July 2008

This week we saw the debate over solar tax credits bring into focus support of off shore drilling for oil versus support of clean energy technologies.

But will offshore drilling really bring the price of gas down? Time Magazine weighed in on this question in its piece, "Will More Drilling Mean Cheaper Gas?"

"Even if tomorrow we opened up every square mile of the outer continental shelf to offshore rigs, even if we drilled the entire state of Alaska and pulled new refineries out of thin air, the impact on gas prices would be minimal and delayed at best. A 2004 study by the government's Energy Information Administration (EIA) found that drilling in Arctic National Wildlife Refuge (ANWR) would trim the price of gas by 3.5 cents a gallon by 2027. (If oil prices continue to skyrocket, the savings would be greater, but not by much.) Opening up offshore areas to oil exploration — currently all coastal areas save a section of the Gulf of Mexico are off-limits, thanks to a congressional ban enacted in 1982 and supplemented by an executive order from the first President Bush — might cut the price of gas by 3 to 4 cents a gallon at most, according to the Natural Resources Defense Council. And the relief at the pump, such as it is, wouldn't be immediate — it would take several years, at least, for the oil to begin to flow, which is time enough for increased demand from China, India and the rest of the world to outpace those relatively meager savings. "Right now the price of oil is set on the global market," says Kevin Lindemer, executive managing director of the energy markets group for the research firm Global Insight. President Bush's move "would not have an impact."

The reason is simple: the U.S. has an estimated 3% of global petroleum reserves but consumes 24% of the world's oil.

Breaking news from SEIA, Wednesday, July 30:

Solar Energy Industries Association president Rhone Resch released the following statement after the Senate failed to pass a cloture motion on S. 3335, the Jobs, Energy, Families and Disaster Relief Act, which included provisions to extend the solar investment tax credit for eight years. The motion failed by a vote of 51 to 43, unable to gain the support of 60 senators needed for passage.

"For the eighth time since June 2007, the Senate was unable to reach a bipartisan compromise to extend solar tax credits which are vital to the solar industry and our economy. Time is running out to extend the solar tax credits and without passage in the immediate future, tens of thousands of jobs and billions of dollars will be lost in new solar investment. Already companies are putting projects on hold and preparing to send thousands of jobs overseas – real jobs that would otherwise be filled by American workers. Failure to extend the solar tax credits is a severe blow to an industry that has proven to be an economic engine for the U.S. at a time when we need it most.

"The Senate now has little time left this year to extend these tax credits. I strongly urge the Senate to figure out a bipartisan compromise and immediately extend the solar tax credit when they return from their August recess."

More evidence of the repercussions of high energy costs are being felt in mounting electricity costs. Record numbers of utility companies across America are requesting price increases. Unless you have installed a solar electricity generation system on your home and business, you are facing steep price increases, as high as 30%!

Southern California Edison announced July 21 it was seeking an average rate increase of 25 percent with high use customers set for in excess of 30%

Pacific Gas & Electric, in its June 10 media advisory: “Starting in October 2008, these factors are expected to increase electricity costs to PG&E customers by approximately $482 million, resulting in a roughly 4.5 percent rate increase, to be collected over a 15 month period through December 2009.”

Department of Water & Power, LA: April 9 announced power rate increases of 2.9% in May 2008; 2.9% on July 1, 2008, and 2.7% on July 1, 2009.

Consumers from California to New York are facing rate increases of as much as 30 percent, reports the Christian Science Monitor, July 25, in its report "Fuel cost now driving up electric bills."

"In the last two months, 20 to 30 utilities started requesting to have their rates increased," says Tyler Hodge, an electricity analyst at the Energy Information Administration (EIA) in Washington. "With the rise in fuel costs, other utilities will follow suit pretty soon."

The report goes on: The fuel cost that has risen the most so far is natural gas, up about 40 percent in the past year. Last year at this time, the spot price of natural gas was $6 per million BTUs. Thursday morning, the price was $9.85 per million BTUs. In early July it reached as high as $13.31.

The rising price of natural gas is one of the reasons why Southern California Edison, the largest utility in California, recently warned customers it would be requesting a sharp increase in rates. Mid to high use residential customers can expect a rate hike in excess of 30 percent. For their overall system of 4.8 million customers, the average rate increase will be 25 percent.

"On August 1, we normally make a filing to the California Public Utilities Commission that will highlight what we feel our fuel and power costs will be," says Gil Alexander, a spokesman for the utility. "Last week we issued an early warning because of spiking natural gas prices."

