A Place in the Sun
Is Maryland’s Solar-Power Future Shining Bright Or Partly Cloudy?
Standing there watching this, a satisfied, knowing grin emerges on Yuhas’ face. For this seemingly dead electric meter is not a cause for alarm or consternation. Rather, it represents a small victory, both a personal one and one for something far beyond the personal.
For even late in the afternoon on a June Sunday, when the sun is already far in the west and beginning to sink in the sky, there is still enough radiant light striking the flat black panels on the roof of the Pasadena home Yuhas shares with his wife, Frances, to supply their home with all the electricity it needs. At that moment there’s no need for an additional single kilowatt of electricity from Baltimore Gas and Electric and its coal, oil, or nuclear energy suppliers. The solar electric panels are doing it all.
“This solar system follows with what I and my wife believe,” says Yuhas, a former electrical engineer. “To use the sun that we all have every day and produce electricity that we can convert to use for whatever our needs may be.”
A similar but even more satisfying moment occurred in late April when Maryland energy officials and state and local elected representatives gathered at the Yuhas’ home to publicly celebrate the installation of these solar panels. Only a single reporter from a local community paper showed up to what had been arranged as a media event, but the poor turnout couldn’t dampen the excitement and enthusiasm for all involved when they went to the rear of the house and observed the electric meter spinning backward. Not only were the solar panels supplying enough electricity to meet the needs of the house, they were generating excess electric capacity that was being fed back into the BGE transmission lines for use elsewhere.
As Yuhas recalls, when one of the state delegates saw the meter going backward, he turned to a BGE representative and quipped, “Well, that’s money out of your pocket.”
Considering a new wave of public concern about dwindling oil and natural-gas reserves at home and abroad and the environmental impact of coal and nuclear waste, the future of solar power in Maryland should be looking bright. After all, not only are the solar panels on the Yuhas’ roof a local source of inexhaustible energy with zero air emissions, but the panels themselves were manufactured by BP Solar at its plant in Frederick, installed by Aurora Energy of Annapolis, and paid for with some financial assistance from the state government.
Publicly prominent solar installations are also in the works. The Maryland Science Center has a solar electric system due to be up and running by year’s end. Word is that local developer Struever Bros. Eccles and Rouse intends to include a solar electric system on a community center planned for East Baltimore. On June 1, BP Solar donated $100,000 worth of solar panels to the Earth and Space Science Laboratory of the Frederick County Public Schools.
But are we really at the dawn of a new solar era? Or, like the Yuhas’ electric meter, is the state’s solar policy standing still or possibly even moving backward?
Certainly there are some exciting indicators of growth. Maryland solar companies report being busier than ever. The state has a new solar grant program to help underwrite homeowner systems such as the Yuhas’. For the first time, state law requires its electric utility companies to provide a growing percentage of their power from renewable resources, including solar. Rhetorically, everyone from the corporate sector to state lawmakers seems to be on board with solar as a legitimate part of the state’s energy future.
In practice, however, entrenched interests and mind-sets continue to limit and even thwart solar energy’s potential role in Maryland. While traditional fossil-fuel sources of electricity receive huge subsidies from the state and federal government, support for solar remains largely symbolic. A June 2003 statement from BGE, for example, showed that the utility relied on coal for over 52 percent of its electricity generation, more than 41 percent came from nuclear, another 3 percent from oil, and 0.0 percent from solar. These numbers portray an energy system trapped in the coal mines of the Appalachians and, as President George W. Bush’s recent celebratory visit to the Calvert Cliffs nuclear plant in Southern Maryland indicates, possibly headed toward an expanded nuclear future.
These signs of both the sun shining and the sun barely rising on Maryland’s solar future can partly be read through the flat black panels on the Yuhas’ roof.
The Yuhas’ solar electric system is brand new, but their house has a history with solar power. During the 1970s, a previous era of Middle East unrest stimulated anxieties about the oil supply, sending the government and consumers looking for cheaper and more easily accessible power sources. When previous owners of the Yuhas’ house installed a solar water-heating system in the early ’80s, they did so at a time when they could take advantage of a federal tax credit for the purchase of solar systems, enacted by Congress in 1978, as well as various state and county programs designed to encourage solar power.
“We had a lot of incentives for solar,” says Peter Lowenthal, a former solar contractor and currently executive director of the Maryland-D.C.-Virginia Solar Energy Industries Association. “We had an Anne Arundel County tax credit, we had a beautiful Harford County program. Then we worked hard and got the Maryland state tax credit, which was 15 percent of the price of the system with a $1,000 cap on it.”
