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Solar Future Dims Despite Promise of Stimulus

by Alan Markow, published

California's green initiatives may well be aided by President Obama's stimulus package, but for the time being, the economic collapse is putting the kibosh on many of the state's nascent green businesses. One of the most promising and well-financed of those businesses is OptiSolar of Hayward, which has been forced to delay its plans for a Sacramento manufacturing facility that would have created up to 1,000 badly needed jobs.

Not only does this setback impact economic development in the capital region, but it may also have a long-term effect on our ability to convert power consumption to renewable resources and lessen our reliance on fossil fuels from volatile Middle-Eastern and South American countries.

According to a recent article in the San Jose Mercury News, OptiSolar has been forced to announce a layoff amounting to nearly half of the company's 600-person workforce -- and an indefinite delay in its plans for converting a million square foot McClellan Air Base facility into a modern plant that would produce thin-film photo-voltaic solar panels. The Sacramento retrofit of the former Air Force facility was well underway, with the installation of manufacturing equipment already begun. The company called its decision "a bitter pill," but says it will meet existing commitments to deliver power to PG&E and a Canadian customer on schedule.

It's important to realize that OptiSolar's business plan has nothing to do with rooftop solar installations that remain difficult to justify for the average homeowner, but the development and managing of solar farms on large tracts of un-unused land on which megawatts of power would be gathered and transferred to the state's power grid. This type of installation promises so many long-term benefits that it clearly deserves the opportunity to succeed.

And California has done as much as any government entity to make large-scale solar power a reality. Much of the financial backing for OptiSolar and similar companies (including BrightSource Energy of Oakland, which recently announced the world's largest solar deal has been structured around investment tax credits. With approval of the federal stimulus package, more help is on the way. But it may take too long to get here.

Part of the stimulus bill is a $20 billion allocation to what's called a "smart power grid" for the entire country. Smart grid is a catch phrase that encompasses a broad array of utility applications that enhance and automate the monitoring and control of electrical distribution, and is believed to be better suited to renewable energy sources than the aging energy distribution system in current use.

But a similar approach to nationwide broadband infrastructure has already been hacked out of the bill, and a concerted effort to find "shovel-ready projects" covering more traditional concrete infrastructure could yet jeopardize renewable energy initiatives. To the more conservative political players, renewable energy has always smacked of "new-age" utopian thinking, while drilling for more oil has seemed the more reliable and quicker route to energy independence.

The stimulus plan contains other, important provisions in support of renewable energy including a manufacturing tax credit and a renewable grant program (which is particularly helpful to companies that are not yet profitable and thereby have no major need for tax credits). But the bulk of stimulus funding is contained in provisions to enhance the nation's power grid.

Smart funding by the government should be forward-leaning -- much as the visionary development of an interstate system was in the 1950s. It should include funding to reduce our reliance on foreign and politically risky sources of energy, and ensure that we get there faster. If it also provides employment opportunities, than the matter becomes a no-brainer. Why, then, is the industry going backwards at this crucial juncture? And why does funding largely support this effort through smart grid technology that is likely to take years to have any real impact? Doesn't it make more sense to kick re-start businesses that show so much promise on all fronts?

Imagine a future in which our children look at pictures of a dilapidated building on the grounds of the old McClellan Air Base , and ask "why didn't we do better?" We must not turn California into the new rust-belt when the future is so close to reality.

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