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CHANGES NEEDED IN FUNDING METHODS TO ENSURE FURTHER DEVELOPMENT OF US SOLAR MARKET

If the solar industry is to play a substantial role in lowering carbon emissions in the US, a shift towards greater efficiency in the federal solar funding is necessary.

In May, the Massachusetts Institute of Technology (MIT) Energy Initiative issued a report called “The Future of Solar Energy”. According to the report’s authors, at the moment the United States’ federal policy on solar funding is largely inefficient, as the current tax incentives aimed at fostering the installation of new solar technologies – apart from being politically controversial – have failed to reward the actual energy produced, while, as the report’s co-author Francis O’Sullivan said, “ideally…rather than subsidize investment, we would subsidize production, so you receive the greatest benefit for each kilowatt-hour of solar energy you generate”.

According to the US Energy Information Administration, federal subsidies for investments in the solar market reached $5.3 billion in the 2013 fiscal year, up from about $1.1 billion in 2010; moreover, the solar capacity has hugely increased in the last year, as 82% jump has been registered between February 2014 and February 2015. However, in 2014 solar energy still accounted for only 0.4% of the US electricity generation.

The MIT Energy Initiative report also says that, in choosing what investments to subsidise, the Department of Energy (DOE) should give priority to emerging technologies that could have a transformative impact on costs, and suggested to redirect spending from solar power tax credits and set up electricity grids capable of bearing a large-scale solar energy use.

Regulations and pricing systems should be reviewed too, in order to adapt them to a greater solar penetration in the energy market; notably, this would entail the guarantee that residential and other solar generators pay their fair share of costs to the system, such as maintaining electrical wires.

 

 

The gLAWcal Team

POREEN project

Tuesday, 5 April 2015

(Source: Reuters)