Embraced on both sides of the aisle: An interview with Monique Hanis of SEIA on the potential impact of the 2010 U.S. elections for solar policies

Monique Hanis
Monique Hanis

Monique Hanis is Director of Communications for the Solar Energy Industries Association (SEIA). She is responsible for all communications in support of the association's strategic priorities and lobbying efforts. She is spokesperson for SEIA, develops and implements SEIA's communications plans, manages the communications team and supports key member efforts including SEIA's Public Relations Committee, the Utility-Scale Messaging Working Group and the Solar Thermal Messaging Working Group. Also, she launched SEIA's Environment, Health & Safety Committee.

Monique joined SEIA in 2007 with more than 18 years experience in marketing and communications for the financial services industry. As senior vice president for Marketing & Business Development at America's Community Bankers, Monique built and managed the marketing team, drove re-branding of the $34 million trade group and increased magazine ad sales to $1.4 million. She also wrote, edited and published several industry books, surveys and articles. Previously she held marketing and communications positions at the Mortgage Bankers Association, Independent Community Bankers Association and Bankers Trust Company in New York.

 

Solar Server: What are your general impressions about the outcome of this election for the U.S. solar industry?

Monique Hanis: Our general impression is that it's going to be fine for solar, and the reason for that is that solar has really been embraced on both sides of the aisle, Republicans and Democrats support solar - and independents, I should add as well. It's really embraced on both sides, and we can confidently say that this is bipartisan.

We have a history of a lot of support on the Republican side. There is a wave of new Republicans that are going to be coming to congress. It is probably worth noting that probably the most significant legislative action for solar was in 2005, under President Bush and with a Republican congress, the federal solar investment tax credit passed. This same credit was extended at the end of 2008 also under Bush and with a lot of Republican support. So generally we're very positive and looking forward to working with the new leaders that are coming in and our friends that are already there.

 

Solar Server: The SEIA has talked a lot about the importance of extending the Treasury Grant Program (TGP), the modification of that tax credit through the American Recovery and Reinvestment Act (ARRA). What are the odds of getting an extension of the TGP with the new congress? And why?

Monique Hanis: We are going to have a little bit of an opportunity here with the current congress, the current congress is going to come back in what we call a lame duck session, for a few weeks, and we are looking at that as our next opportunity. These things are tough, it is hard to pass legislation any time, however there has been pretty strong support on both sides of the aisle and in both chambers - house and senate. Throughout the year we've had a number of sponsors of either bills or amendments that propose extending the TGP. There is pretty broad support and acknowledgement that it has been a successful program.

 

Solar Server: So besides the TGP which other policies does the SEIA see as important for the U.S. solar industry?

Monique Hanis: On the immediate front, treasury grants are number one. Still our priorities for this year, though less likely, would be extending the manufacturing tax credit, also a provision within the stimulus that has been very successful and has spurred the expansion or building of 58 solar manufacturing plants here in the U.S. So supporting U.S. manufacturing and helping the U.S. remain competitive is really important, again it's a provision that works, and that supports the broader challenge that we are facing with the economy and jobs.

The next one would be the loan guarantee program, which has had its challenges in the last year and a half, we'd like to see funds replenished that have been borrowed for other programs and we want to see the processing of the loan guarantee applications improved, so that some funding can take place.

Financing remains the biggest challenge for solar. In most mini-markets it’s already competitive. It is just getting the funding mechanisms, the financing to support the up-front costs, the up-front investments, both for the re-tooling of manufacturing and for companies to expand, as well as the actual installations themselves. It is a little bit different energy model because you don't pay for fuel, the fuel is free, but the equipment is a little bit more and the industry is still scaling up.

Even though prices have come down and the price of solar is projected to continue to drop, that financing is the biggest challenge we're hearing from our members out in the market. Looking at things like having a green energy bank is one term that has come up. Clean Energy Development Authority is the formal name, at the federal level, almost like a Fannie Mae or a Freddie Mac, an organization, an agency that can help with the financing side of projects.

As we move into 2011 and beyond, the financing challenge is going to continue.

 

Solar Server: With regards to the extension of the Treasury Grant Program and the financing, can you explain what has happened over the last few years that makes the TGP so critical?

Monique Hanis: The biggest thing that has happened is that we are in a recession. In October of 2008, when the extension of the solar investment tax credit was passed, the industry was ecstatic, it was passed for eight more years, which was a great signal, a stable policy that folks could count on, but at the same time the market crashed. Financial markets took a hit, the economy took a hit, and the investors that were out there that could provide financing to support the tax credit - these are tax equity investors - went away. Most of them went away as a result of the economic conditions.

They are slowly starting to come back, there has been a little bit of movement, but two years later we're still not back yet. Economy-wide, it's not just the solar energy sector or the energy sector, lending is tight. Banks are conservative, these other types of investor just aren't out there as they were in 2005, in 2007.

A tax credit is great, if you have enough of a tax liability to offset the credit that you earn. So if you do a million dollar project, and you have a 30% tax credit, the USD$300,000 tax credit is great - if you have a USD$300,000 liability to offset it. If you only have a USD$100,000 tax liability, then you need to figure out a way to monetize the other USD$200,000. We can formulate the deal in such a way that we can offset it with the tax credit, and move the project forward. And everybody benefits.

