By Dave P. Buemi, Advisor to the CEO, Energy Materials Corporation
Over the last few years, I have often had contentious conversations for saying it was time for the solar ITC to go away. I view this difficult and expensive-to-claim subsidy as market skewing and paradoxically margin limiting. It encourages innovation laziness, lowers industry competitiveness and significantly restrains solar PV sector growth in the medium and longer term.
I am then usually told by proponents of the ITC that the fossil fuel industry we compete against receives 20-times more subsidies. While that subsidy imbalance has long been understood, our industry has proven, over the 22 years that I have been involved, that we can compete with the fossil fuel industry with subsidies that are minuscule in comparison.
But it’s now no longer just about competing with fossil fuel-based energy.
The solar ITC has resulted in the industry’s failure to plan ahead. We keep punting on real, meaningful industry growth and profitability by focusing on short-term subsidies as the only competitive path forward. This lack of planning ahead isn’t just a solar industry problem but cuts across all business and policy segments, as outlined in this important TED talk. We live in an age of debilitating short-termism when we urgently need to start thinking ahead on planetary, social, economic and environmental problems that are accelerating on many fronts.
In particular, global civilization is facing the implications and consequences of climate change which is now accelerating far beyond most model timelines. Fortunately, the signs of positive climate crisis action is everywhere, from financial divestment to daily zero emissions target announcements to energy transition announcements to sizable and growing social climate activism.
Stringent emissions reductions, whether regulatory, voluntary or market-based, are just around the corner. It will mean that our industry will have to, essentially overnight, go from our current global 100-GW install capacity to approximately 500 GW (linear example) or more each year from now until 2050 to meet the UN’s solar sector contribution in the decarbonization model. In principally electrification-based decarbonization models, PV’s beneficial modularity and deployment flexibility would send solar industry demand soaring past 700 GW annually.
The only way the solar industry will scale to this size in the next 30 years, let alone solve other challenges including the solar energy value deflation issue, is by rapid innovation. Innovation is the path to drastically lower costs, supply chain complexity, raw material challenges and environmental concerns to achieve a $0.30 per watt or lower installed cost point. Innovation requires support and focus by governments and industry to encourage rapid R&D investments, and support for early deployment to quickly hurdle the much discussed but rarely acted upon “valley of death.”
We have many of the innovative technologies and business models already in focus at mature lab scale or in preliminary use in the module, inverter, racking, storage, solar-driven power-to-gas, grid integration, finance, regulatory and other PV-related sectors. But we need adroit and dedicated leadership from industry and government to enable the necessary explosion of innovation.
The recent ITC defeat provides a significant pivot point for the U.S. solar industry to move away from short-termism and put in place a plan to rapidly increase solar PV sector velocity and growth via innovation in the near term. Rather than focus on another ITC extension or some other subsidy scheme, our collective lobbying and business efforts should be on innovation funding and regulatory support, which are more palatable and bipartisan in nature than the perceived partisan ITC. Another ITC or similar subsidy effort does not result in global industry leadership for the United States, nor does it provide significant domestic or global economic advantage, nor solve solar industry scalability challenges.
With our technological and intellectual prowess, the United States can become the global leader in PV industry innovation and get us to 500 GW annual capacity. It will take a far-reaching, highly coordinated effort, across federal agencies and the corporate sector, but the resulting large economic gains will lead to the United States winning back its place in global PV industry leadership.
Currently serving in an advisory capacity to Energy Materials Corporation, Dave P. Buemi has a 22-year career in renewable energy with broad experience in the solar PV industry. He has held senior-level positions throughout the PV supply chain including technology commercialization, manufacturing, EPC and project development with companies that include Brightphase Energy, Daystar Technologies, Empower Energies, Gehrlicher Solar/M&W, Suniva and Willdan Energy Solutions. He also played a key role developing the community energy model and commercialization of both advanced thin-film solar cell and solar tri-generation technologies. His work early in renewable energy overlapped with the U.S. Department of Defense renewable energy and microgrid strategy deployment where he provided strategy and knowledge in the warrior, forward deployed, home base and airborne sectors. A climate change and climate resiliency activist and consultant, Dave believes that urgent innovation throughout the PV industry ecosystem is key to meeting the Paris Climate Accords 2050 timeline while enabling a more profitable and stable industry for all stakeholders.
Opinions expressed here are of the author only.
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