Solar panel prices have plummeted as much as 80% over this past decade, leading to a huge boom for renewables and helping to dethrone coal in our power sector. Much of that decrease has been the result of large-scale manufacturing advances and scale from solar panel manufacturing in China.
But a new trade dispute could upend the economics of the solar industry in the United States. It starts with Suniva, one of the few domestic solar panel manufacturers that was left in the U.S., until it went bankrupt earlier this year. Although Suniva assets were eventually bought by a Chinese company (ironically), its creditors now want the U.S. to invoke an obscure law to “level the playing field,” per Bloomberg:
Suniva is asking for import duties of 40¢ per watt for solar cells, which currently sell for 25¢ to 33¢ a watt. If the company prevails, the price of panels imported into the U.S. could double, potentially crippling demand for solar power. Suniva’s majority owner, Shunfeng, makes its own panels in China and opposes the trade case, but it lost its say once the bankruptcy began. Suniva’s biggest creditor, New York-based SQN Capital Management LLC, made filing the trade case a prerequisite for a $4 million loan Suniva is using to finance the Chapter 11 case.
The case goes to the U.S. International Trade Commission, which will rule by September 22nd and then send its recommendations to the president. But even if the commission finds against Suniva, trade experts apparently think the law gives the president broad authority to slap import duties on the panels.
The fear is that this case plays right into Trump’s political hands: he can kill the solar industry, which is a rival to his favored coal base, and he can then claim to put “America first.”
But given that solar PV jobs vastly outnumber coal jobs, and that solar panels provide Americans with choices to save money on utility bills and reduce local air pollution, it would be a backwards move, even by his logic. As with so many issues and this new administration, we’ll have to wait and see on the outcome.
Republican politicians and their allies in the Trump administration may seem to be motivated by climate science “skepticism,” but their actions seem more about protecting favored polluting industries at the expense of clean ones.
Take renewable energy: the costs have come down so dramatically that solar & wind, plus cheap natural gas, is out-competing coal, the favored Republican industry.
So how can Republicans try to privilege coal over renewables, in the face of market pressures? It’s unlikely that Congress will cooperate by eliminating federal tax credits for renewables that have strong bipartisan support (although it’s still a possibility with tax reform discussions looming — plus reduced corporate tax rates can undermine the tax credit incentives for renewables).
So that means the action has to fall on the regulatory side, specifically at the U.S. Department of Energy. We know that DOE appointees are trying to gut clean tech research and shut down all climate and clean energy programs.
But the new tack is to create a phony “study” of grid reliability and then use it to undermine solar and wind. The argument is that solar and wind, given that it relies on intermittent sources (sunshine and wind), will lead to blackouts and grid instability and cause grid failure. As E&E News reports on DOE secretary Rick Perry’s recent memo to this effect:
Boosted by “extremist political agendas,” according to Perry, renewable energy undermines baseload power that includes large coal and gas-fired generators, dams, and nuclear reactors. “Baseload power is necessary to a well-functioning electric grid,” Perry declared in the memo.
At least that’s the theory, and DOE appears set to write a study that proves that outcome. They can then use the study to invoke an obscure law that gives them emergency authority to freeze in place coal production at 30 percent of our nation’s supply, all in the name of securing grid reliability.
But the problem, as with so much of this pro-“brown power” ideology, is that the facts don’t support it. Here’s California Energy Commissioner David Hochschild and California Independent System Operator board of governor David Olsen in a pre-emptive strike in yesterday’s San Francisco Chronicle:
What happens when the wind doesn’t blow, or the sun doesn’t shine? To answer that question, one needs to examine the many countries that have more renewable energy than we do. Wind and solar contribute a share 2.5 times larger in Germany’s electricity mix (18.2 percent in 2016) than they do in the United States (6.9 percent). Germany produced 82 percent of its electricity from renewables for a period of several days in May. Denmark gets 100 percent of its electricity from renewables on many days of the year. Yet both nations have electric grids that are 10 times more reliable than America’s. Germany and Denmark average 23 and 24 minutes of customer outages per year respectively, while the United States averages 240 minutes per year.
The key to avoid reliability challenges is a diverse renewables mix, energy storage, and a regional grid, all features that many states in the U.S. already have or feasibly can have. So Perry’s study is unlikely to bolster his pro-coal (and pro-nuclear) case, unless he and his appointees are willing to cook the books.
As the secretary might say: “oops.”
— Governor Sandoval (@GovSandoval) June 15, 2017
What a difference a year (or two) makes. Back in 2015, Nevada became the enemy of rooftop solar advocates when state regulators arbitrarily ended all rooftop solar incentives, including for customers who had already invested in them with an expectation of a 20-year return.