The TGP has provided another financing option, and it allows people to take advantage of the 30% tax credit just a little bit sooner and as a cash grant. In this economy if you don't have the full financing that's helpful, and if you are trying to finance a project you can get the cash flow sooner.

The way the cash grant works is that the project has to meet the same criteria that it would for this tax credit, it has to be completed, and it has to be producing power. Once that is the case, the owner of the project can apply for the treasury cash grant, in lieu of the credit, and that application is processed in 60 days. And as long as the project meets the criteria and is producing power, you can get the credit. It speeds up the process, otherwise you would be waiting to file your tax return at the beginning of the new year and get the tax credit which would apply to your tax liability.

 

Solar Server: How significant do you consider state-level renewable portfolio standards (RPS) to be as drivers for the U.S. solar industry?

Monique Hanis: From SEIA's point of view, the state activity has been very important, the states have demonstrated what works, and what can work. They have been policy laboratories for us to learn from.

The programs that have worked the best on the state level, were programs where there was a renewable energy standard, not just electricity. That is important for solar because solar thermal is a very important, cost-effective form of energy and it should be counted, not just solar electricity. It is where there was an RPS that included a specific mandate for solar or distributed generation, and there is either a requirement or a mandate that says a certain amount of our energy is going to come from distributed generation or specifically from solar.

And the reason for that is to create diversity in the portfolio, the energy portfolio and not just go for the lowest cost option. That's lowest cost today, but you are trying to drive the industry and scale up to help become more cost-effective. In some markets solar may not be cost-effective just yet, but with an RPS that includes the mandate solar has thrived. The other piece that is important is to have some kind of incentives, grants or tax incentives, that support the transition. And in those states where there were these essential elements, like California, Colorado and New Jersey, you've seen the greatest impact.

For a national RPS we support those specific things. The RPS has to include solar thermal. It should include a solar carve-out or mandated requirement, a specific one, and there should be supporting incentives to help with the transition.

 

Solar Server: Shortly before the election the Center for American Progress put out a report where it expressed concern about the shift in state governors in terms of the potential effect on state-level RPS policies. Do you share that concern that the shift in governors might affect existing or potential RPS policies?

Monique Hanis: What I can tell you is that it is part of a trend that we have seen, SEIA is stepping up its efforts to coordinate and be more engaged in policy happening at the state level. We are working with our board, and our members, and the alliances that we are involved with to help guide and shape this policy, for the same reason I mentioned earlier. These policies become the model in some cases for national policies. And we actually see it as opportunities. We see some tremendous opportunities in states for strengthened policies that are going to support solar.

 

Solar Server: The U.S. Democratic Party has emphasized the job creation aspect of renewable energy industries a good deal in its messaging, and has specifically promoted legislation and policies that require domestic content in renewable energy installations such as the domestic content requirement in ARRA as well as the attempt to redress trade imbalances, such as the "Make it in America" legislative suite. What are the actual and potential impacts of these policies on the U.S. solar industry? What is the SEIA's stance on domestic content requirements or other forms of economic nationalist legislation?

Monique Hanis: Our current stance on trade policy is that we believe in free and open trade policy, and we believe in following the rules that our out there. Abiding by the rules is really important. But we also see that our government has a responsibility to, within the rules, foster a strong competitive environment here in the U.S. for manufacturing and the jobs that would come with it.

That being said, specifically on the domestic content issue we actually think we have a good story to tell. The U.S. is a huge exporter, as well as an importer, it is a complicated global business, similar to the automotive industry, where content and material and components are going back and forth across borders and final completed equipment is being shipped and delivered, we are right now in the middle of a supply chain study to confirm what we think is a good story. We will have those results out in early December, and would be happy to share that with you.

Some basic facts are that the U.S. is the number one exporter of polysilicon, which is a basic material used in most of the panels being produced worldwide. We have a lot of manufacturing going on here in the U.S., and in fact have identified about 5,000 companies in the U.S. along the entire supply chain, the other piece of the story that is really strong for solar is that no matter where the equipment is manufactured, it has to be installed. And that's a big piece of domestic content, its the labor to install the panels, or construction workers on some of the larger projects.

The other thing is that we have some good data to show that solar is creating jobs and it is growing for the U.S. The Solar foundation finally put out a count of U.S. solar workers. 93,502 solar workers were counted in the study which was put out over the summer. The companies were also asked to comment on their plans for the coming year. More than 50% of companies plan to grow, they plan to add staff, and total percentage growth of the workforce in the U.S. is expected to be 26%. So right now solar has a great story to tell about creating jobs, creating domestic jobs, and the export side of what we are doing. More to share as soon as our study comes out. 

 

Solar Server: I look forward to the study. Any other comments the November 2, 2010 election results and the U.S. solar industry? Anything we didn't cover?

Monique Hanis: We should emphasize the big issue on jobs and what we have seen when we talk to members of congress, really over the last couple of years, tremendous concern about the economy, tremendous concern about jobs. And that someplace where solar really has a good story to tell, we are creating jobs, we have companies that are growing and expanding and we see additional growth in the coming years.

The vision for the industry, the shared vision for the industry is that we can get to a point by 2015 where we are installing 10GW of solar per year, the equivalent of enough power for 2 million households, so solar is really on its way to becoming a significant source of energy for the U.S. creating hundreds of thousands of jobs, and expanding manufacturing.

Despite a down economy, we have seen strong growth in the solar industry in 2010.