The giant utility uses natural gas for 60 percent of the energy that it generates or buys since it is one of the cleanest fuels. "The price has doubled over the last twelve months, and we are quite vulnerable," says Mr. Alexander.

But, coal has also been climbing. In the past 18 months, the spot price of coal has doubled, says Jim Owen of the Edison Electric Institute, which represents the investor-owned utilities in Washington.

Here in California, not all of the rate increases are in the double digit range. Pacific Gas & Electric sees a smaller 4.5 percent increase.

Today from Renewable Energy World:

From Solar Nation today… Solar Investment Tax Credit Bill Introduced by Senate Finance Committee …and this one might actually pass!

As the train that will carry senators and representatives home for the summer vac. gets ready to chug out of Union Station, we think there may be light at the end of the railroad tunnel; we just hope we get there before the Government closes for business.

Senator Baucus, Chair of the Finance Committee, and Senator Reid, Majority Leader, have introduced a Senate version of the storied clean energy investment tax credit bill. It's S3335, the Jobs, Energy, Families and Disaster Relief Act of 2008. It contains the extensions to clean energy investment tax credits (ITC) that we've been promoting for so long, and it could come up for a vote as early as Tuesday July 29th.

What's different this time, that might lead to a bill actually making it through both chambers? Well, on this occasion the document is coming from the Senate with funding provisions attached–the very issue that senators have objected to, for over a year now. This means that a lot of bipartisan shaping of the bill has been going on, to either remove provisions that senators disliked or add provisions that would switch their votes to 'yea' (such as tax relief for those affected by natural disasters this year). But most importantly to the House, it ensures that the clean energy tax credits can be paid for without adding to the deficit. And it means that:
-commercial and residential solar 30% ITCs will be extended for 8 years
-the residential cap on the ITC will be doubled to $4000
-corporate and individual taxpayers can claim the ITC against the AMT
-investor-owned utilities can claim the ITC directly

It sounds like there's a good faith effort, this time, to provide sufficient 'feel-good' measures all around to put the dreaded filibuster to bed. We sure hope so. But to make sure, can you hit your senators one more time with an e-mail, reminding them how important this bill is to the future of solar power in America?

To take action, click here.

Breaking news Friday, July 25, 2008 from Solar Energy Industries Association:

Media report from ABC TV, July 21: ARCADIA (KABC) —

Southern California Edison customers could soon be facing a big jump in their power bills. The utility company wants to raise rates 25 to 30 percent to cover rising fuel costs. Customers are shocked by the big rate increase request.

This is the worst possible news for a whole lot of people. Homeowners, business owners, apartment dwellers: They've barely gotten over the shock of sky-high gasoline prices, and now, first, the DWP and the city of Los Angeles, and now Edison, proposing big electrical rate hikes, and for Edison, it is really a big one.

For the full story including video, click here.

From the nation’s leaders to everyday citizens, the quest to shape a national clean energy policy in this election year is igniting participation on all levels in our country.

We’ll track some of these efforts and the people involved in them here on our Helio blog. If you know of others and want them included in the dialogue please send me an email at gwiseman@heliopower.com.

Big hitters weighted in over the last couple of weeks moving the discussion forward in the media.

Last week, Al Gore issued a visionary call to the American public:

“Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.

This goal is achievable, affordable and transformative. It represents a challenge to all Americans – in every walk of life: to our political leaders, entrepreneurs, innovators, engineers, and to every citizen."

For the full speech click here. His site, We Can Solve The Climate Crisis. includes quotes and comments by many leaders and experts.

Earlier this month, T. Boone Pickens launched The Pickens Energy Plan.

News on the solar power front likely to give a statewide boost to the installation of solar panels to generate electricity comes in from the Los Angeles Times today. Reporter, Margot Roosevelt, reports on the progressive new law in "California adopts innovative solar loan law."

Left-leaning Berkeley and right-leaning Palm Desert are unlikely bedfellows, but the two cities were twin forces behind California's innovative solar and energy efficiency financing law enacted Monday.

The law, sponsored by Assemblyman Lloyd Levine (D- Van Nuys), allows cities and counties to make low-interest loans to homeowners and businesses to install solar panels, high-efficiency air conditioners and other improvements to save energy. Participants can pay back the loans as part of their property taxes. If they move, the improvements and loan balance are transferred to the next owner.

The financing scheme, if adopted by cities, is likely to give a statewide boost to the installation of solar panels to generate electricity. Solar power systems can cost between $15,000 and $30,000–more than many homeowners can afford, although state rebates cover much of the cost. But with the loans, and the guarantee that the investment will not be lost when people sell their homes, the risk is dramatically reduced.

For the complete story, click here.