to earth. The first satellites used batteries with a finite life for this purpose but a lucky accident found a solar panel powering the transmitter (unknown to the space scientists) for much longer than expected periods.

1959
Fearing diminishing natural resources’ for electric generation, the Japanese government convenes a meeting with the leading Japanese electronics manufacturers to initiate a government sponsored study of commercialization of solar electricity. This meeting was attended by companies that today still dominate the solar industry, Sharp, Kyocera, Mitsubishi and Sanyo. Of course, the technological basis for the meeting was Bell Labs innovation of four years previous.

1960 through 1990
Through this time period Solar, though a small industry, grew at a steady rate. Solar systems were used to provide power for many critical loads, off grid applications such as lighthouses, remote telecommunications, water pumping, rural electrification and the health applications of remote clinics and vaccine refrigeration. Also, remote leisure applications such as marine, RV and vacation cabins used solar generated electricity.

Arco Solar (a US subsidiary of the oil company) was the world’s solar leader and the big fish in a very small pond. Arco Solar received millions of dollars in US federal funding for research and market development.

Early 1990s
Amidst protests and federal hearings, Arco sold its solar operation to a German company, Siemens. After the precedent was set, Solarex (a US, solar subsidiary of Amoco) sold its operation to British Petroleum and ASE, another European company, purchased Mobil solar (US solar subsidiary of the oil company). After that M&A activity the US, though the father and mother of solar power, owned practically no solar technology.

1994 Japan institutes a 10 year incentive program to promote the use of solar power on residences. This program featured high incentives that diminished each year. The net result was, that by 2004, the number of systems installed each year increased from 500 to 60,000, the cost of the systems decreased by 73% and the incentives sunsetted. By 1998 Japan became the dominant solar market and manufacturing base in the world.

2003 An extraordinary “feed in tariff” for solar electric production was instituted in Germany. This tariff paid more than 2.5X the amount for solar generated kilowatts than standard utility generated power cost the rate payers. This incentive pays out for 20 years making solar power an incredible investment opportunity. Germany skyrocketed to the #1 solar market position in the world in 2005 surpassing Japan. Consequently, many German solar companies have gone public and attracted thousands of investors. $1.8B of capital was raised in a 12 month period. The German market is now 2X that of Japan and 6X that of the US.

Think of it: Germany and Japan have less usable sunlight than the northern tier states of the US!

2005 The US Federal Energy Bill was passed and featured a two year tax credit for installing solar systems. This was the first federal solar incentive enacted in the US since 1985. Championed by Senator Lamar Alexander of Tennessee, some say because of the location of the Sharp solar factory in Memphis, this bill allows a 30% federal tax credit for installation of solar systems on both residential and commercial buildings. The residential credit is capped at $2000.00 and the commercial is uncapped. Though a good start, two years is far too short to be very meaningful and the US solar industry is asking for an eight year extension on both applications and an increase in the residential credit amount. This extension will be voted on in 2007.

2006
Suntech, a Chinese company raises more than $400M in a public offering and vaults to a position in the top ten in solar production in the world. Now there are at least five Chinese manufacturers of note. California passes the breakthrough California Solar Initiative (CSI) which guarantees a ten year incentive for solar applications. The solar industry breaths a sigh of relief as this initiative was originally opposed by both unions and California elected Democrats. Thanks to the CPUC, the Governors office and changing attitudes of California Democrats, the initiative went into effect in January.

The present Since mid 2004 there has been a shortage of refined silicon which has slowed the growth of the solar industry. It is not accurate to call this phenomenon a shortage because it was the explosive growth of the German market that caused the inadequacy of supply. The solar industry uses 58% of the worlds’ refined silicon and silicon chips the remainder. A complete reversal from three years ago. To overcome this shortage, refiners are busy building plants and solar cell manufacturers are making thinner, more efficient cells, using scrap better and developing less silicon hungry solar technologies. The gap between supply and demand should begin to close by 2008. In the meantime, with the ending of incentives, the Japanese market has slowed. German feed in tariffs, by design, diminish by 5% per year and some say that that market is or will cool down shortly. To meet part of their need for energy, China is supporting the growth of its solar industry and even providing funds for the development of the largest silicon refinery in the world. Spain, Italy, France, Portugal, S. Korea, and Canada have active solar programs.

But what about the US? This third largest solar market is now drawing the attention of the worlds’ solar industry. German and Chinese companies that are the beneficiaries of large IPO’s are purchasing US solar entities and also opening US offices. Japanese companies such as Sharp, Kyocera, Mitsubishi and Sanyo are already entrenched in the US market. Recently a Japanese company, Mitsui, purchased a long time American solar distribution company. Two smaller companies are the only US owned players; Sunpower and UniSolar and the former manufactures in the Philippines. These companies account for about 7% of the worlds’ production. That being said, it is becoming clear, that the US could, in the near future, become the largest solar market in the world!

This entry references Ronald Brownstein's article "Local Governments Get Serious About the Environment" in the October 1 Los Angeles Times.

Though Ronald Brownstein champions an important new trend in local governments' approach to dealing with the ever increasing threat of global warming and just plain stupid energy policy, he pays lip service to only one half of the solution.

