In February, the U.S. Congress passed an ~$800 billion “Stimulus” package that the administration said would create 2 million new jobs, stimulate the economy and reduce the suffering of those who have already lost their jobs in this economic downturn. Critics say that the package has failed in all of these measures. Now what?
The goals established for the stimulus package represent the needs & hopes of the American people. If this first effort falls short, then perhaps it is time for simpler, more focused program. The majority of problems in America are solved when working Americans have jobs that allow them to pay their bills, receive employer supported health care and add value to the American economy.
The problems in America soar when unemployment rises and Americans can no longer pay their bills, loose their health care and become a drag upon the economy. So let us focus on programs that can create jobs starting in a matter of months, create sustained value for the economy and generally lift the spirits of Americans because they feel they are once more a part of a wholesome America.
I propose a Solar Energy Program that would accelerate the path of America’s progression toward carbon free renewable energy. This program would target the conversion of America’s commercial & industrial flat rooftops into distributed power generating stations.
The Solar Energy Program would have Congress set aside US $50 billion in no-interest 15-year loans for the construction of a slew of 250-kW rooftop power stations. The $50 billion would allocate US $1 billion to each of the 50 states who would administer the program (most states already have some sort of solar energy program so this avoids creating a new government agencies). Note that these are loans, not grants or giveaways.
The $1 billion should fund at least 1,000 250-kW rooftop installations in each state, creating 250 megawatts (MW) of solar power generating facilities in each state. This is equivalent to one-half of a typical coal-fired power plant so in total, the entire program would create the equivalent of 25 new coal-fired power plants. Consider this a serious down payment on carbon footprint reduction in the United States.
The 250 kW size is a function of program efficiency (only 1,000 projects for each state to manage) and making the projects suitable for as many state contractors (solar system designers/installers) as is practical. Greater then 250 kW is too large for most solar companies to cover the initial costs, and smaller means too many applications to get off the ground in time to get the money spent in less then 16 months (so it actually impacts the economy).
To maximize the number of U.S. jobs created, some basic rules should apply:
All solar modules should be produced from solar cells manufactured in the U.S. and solar modules assembled in the U.S. The goal is to stimulate U.S. job production, not foreign countries. The DOE could be tasked to qualify products and maintain a website of approved solar panels. All solar panels should come with a 20-year warranty including power output over time to ensure installations deliver the required power to pay off the loan.
All inverters should be produced in the U.S. and should have a warranty consistent with the federal loan guarantee program (15 years). The DOE could be tasked to qualify products and maintain a web site of approved inverters.
The application process should be simple but must ensure that loans only flow to real projects. Applications for loans should include state permits for the project and before any funds are provided additional approval from the Authority With Jurisdiction (AWJ = County and/or City) approval for the electrical design of the system. All projects must have a Power Purchase Agreement (PPA) that guarantees a kWh rate and purchaser for 20 years to ensure payback of the federal loan.
All projects should have a clear lien of the federal government to ensure repayment of the loan. In the event repayment falls behind by 90 days or 6 consecutive months pass without loan payments fully current, the Department of Energy would take possession of the site and, via the Power Marketing Authority, would become responsible for marketing the power produced by the site and serving the loan.
Payment of the federal loan should be made in stages to avoid help cover the project costs without having money disappear into failed or ill-managed efforts. Some basic ideas would be:
Initial payment of 10% upon state approval and completion of electrical design (signed off by AWJ) and signed PPA. Approval should also require the solar firm to be bonded to the full cost of the project ($1 million) such that in the event of failure, the bond payoff will allow another firm to be hired by the state to complete the project.
Payment of next 50% upon purchase of U.S. manufactured approved materials (solar panels, inverters, racking, and wiring). Invoices must support proof that money has been spent.
Final payment of 40% upon acceptance of system, connection to grid, and start of electrical generation at full design rate.
The goal must be to ensure that funds flow smoothly to keep projects moving, that state administration of the program is manageable but that the funds don’t get wasted or lost in failed or poorly managed projects.
The Solar Program could be passed by Congress and put into operation in as little as 90 days in states with existing Solar Programs. Solar firms could begin generating rooftop proposals while the states get set up to administer the program and there is little doubt that the first installations would be underway within six months.
This is a program that WILL create “Green Jobs” and do so without expanding the national debt. It will prove to the world that America has changed its position on our carbon footprint and show our commitment to green and sustainable energy.
Michael Mellish is a Process & System Consultant with 30 years of experience in Power Quality & Energy Management, Substation Automation & Electrical Distribution, Off Shore Oil & Gas Platforms, and Manufacturing Execution Systems. Michael is a Graduate of the University Of Lowell with a B.S. in Chemical Engineering in 1978.