Steve's Comments

There you go again, Atomic Rod. #45: "The US government stopped doing anything to actually support the development of nuclear energy many years ago." How about DOE's $36 billion budget? Thanks for the facts, peterlynch. And Price-Anderson is still in effect, after 54 years and counting. If it were repealed today (not likely!), much of the nuclear industry in the U.S. would shut down. Well, time for me to shut up and get back to work.

C'mon, Rod, you're being too clever by half.

1. You say (#40) that "subsidies are things that cost money." The federal government's assuming liability in the event of a nuclear accident is a subsidy, plain and simple, even if the feds have not yet had to pay out anything. In a way it's kind of like a loan guarantee. If the borrower makes his payments to the lender, the guarantor has no costs. But it's the availability of the guarantee that makes the loan happen in the first place. And Obama is pushing massive loan guarantees for the nuclear industry to encourage private-sector investment in nuclear. That's a subsidy, Rod.

2. You also say (#42) that "the vast majority of the destruction and loss of access to the area around Fukushima came as the result of a tsunami, not as the result of a nuclear reactor plant accident." That's a howler. If there had been no nuclear plants in Fukushima, the survivors of the tsunami would all have long ago returned to their villages to rebuild. The great tragedy of Fukushima is that Tokyo Electric Power, the operator of the affected plants, was unprepared for the scope of the natural disaster it was facing, so its plants blew up and a huge area was contaminated.

One more thing about subsidies. People like me in the renewables industry are upfront about the need for subsidies to catalyze a thriving industry which in time will no longer need subsidies. But too often people in the fossil fuel and nuclear power business, like Atomic Rod, pretend they aren't being subsidized (despite decades of government support) and conveniently ignore the external/environmental costs of what they do. Baloney!

Hey, Atomic Rod, you say the nuclear industry receives no subsidies from the federal government? Surely you jest! You alluded to the liability issue in your comment #38. But what you didn't explain is how the liability of a nuclear plant operator in the event of an accident is limited to the $12 billion you mentioned. Should a nuclear catastrophe entail damage greater than that (which thankfully has not occurred and we all hope never will, but tell that to the people of Japan), the federal government is on the hook for the rest, under the Price-Anderson Act of 1957. The idea behind Price-Anderson when enacted was that in ten years private insurance would underwrite that risk, after the start-up nuclear industry had a chance to prove itself. But that has never happened, and Price-Anderson has since been extended several times, most recently through 2025. When the Supreme Court upheld the constitutionality of Price-Anderson in 1978, it said that Congress's purpose in enacting it was to remove the economic barriers to and stimulate the growth of private development of nuclear power. Without such a limitation on the liability of the nuclear industry, it's widely accepted that there would have been no commercial nuclear industry in the United States. I'd say that's a pretty damn big subsidy, enabling the industry to exist.

1. This article says that SolarCity will sell electricity to the end user. Does this mean that they are abandoning their predominant model of leasing panels in favor of a power-purchase model? If so, that's a major strategic shift.

2. Doubling the number of residential PV systems in 5 years makes a good headline, but it's not as impressive as it may seem at first glance. Here's the year-by-year installed base of residential PV since 2005, in megawatts of installed capacity, and the percentage increase from the previous year (derived from data published by U.S. Solar Market Insight Research):

2005 / 27 / --
2006 / 65 / 141%
2007 / 123 / 89%
2008 / 200 / 63%
2009 / 357 / 79%
2010 / 621 / 74%

In the last four years the installed capacity of residential PV has almost doubled every year, and more than tripled in the last two years (2008 to 2010). Of course, as the installed base grows, you can expect the annual percentage growth to slow. And it is impressive for one company to aim to install 160,000 systems in five years, although it remains to be seen if they can do that in the face of competition from SunRun, Sungevity and many others.