But Governor Sandoval just signed AB 405, which will officially restore those rooftop solar rates almost back to where they were, with a slow phase-out to encourage more energy storage options (see his Twitter post above).
But more legislation is on tap, as the legislature has passed some ambitious clean energy bills. Specifically, AB 206 will boost the state’s renewable energy portfolio standard to 40 percent by 2030 (by comparison, California has a 50% target for 2030). And as Greentech Media reports, the innovative part of this bill is that energy storage can count for up to 10% of the portfolio, with special privileges for geothermal energy. Let’s hope the governor signs this bill, too.
While the solar industry had a lot to do with this win, environmental groups may also have played a key electoral role. Specifically, according to E&E News (pay-walled), the League of Conservation Voters spent more than a half-million dollars on state races in Nevada last year and helped flip the statehouse, paving the way for legislation like this.
It shows how effective political dollars can be at the state level, and how important state leadership is at a time of federal retrenchment on clean energy policies.
A few weeks ago, I blogged about how Tesla solar roofs may have a rocky start due to the high costs and technological uncertainty. But Understand Solar recently dug into some of the initial numbers and provides some reason for thinking these tiles may be a bargain, assuming your home needs a new roof and the tiles perform as advertised.
First, the site did the basic calculations on how much the solar roofs would cost:
- 1,000 square foot home: $21,210 ($21.21 per square foot)
- 2,000 square foot home: $40,250 ($20.12 per square foot)
- 5,000 square foot home: $95,970 ($19.19 per square foot)
That ain’t cheap. And traditional roofing materials are much cheaper, especially asphalt shingle:
Even the most expensive slate tile costs about 25% less than Tesla’s solar roof tiles. So that’s not great.
But here’s the rub: assuming a 30% federal tax credit and that the tiles can produce as advertised over 30 years, the total net savings for a house in Los Angeles is as follows:
Los Angeles, CA
- 1,000 square foot home: produce $49,900 worth of electricity (net savings of $28,690)
- 2,000 square foot home: produce $94,800 worth of electricity (net savings of $54,550)
- 5,000 square foot home: produce $180,600 worth of electricity (net savings of $84,630)
So the savings (and eventual profit) are there in spades.
But how would this savings rate compare to simply adding traditional panels on top of an existing roof? According to estimates, Tesla’s solar tiles have a payback of 11 years, while a traditional solar installation has a payback of just 6.5 years. So you lose some payback, but you gain a whole new roof.
Overall, if you’re in the market for a new roof and are willing to gamble on new technology, plus you like the look of solar tiles as opposed to traditional panels, the Tesla product would be a good deal.
But the reality is that fighting climate change represents a generational business opportunity for the United States. As I wrote recently, the required action will necessitate huge investments in everything from the electricity grid to the automobile sector.
Renewable energy in particular may be the “gateway drug” to get Republicans to support these investments. Take wind energy, as the New York Times reports:
The five states that get the largest percentage of their power from wind turbines — Iowa, Kansas, South Dakota, Oklahoma and North Dakota — all voted for Mr. Trump. So did Texas, which produces the most wind power in absolute terms. In fact, 69 percent of the wind power produced in the country comes from states that Mr. Trump carried in November.
So it’s not surprising that representatives and senators from these states have been some of the strongest supporters of federal tax credits for renewables in congress.
Overall, the electricity sector is one area where states have a lot of sovereignty to push for low-carbon technologies. Blue states in turn can encourage red-state action, which will help change the politics on clean technology in these states, as the clean tech industries mobilize and lobby their representatives.
A good example is the effort to integrate California’s grid with western states, as the New York Times story describes:
California and other Western states are discussing linking their electricity markets more closely, which would allow more renewable energy generated in the red states to flow to California consumers — and move California money into the pockets of red-state landowners.
Republican-led Wyoming, the nation’s largest coal-producing state, could be a prime beneficiary, with a proposed wind farm that would be one of the biggest in the world. The governors of Wyoming and California are discussing a deal, though both are nervous about giving up some control of their electricity markets.
That plan is held up by politics in California and a fear among these other states of having their grids controlled by California interests. But for climate advocates, it could be not only a long-term energy strategy, but a political one as well.
With so much noise coming out of Washington DC these days, from phony bill signing ceremonies to endless provocative tweets and misinformation, it’s easy to lose sight of the real, consequential policy battles going on at the moment.
On the environment, the big battle in Congress will take place over the budget late this summer. A temporary stopgap measure helped preserve funding for key environmental initiatives, such as clean energy research and transit projects like Caltrain electrification. But that bill just kicked the can down the road to September, when the government must act to avoid a shutdown.
