VIA Bloomberg Government
December 7, 2015 Yuri Horwitz
Bloomberg Government regularly publishes insights, opinion and best practices from our community of senior leaders and decision-makers. This column is written by Yuri Horwitz, Chief Executive Officer at Sol Systems.
As world leaders converge on Paris to discuss climate change, there is a negotiation occurring in Washington, D.C., that may have a more tangible and immediate impact. In the next two weeks, Congress will decide whether or not to continue to support the solar industry, one of the fastest growing industries in the nation. At risk are more than 100,000 jobs, and inaction will slow one of the most promising economic revolutions this country has seen in the last half century.
With a tax extenders package on the horizon before year-end, Congress has the opportunity to keep solar on its growth trajectory through the extension of the investment tax credit (ITC), or wipe out the last decade of growth for an American success story.
The solar industry has its roots in America. American inventors Charles Fritt, Edward Weston, Nikola Tesla led the innovation of the technology. American scientists at Bell Labs and Western Electric helped commercialize solar in the 1950s. The American government and NASA helped drive efficiency of the technology during the space race.
In the decades since, American scientists, engineers and entrepreneurs have collectively built a power generation infrastructure that is revolutionary. It runs each minute of each hour in each day across every state in our country and emits no carbon, no particulate matter and no mercury. These pioneers were the foundational blocks for today’s $50 billion (and growing) industry that employs hundreds of thousands of people in almost every state in our nation, and many times that globally.
The ITC has spurred this industry to add workers nearly 20 times faster than the overall economy, accounting for 1.3 percent of all jobs created in the U.S. over the past year. It has helped drive industry growth of 1,000 percent, and drive down the costs of solar power by 50 percent, in the last five years. More than 8,000 companies now operate nationwide and employ over 174,000 Americans. That is more than Twitter, Apple, Facebook and Google combined.
The solar industry also provides long-term stability and value for the electricity grid and its customers. Its only fuel source is the sun. Solar production is local and this production varies little from year to year. This is why energy giants like Duke, NextEra, Sempra and Warren Buffet’s MidAmerican now own the vast majority of solar power plants in this country. This is why corporations like Amazon, Ikea, Walmart and Apple have increased their investment in solar by 183 percent just in the last four years.
Tax incentives like the ITC should be utilized intelligently to drive innovation and support emerging technologies that have a net benefit to society. They should be reduced and removed when such technologies have matured and are directly competitive.
In the next 10 years, we must replace billions of dollars of aging and inefficient energy infrastructure with new wind, solar and natural gas facilities. In the same timeframe, solar power costs will continue to decline and reach cost parity across the nation – as it already has in Hawaii and Puerto Rico, as well as emerging international markets such as Latin America. The federal ITC is the bridge that gets us there.
In 2008, we established our company, Sol Systems, as a vehicle to empower ourselves and others alongside us to make a concrete, lasting impact on our global environment through clean energy investments here in the United States.
Almost eight years and 50 employees later, we stand by that mission and have financed over 375 megawatts of solar energy through partnerships with utilities, banks and insurance companies. That is enough clean, renewable energy to provide electricity to 42,682 homes.
The ITC has been critical to that growth. An ITC extension will enable the technology to evolve and drive the industry to mature so that both can contribute more effectively to our energy future.
The solar industry was born in America, it employs and empowers Americans and it powers America. It is time to unleash its full potential.
This column does not necessarily reflect the opinions of Bloomberg Government.