The solar water heater panels which Jimmy Carter installed on the White House roof were not "removed from the House in 1986 after oil prices declined and the imperative had diminished," as the article states. After all, it cost virtually nothing to leave them in place. No, they were in fact removed by Ronald Reagan as part of his anti-solar policies. He also slashed funding for the Solar Energy Research Institute (now National Renewable Energy Lab), terminated four regional centers working to commercialize renewable energy technologies (I worked at the one based in Boston), killed the investment tax credit for solar, and tried albeit unsuccessfully to eliminate the Department of Energy. Reagan's imperative was to reduce regulation of the fossil fuel and nuclear industries and preserve the federal subsidies they enjoyed, while preventing the government from "meddling" in the marketplace to encourage the development and use of energy alternatives.

The story of Carter's solar panels is told in the documentary "A Road Not Taken" now showing at various film festivals and soon to be released on DVD. http://www.facebook.com/AROADNOTTAKEN

Support for long-term energy research is vital, but it is not the kind of short-term stimulus the economy needs now. Unsexy programs like Cash for Clunkers and extending unemployment benefits do have a short-term stimulative effect, because that money gets spent quickly. It has long been accepted that small businesses provide most of the job growth in the US. But recent research shows that it is actually startup small businesses that provide those jobs. So the best thing the feds can do is provide a loan guarantee program that will encourage smaller banks to make loans to startups. I know from where I speak, because my solar startup needs both equity and debt financing to get off the ground and start hiring people.

A goal of 10 million solar rooftops in 10 years is a worthy one, although perhaps overly ambitious to achieve. As Anonymous #2 notes, the additional $1.75 per watt federal rebate proposed by Senator Sanders would require a huge expenditure (I peg it at $70 billion, assuming an average residential PV system of 4kW). This is not only a difficult political sell, it's a wrongheaded approach, in that it puts the burden on homeowners to shell out the money to erect mini power plants on their roofs. We can't build a true green economy on a foundation of consumer debt and government financing (municipal financing in the case of PACE). It will require much greater participation from private sector financing sources. And we see that occurring with solar leases and PPAs, which are demonstrating tremendous acceptance in the marketplace. This week I appeared on a Boston TV news report (along with executives from SunRun and its installer partner Alteris Renewables) about how homeowners in Massachusetts can get solar panels installed on their roofs for free. In response to that report I got numerous phone calls from interested viewers. They were not green enthusiasts, but middle-class homeowners who had either looked into solar and found it too expensive, or had never even considered it before. Removing the financial burden from consumers to purchase PV systems is the key to getting solar on those millions of rooftops. FYI, you can see that report at http://wbztv.com/local/solar.power.homes.2.1817992.html.

I have that very picture of Reddy Kilowatt on my refrigerator door (along with souvenir magnets of Elvis, armadillos and other curiosities), to remind me that "brown" utility power is indeed the main competition for the "green" PV alternative. If Congress enacts cap-and-trade on utilities as they are now discussing, and that's a big "if", it will be a big boost for solar. But Reddy's not the bright-eyed icon of youth and vitality he once was, back in the day when the utilities used him to push the use of electricity for all those "wonderful modern conveniences" such as electric heat! Like other big institutions, the image of utilities has been tarnished, what with rising electric bills, brownouts and blackouts, and public awareness of how they contribute to environmental damage and global warming by burning fossil fuels. Reddy is not ready for a comeback from his retirement to the marketers old age home. If we saw him today, he'd look a little shabby and disreputable.

Reply to Anonymous: As a dedicated New York Times reader, in print and online, for decades, I think Todd Woody did a poor job of reporting in his story on Fannie Mae and Freddie Mac. He portrayed this situation as big bad F & F pulling a bureaucratic fast one on poor old solar, without bothering to look into the laws and regulations which (thankfully!) impose restrictions on what F&F can and can't do. Now he's trying to backpedal in his blog by saying the situation ain't so bad. He notes that Representatives Henry Waxman and Barney Frank, whom I generally think of as good guys, sent letters to the Administration asking them to issue guidelines which would allow PACE financing to continue. I suggest this may require Congressional action to amend their charters, which is none to likely to succeed.

