Race to the Solar Sundown for Stimulus Funding

This is a good news story.

There is a race underway to win federal stimulus dollar lotto that could mean as much as 30% Federal stimulus grant payment of construction costs or about $5 billion in Federal stimulus along with $30 billion in private investment if the solar energy projects in the race meet all the requirements to be actionable by the end of 2010.  This would be a big shot in the arm for solar developers and the investor owned utilities in California eager for the renewable energy they will produce.  The 9,000 MW of solar power generation capacity at risk is enough to satisfy almost half of the 15,000 to 20,000 MW of renewable energy needed for California’s ambitious 33% renewable energy target.

So with so much at stake for so many the stars and planets of political cooperation came together in SB x834 Governor Arnold Schwarzenegger signed into law March 22, 2010.

The bill is a notable achievement on several fronts:

  1. Bipartisan cooperation and industry and environmental agreement.  What a concept!  The bill speeds permit approvals for utility-scale solar projects in California to meet that end of 2010 federal deadline to qualify for at least $5 billion in federal stimulus money.
  2. Common sense balancing of interests for environmental compliance. Instead of fighting over a project by project mitigation plan to compensate for wildlife habitat destroyed during construction, the bill lets developers to pay into a revolving fund to preserve sites for endangered species instead of each developer doing it themselves.
  3. Speeds up the Regulatory Approval Process and Adds Certainty for All. The fees for the revolving fund will be set by the California Energy Commission and the Department of Fish and Game.  State and Federal resource agencies will use the revenue in the fund to buy and protect land for wildlife or to restore habitats of endangered species.

The project affected will create as many as 12,000 California jobs and generate $30 billion in investment, including billions of dollars in funding under the federal American Recovery and Reinvestment Act of 2009 the Governor said. But the precedent set by this bill the reforms contained in is limited to solar thermal and photovoltaic technologies and does not apply to other renewable energy such as geothermal and wind. The bill is also limited to about 22 large projects in the desert region, or less than 10% of more than 250 renewable energy projects proposed throughout the state.  Further legislation will be needed to extend the provision of SB x834 once it achieves its end of 2010 target and to clarify whether California will tax federal stimulus dollars used on renewable energy projects.

“Twenty companies right now with large projects that are potentially breaking ground this year — and this is why we are all working together frantically to help them with the permitting and to bring all this together.  If they break ground this year and if they spend 5% of their costs and if they complete [them] by 2016, this means they could then actually qualify for federal stimulus funds. And let me tell you, this is $5 billion to $10 billion of the funding that is available.

By streamlining the permit process for only a small fraction of the renewable energy projects proposed for development in California we are leaving 56,000 megawatts of renewable energy, $200 billion in investment and 100,000 clean-tech jobs on the table. We can and we must do better if we want to compete with other states for those investment dollars and jobs.”           Governor Arnold Schwarzenegger

So what?

This is a practical lesson of the best type on how the parties to a complex set of issues can work together for common cause that produces an outcome good for business, good for the environment, good for the State and good for the public interest.

Don’t you love it when a plan comes together?