Innovative energy technologies are essential for limiting import dependency. This fact is especially well understood by countries with dwindling fuel resources. Germany already derives 17% of its electricity from renewable energy generation. World leadership has been achieved by providing reliable financial returns to operators. The 3,800 megawatts of new photovoltaic generation realized in 2009 alone represents nearly twice the entire solar capacity (2,108 MW) installed in the United States.
Germany's success rests on a grid power feed-in law, called the Renewable Energy Sources Act, that recently entered its second decade of deployment. Utility companies are required to buy CO2-free electricity at premium rates from solar, wind, hydro, and biomass generation, successively lowering the use of fossil fuels and the greenhouse gases they emit.
U.S. Congressman Jay Inslee now wants to multiply Germany's achievement in this country. He is not only concerned about global warming and the security risks of foreign oil and gas. From his Congressional district on Washington's Puget Sound, he also ranks carbon dioxide emissions as “an absolute time bomb” irreversibly acidifying the world's oceans.
On July 26, Inslee introduced a “renewable energy jobs and security bill” into Congress modeled after German legislation. It would require electrical utilities to provide long-term incentive payments at uniform nationwide rates for renewable grid power. The contract time would be fixed at 20 years, just like in Germany. The rates can be lowered for future installations as technology costs decline. The investment payback for each type of renewable generation is graduated to provide a reasonable return, while preventing excess owner profits. The cost of feed-in payments is redistributed to all utility customers and readjusted in a biannual review process. All renewable generating installations up to 20 megawatts would qualify for the incentive program.
The bill's provisions are intended to place the United States “at the forefront of the global renewable energy revolution”. It nevertheless remains uncertain how many lawmakers may support Inslee's plan, unless near-term benefits emerge throughout the country.
A real estate agent in Glendale, Arizona, thinks she may have found one pathway to that objective. Jennifer Del Castillo is reorienting her business toward solar home sales. Renewable technologies don't only inject green jobs into the economy. They also enhance the value of existing real estate by capitalizing on the financial benefits of non-fossil energy.
Ms. Del Castillo recently sold a solar-retrofit home in only 35 days, while conventional offerings languish on Arizona’s depressed real estate market. The buyer paid the full asking price in cash to preclude adversary bidding. The 6.15 kilowatt rooftop photovoltaic system had cut electricity costs for the previous owner by more than half. Assuming future utility rate increases of 5% annually, more than 66,000 dollars may be saved on power bills over the next 30 years. That's over a quarter of the total sales price of this three-bedroom home.
On two trips to Germany, Ms. Del Castillo has seen solar panels in every town. Over 21 thousand gigantic wind machines are implanted in the countryside. With twice as much annual sunshine as Northern Europe, however, Arizona would seem predestined to become the solar capital of the world. Yet without enduring payback guarantees, rooftop generation has remained too expensive for most homeowners.
That situation is now rapidly changing. The prices for solar equipment have fallen dramatically due to the exponential growth of manufacturing. Future carbon emissions taxes would tip the economic balance even more in favor of renewable generation and shorten equipment payback times.
In the view of Jennifer Del Castillo, anyone considering selling his home in the next few years should be installing solar panels now. Only then can actual electricity savings be documented to increase point-of-purchase value. A solar retrofit can easily raise a home’s asking price by 10 to 20 thousand dollars, while the sale may be closed in weeks instead of months.
The deepening relationship between solar energy and real estate is enhanced in the United States by frequent property turnover. Paul Gipe, who maintains a website on feed-in policies at www.wind-works.org, notes that the equity of a solar home is relatively unaffected by housing market conditions. The ongoing value instead rises in step with utility rate hikes and cumulative power bill savings.
The passage of Congressman Jay Inslee's renewable energy bill could create a resilient safety net for the real estate market. Solar rooftops, regional wind farms, and rural biomass plants would revive local economies and enhance their collective contribution to national energy security.
Jeffrey Michel can be reached at: email@example.com