But this first wave of solar enthusiasm subsided. During the 1980s, oil prices dropped from their ’70s peaks and stabilized; memories of blocks-long lines for gasoline faded and even natural-gas prices fell. When the previous owners of the Yuhas’ house had the roof redone in the late ’90s, the solar hot-water system was removed and never replaced. President Ronald Reagan dismantled the solar hot-water system installed by his predecessor, Jimmy Carter, on the White House roof; Congress allowed the federal solar tax credit to expire in 1985. State and local incentive programs also fell by the wayside.
But with the recent deregulation of utility companies, a sharp rise in energy prices, and growing concerns over greenhouse gases, solar is making a comeback. And the systems themselves have benefited from years of subsequent research and development. During solar’s first heyday, the focus was primarily on systems that harnessed the heat of the sun’s rays to warm living spaces or heat water. A new generation of more efficient solar electric systems turns sunlight directly into current. The light strikes the photovoltaic panels, which contain arrays of silicon chips. The photons of sunlight stimulate electrons in the material of the chips, generating movement by chains of electrons—electricity. The electricity then travels through an inverter, which translates the direct current (DC) from the solar panels into alternating current (AC) for use in the nearest wall outlet.
The 20 solar electric panels on the Yuhas’ roof have the capacity to produce 3.2 kilowatts of electricity—enough to provide an estimated 30 percent of their house’s annual needs. “There’s no moving parts and no real maintenance,” Yuhas says. “The only activity we have is to occasionally watch the meter spin backward.”
So if it’s so simple and so efficient, why doesn’t everyone have a solar electric system on the roof? In a word, money. The Yuhas’ solar panels cost $30,000. Even with a $3,000 grant from the Maryland Energy Administration’s solar program, the savings from the system could take up to 20 years to make up the costs. (Solar advocates point out that investment in solar also enhances home value.)
“Some people use their money to buy a Lexus because that makes them happy,” Yuhas says. “We spent our money on what makes us happy.”
For now, the expense confines the happiness that comes from solar electric systems to affluent homeowners. Little surprise, then, that much of the solar business in Maryland today is largely being conducted in well-to-do, environmentally conscious communities like Annapolis, Takoma Park, and Columbia.
But the Yuhas’ investment in solar energy provides more than an individual benefit. Despite any loss in revenue for BGE and its parent corporation, Constellation Energy, the electricity generated by the Yuhas’ panels actually frees up BGE’s electricity for other uses during “peak” hours—the time during a summer afternoon, say, when the system is under the most strain from air conditioning and when electric plants are serving up the most expensive electric watts. If solar systems’ like the Yuhas’ proliferated throughout the state, it could result in greater flexibility for BGE and savings for its customers.
The communal savings from air pollution also are considerable. According to the BP Solar Calculator, a system like the Yuhas’ in a Baltimore-area ZIP code would eliminate the annual release of more than three and a half tons of carbon dioxide, 41 pounds of sulfur dioxide, and over 17 pounds of nitrogen oxide, greenhouse gases that contribute to acid rain, smog, particulate pollution, and global warming. The benefit to air quality, BP Solar calculates, is “equivalent to planting one acre of trees.”
Just around the bend from the Yuhas’ home sits Constellation’s Brandon Shores coal-fired electric plant. While achieving substantial reductions in its pollutant output over the past decade, in 2003 Brandon Shores still emitted more than 8 million tons of carbon dioxide, 40,000 tons of sulfur dioxide, and more than 13,000 tons of nitrogen oxide.
A nonprofit group called Clear the Air issued a report, “Dirty Air, Dirty Power,” in June 2004 that calculated the casualty count from power-plant pollution. Using a methodology accepted by all sides, its count for the toll from Maryland plants was 687 premature deaths, 1,014 nonfatal heart attacks, and 17,325 asthma attacks each year.
The economic and environmental community benefits have inspired lawmakers at the national level to boost solar. There is a solar tax credit contained in the national energy bill now in conference committee in Congress. The Senate version proposes a 30 percent credit, while the House version features a 15 percent credit. Even if a tax credit of 15 percent emerges in the final bill, it would mean thousands of dollars saved by a typical homeowner installing a solar system.
ýut Maryland’s solar program lags badly behind other states. California has the biggest, most aggressive solar initiative underway: With Republican Gov. Arnold Schwarzenegger’s support, a bill is moving through the legislature that would finance a million solar electric roofs. But even neighboring jurisdictions such as Delaware, New Jersey, Pennsylvania, and Washington, D.C., have much more advanced solar programs than Maryland does.
