Trump won’t ‘stop the train’ on solar — industry
A Trump presidency will not “stop the train” on solar power, an industry official predicted yesterday.
The surprising victory of President-elect Donald Trump on Tuesday left many environmentalists speculating that the new administration would automatically slash support for solar dramatically, as well as other renewables. Solar stocks plunged after the election on expectation that renewables generally might not fare well in the next four years, particularly with the industry’s expected loss of the boost from the Clean Power Plan and other climate policies.
Trump mentioned solar little in the campaign, although he was on record years ago criticizing the administration’s handling of Solyndra, a solar company that filed for bankruptcy in 2011 after receiving millions in loan guarantees from the Energy Department.
In 2012, Trump tweeted, “After Solyndra, @BarackObama is still intent on wasting our tax dollars on unproven technologies and risky companies. He must be accountable.”
Yet several advocates noted yesterday that the main federal policy driving solar, the investment tax credit (ITC), was extended last year for five years, and that much of the industry’s growth is not driven at the federal level. The rooftop solar industry, which celebrated its 1 millionth installation earlier this year, largely is driven by state policies on net metering, said Dan Whitten, spokesman for the Solar Energy Industries Association.
“A lot of what [Trump] said on the campaign trail was based on a perception that really isn’t accurate anymore,” said Whitten, noting the sharp drop in solar costs since Trump’s tweets several years ago.
“Solar is dropping in price, very quickly. … We don’t see any reason why those trends won’t continue,” said Whitten, who made the won’t “stop the train” comment.
The association’s interim leader, Tom Kimbis, has spoken with Trump’s advisers, and they are aware of solar’s growth, according to Whitten. And advocates are encouraged that Trump’s website unveiled yesterday states that the new administration will make “full use of our domestic energy sources, including traditional and renewable energy sources” (E&E Daily, Nov. 10).
“What do we do? Simple: We go to work and continue to show to our customers, policymakers and rest of the country that solar is cost-effective, creates jobs and is one of the leading industries of the future,” said Barry Cinnamon, CEO of Spice Solar and a longtime solar industry installer.
One area where Trump could make a big difference one way or another at the federal level is with land use policy. Many energy policy experts say that means favoring fossil fuel extraction over renewables, but some see an eventual upshot from the rhetoric.
Trump’s pledge to open up more public lands to oil and gas production could also help solar, by “providing access to lands that generate electricity,” said Whitten.
Timothy Fox, vice president at ClearView Energy Partners, said Trump has positioned himself as a deregulator who supports domestic production, and that could extend to clean electricity generation.
“On the other hand, federal agencies under his leadership may wish to focus their time and resources on opening federal lands to conventional energy sources. We think who Trump chooses to fill the leadership roles at federal agencies could be the next indicator of the energy policies we should expect during his administration,” said Fox.
Today, the Interior Department finalized a rule that would set up a competitive leasing process for renewable projects on federal lands (see related story).
Discerning Trump’s stance on tax credits
In a research note this week, ClearView Energy Partners noted that Trump’s Rust Belt backers might succeed in protecting the investment tax credit (ITC) for solar energy, too.
There’s no indication at this point that Trump would push to repeal the tax credits, which would require an act of Congress.
Roth Capital Partners, however, rated the likelihood of the ITC extension getting repealed as “meaningful,” because of Trump’s likely broader push on tax policy, according to PV-Tech. The research equity firm noted the 1986 repeal of the ITC under the Reagan administration, as part of a major rewrite of the tax code at the time. The $40 billion to $50 billion valued in the ITC could help “pay for a corporate tax cut” desired by Trump, according to Roth.
ClearView made a similar point in its note, saying “tax reform lists among the GOP’s top legislative priorities next year, and “broadening the base and lowering the rate” implies the removal of some tax expenditures,” including renewable credits.
Tyler Ogden, a solar analyst at Lux Research, said that’s unlikely to happen, though, considering congressional support for the ITC.
What will be key to watch for at the federal level is ongoing military support for solar, and whether Trump’s push on trade deals affects the industry, considering the large percentage of imported solar modules, Ogden said.
The Department of Defense’s interest in deploying more microgrids and photovoltaics to increase security has helped the industry because of the military’s sheer size, according to Ogden. It has been a driver of a tenfold increase in utility-scale solar projects since President Obama took office. Last month, for example, the 50-megawatt Mesquite Solar 3 PV project in Arizona was dedicated to provide power to 14 Navy and Marine installations in California (Greenwire, Oct. 17).
The military is “the biggest area that’s up in the air right now,” said Ogden. “I would expect that the military has been so supportive of renewables from a strategic viewpoint that there wouldn’t be any dramatic shift,” he said.
Many environmentalists remain worried about the ripple effect on solar, considering Obama’s push for the industry and his decision to link it to climate change policy. In a blog post before the election, Center for American Progress senior fellow Joe Romm said Trump’s pledge to save $100 billion in climate change spending from the Obama era likely would affect general clean energy spending.
“The overwhelming majority of the money that was spent during the Obama years on ‘climate change’ was in fact spent on clean energy technologies from solar energy to advanced batteries,” Romm wrote.
One obvious way Trump could alter federal solar policy is by proposing cuts to the Energy Department’s solar programs that support research, such as the SunShot Initiative, Ogden said. But given support for programs like that and prior congressional inaction on appropriations bills, Trump would “not have as much power as he might potentially plan to have,” he said.