Earlier this year, the U.S. brought online its millionth solar installation. The U.S. solar industry now employs more people than coal mining or oil and gas extraction. And last year, clean energy investments in the U.S. totaled $56 billion, with a majority of dollars going to solar and wind.
Yet, solar only represents about one percent of U.S. electricity generation, and non-hydro renewables represent just 7 percent. Electric vehicles, needed to address transportation emissions, are still less than three percent of U.S. auto sales.
The trajectory of the clean energy sector depends greatly on the next president of the United States, according to a recent report by the venture capital firm DBL Partners. The authors write that maintaining U.S. leadership in clean energy will require thinking holistically about the industry.
More specifically, “the most important achievements the next president can accomplish for clean energy are fostering stakeholder unity behind the shift to renewables, increasing accessibility and viability for investors, and improving nationwide energy literacy,” the report states. DBL goes on to list a dozen specific policy recommendations to make good on these aims.
If the next president is successful, there will be wide-ranging benefits. For instance, DBL calculated that if 10 large states saw their solar sectors catch up to California on a solar watts per capita basis, the nation’s solar capacity would double — increasing by 34 gigawatts — and create more than $67 billion in economic activity.
One of the first tasks for the new president should be to enact policies that bring renewables to populations for whom clean energy solutions have been out of reach for economic or political reasons. Today, communities that have traditionally depended on coal to drive their economies are building feelings of resentment toward clean energy and environmental protection, while coal demand is primarily suffering from the rise of natural gas. At the same time, states are simply getting left behind in the clean energy transition.
“The good news is that these three communities — coal states, low income populations, and large states with unrealized potential for renewables — offer the next presidential administration exceptional opportunities to spread renewables into untapped markets,” she report states. “By doing so, the administration will further strengthen pro-renewables political will power.”
Passing a “Clean Jobs Transition Act” is one of the policies the next administration needs to push for. This legislation would require coal companies to fund solar training programs and assist with program enrolment as part of their bankruptcy settlements. This would allow the next president to turn the downward spiral of coal bankruptcies into an opportunity for upward mobility.
Another priority should be to overcome the “deferred maintenance overhang” by requiring low-income housing managers to invest in neglected building maintenance, so that it's possible to deploy renewables and energy efficiency measures. To achieve this, the report recommends the federal government establish a dual purpose Deferred Maintenance Overhang Loan program for both deferred maintenance and energy efficiency investment. The government could also issue maintenance and energy upgrade bonds.
Removing barriers to cleantech adoption creates opportunities. In California, for instance, lower income households have made the greatest strides in solar adoption since 2013. “As we become a clean energy superpower, remember that solar is for everyone: middle income is fastest growing segment!” tweeted Nancy Pfund, managing partner at DBL Partners.
Another part of the next president’s coalition-building effort should be to engage with electric utilities so that both incumbent and new business models can thrive simultaneously. In particular, the report recommends that the federal government work with the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) “to create a DER cost-benefit framework and supporting playbook that lists best practices for quantifying DER cost-benefit categories.” The two government arms should also seek to build consensus among stakeholders to avoid future disagreements in state-level proceedings.
The next administration should look to the outcomes of California’s Distributed Resources Plan (DRP) proceeding and New York’s Reforming the Energy Future proceeding and share best practices with other states, the report says.
Next, the new administration should find ways to promote more clean energy investment. One step is to expand the 2012 Green Button Initiative, which allows utility customers to easily download their usage data for purposes of energy efficiency and management. Better access to data allows entrepreneurs to create new solutions to upgrade the grid.
The next administration should also “refine and build on the existing frameworks of the Investment and Production Tax Credits, the Community Reinvestment Act, and the Capital Gains Tax to incentivize sustainable and clean energy investment,” the report states.
Spurring investments is critical. DBL pointed out that Tesla’s nearly 400,000 pre-orders for the cheaper Tesla Model 3 in the weeks after its debut illustrate the level of price sensitivity among U.S. customers. Without significant venture, equity and debt investments, moving down the cost curve would have been impossible for Tesla or any other EV manufacturer.
Finally, the next president should make it a priority to boost energy literacy. DBL Partners specifically recommends a three-pronged approach led by the DOE that includes working with celebrities, coming up with more effective energy curriculums and holding a “solarize” competition among states to drive down clean energy costs. States that have already used the “solarize” model, where solar installers compete to provide the lowest viable installation costs, have seen deployments increase dramatically.
Whoever wins the 2016 presidential election will not be able to ignore the reality that the clean energy sector is now a significant economic engine in the U.S. And — regardless of where Hillary Clinton and Donald Trump stand on energy issues today — the next president will be called on, especially by younger generations, to combat climate change while creating new jobs.
“The next president will have an opportunity like no other,” the DBL report states. “The energy industry that we have lived with for over 100 years is on the precipice of transformation — the next president just needs to give it an intelligent push.”