The Trump administration’s proposed budget would zero out basically all environmental programs, including all new transit projects. I’m following the fate of clean energy research at the uber-successful ARPA-E in particular, at the Department of Energy:
September is now the new showdown date for the future of federally-funded breakthrough energy research in the United States. And if Trump has his say, the September fight could be waged in a higher-stakes, post-filibuster, 51-votes-to-pass-a-bill Senate. (Regardless, apparently, of any consequences for Republicans when Democrats next control the White House and/or Congress.)
On transit, the administration wants to end all federal support for urban transit projects, essentially ending a half-century of federal involvement in this area. As Transportation for America writes:
The administration reiterates their belief that transit is just a minor, local concern.
“Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects,” they write, making it clear that they see no benefit in providing grants to cities of all sizes to build new bus rapid transit or rail lines, or expand existing, well-used lines so they can carry more passengers.
The administration even uses the example of local cities approving their own funding measures for transit as a reason to discontinue federal support, when those local measures were actually sold as ways to leverage federal dollars in this longstanding partnership.
The good news is that many of these programs and initiatives have bipartisan support. We saw that in action with the stopgap measure passed this spring. But that support will be put to the test as we witness an assault on federal dollars for the environment and public health like we’ve never seen before.
Trump’s announcement yesterday that the U.S. will withdraw from the Paris climate agreement (although technically not for another three years or so) was a big victory for his die-hard political supporters. A significant percentage of Republican voters simply discount climate science and hate the idea of global cooperation to address it.
Why do they feel that way? There’s been a fair amount of research on the question, but the bottom line is that they must feel like climate policies and programs will have no benefit for them — and may instead drive up their costs and undermine their employment opportunities.
At the same time, the U.S. economy has experienced an uneven recovery since the last recession, which has essentially only benefited the urban, knowledge-based parts of the country while almost completely leaving behind the rest with stagnant or declining wages. And that’s where these Trump voters made their stand and determined the election last year.
The irony though is that climate policies and related investments have a huge potential to benefit these rural areas and compensate for the tectonic economic changes that have left them behind. Just take California’s San Joaquin Valley, a poor and economically challenged part of the state. Our recent Berkeley Law report with Next 10 and UC Berkeley’s Labor Center showed that California’s three major climate programs — cap-and-trade, renewable energy, and energy efficiency — boosted the San Joaquin Valley’s economy by more than $13 billion and created thousands of new jobs to date.
Or take high speed rail, which is a long-term effort to move people around the state on low-carbon electricity rather than petroleum-guzzling cars and airplanes. The Sacramento Bee editorial writers argued in support of the project precisely for its economic benefit to the San Joaquin Valley:
The $20 billion Central Valley to Silicon Valley leg won’t carry commuters until 2025, give or take. But once it does, the forgotten part of California that coastal residents fly over or zip past en route to Yosemite will become connected to the rest of the state and gain their share of California’s bounty. That’s not a boondoggle. That’s fair.
Nationally, a “deep decarbonization” strategy for the entire U.S., with its attendant investments in the electricity grid and vehicle electrification, could generate up to 2 million jobs by 2050, according to ICF International. Many of those jobs would happen in the economically challenged parts of the country that supported Trump and his decision yesterday.
So the solution to building more political support for climate change policies therefore rests within the solutions to combat climate change in the first place. But given recent events, that message is simply not coming across to the parts of the country that need to hear it.
California aims to generate 50 percent of its electricity from renewable sources by 2030, and a new bill now in the legislature seeks to get to 100% renewables by 2045. A significant amount of this energy will come from solar photovoltaic (PV) installations, with much of the deployment likely to occur in California’s San Joaquin Valley.
But these facilities often engender controversy related to the loss of agricultural and biologically sensitive lands, among other conflicts. How can stakeholders and policy makers ensure that future solar PV deployment occurs only in “least-conflict” lands (which are least likely to engender objections and possibly litigation) in the San Joaquin Valley region and beyond?
This was a subject that Berkeley Law covered in last year’s report “A Path Forward: Identifying Least-Conflict Solar PV Development in California’s San Joaquin Valley.” It is also the topic for discussion at a free evening event next week, Tuesday, June 6th, from 5:30 to 7pm at Farella Braun + Martel LLP’s downtown San Francisco office.
In addition to my overview of the report, panelists will include:
- Erica Brand, Director, California Energy Program, The Nature Conservancy
- Renee Robin, Senior Counsel, Allen Matkins
- Diane Ross-Leach, Director, Environmental Policy, PG&E Company
A Tesla solar roof will also lose some of the energy-generating density of a traditional panel, because the cells must be spaced farther apart to account for the edges of the tiles, BNEF’s Bromley said. Therefore, the percentage of the roof that will be covered by active solar cells will be higher, as will the total cost of the roof. All told, a traditional solar setup might be 30 percent cheaper than a Tesla roof, he said, but Tesla’s will look better and come with a lifetime warranty. “A 30 percent premium could well be acceptable.”
