By Brett Bumeter - 17.01.2008

A few years ago the US government ended tax credits to home owners for solar energy products and installation.  Many saw the removal of this tax subsidy as the end to an era in the solar energy industry as it related to homeowners.  This removal happened at a time when oil prices had not yet hit $100 a barrel and when gas prices had not found a new equilibrium at $3 a gallon with hints of growing to $4 per gallon. 

After returning from CES in Las Vegas last week, I can attest that the industry had an anemic presence if you just count trade show booths.

Today, the Federal Reserve Chairman went before Congress to give recommendations on how an economic down turn might be avoided.  One astute Congress Woman pointed out in her questioning that some of the $150 billion that might be spent to save the economy from a down turn, could be used to put Solar Energy tax credits back in place or to fund other spending related to solar energy.

This would have the double benefit of helping the economy and slightly reducing our dependence on oil even if only fractionally.  The trick to making this a reality is in finding a way to spend a majority of the money, over 60%, before 2009 and preferably to have the money spent by the government and paid to US Citizens that would then in turn spend it on Solar Energy products produced by US companies. 

If it is spent in this way, then it would give the government the most bang for their buck in hopes of stopping a US recession or at least ending it by the end of the year.

Solar Energy – Independent Energy Source and Economy Booster?

Now there will be a large number of other interest groups outside of solar energy looking to get a major portion of that $150 billion, but let us consider for a second how it could be spread out to US consumers.

The US Cenus projects that we will reach about 115 million households (population around 325 million) by 2015, with approximately 34 million people renting that leaves 81 million households of homeowners.

Note the Census does not look at households as free standing homes, so this number will include condominiums as well.

The average solar system installed with the ability to send energy back to the grid runs at about $35,000 (for a 3600 Watt system).

If Congress were to spend the full $150 billion requested by the Federal Reserve on solar installations for homes, they could cover about 4.3 million homes.    If they were to cover all 81 million households, that would cost about $2.8 trillion.

The current cost of the Iraq war totals about a half trillion dollars if you do not count the interest on the debt to pay for that war, which is usually tallied at about a half trillion dollars a year related to war efforts since 2003.

Congress could use that money as a starting point to test the benefits of solar power and supplying for the first 4.3 million people and could then move into covering all households.

Plus, Congress could benefit by taxing any income from selling electricity back to the grid, which over time could be used to pay for additional solar energy solutions or even other alternative energy solutions to cover gaps that solar energy creates.

This could also be targeted to areas rich in sunlight such as the SouthWest and the SouthEast.  As an interesting counter point, the SouthEast is suffering from a drought and is expected to run out of the water needed to keep nuclear and coal power plants cool by May or June of 2008.  If Congress were to act very quickly, this program could help offset some of the demands on the energy grid when or if power plants are forced offline due to lack of cooling water.

Plus, this concept meets the goals of putting money into the system quickly, providing jobs to the installation crews, and selling a large assortment of products from the solar panels, to the grid tie in products to converters, even fiber cable necessary to connect the system to  a computer an monitor the progress of the program.

If it could be helpful, Congress could even require an energy monitoring program be installed to gather data on the energy usage and send it straight into HUD for evaluation of further program growth.

 

This entry was posted on Thursday, January 17th, 2008 at 3:34 pm and is filed under Solar Energy Politics, Solar Investments. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.