Thanks in part to state and federal tax benefits, as well as strong state clean energy policies, the large-scale solar energy industry has boomed. By the end of the decade, commercial solar is expected to make up about seven percent of our state’s electricity supply. This is in stark contrast to other types of renewables whose portion of the energy mix is projected to decline, due to waning tax credits and expiring contracts. Still, solar energy developers are working behind the scenes to sneak continuation of an industry-specific property tax exemption into the state budget deal, further tipping the playing field in their direction.
According to California Public Utilities Commission (CPUC) projections, the contribution of utility-scale solar energy projects to the state’s renewable resource electricity supply is projected to increase more than 1,200 percent between 2012 and 2020. The original intent of the property tax exemption was to help launch what was once a fledgling industry. But that time has come and gone, and today solar is thriving.
Given these figures, why should the Legislature do something to tip the scale even more in solar’s favor?
The outlook is not so sunny for other renewables. The CPUC projects a decrease of nearly 50 percent from geothermal energy and biopower by 2020. The Geysers, the world’s largest geothermal operating facility, has 400 megawatts coming off contract by the end of 2017. Biomass also has hundreds of megawatts coming offline, and three facilities have already shut down. Wind, too, is encountering difficulties securing contract renewals that would enable hundreds of megawatts of old wind turbines to be replaced with many fewer modern ones.
Given these figures, why should the Legislature do something to tip the scale even more in solar’s favor? And why do it now when the property tax exemption does not expire for another two years, and the federal solar tax credit remains in effect until 2016? The last time lawmakers passed legislation on this issue was in 2008 and that bill, like those before it, went through the full legislative process. Not only is this extension not being done through the normal legislative process, but it was not proposed forthright in the Budget Subcommittees either. SB 871 literally popped up over Father’s Day weekend with virtually no notice.
There is plenty of time for the solar industry to introduce legislation through normal channels, which would provide an opportunity for an open debate on the merits of providing a state subsidy to one renewable technology, and to more thoroughly examine the costs and benefits to the state and local economies.
But it should not be given an advantage at the expense of local governments and local economies, and other valuable energy resources
Instead, we should focus on legislation like Assembly Bill 2363, which promotes energy diversity. AB 2363 seeks to create a more level playing field for all renewable resources – solar, wind, geothermal, biomass – and both existing and new renewable energy projects. It does so by requiring the CPUC to consider all the costs and benefits of competing renewable resources in the utility procurement process.
Clearly, solar energy is an important resource for California and one that will continue to be a critical part of our energy mix. But it should not be given an advantage at the expense of local governments and local economies, and other valuable energy resources that provide equally significant economic and environmental benefits in the form of stable energy prices, green jobs and lower carbon emissions. If we are going to have this debate, let’s at least do it out in the open through the regular legislative process.
Ed’s Note: Nancy Rader is executive director of the California Wind Energy Association. Karl Gawell is executive director of the Geothermal Energy Association, and Julee Malinowski-Ball is executive director of the California Biomass Energy Alliance.