Paul Detering, CEO, Tioga Energy
Incentives are a temporary but vital component to the solar industry as we strive to increase volumes and decrease costs. At the federal level, the solar investment tax credit will support new growth through at least 2016. The real challenge comes at the state level, where a plethora of incentives are being designed to spur local markets.
This hit-and-miss exercise has come in a variety of flavors. In 2011, we’ve seen New Jersey’s SREC market collapse and Massachusetts’ attempt to correct these issues for its own program, creating an overly complex financing nightmare in the process. We’ve seen the blink-and-they’re-different programs plaguing various states and incentives in Hawaii that always seem to be on the brink of death. California’s performance-based incentive is a notable exception, although the program’s success caused it to run dry in less than five years when it was expected to last for ten.
So, what can we learn from these floundering markets? Clearly, a successful incentive design needs to offer three things: transparency, long-term stability and monetization. When this strong foundation is achieved, state-level incentives will serve as our bridge to grid parity.
Additionally, as we glide down the learning curve, module and system prices will continue to hit new lows. The time has come, then, to turn our attention to reducing solar’s “soft” costs. For our part, the Tioga Energy team released its power purchase agreement into the public domain — ideally the first step toward developing a uniform document across the industry and slashing the resources required for PPA negotiations.
In both cases, the solution to our woes lies in working together for the greater good. If key stakeholders can unite to share resources and develop best practices, we will find ourselves at the center of a self-sustaining industry with the ability to truly transform the power sector.
Paul Detering is the CEO of Tioga Energy, a leading provider of renewable energy services to commercial, non-profit and governmental organizations. A veteran leader of early stage technology companies, Detering has more than 20 years of experience in the clean technology, telecom and software industries.