The debate over Maryland’s solar program has been conducted quietly and mostly without public attention, and with all sides claiming to be in support. But the politics of Annapolis and the struggle over the future of electric power in the state is seriously clouding solar’s potential.
Earlier this year, when Marylanders saw and heard Gov. Robert Ehrlich in TV and radio ads touting purchases of “Energy Star” products—part of a national program to designate and promote appliances with high energy-efficiency ratings—they probably had no idea they were experiencing the beginning of a political food fight that affected the state’s small solar grants program.
As The Washington Post reported in March, Michael Richard, director of the Maryland Energy Administration, an independent agency in the state’s executive branch, had sent an e-mail to the governor’s chief of staff and press secretary urging that “we put the governor on the air and in print as the spokesperson” for the Energy Star program in order to “give the governor an opportunity to be out front on a program highly favored by the environmental community.”
The Republican governor’s reputation with the environmental community could have used some burnishing, especially in regard to Energy Star. The Post article noted that a few months previously Ehrlich had vetoed a bill mandating a variety of appliances adhere to Energy Star efficiency standards.
The state legislature’s Democratic leadership profoundly disapproved of Ehrlich latest TV role. In order to express its feelings about what it saw as the governor’s bad faith and raise his energy consciousness, a state Senate budget committee slashed portions of Maryland Energy Administration funds, including completely cutting the budget for the state’s solar grant program at one point.
(The legislature was also mightily displeased with the shake-up of the Maryland Energy Administration by Richard, a 42-year-old former lobbyist for the Nuclear Energy Institute appointed to his post by Ehrlich in June 2003. Half of the 20-person staff left the agency after Richard’s arrival, with some being replaced by personnel with political connections to the incoming administration but no energy backgrounds.)
When the legislature did restore the Maryland Energy Administration budget, funding for the solar program stood at $80,000 instead of the originally proposed $103,500 allocation. Richard tells City Paper that he plans to bring the 2005-’06 budget back to $103,500 by supplementing it with monies the state receives from the federal Oil Overcharge Restitution Trust Fund.
But even restored to the previously proposed level, the funds would only support the addition of another 30 to 40 solar systems statewide. Considering the fact that the half-dozen solar contractors in the state say that about half of their residential clients utilize the solar grant program to help fund their systems, that doesn’t add up to much of a state commitment to solar energy—almost nothing compared to what the state does for, say, the coal industry.
In 1988, the legislature passed a $3 a ton subsidy for every ton of Maryland-mined coal purchased beyond the amount which had been sold in 1986. Twelve years later, in 2000, the legislature expanded that subsidy for every single ton of Maryland-mined coal that was purchased.
Last year Maryland taxpayers had to pony up $15 million in coal subsidies.
The intriguing thing about the coal subsidy is that the Office of the Maryland Attorney General has consistently advised the legislature that this subsidy is probably unconstitutional under the interstate commerce clause.
“Legislatures regularly pass bills that might be unconstitutional and let the courts handle it,” assistant attorney general Kathryn Rowe explains. Asked why the courts haven’t yet thrown out the coal subsidy law, Rowe replies: “Because no one’s taken it to court. Nobody’s going to sue because there’s nothing in it for anyone. With this kind of case in state court, you can’t even recover attorney’s fees.”
If someone did sue, Rowe says, the state Attorney General’s Office, which had advised the legislature of the probable unconstitutionality of the coal subsidy, would have to defend it. “That would lead to one of the great moments in court,” she says.
Even if the coal subsidy finds no challenge in court, it already faces one in the legislature. State Sen. Robert Garagiola (D-Montgomery County), who authored the 2004 bill creating the solar grant program, tried to pass legislation this year to eliminate the coal subsidy by 2008. While most of the money saved would return to the general fund, a small portion would have gone to expanding the solar grant program to $1 million by 2009 and launching a job-creation tax credit for renewable energy companies. The bill never made it out of committee, but Garagiola says he firmly believes the phase-out of the coal subsidy “has legs, and will have legs in the next year or two. It’s only a matter of when.”
In the meantime, Garagiola and solar supporters are in search of “a guaranteed source of funding” for stimulating solar through the grant program. He says he has been having conversations with the state Department of Budget and Management, with the Maryland Energy Administration, and with “stakeholders” in the issue. “There are lots of options,” he says.
One option for financing solar, which has been used by most other states, is a small surcharge on everyone’s utility bill. The Delaware Green Energy Fund, the Pennsylvania Sustainable Energy Fund, the New Jersey Societal Benefits Fund, and the District of Columbia Reliable Energy Trust Fund were all created by using this mechanism. The result in New Jersey, for example, is a program recently hailed by The Wall Street Journal, with $358 million raised between 2001 and ’03 for energy efficiency and renewables, about $85 million of that directed to solar.
