Presidential Debate Highlights Differences Between Energy Philosophies and Government’s Role
While energy and the environment got relatively short shrift at the presidential debate, the candidates’ positions nonetheless came shining through. Case in point: the implicit reference to Solyndra, the failed solar company that got a federally guaranteed loan — and the role of new energies and cleaner fuels in the 21st Century.
The Democratic nominee said during the debate that the country could “deploy a half billion more solar panels,” underscoring her commitment to the New Energy Economy and toward defeating the negative effects of climate change. And while the Republican nominee Donald Trump had tried to say that he has never denied the existence of climate change — that is false as is he has called it a ‘hoax’ being perpetrated by the Chinese — he made a point of bringing up the failed solar maker without calling it by name.
“She talks about solar panels,” Trump retorted. “We invested in a solar company, our country. That was a disaster. They lost plenty of money on that one. … Now, look, I’m a great believer in all forms of energy, but we’re putting a lot of people out of work. Our energy policies are a disaster.”
A disaster? Let’s look at the facts. The federal loan guarantee program has a total portfolio of $35 billion. The total number of defaults has amounted to about $750 million, which was mostly attributed to Solyndra that lost $535 million. But the loan program, which was never designed to turn a profit but rather, to enable promising start ups, has taken in about $810 million in interest payments. Therefore, it has made $30 million, says the US Department of Energy.
The notion that investing in the solar market is a waste of taxpayer money is a popular one among those who espouse pure free market thinking — that markets will embrace those technologies and fuels that are proven and effective, as opposed to those that are propped up. Others will counter that the federal government has long been involved in energy markets and has provided both research and development as well as outright tax benefits and subsidies to all fuel forms.
To that end, the solar market is gaining traction. Just how big is it here? GTM Research says that more than half of all utility-scale solar plants in 2016 will be built irrespective of state mandates. Utility-scale refers to those centrally-located projects that aggregate thousands of solar panels and that must ultimately connect to the transmission grid, with the power most often being sold to other utilities.
According to the firm, the U.S. will install more than 6,000 megawatts of non-renewable portfolio standard utility-scale solar in 2016. That’s compared to the roughly 4,000 megawatts installed in 2015. Still, the growth potential for onsite rooftop solar for homes and businesses is also enormous, largely because of the falling price of solar panels.
GTM Research says that utilities are procuring green power because it has value. That is, it is fairly priced and it is displacing fossil-fueled energy at the most expensive time of the day, which helps offset carbon emissions. At the same time, power companies are able to lock-in prices over several years, which is also giving the project developers a guaranteed income so that they can build.
“More and more utilities have been procuring solar as a hedge against other fuel prices,” says Colin Smith, an analyst with GTM. “These are now largely voluntary procurements.”
The partisan divide over government’s role in energy markets is as bitter as ever, especially now that one candidate has planted her fate with lower-carbon fuels while the other is vested with the more traditional industrial economy. In the end, markets — and indeed, voters — will decide which direction they want to head.
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