Good afternoon. My name is Richard Eidlin. I am the Vice President and Business Development Director for Solar Works, Inc., a distributed generation services company that provides solar and other renewable energy systems to residential, commercial and institutional customers throughout the Northeast.
I appreciate the opportunity to offer some thoughts at today’s hearing regarding the important role that solar electric photovoltaic technologies can play in addressing the nation’s energy needs. First, allow me to describe the types of activities that Solar Works is involved with.
Founded in 1980, Solar Works offers a wide range of standardized, grid-intertied solar electric, domestic hot water, wind turbine and energy efficiency systems. As the technology matures and market develops, we will also begin providing residential fuel cell units. Within the solar industry, Solar Works acts as a renewable energy ‘system integrator’, in that we provide a complete set of technical, hardware, and programmatic strategies to clients. In this role, Solar Works serves as the catalyst that brings together manufacturers, energy service providers, policy makers and consumers. While maintaining its historic role as a “systems integrator”, Solar Works is evolving to become a comprehensive renewable energy services firm, active in commercializing technologies and developing market-based programs for utilities, state agencies, cooperatives and housing developers interested in promoting solar electric and solar hot water systems.
Headquartered in Montpelier, Vermont, Solar Works maintains sales and service offices in eight additional Northeastern states; Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York and Rhode Island. Over the last five years, in response to the maturing domestic market for renewable technologies, Solar Works has developed its capabilities to design and deliver complete marketing and installation programs on a state or regional basis. We presently run five major market development programs for utilities, state agencies, or national manufacturers, including companies like AstroPower. As we observe the on-going discussions in Washington regarding energy policy, I would like to offer a few observations.
Over the twenty-one years, Solar Works has been in the renewable energy business, we have experienced several major shifts in public policy, technology development and market acceptance. Today, unlike a decade ago, there is a vibrant market for solar technologies in the United States. As we are fond of saying, ‘ There has never been a better time to create your own electricity’.
A host of factors account for this. First off, solar electric and solar hot water technology is demonstrably more reliable and resilient. Concerns dating back to the 1970’s have no bearing on current discussions regarding the role for solar technologies. Solar electric photovoltaic systems have become standardized, with UL-listed, National Electric Code compliant equipment, which requires virtually no maintenance. Questions about solar domestic hot water systems’ reliability have also been resolved in favor of fail-safe cost-effective equipment. Technological improvements have brought the payback for a hot water system down to eight to ten years, and twenty plus years for solar electric systems.
The second observation concerns the market for renewable energy. Survey after survey indicates that the American public is highly supportive of clean, domestically generated energy technologies. The past five years have witnessed a significant shift in the market. Once largely the domain of off-grid applications, such as water pumping, telecommunications, vacation cabins and or rural electrification projects, PV is now becoming more widely accepted and used for grid-tied homes, businesses and schools across the country.
Homeowners and businesses are choosing solar energy systems for a number of key reasons –
(1) power quality and reliability, (2) demand for clean, non-polluting energy, (3) growing interest in generating electric power from a decentralized source, (4) escalating conventional energy costs,
(5) power shortages, including brown-outs and blackouts.
PV is the ideal distributed generation technology, well suited for almost any energy application. PV systems are highly modular and flexible in nature. Recent technological advances in performance and design are creating an increasingly cost-competitive energy source. Customers such as the U.S. Postal Service understand these inherent advantages that solar generation has over back-up fossil fuel generators. While a fossil fuel generator mainly sits idle and depreciates, a solar system lowers monthly utility bills and can provide 24-hour automatic uninterruptible power supply PV’s can be easily sited, require comparatively little permitting, and produce 99.9% reliable power for any application. PV’s also provide an excellent hedge against almost certain energy inflation.
With today’s increased reliance on computers, telecommunication systems, and high performance electronic devices, any loss of power or even power quality can be very costly. Solar assisted Uninterruptible Power Supply systems (with batteries) offer a cost-effective, safe and reliable means of providing emergency backup power to homes and businesses alike.
