The Association finds itself on the right side of the good fight, as the public and big business see a bright future for renewable energy.
By David Weldon
These are definitely sunny days for the solar industry. Alternative energy is the politically correct energy resource today.
States are increasing their tax incentives for businesses and homeowners that invest in solar energy systems.
And a growing number of companies say they have seen the light, and view solar energy as a wise investment opportunity.
All of which helps make the outlook for the Solar Energy Industries Association (SEIA) just a bit brighter in 2007.
The SEIA is a 600-member trade association representing manufacturers or installers of solar energy products, headquartered in Washington DC. As is the case with most trade associations, the SEIA has a two-fold mission: education and advocacy.
According to SEIA Director of Public Affairs Noah Kaye, within that dual mission are four primary goals for the organization:
First it to work to expand the solar energy market, both in the U.S. and abroad.
Second is to help reduce barriers to market access for solar energy providers.
Third is to encourage research and development — and funding for it — in the solar energy sector by the federal government.
Fourth is to help educate the public on the benefits of solar energy and on available incentives for purchasing solar systems.
The association does a great deal of education outreach, not only at the consumer level, but also to “policy makers,” Kaye notes.
In its advocacy role, the SEIA works to identify clean energy activists and public citizen groups, “to work with us as stake holders,” Kaye says. That mission has become easier in the past few years, he notes.
“It is the most popular energy source with the American public right now, and this is one that most people think we need to invest more in for the future,” Kaye says. “Energy isn’t an industry that often lends itself to broad advocacy, but in this case, it does.”
Aiding the SEIA’s efforts are general public attitudes that solar energy is clean, renewable, pollution-free, noise-free, and that it creates local jobs, while having no negative impacts on a local economy, Kaye explains.
Bright Beginnings
The association was formed in the 1970s, largely to represent manufacturers of solar water heating systems, which at the time was the primary consumer product line.
Kaye says the association’s size, and importance, grew in the 1980s and 1990s, as solar power plants started coming online, and as the photo-voltaic industry began to grow.
Not all members of the SEIA are U.S. companies, according to Kaye, but all have U.S. sales or operations.
The reason that foreign companies are interested in membership in SEIA is simple, Kaye says: “They believe that the United States will be on top of the market for the next couple of years.”
There are certainly a few states that seem to agree. California has been very solar-friendly, and in fact, has 30 percent of the solar market at this time. Even more impressive, Kaye says, is that California accounts for 80 percent of the photovoltaic market.
“There is a lot of built-in public awareness for clean, non-polluting energy in California,” Kaye says, “and that affects the business and the regulatory climate.”
But other states are getting on board with solar, and either raising tax incentive levels, or setting renewable energy requirements for power companies, or both.
Besides California, other states that are adopting solar-friendly policies include New Jersey, Maryland, Pennsylvania, Nevada, and Arizona, Kaye says.
“It has a lot to do with policy, and with economics,” Kaye explains.
Solar energy is by definition easier to obtain in sunny states, making the Southwest a prime target. But existing utility rates also play a major role.
Helping the association in its efforts across the nation is the greater focus on renewable energy resources by Congress. Both the U.S. Senate and the House of Representatives
are considering bills related to the solar industry.
Basically, the two bodies of Congress have been considering different tax incentive limits regarding solar energy investments. Kaye says that each branch of Congress will handle their bills in committee, with the goal of “reconciling the differences in the two bills.”
The reason for the association’s interest in these two bills is that tax incentive periods are due to expire in 2008, unless extended by Congress with the new energy bills. Kaye says the SEIA wants to see an eight year incentive extension given to businesses, and a six year extension granted to homeowners.
With such extension, businesses and homeowners would be able to continue taking a tax credit for their solar energy related investments for that time period, a key to convincing people to invest in solar in the first place, Kaye explains.
Also on the SEIA wish list would be for Congress to establish a $2,000 maximum tax credit for taxpayers. This credit is available for purchases of such solar related items as photovoltaic products to produce electricity for the home and solar water heaters. Kaye says the typical solar water heater costs $4,000 to $6,000. A full photo-voltaic energy system can run a homeowner $30,000 to $40,000.
Increasing the maximum tax credit for homeowners is only the fair thing to do, Kaye says, since there is no cap on the amount that a business can claim in its deductions.
“It’s a critical time for Congress to show leadership on renewable energy,” Kaye says.
Another area that Kaye would like to see the government play a strong role is in the setting of standards within the industry.
“There is currently a lack of clear national standards,” Kaye explains, “and that lack of standards has hurt both the industry and consumers. We feel that the federal Energy Resources Commission, and Congress, could play a role in solving this.”
Finally, the other area where Kaye would like to see the industry place more attention is on developing a set of Best Practices benchmarks for solar product manufacturers and installers.
“Right now, each state has its own certification restrictions, and its own local regulations,” Kaye says. “It makes it hard to standardize Best Practices.”