Considering the current climate of hostility toward renewable energy in the wake of the Solyndra debacle, it may come as a surprise that in general, renewable energy remains a strong investment.
To place the return on the federal government’s clean energy research and development (“R&D”) investment into the proper context, Joseph Romm of Climate Progress recently referenced a report by the National Academy of Sciences (“NAS”) which independently verified the U.S. Department of Energy’s (“DOE’s”) venture capital success. The NAS found that a handful of clean energy technologies developed through the DOE Office of Energy Efficiency and Renewable Energy have returned about $30 billion on an R&D investment of about $400 million. These numbers don’t even take into account the benefits of reducing pollution or from carbon reductions.
Of course, the economic benefit of such investment is compounded by regulations and policies, such as renewable portfolio standards and energy efficiency goals, which encourage nationwide adoption of clean energy technologies. According to the Energy Information Administration (“EIA”), a national clean energy standard requiring 80 percent of our country’s power from low-carbon and zero-carbon sources would effectively serve just that purpose. Under the EIA’s proposal, electricity generation from renewable resources would almost double, providing potential for an even greater return on investment from future R&D efforts.
While momentum for implementing a national clean energy policy has stalled, New York has several programs to encourage clean energy investment and may soon become a leader in the embattled solar industry, which just got a boost from Warren Buffet’s purchase of a $2 billion solar project. Enacted in 2009, the Green Jobs - Green New York program promotes energy efficiency and the installation of clean technologies through access to energy audits, installation services and low-cost financing. New York also has a robust Renewable Portfolio Standard, with a total renewable capacity that could reach up to 1,562 MW by 2012, or enough clean energy to supply nearly 630,000 average homes.
A potential follow-up to these programs is the New York Solar Industry Development and Jobs Act of 2011 (“Solar Jobs Act”). This legislation, which was put on hold last summer but may see movement in early 2012, would, among other things, amend the Public Service Law and put in place a Solar Renewable Energy Credit (“SREC”) program that requires utilities to procure enough SRECs to meet a certain percentage of the utility’s total electric sales each year. From 2013 through 2020, that percentage would incrementally increase from 0.15% to 1.5%. Systems would be in place to track the purchase and sale of SRECs, and a compliance payment would need to be made in the event a utility could not meet its obligation. The program has been designed to foster a diversity of solar project sizes.
Given past success with clean energy R&D, legislators should consider the Solar Jobs Act as insurance towards future returns on clean energy investment in New York.