PV’s are also an excellent means of shedding load demands and avoiding summertime peak power costs, which last summer in some parts of the country soared to more than $600 a megawatt. PV’s offer utilities and businesses the option of reducing congestion on the grid and moderating the demand for additional power plants and generating capacity. For homeowners, PV’s provide an assurance that the power will stay on in the event of a blackout due to a natural disaster or power scarcity.
Recent studies of the large-scale power failures during the winter of 98-99 in both the Northeast and Northwest strongly suggest that scaled PV installations placed at strategic places along the power grid would have prevented the blackout from cascading from state to state. Homeowners and businesses, due to net metering rules can now also ‘sell’ power back to the utility at times when their solar electric systems are producing more power than the home or building requires. This provision, along with others is helping to drive the market for solar technologies.
It is regretful that the Federal government during both the 1990’s and today, has committed disproportionately limited resources to supporting the photovoltaics industry. In contrast, over 40 states have enacted one or more requirements to actively encourage the broader use of renewable energy sources. Net Metering, state income tax credits, renewable portfolio standards, and system benefit charges are some of the many ways renewables are being encouraged at the state level by public utility commission and legislatures. In six states alone, (CA, IL, MA, NJ, NY, PA) over $375 million is being collected annually from ratepayers through electric industry restructuring programs to support renewable energy development. These funds will leverage about five times their value in retail market activity, or about one and a half billion dollars a year.
The upshot of all this is that the domestic solar energy market will grow ten fold in the next five years, from 80 megawatts to 820 megawatts of installed capacity. According to the Energy Information Agency, photovoltaics will be the fastest growing generation technology in the U.S. over the next twenty years. Solar energy will still be a niche market compared to fossil fuel generated power, but it will be a multi-billion dollar a year opportunity for those few companies that have the infrastructure to support it’s tremendous growth.
There is a historic market opportunity emerging in the U.S. for renewable energy technologies. An extraordinary convergence of market forces is transforming a small, niche industry into a multi-billion dollar one, almost overnight. Electric industry restructuring is literally jump-starting the market by offering customer choice and millions of dollars of financial incentives for renewable generation. Demand for zero-emission generation technology to combat global warming and air pollution is another important market driver.
The current California power crises is a good example of the inability and unwillingness of utilities to build new central station generation and transmission facilities. The answer to this lies in distributed generation systems that can be tucked into homes, neighborhoods, and businesses. Photovoltaics are the ultimate distributed technology that runs on pure sunshine. Declining costs of photovoltaic modules and renewable energy incentives enacted by all levels of government are creating an exponentially expanding market.
Given these trends, it is of concern, that the Administration’s energy plan devotes limited attention towards the role of solar technologies. The substantial reductions in the Department of Energy administrative and RD&D budget for renewables is a shortsighted approach to balancing the budget. In addition, these policies are placing the domestic American solar energy industry at a competitive disadvantage to their European and Japanese counterparts. Relative to investments that other advanced industrialized nations have made in supporting PV’s over the past decade, the US federal government has directed exceptionally modest resources to building a domestic industry.
Let me return to the immediate issue of the Administration’s proposed energy plan. While Solar Works supports the proposed $2,000 income tax credit for residential energy tax credits, we are not in favor of doing this at the expense of drilling for oil in the Arctic. What is needed instead is a greater reliance on a wide range of renewable technologies, including fuel cells, hydro and wind. We also support pending legislation that would establish a national standard regarding the process by which PV systems are interconnected to the utility grid, as well as proposals to create a federal renewable energy portfolio standard.
Here in New Hampshire as elsewhere in the Northeast, Solar Works has been working to expand the market for solar technologies. Over the past two and a half years, we have installed over forty solar electric and solar hot water systems on homes, environmental centers and public buildings throughout the state. Our Solar on Schools Program has resulted in nineteen PV systems being installed on public as well as private schools, including the 1 kW solar system located on top of the University of New Hampshire’s Memorial Union Building.
Solar Works looks forward to working with the Senate Committee on Environment and Public Works in crafting policies that help to accelerate the commercialization of solar electric technologies. Thank you for your interest.
Solar Works, Inc.
PO Box 577
Wilton, NH 03086
ATTACHMENT, Powerpoint slides accompanying the testimony.