Will Texas Catch Some Solar Rays?

Last Thursday was the summer solstice, when more sunlight fell on the state than any other day. That sunlight contained more energy than 3,500 times the electricity Texas consumes in one year, according to Austin's Clean Energy Incubator, a UT offshoot designed to marry local intellectual capital in the clean energy field with investment capital. That evening, the CEI hosted a solar symposium as part of its Cleantech Venture Forums series, which featured a panel of local and worldwide solar-energy experts from scientific, business, and governmental disciplines. Their distilled message to the standing-room-only crowd: The day when solar energy will compete economically with traditional fossil-fueled power is fast approaching, and while other U.S. states and foreign countries with far worse resources for sunlight and solar-panel manufacturing are positioning themselves to capture the solar boom and its economic and environmental bounties, Texas is doing much less than it could be to utilize its prime solar potential – and time's a wasting.

Solar energy, or photovoltaics, is defined by the State Energy Conservation Office as the conversion of sunlight directly into energy. When sunlight strikes PV cells, electrons are released and then gathered to create an electric current. Crystalline silicon panels are the most common form of solar, but thin-film PVs, which don't use silicon, are gaining popularity given their cheaper production costs and ability to be integrated into building materials. Solar is now a $12-billion-per-year worldwide market, growing 40% annually, and the present industry can't keep up with demand.

A white paper released last Thursday by UT's IC2 Institute details how Texas' abundant sunlight, scientific brains, and experienced semiconductor manufacturers, who make computer chips with virtually the same materials and technology required to make solar panels, should translate into a leadership position in the solar industry in coming years. Attaining that leadership, the paper says, will contribute to the creation of hundreds of thousands of high-value clean-energy jobs. Meanwhile, it predicts, solar energy's true cost will fall to half of today's average residential electricity rates by 2010, thanks to rapidly advancing technologies and economies of scale, in addition to rising hydrocarbon costs. The paper also explains that beefing up the state's solar installations would offer cheap energy at peak demand times and could even allow Texas to re-emerge as an energy exporter. To get there, however, the paper advocates aggressive public investment in solar, such as the installation rebates Austin Energy instituted in 2004, and programs in such solar-generating states as California and, surprisingly, New Jersey. Also recommended are the policy-streamlining and innovative subsidies enacted by Germany and Japan, now the two world leaders in solar capacity – even though they have the climates of Alaska and Seattle, respectively.

At the symposium, German Parliament Member Herman Scheer – regarded as the father of Deutschland's solar program – told attendees by phone that he viewed Germany's solar incentives as an alternative to slow-moving climate protection programs like Kyoto, which he called "globally talking and nationally postponing." Known as feed-in tariffs, Germany's solar program requires power companies to prioritize feeding renewably sourced energy into the grid, and the program pays producers a fixed price with no limitation in quantity. Since enacting the rules in 2004, Germany has become the world's No. 1 solar producer and, according to Scheer, has added 200,000 new renewable-energy jobs. He referenced growing worldwide dependence on a small number of oil- and gas-producing nations for energy, the rising monetary and environmental costs of fossil energy, and solar's declining price and lack of fuel costs as the primary reasons for undertaking the program.

Discussing PV incentives closer to home, State Rep. Garnet Coleman, D-Houston, was on hand, voicing his firm support for solar. He and fellow Houston Dem Rodney Ellis proposed the Tex-Sun rebate program this year – a five-year, $500 million program to incentivize statewide solar installations. The bill eventually died in committee. One solar-related legislative success was the inclusion of so-called net metering in an omnibus energy bill, requiring utilities to pay customers for surplus energy they generate and add to the grid – though it doesn't apply to municipally owned utilities or Co-ops.

Back in Houston, Coleman said, "We have a problem: It's hot, people can't afford their electric bills, the air is dirty, and it's making people sick." Citing a statewide opinion poll in which 84% of respondents said the Texas Legislature should encourage solar power, Coleman has vowed to keep fighting for PV incentives.

Cecilia Aguillon, of Japan's Kyocera Solar, the world's No. 2 PV manufacturer, testified Thursday to the success of solar incentives. In 1994, she said, Japanese elected officials and power companies teamed up to create market-stimulating, gradually decreasing incentives that expired recently. As of 2006, Japan had the world's second-largest solar capacity at about 1,772 megawatts – well shy of Germany's 2,429, but nearly three times that of the third-place U.S. at 619 megawatts, according to solar consulting firm PV Energy Systems. Given PV production's automated nature, Aguillon said, most solar jobs will be in distribution and installation; she noted that California had around 50 installation companies in 1999 and more than 1,000 now. California is No. 1 in U.S. solar production and, unsurprisingly, has the nation's most aggressive solar-subsidy programs, including a $3.3 billion, 11-year rebate program and the 3,000-megawatt Million Solar Roof goal, both enacted in 2006.

Pointing to a chart that correlated the relationship between Austin's steady increase in solar installations and Austin Energy's late 2003 announcement of its solar installation rebate program, Andrew McCalla, founder of local PV installation start-up Meridian Enerfy Systems, listed a litany of tasks necessary in PV installation. From highly technical power-density analysis to well-trained laborers, "Incentives are needed to create jobs for these people," McCalla said, especially outside Austin Energy's service area.

Today, Meridian claims to have installed Texas' largest PV capacity and employs 25 full-time staffers. McCalla and Aguillon agreed that a statewide rebate and inclusive net metering laws would foster explosive growth in Texas' solar industry.

From a financial perspective, Pearce Hammond, vice president of alternative energy research for Houston investment bankers Simmons & Company, predicted solar will ultimately be the largest alternative energy technology. He listed a series of solar success stories: publicly traded solar manufacturers such as First Solar, SunPower, and Q-Cells, whose year-to-date values have risen between 60% and 170%, driving their overall values into the multibillions. The IC2 paper noted a weakening in the semiconductor industry and cited solar as a means to bolster those losses, giving chip-makers an easy transition to PV-making.

B.J. Stanbery, founder and CEO of HelioVolt, an Austin-based start-up planning to manufacture thin-film PVs, said he chose to site his firm in Austin because of its "human resources." Stanbery advocated a local solar-market-creation effort similar to the city's semiconductor-industry-seeding tactics in the 1980s. The UT paper went further, advising that the state's Emerging Technology and Enterprise funds – large pots of money used to lure employers to Texas – should give priority to PV companies. Stanbery suggested that incentive mechanisms that attract both small and large firms and allow them to work together are the key to success. HelioVolt is planning its first factory, where it will purportedly produce thin-film PVs using a new, cheaper, and faster manufacturing method.

As more investors and bright-eyed governments position their resources under the sun, and groups like the Clean Energy Incubator work to commercialize the innovation made in Austin, backward power brokers like Gov. Rick Perry and his ilk remain solar-shy, while retardedly cheering on toxic coal-power development. One wonders if they'll acknowledge PV's array of statewide economic and health benefits before Texas misses its opportunity to fully capture its solar potential.