The Maryland Public Service Commission, which governs utility companies and their rates, has advised against such surcharges, whether dedicated for renewables or energy efficiency. The Public Service Commission’s position is that its job is to keep electric rates down, not to impose “public benefits charges.” This stance held sway in the legislature this year when a surcharge to finance energy-efficiency measures failed to pass. Members of the Public Service Commission declined to comment for this story, spokeswoman Christine Nizer says, because they act as an adjudicatory body.
The legislature did impose a Renewable Portfolio Standard on state electric utilities in 2004. Crafted through lengthy negotiations between the utility industry and the environmental community, the law mandates that utilities guarantee that a growing percentage of the electricity they sell comes from renewable resources like solar, wind, and biomass (energy produced from decomposing plant and animal waste). By 2018, the law says, at least 7.5 percent of all electricity sold in Maryland will have to come from renewables. But unlike similar renewable mandates in other states, there is no solar “carve out”—that is, no set amount that must come from solar electric systems.
“Absent a solar carve-out, you’re not going to get any solar as part of the renewable portfolio,” observes Edward Smeloff, a longtime leader in public power utilities and currently solar projects manager for Huntington Beach, Calif.-based Sharp Solar Systems, the leading photovoltaic manufacturer in the world. (BP Solar is second.)
“A solar carve-out in a [Renewable Portfolio Standard] is important to the solar market,” agrees Sandra Burton, project manager for the U.S. Department of Energy’s Mid-Atlantic Million Solar Roofs Initiative. While in terms of cost-effectiveness, “right now solar is always going to be third or fourth in line,” she notes that places which do have a solar carve-out have seen no increase in the overall price of electricity.
The Maryland Energy Administration’s Richard is sanguine about the lack of a legal requirement that utilities do their part in stimulating solar power. “If this works, great,” he says of the current standard. “If not, we can go back and look at other ways to promote renewables.”
Paradoxically, the utilities’ failure to fulfill their renewable-energy requirements might end up boosting solar in the end. Utilities that do not meet the standard for renewable electric power will have to pay a noncompliance fee to the state. Richard says that his staff estimates that these fees could total $1 million to $5 million a year. A portion of these funds, he suggests, could be targeted for solar programs—though no law or regulation currently requires this.
Even where the state legislature has seemed to act responsibly in promoting solar and other renewable electric resources, the utility lobby apparently has been successful in crippling these actions. Remember the Yuhas’ electric meter moving backward because their solar electric system was producing more kilowatts than needed? That backward movement means that the Yuhas are being credited with the extra energy they’re providing to BGE. But Maryland law only allows this “net metering” for 30 days at a time. That means if the Yuhas produce more electricity than they use during a particular month they can’t carry over the credit for those surplus kilowatts to their next bill. Like cell-phone companies that won’t let their customers carry over unused minutes, BGE will have gotten the kilowatts for free. A 2005 legislative attempt to amend the law so that metering credits could be carried over during the course of a year—as is the law in some other states—failed.
While the Yuhas may be able to absorb the missed savings on their monthly bill, such a restrictive policy has a chilling effect on larger solar projects. “This particularly impedes solar electric installations on big box stores like Home Depot, which have installed them in other states” Lowenthal says. Such stores, he points out, “have lots of flat roof space for solar panels.”
The state of Maryland may be some-what in the dark when it comes to solar policy, but that doesn’t mean that the state’s businesses and consumers haven’t begun to see the value of solar power. Just ask the state’s solar industry. Columbia-based Chesapeake Wind and Solar just hired a plumbing installer and a master electrician to handle its expanded business, and even brought on a full-time administrator to deal with the paperwork.
“We’ve seen a real transition in the six years that we’ve been in business,” Chesapeake partner Richard Deutschmann says. “Our typical client six years ago was mostly motivated by environmental concerns. That hasn’t dropped off. But we’ve seen a tremendous increase in people who are more motivated by economics and by energy security. People wanting to take away some of the volatility in their future energy bills. They have an environmental ethic, but they’re also very concerned about economics.”
Once solar panels are installed, the price for the fuel is set—sunlight is free. On the other hand, oil and natural gas prices are zooming and remain subject to international circumstances beyond the control of buyers and suppliers. Even the literal bedrock of the region’s cheapest electric supply—coal—is showing signs of long-term cost uncertainty. “If anyone believes that coal-fired plants are not going to be subjected to serious future cost increases to control the gases that cause global warming, they’re not living in reality,” says John Geesman, a former investment banker and current California energy commissioner.