Energy efficiency, green building practices and innovation on the load side of the equation are vitally important weapons in the war against the harmful effects of fossil fuel use. But it is just as important to encourage the use of nonpolluting, green, energy-generating technologies to complement "smart" buildings and replace old, dirty, fossil fuel-generated electricity.

The answer is "negawatts" and megawatts — energy efficiency plus renewable power, the sum total of which is zero harm to the environment. So the vision should be great new buildings powered by integrated solar electric systems.

MYTH 1: Solar systems only work where there is abundant sunshine. It won't work for me.

The largest solar markets in the world are Germany and Japan (roughly 5 and 3 times the size of the US market.) Latitude wise the most Southern portion of Germany is the same as the northern tier US states close to the Canadian border. The average usable sunlight in Japan equals that of Michigan and Illinois (hardly the Sun Belt). Solar electric power systems work anywhere that the sun shines. Of course, in areas where there is abundant sunshine like Arizona, a smaller solar system will provide as much power as a larger system located in Maine or Washington State for example. But, solar works just about anywhere and makes a difference on your utility bills and in the amount of greenhouse gases emitted through the burning of fossil fuels. If there is enough light to see your hand in front of your face then solar panels can produce electricity.

MYTH 2: Solar power is too expensive.

Expensive is a relative term. Though the average price of utility power in the U.S. is a little more than $.10 per kilowatt hour (kWh), if you live in some of the most populous areas you could be paying quite a bit more. Residents of California, New York, New Jersey, Illinois, Pennsylvania and other states can pay upward of $.35 per kWh at times of peak power usage ( when solar works best). Many of these same states have rebates and incentives to help buy down the cost of solar power and the Federal Government is offering a tax credit incentive of 30% that reduces your cost even more. Let's take a look at what this means in dollars and cents.

A typical 3 KW solar home system in California costs approximately $21,000.00. After state rebate your cost is $13,500.00. The Federal tax credit for this system is $2000.00. So your net cost is $11,500 or $3,800 per KW. This system should cover roughly 50% of the yearly energy use of the home. And the value gets better over time as utility costs rise. When was the last time your utility reduced its rates?

Two more points on the cost of solar: Solar is a clean technology. No pollutants, no noise, no clean up. The alternatives (the power sources that most of you are now using, natural gas, coal and nuclear), are not. Nowhere in the cost of electricity generated from these sources is the cost of clean up added in. Think about it: what would the price of your power be if the cost of cleaning up the air and water were added into your utility bill? And then would you still consider solar to be expensive? The second point is that when you pay your utility bill what do you get in return? The right to pay next months bill. US families pay more than $100,000.00 to the utility company in their lifetimes. The real question that I like to ask is "you own your home, why RENT your electricity?

MYTH 3: Solar electric systems will destroy the aesthetics of my home

Most people who make this complaint are thinking about older solar hot water systems which employ large panels that sit in plain site on the roof. While I think solar hot water systems are very useful appliances for any home, solar electric systems are much different. They typically use much less space and come in shapes and models that make them almost invisible. The newest solar electric systems can have black backings which make the panel look uniform, fit the contours of a roof with triangular panels and have trim that blends the solar array into the roof like a skylight. Also, solar modules in the shape of roof tiles that are virtually unnoticeable are now available.

Solar module manufacturers realize that in order for solar power to be accepted as a mainstream energy solution it has to look mainstream.

MYTH 4: Americans change homes on the average of every seven years. You can never recoup your investment on a solar system.

The latest data shows that not only will you make a profit on your investment but you will sell your home quicker if you have a solar electric system installed. And as today's housing boom flattens out, ease of selling is becoming a more important issue. Most, if not all, remodeling or home improvement, programs — such as putting in a swimming pool or a new hardwood floor — return 95% or less of the initial investment. Solar systems (because every system comes at a discount — remember state and federal incentives — and people value energy savings as utility rates continue to rise) return more than the original investment. Think about it, if you were looking at two identical homes for purchase but the yearly utility bill of one was half as much as the other, wouldn't you pay a little more (and don't forget that increased amount is translated into a small increase in your monthly mortgage payment). That's all without considering the value of doing something good for your family and the environment.

MYTH 5: Solar power only works because of government incentives.

Yeah, so what? Do you think it's a coincidence that we pay less per gallon of gas than motorists who live in two of our largest gas suppliers, Mexico and Canada? Every fuel source that we use is subsidized. In the Federal Energy Bill of 2005 the Nuclear Industry was granted freedom from paying for law suits incurred. The Federal Government (you and me) gets to pay, thus lowering the cost of making electricity from nuclear fuels.

Subsidies for solar systems typically and historically feature fixed time of operation, diminishing year-on-year subsidy amounts, and a sunset when the subsidy ends and solar power — in order to successfully matriculate into a mainstream energy choice — must be available at market price or as we like to say, achieve grid parity.

Many new and emerging technologies have been subsidized to ease market entry such as hybrid vehicles, wind power, energy efficient lighting and water heater blankets. Once America wakes up to that fact and gives solar the same shake as other energy sources, we'll all benefit.**********

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NOTE: Sun Ray is the pseudonym for our resident expert solar blogger. He has had more than thirty years of professional experience working for numerous leading solar and energy companies.