From an article in the Nanosolar Blog. Martin Roscheisen, CEO, Nanosolar, Inc.
At a time when many folks in Washington are running around with their hair on fire looking for schemes to dramatically increase renewable energy use by mid-February at the latest, let’s consider that what renewable energy really needs is a shift to permanent, effective policies to pursue and develop its potential.
The recent inclusion of the Federal Investment Tax Credit for solar energy through 2016 is a good example of this type of policy. But, it is just the start.
In our view, renewable energy’s greatest potential and competitive advantage is its ability to evolve rapidly and offer technologies that produce electricity at lower and lower prices with no carbon emissions, subsequently decreasing our dependence on foreign fossil fuels.
Here is one effective, low-cost approach to encourage innovation: Create a set of national Standard Offers or Feed-in Rates for new, significantly better renewable technologies. This policy would offer predictable compensation to any renewable energy generator in the form of long-term power purchase contracts, creating a streamlined administrative national framework that makes developing renewable energy projects and manufacturing new technologies highly investable for entrepreneurs and private capital alike.
The great virtue of offering a national price for renewable energy is that it would be immediately transparent and open to any technology company/developer. Currently, developing utility-scale renewable energy projects requires dealing with hundreds of private and public utilities all operating under strikingly different state regulatory requirements, and often requiring substantial upfront investments just to respond to requests for proposal.
The feed-in rate we are proposing would be set below what current renewable technologies deliver in order to focus support on breakthroughs that will drive the price of renewable electricity down in order to replace more and more traditional, fossil fuel based electricity generation. The national feed-in price could be adjusted periodically by the policy’s governing board in order to move renewable electricity through the price points that would deliver greater market share to renewable generation while avoiding excess or windfall profits at the expense of the taxpayer. For example, the set of feed-in rate price points could be set by (1) on-peak natural gas fired generation to (2) combined cycle natural gas –fired generation to (3) base load coal generation with an adjustment to reflect the cost of CO2 emissions.
Setting an initial feed-in rate at $.15 per kWh for 20 years for solar projects, for example, would draw out multiple breakthrough technologies and greatly advance their market penetration.