Federal government announces funding for solar energy

If you’ve considered installing solar energy in your home – and then backed away because of the price – you’re not alone. The large initial investment usually pays for itself over the twenty-year lifespan of the solar panels, but that’s a long time to wait. Some new federal initiatives could help make it more affordable to go solar – without costing taxpayers. Tanya Snyder reports:

TRANSCRIPT:

Over the Fourth of July weekend, environmental activists called for a declaration of the country’s independence from its addiction to oil.

And President Obama answered their call:

OBAMA: “Today, I’m announcing that the Department of Energy is awarding nearly $2 billion in conditional commitments to two solar companies.”

The money is in the form of loan guarantees for low-interest financing – not outright grants. Three-quarters of it will go to Abengoa Solar, a Spanish company that’s become a leader in solar technology. The loan guarantees will help Abengoa secure financing to build the first large-scale solar plant in the country to generate and store energy.

OBAMA: “And it will generate enough clean, renewable energy to power 70,000 homes.”

While it might seem strange for stimulus money to go to a foreign company, Monique Hanis of the Solar Energy Industries Association says that’s the result of the low priority the U.S. has given to solar energy production- until now:

HANIS: “Frankly, other countries are ahead of us, and the companies from those countries are more competitive.”

Besides producing energy for U.S. consumers, the project will also create an estimated 1600 construction jobs, and most of the components used in construction will be American-made. Abengoa’s U.S. headquarters is in Colorado and its new plant will be in Arizona.

Another Colorado company, Abound Solar Manufacturing, will get the remaining $400 million of loan guarantees to make solar panels at its current facility and at a new plant in Indiana. Mark Chen is Abound’s director of marketing:

CHEN: By increasing the production scale and capacity we can further drive down the cost of our product and therefore the cost of solar electricity.

Abound estimates it will create up to 1500 permanent new jobs – not just temporary construction jobs.

The investment into solar technology comes at the same time as some bad news for another well-regarded solar program.

The PACE program gives homeowners a way to finance the addition of solar panels by letting them add the cost to their property tax bill, paying it off over the course of decades. But the Department of Energy is wrangling over details with Fannie Mae and Freddie Mac.

Monique Hanis of the Solar Energy Industries Association explains:

HANIS: The concern of the PACE financing is that it changes the order of the first lien on a property. So if there is a problem with a mortgage, property taxes get paid off first. So theoretically, the investment in the solar energy property would get paid off first.”

But she’s optimistic they’ll sort it out quickly.

HANIS: Adding solar actually adds value to a property.

While the investments in renewables are a step in the right direction, many environmentalists say that they’re no substitute for the real goal – comprehensive energy legislation that will reduce carbon emissions. The legislation currently stalled in the Senate is controversial in the environmental community for the concessions it makes to fossil fuel industries, and the solar sector has been disappointed that it doesn’t do more to jumpstart large-scale energy production from renewables.

Tanya Snyder, FSRN

Photo: U.S. Capitol reflected in solar panels

Photo by futureatlas.com