Comments on: Lower Renewable Energy Benchmark May Discourage Production

By: Paul Alvarez

Paul Alvarez — Mon, 16 Nov 2009 19:42:36 +0000

The cost of building new clean power plants, from wind turbines to PV Solar panels, has come down significantly recently due to the reduction in demand. Increased competition (in the form of a lower MPR) will put pressure on all parts of the value chain – manufacturers, designers, installers, etc. — to innovate if they are to survive. Manufacturers’ integration of inverters into PV Solar panels is but one example, offering not only lower hardware prices but also lower design, installation, and maintenance costs over non-integrated designs.

By: Paul Alvarez

Paul Alvarez — Mon, 16 Nov 2009 18:31:41 +0000

While this cut in the MPR may reduce solar installations in the short term, it highlights several encouraging signs for renewable generation:
1. Natural Gas prices (and associated electricity prices) are highly volatile. They can go up as sharply as they come down. A PV Solar panel, once installed, offers price certainty that is valuable and that some (companies and homeowners) will pay a premium to obtain.
2. Absent improvements in electricity storage, renewable generation will always represent an alternative to natural gas, and vice versa. This is good news for renewables. Over time, GHG legislation and supply issues will make natural gas more expensive relative to renewables, which will become less expensive in the future (economies of scale, progress down the learning curve, technological innovations, etc.).

While retail electricity markets are transforming, we must keep our collective vision on the long-term goals. For renewable generation to be a credible alternative to fossil-fueled generation in the long term, it must eventually compete on price and value (like cost certainty value, public relations value, and others) without subsidies. Reductions in the MPR, as long as they don’t kill the renewable industry in the short term, will make the industry stronger in the long term. As an industry, let’s redouble our innovation efforts to reduce costs throughout the renewable generation value chain (production, distribution, installation, maintenance), improve technology and efficiency, and increase marketing and education prowess. These efforts will ensure short-term survival and lead to long-term success.

By: david faylor

david faylor — Mon, 16 Nov 2009 18:18:03 +0000

If this proposal goes through it will make investment in renewable energy not so favorable.
The cost of building new clean power plants will not change much, how will it repay itself if you can’t sell the energy produced and show timely profits with investors ?