Living Green

Solar industry looks to maintain momentum

LONG BEACH, Calif. — Hoping that federal regulators follow the lead of states like Florida and California, the solar industry is launching a major effort to persuade Congress to extend tax breaks and other incentives they say are critical to keep the industry's recent momentum going.

"We are going to become a political force," Rhone Resch, president of the Solar Energy Industries Association, declared at an industry conference here last week. "It's our time ... we're in position to grow like never before in our history."

Solar industry boosters want Congress to extend tax breaks initially passed in 2005 that give consumers and business owners who install solar equipment an income tax credit equal to 30 percent of the cost of the system, up to $2,000.

The tax breaks are set to expire next year, but far-reaching energy bills in both the House and Senate would extend them for up to eight years.

Proponents say the bills help put solar on a more level playing field with other energy industries that already get federal tax breaks. "This is the best energy bill ever proposed in Congress for solar," Resch said.

The House and Senate bills have many differences, however, and reconciling them won't be easy. President Bush has indicated he will veto either bill in its current form, in part because his top energy officials say they would raise taxes for producers and prices for consumers.

Cognizant of a tough battle ahead, Resch acknowledges that there's only a "50-50 chance" of a bill passing this year.

As Congress deliberates, solar power — which still provides only a fraction of the nation's electricity after a history of fits and starts — has become red-hot.

Last week, Juno Beach, Fla.-based FPL Group Inc. and Florida Gov. Charlie Crist announced that FPL will invest up to $1.5 billion in solar generating plants. Included in FPL's plans is a $900 million solar-thermal plant in Florida that would be the first of its kind on the East Coast.

Smaller solar projects are surging too.

According to figures from Resch's group, installations of photovoltaic solar equipment are expected to rise by about 80 percent this year from last year. Installations of solar water heating systems are up 50 percent or more.

It's not just consumers suddenly warming up to the idea of getting power from the sun.

After successful solar experiments at a store in McKinney, Texas, Wal-Mart Stores Inc. plans to install solar panels at many of its locations. Miami-based homebuilder Lennar Corp. recently announced that all the houses it builds in parts of California — some 2,000 in all — will come standard with solar power equipment. Google Inc. last year began installing the largest array of solar panels in the world at its corporate headquarters in Mountain View, Calif.

Falling materials and equipment prices, along with environmental, supply and pricing uncertainties surrounding fossil fuels, is helping drive the surge in solar. So are state incentive plans, pioneered by California and replicated in Florida and other states.

But perhaps most important, industry boosters say, is extending the federal tax credits.

Last week, Resch's group called on its members and supporters to flood Congress with pleas to support the energy bills. It also is enlisting some high-powered help to lobby lawmakers — most recently Ted Turner.

"We've got a lot of work to do in Washington," Turner said last week. The CNN founder is a part owner of a New Jersey solar company and said he plans to invest in more in solar ventures.

Solar proponents say it's not an option to let a federal energy bill fail this year. But if it does, Resch said his group is ready to pursue other avenues in Congress to extend the solar tax credits. It's also already trying to muster support to overturn a Bush veto if necessary.

Some supporters wonder if the solar industry should even wait on Washington. Recently, the biggest support for the industry has come not from the federal government, but from states.

California launched a $3 billion solar program in January that includes rebates covering about half the cost of a typical $20,000-plus solar power system. Already producing about 70 percent of all solar energy in the country, California's solar industry has soared since the program started.

In Florida, state officials launched a $2.5 million rebate program that paid up to $20,000 for solar energy systems and $500 for solar water heaters for the first to apply.

Lawmakers in other states, including Texas, are considering similar rebate programs.

"If I were sitting in Washington representing a state, I'd be embarrassed by how much work the states and cities have accomplished without Washington even lifting a finger," said Ray Lane, a managing director of venture capital firm Kleiner Perkins Caufield & Byers, a major investor in solar start-ups. Among its biggest investments is in Ausra Inc., which FPL tapped to help build its solar thermal plants.

Along with state incentives, some state leaders are providing the biggest boosts to the solar industry.

Crist, who has installed solar panels on the Florida governor's mansion, gets high praise for promoting solar, as does California Gov. Arnold Schwarzenegger.

"We are the Sunshine State," Crist said Wednesday in announcing the FPL project. "What better place to have solar energy?"