Not only is solar energy stable, but it appears to be an economic boon for the state itself. The BP Solar plant in Frederick has a $25 million expansion underway, doubling its annual production capacity from 20 megawatts to 40 megawatts worth of solar panels by year’s end, and adding 50 employees to a work force “north of 400,” says BP spokesman John Curry.
In fact, the solar industry is starting to have trouble keeping up with demand. Another sign of the recent growth is a shortage of solar-quality silicon, which is used in the photovoltaic panels. Chesapeake Solar’s Deutschmann mentions a church in Gaithersburg wanting solar panels with “a certain reflective benign look to [them]. We designed the system and are contracted to do it, but we come to find that we can’t get this product until after the first of the year.”
Much of the current demand for photovoltaics, though, is coming from abroad. In the past year, Germany, under the ruling Social Democratic-Green Party coalition, has installed nearly 350 megawatts of solar electric power, and more is scheduled. By comparison, for all its incentives, California has only installed about 90 megawatts of solar electric power in the last three decades. Portugal and Spain also are launching major efforts, says Sharp Solar’s Smeloff. And energy resource-limited Japan remains a robust and growing market for photovoltaics.
In Peter Lowenthal’s view, there’s a sad irony in “Maryland burning coal to power the BP Solar plant in Frederick to produce solar panels for export to other states and nations.”
Now is the time, Lowenthal says, for the state to put its resources to work to help build solar energy and the solar industry in Maryland.
“Solar companies here are expanding now, they’re investing in expansion. We’re on the upward slope. We need to be able to continue that,” he says. “The D.C. government has just released $180,000 from their Reliable Energy Trust Fund for solar grants, and they hope to go to $600,000. Imagine what $600,000 will do for the District, and we can only get $85,000 for the whole state of Maryland? It blows my mind.”
While no one City Paper talked to for this article overstates solar as a panacea for all of Maryland’s energy needs, the state’s solar progress and potential could cast a different kind of light over upcoming energy debates. With likely economic and population growth foreseeable in Maryland, proposals for new electric power plants will inevitably make their way onto the public agenda. Recently NuStart Energy, a consortium of power companies formed to promote nuclear energy, listed the top prospects for expansion of existing nuclear plants; Constellation Energy’s Calvert Cliffs plant in Southern Maryland was among the top six.
While NuStart member Constellation had no comment on the report, area environmentalists such as the Maryland Public Interest Research Group say they are ready for a fight, and announced their opposition during the president’s recent visit. Although global warming has some respected national environmental leaders concerned enough to publicly suggest the nuclear-power option be reconsidered, the consensus of environmental groups overwhelmingly remains that the long-term problems of nuclear waste and nuclear plants as terrorist targets remain unresolved. Furthermore, nuclear opponents argue, the nuclear industry still requires billions of dollars of government subsidy—as found in the national energy bill under consideration by Congress.
If a substantial federal solar tax credit is enacted with the national energy bill, it would provide a tremendous financial boost for buyers of solar systems and for the solar industry. But the pace of solar power expansion in Maryland still depends on the signals coming from Annapolis. With the existing state solar grants, there is a program without a policy for achieving set goals. With the state Renewable Portfolio Standard, there is a policy with no set solar program.
In the view of solar businessman Deutschmann, Maryland utilities’ investments in coal and nuclear plants translates into heavy pressures to protect those interests in the state capital. “There certainly is a groundswell in this state right now, and high public support for solar and renewable energy,” Deutschmann says. “But the entrenched dirty-energy industries are politically very powerful in this state. They manage to keep their interests in Annapolis with high-paid lobbyists. The time is coming, though, for solar. Its time is definitely coming.”
Over at the Yuhas’ home, where solar’s time has already come, Tom Yuhas readily acknowledges that he and his wife’s decision to spend their money on a solar system was motivated “to give ourselves the good feeling, if you will, of producing power that falls in line with our beliefs.” While Yuhas thinks there are many others who also want to have that “good feeling,” he also believes that the state and nation have reasons beyond these feelings to take the solar path.
“Despite what the politicians might say, a country that is as strong as ours, as technologically advanced as ours and as rich as ours, can certainly do more than burn things to create the energy we need,” Yuhas says. “Goodness knows we don’t own most of the stuff we burn anyway. So from a national-security perspective, it would also seem intelligent to be a little more forward-looking than our government is today. Installing this system is our way to adopt our own energy policy. Hopefully, at some point, the rest of the country might migrate that way as well.”
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