I'm not totally against PACE, I just think it's been way oversold as a miracle cure without adequately addressing the problems it creates for a homeowner's equity in his house, especially in the face of depressed real estate values. As I wrote, PACE can be a good tool for financing energy efficiency improvements, which are far less costly than solar and present less of a problem to a mortgagor. But I do reject the premise behind PACE, that a homeowner should get locked into a 20-year, 7% loan to finance the construction of energy generating capacity, when a family can go solar without going into debt. And as an independent progressive who believes in good government, I can only ask when do we get over the idea that government programs are the answer to everything? We must deeply engage the private sector in the transition to a green energy economy, or we'll never get there.

Reply to daniel-simon-33441: It's not a question of Fannie and Freddie having a lot of nerve blocking solar loans after we bailed them out. Under their charters their mortgages can't be subordinate to any liens, whether for solar or otherwise. Aside from the Wisconsin case cited above by Anonymous, commercial lenders usually won't issue first mortgages subordinate to any kind of lien either. That's why they're called "first" mortgages -- they take priority and must be settled first before any other obligation on the property.

President Carter did not "abjectly" fail to deliver. He set the nation on a path toward a goal of renewables supplying 20% of our energy supply by 2000. Ronald Reagan deliberately sabotaged Carter's efforts when he took office. I was there, working on a Carter-funded renewables program, and was tossed overboard along with most of Carter's energy initiatives.

I support your bicycle trip as a way to raise awareness of the need to transition to a green energy economy. But generating 100% of our electricity supply from renewables by 2020 may be an unrealistic goal, no matter how hard you pedal, that will only leave people disappointed when we "abjectly" fail to achieve it. President Kennedy knew from his science advisors that we could get to the moon, and what it would take to do it, when he announced the Apollo program. Aim for the moon on your trip, but be sure you know how to get there.

The scientists and engineers who invent new products are not the only ones with a blind spot for marketing. Too many venture capitalists (David Anthony obviously not being one of them, of course) are obsessed with only funding proprietary technology which they believe can disrupt established paradigms, yet most of those investments fail in the marketplace. If you read this website regularly you see that the established paradigm for residential PV -- selling custom-designed systems to homeowners -- is being disrupted by the introduction of pay-as-you-go models such as PPAs and solar leases. As a result, the residential PV marketplace is on the verge of exploding, yet with no breakthroughs in the underlying technology. When those come along, as they surely will, all the better. But it is a new sales model which is the driver in this space. The long-term winners will be those companies which succeed in executing and excel at marketing to build consumer brands and capture market share, tapping the pent-up demand of millions of homeowners who want to go solar.

We all support solar as a cause, and many of us have for decades! But what we need now is real-world results by getting the public and private sectors fully behind increasing solarized rooftops by orders of magnitude. SunRun is a leader and an innovator in residential PV. And while my company will compete with you, I applaud and support what you are doing.

This is a classic attempt to capitalize on a highly-visible public event, like the disaster in the Gulf, as a sales and marketing tactic. Nice bit with the "10,000 Solar Roofs" page on Facebook, where you see many attempts to get people to join or "like" pages such as "1,000,000 Strong Against Sarah Palin." Not coincidentally, a major venture capital investor in Facebook is also a backer of SunRun. But this is no "cause" or "movement" as claimed, just a thinly-veiled ad for SunRun and its installer partners Verengo Solar Plus and HelioPower to achieve a highly-ambitious target of 10,000 residential PV system installs in 2010. Despite their transparent Facebook ploy, they are to be commended for setting the sales bar that high. We need to think big.

Tor, you use the word "brand" in this posting as referring to the name of the manufacturer of a panel. But neither that name nor the performance specs of a given panel in themselves constitute a true consumer brand. What are a panel's brand attributes which cause a consumer to say, "I gotta have that one!"? Certain consumers may respond to minor differences in panel output just as they respond to minor differences in processor speed when buying a PC. But with the exception of the negative brand equity BP is accruing every day in the Gulf of Mexico, one panel is pretty much like another to most consumers. They are more likely to rely on the brand (i.e., reputation) of their integrator/installer and leave it to him to specify a particular manufacturer's panel. The panels are just a component in a system, and as such are a commodity with little or no brand differentiation.