By Charlie Seltzer
Between news of a global pandemic and the U.S. presidential primary, it’s easy to have missed that the U.S. senate will vote on a sweeping energy bill that has bipartisan support. The American Energy Innovation Act (AEIA), introduced by Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV), is a collection of 55 debated senate measures and addresses renewable energy, cybersecurity, grid modernization, supply chain vulnerabilities, energy storage and mineral extraction. While this bill secures funding for solar and storage research and development, there is no support for extending tax credits. This bill won’t interrupt distributed generation (DG) deployment, but it’s not going to accelerate DG solar + storage either.
The AEIA does not allocate funding or support for a nationwide Net Metering Program (NEM) and/or Value of Solar Tariff (VOST) study. Utilities across the country are updating their NEM policies and there remains much debate on how the nation should value distributed energy resources. Competing lobbying groups representing the solar industry and electric utilities have funded research on this topic and it has led to uncertainty for the industry and created a “boom-bust” installation cycle. While there would not be a blanket VOST study for all utilities, the AEIA could have done a comprehensive VOST analysis and included the effects DG solar has on local economies. This would give public utility commissions and utilities an impartial set of guidelines on how to value DG solar and storage.
The AEIA also neglects to support the important policy issue of streamlining solar permitting and interconnection. Over the past several years, solar contractors and professionals across the country have documented the challenges with interconnection and permitting. Permitting costs are prohibitively expensive in some counties, and permitting as a whole is much more expensive and difficult in the U.S. compared to other countries. The AEIA could have spearheaded a nationwide study and made recommendations for streamlining solar permitting and interconnection processes. The Solar Foundation is already leading this initiative with the SolarAPP and could have benefitted from additional AEIA funding.
On the plus side, the AEIA effectively secures and supports the DOE’s Advanced Research Projects Agency-Energy (ARPA-E) program. AEIA directs $270 million in funding for renewable energy through 2025 to improve PV’s reliability, cost-effectiveness, security and recyclability. The DOE will administer these funds through grants, technical assistance and competitions. Also, this bill provides $180 million per year through 2025 for energy storage research and development of new technologies, with technical assistance for utilities and electric cooperatives to procure energy storage and pilot projects. Funds are earmarked for long-duration storage and there’s an additional $100 million in grants for storage pilot projects. ARPA-E has played an important role in the past several years for the solar industry and AEIA assures that the program will continue uninterrupted.
Long-term and strong support for ARPA-E and research development for PV and energy storage is a win for DG solar + storage. There’s also $200 million in grant funding designated for grid modernization, which includes microgrids and storage integration, and $45 million for workforce training. But overall, AEIA is a missed opportunity for DG solar + storage because it omits clear, actionable solutions for key challenges facing the industry. There’s also no renewable energy goals or greenhouse gas emission reduction targets in the bill, even though these policies have wide support across the country. In lieu of robust DG considerations in the senate bill, solar contractors and industry professionals should continue to focus on policy support and change at the state and local levels.
Charlie Seltzer has 5+ years of solar equipment sales experience. Most recently, he was the West Coast sales manager at CivicSolar. Before working in solar, he was a Peace Corps volunteer in the Dominican Republic where he worked with coffee cooperatives and led youth programs. He’s currently living in San Francisco and in addition to following the solar industry, he loves the outdoors, podcasts and cooking.