Full Length Interview with Rhone Resch, Solar Energy Industries Association

Rhone Resch is not just the president and CEO of SEIA, the Solar Energy Industries Association. He is also the proud owner of a 6 kW grid-tied PV system that powers his home in Washington, D.C. A registered lobbyist with over 15 years of experience working on clean energy development and climate change issues, Rhone is responsible for both SEIA’s operations and the implementation of its strategic priorities.

SolarPro Technical Editor, David Brearley spoke on the phone with Rhone the day after President Obama’s inauguration and prior to the passage of The American Recovery and Reinvestment Act.

DB: Looking at the resumes for Steven Chu, the new Secretary of Energy, and Carol Browner, Obama's energy and climate coordinator, it certainly appears that the new Administration is getting serious about renewable energy and climate change. Do you think we will see progress on global warming legislation? What form do you think this legislation is likely to take? And what kind of schedule do you anticipate for a vote?
RR: Yes, we are absolutely going to be seeing global warming legislation introduced this year. It will be in the form of a cap-and-trade program. It will be a pretty substantial rewrite of the bills we saw last year. You now have Henry Waxman as the House Chairman of the Energy and Commerce Committee and Congressman Ed Markey leading the climate initiative. So you have two very pro command-and-control officials who are going to lead the effort to pass this legislation.

My sense is you will see legislation developed over the course of the next 2 or 3 months that will be very favorable for solar energy. It will include substantial incentives, as well as opportunities for solar to participate in the carbon marketplace. I think the big effort that we are making as an industry is to ensure that those technologies that generate carbon-free electricity are able to monetize that carbon-free generation and to receive credits for it, and that certainly hasn't been the case in the past.

I just sat down with Carol Browner last week on some of our concerns about the stimulus bill. "Rhone," she said, "at the end of the day with the stimulus, your glass may only be 75% of the way full. But right after we finish the stimulus, we're going to be doing an energy bill. Right after we finish the energy bill, we're going to be doing a climate bill. All of those bills will have very strong policies to support solar."

DB: In the second round of the stimulus package, what SEIA is asking for has changed in a meaningful way. The investment tax credit is secured for 8 years, but SEIA would like to see that credit changed to a tax refund. Can you put this in perspective for our audience and explain why a refund is so important now?
RR: The problem in an economy in a recession is the typical tax equity players are no longer participating in the tax equity market. In 2007 and 2008, there were about 20 companies that participated in this tax equity market. Today, there are only five. So monetizing the investment tax credit for solar or the production tax credit for wind has become much more complicated and expensive. And even though we had a long-term extension of our tax credits, it's really the economy that is making that incentive unusable at this point.

What we have asked Congress to do, and the Administration as well, is to adjust the tax credits so that they can be used during a recession. Originally, we were asking for refundability. This would have meant that if you didn't pay taxes this year, you could still get 30% of the cost of the system. But it would come in the form of a refund from the Treasury. We've received a lot of pushback from people on refundability, simply because it's the camel's nose under the tent. If we're the first one to get refundability, every industry out there with a business to tax credit is going to be asking for refundability. Therefore, they are unwilling to go there.

Then we said, "What about a grant program?" They are open to the idea of having the tax credit monetized through a direct grant from the Department of Energy. If you put in a $M solar system, you would be eligible for a $300,000 grant from DOE. The catch, of course, is that the solar system has to be put into service within 2 years. This is a short-term stimulative measure to try to keep the industry growing.

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