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Electricity production from solar energy
is on the upswing. The U.S. Department of Energy recently released
a report revealing that shipments of solar photovoltaic (PV)
cells and modules increased 11 percent to nearly 98,000 peak
kilowatts during last year. There are many reasons for the
increasing popularity of solar energy, including technology
improvements, financial incentives, renewable portfolio standards
and green power pricing programs.
Several research centers and universities, including Sandia
National Lab and the Georgia Institute of Technology, are joining
forces with equipment manufacturers to achieve productivity
breakthroughs in photovoltaics. They are working closely to
increase the life and durability of system components, as well
as improve manufacturing techniques to lower equipment costs.
Other research and development projects focus on maximizing
productivity by increasing output capability of equipment.
These advancements help foster growth in PV applications by
reducing space requirements and offering customers greater
benefit for less money.
Another important reason underlying interest in PV applications
is the strong financial support from utilities, states and
even local communities. Southface has identified nearly 200
programs across 43 states that offer financial incentives for
implementing solar energy technology. These incentives cover
all market segments, and range from property tax exemptions
for agricultural solar water pumps to low-interest loans for
hospitals utilizing PV. While utility rebate programs are the
most popular form of solar financial incentive nationwide,
23 states offer property tax reductions and 10 states offer
sales tax reductions for solar equipment. Unfortunately, Georgia
is one of only seven states without any type of financial incentive.
Opponents of subsidies argue that a viable product combined
with consumer interest and application cost-effectiveness will
naturally create a robust marketplace for any technology. So
if Georgia is one of the sunniest places in the country suffering
from some of the most troubling air quality problems, why isn't
solar viable? It is primarily because low electric rates in
the Southeast make the economic analysis for solar technology
less attractive than in other areas.
A study performed by Pace University conservatively estimates
the true cost of electricity production from fossil fuels and
renewable energy sources, by quantifying costs not incorporated
into the explicit purchase price, for each kilowatt-hour of
electricity. These costs are known as externalities and are
ultimately borne by society in covert ways. One example would
be higher health insurance premiums caused by more cases of
asthma and other respiratory illnesses related to coal-fired
power plant emissions. Another example would be federal tax
requirements needed to cover government costs for nuclear waste
transportation and storage. The Pace study estimates that even
natural gas, one of the cleanest non-renewable power sources,
has external costs that are six times higher than those of
solar energy. Not surprisingly, externalities for electricity
generated from nuclear power are estimated at fifteen times
higher than solar. So, when comparing the true cost of solar
energy to current production methods, this clean, environmentally-responsible
option looks even more attractive.
Some Georgians worry that financial incentives would reduce
government revenue from sources such as property, sales, personal
income and corporate taxes. However, studies have found that
revenue losses from one segment may be offset by revenue growth
from new businesses and employment involved with solar technologies.
Respected sources identify the potential for significant job
growth from the solar industry. In fact, the California Energy
Commission has identified 169 companies involved with the solar
industry in their state alone.
Besides financial incentives, states can help promote electricity
production from renewable energy sources through the use of
renewable portfolio standards. This approach mandates a specific
percentage of power sold within the state to be generated from
renewable sources. There are currently eight states with renewable
portfolio standards and three with renewable portfolio goals.
Goals differ from standards because they may not have a strict
implementation schedule or a compliance verification plan as
standards often do.
Another way to increase the proliferation of PV applications
is to encourage utilities to offer green pricing programs.
Under such programs, residents and businesses generating green
power can send their renewable power supply to the grid, where
it is purchased by the utility and offered to customers participating
in the program. There are over seventy such programs across
the nation and Georgia utilities are ramping up with programs
of their own. With utilities essentially acting as intermediaries
for renewable energy supply sources, a marketplace of buyers
and sellers is economically encouraged to flourish.
To learn more about the many aspects of renewable energy,
attend the Greenprints conference, February 12-15, 2003. |
