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by Mark Wangrin

 

The sun will come out – tomorrow

Despite legislative setback, Texas hopes to sustain solar energy push

Legislation that could have been a boon to the Texas economy and the green energy push didn’t make it to a vote last session, but that might not eclipse the state’s efforts to become the national leader in solar energy.

Even without the commercial incentives scuttled when HB 545 stalled late in the last regular session, the state figures to eventually catch up with unlikely solar leaders – such as New Jersey and New York – and potentially make a run at national leader California.

That can happen if Texas, through local incentives, stimulus money and old-fashioned ingenuity, can make do with what laws did pass until the next legislative session, when supporters hope to get more substantial incentives.

“It’s going to happen,” says Lanny Sinkin, executive director of advocacy group Solar San Antonio. “The question is whether is Texas going to be a leader, is Texas going to be a follower or is Texas going to limp behind.”

“By 2011, you hope that the Silicon Valley of solar hasn’t been established elsewhere,” says Steve Taylor, senior manager for internal communications for Applied Materials, a chip-making machinery firm interested in entering the solar energy business. “We have a great business climate, low taxes. There are a lot of reasons Texas will always be on the list for prospective companies.

“But what other states have done is put out a welcome mat for solar. Texas hasn’t necessarily done that.”

Applied has produced equipment for 15 solar panel-producing plants across Europe and Asia – but none in the United States.

Texas ranked No. 1 overall in the Ernst & Young’s October 2009 ranking of the states’ long-term potential for renewable energy. It has slipped to seventh place (tied with Connecticut) in the ranking for potential solar generating capacity, behind California, New Mexico, Nevada, New Jersey, Arizona and Hawaii. The study analyzed infrastructure, political climate, technology status and transmission factors in computing the index.

HB 545, which would have created an incentive program for residential and commercial users, was poised for a vote before questions by Rep. Sylvester Turner of Houston about how much the cost of the incentives would disproportionately affect lower income consumers, stymied it.

The bill would have levied a flat fee of .065 of a cent for resident/commercial customers and $40 a month kilowatt for industrial users to pay for a rebate program. That program, designed to encourage development of 3,000 megawatts (MW) of solar by 2020, included a sliding rebate scale that returned from $1 to $2.40 a watt generated, depending on production levels.

“With $500 million (the program’s projected worth), we’d have had a lot of companies flocking to Texas,” Sinkin says. “They are coming, but we could have gone a whole a lot farther a whole lot faster.”

Texas’ inaction may be Tennessee’s gain. Shortly after HB 545 died, Tennessee Sen. Jim Kyle told reporters, “To any (solar) company that had an eye on Texas, we say come on up to Tennessee.”

Kyle is sponsoring a bill in the Tennessee legislature that would use $600 million in federal stimulus funds to create a Tennessee Solar Institute and energy-producing farm that would involve Oak Ridge National Laboratories and solar energy component producers.

Texas solar power proponents now must wait until the 82nd Legislature convenes in 2011 for another shot at commercial incentives.

“I don’t think anybody wants to wait two years to get additional incentives,” Sinkin says. “We don’t want to lose those two years.

“But if you want to get into solar, now’s the time to jump. We hear it from solar installers we deal with all the time. They tell customers, ‘you can wait and maybe subsidies will be greater in two years; the cost will be lower. We can show you now, though, that if you position yourself properly and get into all available incentives, you can pay for the investment in three to five years. So the return on the investment is here. There’s no reason to wait.”

In the mean time, several projects are underway to promote solar energy.

Sinkin heads up a group that is working with Bexar County, the City of San Antonio and CPS Energy, the utility provider for San Antonio, to implement HB 1937, which did pass last session.

HB 1937 gives local governments power to make low interest loans for energy efficiency improvements and solar installations with the loan repaid through an addition to property tax payments. The improvements, and the debt, stay with the property, if the property is sold.

Planning for program implementation continues while lawyers decide whether Bexar County Appraisal District has the legal authority to include the assessment with the property taxes.

Meanwhile, CPS (formerly City Public Service) Energy, which has contracted for 41MW of solar from commercial sources, most in the state, is also working on a Solartricity Producer Program. CPS is modeling the program after a European ‘”feed-in tariff” system that Gainesville (Fla.) Regional Utilities has implemented.

The program allows CPS to buy solar from 25 MW to 500 MW annually for 27 cents a kilowatt hour (kWh), more than three times the rate for other electricity. The city will sign 20-year contracts, to give the suppliers stability, but will only sign up new customers for two years before the program is re-evaluated, to avoid over-extending their finances.

CPS says paying for the program will add about 12 cents to the average customer’s monthly bill.

CPS also has an $850 million rebate program over 12 years that would save/produce 771 MW each year.

Taylor says the advantage is that not only is solar a plentiful renewable energy – Texas ranks fourth in the United States in solar energy potential – but that solar creates more jobs than any other energy type “and jobs are what everyone’s concerned about.

“Solar will create a lot of mom-and-pop business, like air conditioning does,” he adds. “You need people to install solar, maintain solar, upkeep solar.”

Even without the state incentives, though, solar panel manufacturers are taking advantage of local inducements to relocate to Texas. In June the Corpus Christi city council approved $2.8 million in qualified incentives for GlobalWatt to build a $189 million solar module factory there.

The funding, which will come from a .25 cent economic development tax, is based on how many jobs the factory brings to the city. Officials from GlobalWatt, headquartered in San Jose, Calif., say it will bring 400 full-time and 50 part-time jobs with and average salary of almost $40,000. Production is set to begin by June 2010.