Assessing the role of a stable regulation in development of high-cost CSP projects
 
CSPToday.com Special
 
The incentives, which provide a federal tax credit for renewable-energy investment, are set to expire at the end of 2008.
 
Significantly, the US Senate recently failed to pass legislation that would extend the Investment Tax Credits (ITC) beyond their end of year expiration dates. The Senate was unable to reach a bipartisan compromise to extend solar tax credits for the eighth time since June last year.
 
The Republicans are blocking the legislation because they claim it raises taxes.
 
Subsidies remain critical to solar thermal development in the country. It is being pointed out that many solar projects across the country are on hold until this leglislation is sorted out. Large scale solar power projects could be nearly non-existent in the short-term in the US without the 30 percent tax credit. It is being said that the impact is already being felt.
 
As per the information available, five US-based start-up CSP companies have gotten $419 million in private funding for their technologies this year.
 
But the industry is quite clear about the fact that only a stable regulation can encourage investors to develop this kind of high-cost, long-term projects.
 
As happened in Spain, until the right level of feed-in tariffs were offered, uncertainties in the regulatory frame refrained investors from really launching their projects.
 
Recently, the Solar Energy Industries Association (SEIA) president Rhonse Resch warned that a failure to extend the tax credit could damage the domestic solar industry.
 
"Time is running out to extend the solar tax credits. Already companies are putting projects on hold and preparing to send thousands of jobs overseas - real jobs that would otherwise be filled by American workers. Failure to extend the solar tax credits is a severe blow to an industry that has proven to be an economic engine for the US at a time when we need it most," Resch had said.
 
For its part, CSPTopday.com recently spoke to several executives from the industry on the same issue.
 
Hal LaFlash, director of Emerging Clean Technology Policy, Pacific Gas and Electric Company, who is scheduled to speak during CSPToday's second CSP Summit US to be held in San Francisco on 30th September – 1st October this year, said the extension of the ITC and PTC tax credits for renewable developers is essential to the ongoing success of this industry within the U.S.; developers are depending on this for their project financials.
 
"Delays in extending these tax credits may in turn delay completion of the projects and thus our customers' access to clean energy," said LaFlash. 
 
For its part, according to LaFlash, PG&E is working with members of the solar industry and environmental groups to educate Congress on the importance of a long-term extension of ITC.
 
"If we can address tax incentives, transmission, permitting and other issues, we not only can begin delivering renewable energy sooner to our customers, we can also expand the opportunities for exciting, market-changing projects and advance the industry even further," shared LaFlash. 
 
Chris Huntington, VP - business development, SkyFuel, said, "SkyFuel agrees with (for the same) and actively supports the Solar Energies Industry Association and its position that the 30 percent Investment Tax Credit must be extended soon and for many years. The delays by Congress thus far to do so are indeed keeping several Giga Watts worth of CSP projects from breaking ground right now."
 
From Sener Engineering and Systems, Inc.'s perspective, an engineering, consultancy and systems integration company which recently opened a new office in San Francisco as part of its internationalisation process, its CEO José C Martin says his company is convinced that the USA is the next country to develop a new large CSP capacity, far larger eventually than the one in Spain; the country and the different States seem to be convinced of the need to minimise the use of fossil fuels
 
"We are not in the position at this point of time to disclose our business opportunities, but our chances, parallel to those of our potential customers, are tied to the feasibility of the development of new projects," Martin says. 
 
Sener is planning to coordinate projects all over the US from the new HQ, particularly ones related to the thermosolar energy field, for the implementation of turnkey engineering and construction projects for concentration solar energy plants.
 
Comparing Spanish market vis-à-vis opportunities in some areas like California and Arizona in the US for CSP market, Martin said the factors driving the market development here and in Spain are very different besides the common target of avoiding the use of fossil fuels. The impressive development of the market in Spain is being driven by the feed-in tariff scheme. 
 
"This regulation provides for a clear, stable framework, with a level of income that makes projects feasible.  In the US, however, the lower electricity market prices are hardly compensated by the combination of the economic incentives (ITC's and accelerated depreciation), the higher solar radiation (leading to better utilisation factors) and the possibility of building larger units here (the economy of scale, do not apply but to the power island, only a fraction of the total investment). Permitting processes seem to be some more complex here and the transport infrastructure is less adequate. All this results in probably longer and more expensive development efforts," shared Martin.
 
CSPToday's second CSP Summit US
 
PG&E's Hal LaFlash, SkyFuel's Chris Huntington and Sener's José C Martin are scheduled to speak during CSPToday's second CSP Summit US scheduled to take place in San Francisco on 30th September – 1st October this year.
 
For more info, click here: http://www.csptoday.com/us/programme.shtml
 
Or
 
Contact:
 
Sara Lloyd-Jones
Conference Director
CSP Today
 
t: +44 (0) 20 7375 7153
e: sara@csptoday.com
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