“It is the most affordable roof you can buy, all things considered,” said Peter Rive, co-founder of Tesla’s recently acquired SolarCity division.
Perhaps the extra cost is worth it in terms of getting a new roof and possibly not having the visual impacts of a traditional solar array (I personally don’t mind the look of traditional solar panels, but some people do, which could decrease home values I suppose). But only so many homes need a new roof at a given time, so right away the market seems limited.
There also may be technical issues with this new type of technology. I talked to a solar engineer recently who thought the tiles would have problems without having the cooling air space underneath, like with traditional mounted panels. The extra heat would supposedly hinder the lifespan and energy production value. I don’t know how to evaluate that claim or whether or not Tesla has addressed it, but it points to concerns people may have with adopting a new form of the technology.
I like the idea of Tesla combining with SolarCity to package clean energy and energy storage together with the vehicles, but the solar roof concept may have a rocky start.
Bret Stephens, the New York Times’ new columnist, got the climate change world into an outrage with his first column last week, which compared climate science to Hillary Clinton’s pre-election polling and argued for restraint from climate advocates.
In his follow up column today, he took a more measured tone, noting that he believes the Earth is warming but that we’re not being careful on the solutions:
“The British government provided financial incentives to encourage a shift to diesel engines because laboratory tests suggested that would cut harmful emissions and combat climate change. Yet, it turned out that diesel cars emit on average five times as much emissions in real-world driving conditions as in the tests, according to a British Department for Transport study.”
In other words, to say we want to take out insurance for climate change is perfectly sensible. But whether we know we’re buying the right insurance, at the right price, is less clear, and it behooves us to look closely at the fine print before we sign on.
As someone who works day in and day out on climate mitigation policies, I can tell you that Stephens is cherry-picking from a handful of bad examples.
Take his reference to the ethanol subsidies, which resulted from the federal renewable fuel standard, established during the second Bush administration. Yes, the standard did spur more Midwestern corn production to be used for biofuel.
But the policy was never really a climate mitigation measure. It was primarily meant to boost domestic fuel sources, with greenhouse gas reduction as an added selling point but no strict carbon screen on the fuels. If there was a strong carbon screen on the kind of fuel that could qualify, very little of that high-carbon Midwestern corn-based ethanol would have qualified (hence the opposition to the standard even from some environmentalists).
For a better climate policy model on biofuels, just look to California. The state’s low carbon fuel standard (which encourages biofuel production like the renewable fuel standard but with a strong low-carbon requirement) disfavors land-intensive corn for true low-carbon biofuel, like in-state used cooking oil (surprisingly a growing percentage of the state’s biofuel).
Stephens’ reference to the British diesel problem is also unfortunate. Most climate policy experts will tell you that the best way to reduce emissions from transportation is through battery electric vehicles, as long as the electricity doesn’t come exclusively from coal-fired power plants (in which case hybrid vehicles yield better carbon reductions). Other fuels that can work include low-carbon biofuels and possibly hydrogen, depending on the energy source used to produce it. Diesel isn’t on the list, at least in places like California, unless it’s biodiesel.
On that subject, biodiesel does emit conventional pollutants, an issue we’re grappling with in California, as evidenced by the POET lawsuit against the California Air Resources Board’s low carbon fuel standard. Biodiesel is great at reducing carbon emissions but also emits nitrogen oxide (NOx) — a subject we covered in Berkeley/UCLA Law’s 2015 Planting Fuels report.
Resolving this conflict among pollutants will take a policy balancing act, but it ultimately shouldn’t obscure the huge economic and environmental benefits from switching transportation fuels from petroleum to electricity and low-carbon biofuels. Stephens simply ignores this tried-and-true approach, which is resulting in swift advancements in electric vehicle adoption in places like California, Europe, and even China.
To be sure, care is needed when it comes to developing climate policies, and I’d agree with Stephens on that front. But the main concern is around managing the economic impacts of transitioning the grid and transportation fuels to cleaner sources. We have to go slow to avoid price shocks and bring the costs of these new technologies down.
California is doing just that, with a measured, careful plan to bring down the emissions curve steeply over the coming decades. Our economy is now less carbon intensive than it was in the 1990s and has been growing rapidly, too — which is at least an indication that climate policies aren’t getting in the way, if not actually serving as a boost.
There’s no reason that the country as a whole can’t follow suit, except that we have national writers like Stephens who cherrypick their way into sounding like reasonable skeptics — when they’re really just misleading people.