Solar energy is currently a good renewable solution for peak usage period (which are usually the hottest hours of the day). The policy should focus on:

• Extend the federal incentives for the next 10-15 years. The current short term regulation creates instability for the investors and slows down the development of solar solutions. Incentives should be technology neutral. Investors need stability and predictability. The current renew/don’t renew political episodes every couple of years is bad for our country. 

• Improving the solar technologies until it becomes price competitive and does not require federal and local government subsidies. It is a long process, but we can be there in 10 years. Spain is already reducing its solar subsidies.

• Removing federal roadblocks for building solar power stations. There are no free lunches – we need land for our solar infrastructure.

• Utility scale solar electricity faces the same power transmission problems as all new energy locations. Solving the transmission bottleneck is critical for renewable technologies.

• In states that mandate utilities to build/buy solar electricity, the laws and regulations should be changed to ensure the long term viability of the solar power stations. Political pressures have created bidding mechanisms that render many solar projects unsustainable. We should look at Spain for better mandating models.

Electrical utilities don’t “like” solar energy for some “good” reasons:

• They have to build natural gas based power stations that sit idle most of the time in order to account for solar based shortages (e.g., when cloud cover reduces solar output).

• The transmission lines are utilized only during day time, doubling the effective infrastructure cost. Solar technology and its economics will improve over the years. Until we develop methods for large capacity electrical storage, the limitations of solar energy will max its use at a few percent of our electrical supply and only in sunshine states .

We have to be realistic about the limitations of solar energy:

• Volcanic eruptions significantly reduce the amount of solar energy reaching earth’s surface for at least a few months.

• Some climate change scenarios forecast an increase in cloud cover which translates into reduction in solar energy. There is a limit to the amount of electricity that can be solar based and we need to realistically calculate the limit.

Residential Solar Water Heating technology is economical today. There are a myriad of federal and state tax breaks for builders and home owners. We need to:

• Provide home owner tax breaks for installing solar water heating system.

• Mandate the use of solar water heaters in new construction (in most states) and provide the buyer with installation tax break.

• Simplify and streamline the tax breaks and limit them to five years. Since the technology is already economical, it should not receive government tax breaks for a long time. It is needed now in order to increase the adoption speed.

Photovoltaic solar power is not economical yet. However, recent research directions and a few start-ups show promise. We need to:

• Regulate the sale of electricity by the home user back to the grid.

• Offer tax breaks to a limited amount of users per year (first come first served). We need to help the industry to develop.

• Once the technology is economical, we should consider similar mandates and tax breaks as with solar water heaters. We need to be realistic about the technology problems we are still facing, the high initial costs and the state of our electrical grid which is not designed for distributed electricity generation. It is a long term effort that will probably yield results, but its effect in the next 10 years will be negligible unless we have a technology breakthrough.

A longer term goal is the development of cheap large capacity storage of electricity (“battery”). It will allow the usage of generated energy based on demand and will greatly boost the economical viability of solar technology. When large capacity batteries become available, our solar and wind policies will need to change.