In a recent interview, Vivint Solar CEO Greg Butterfield said he is optimistic about how the new Congress will be in relation to solar power.
His perspective is admirable, because optimism tends to help CEOs be effective leaders. This mental framework is not about expecting positive outcomes only, it is more of a belief in the potential to overcome difficulties and to experience success.
The general view is that Democrats favor solar power and most Republicans do not… well, on the Congressional level, that has very much been true. Therefore, renewable energy supporters may have been very upset about the mid-term elections.
Let’s look at some of Butterfield’s answers in the interview: “I think the federal government steps in whenever something must be done to benefit the broader public. For example, it has offered subsidies for oil and gas since just about forever. It also provides the ITC tax credit for solar, which has been instrumental for us to build a renewable, lower-cost energy service. There is a step-down in the credit anticipated for 2016, but we believe we’ll still be successful after that happens.”
That fossil-fuel companies have received federal support is a great point, and one that is often not included when critics attack solar power for having a tax credit. The ITC provides a 30% tax credit for new residential and commercial solar power systems. It was implemented in 2006, and has aided in increasing the annual rate of solar installation 1600%.
As it stands, the law will expire after December 2016. There is some concern that solar power should be able to stand on its own. However, why do oil and gas continue to receive federal support, but solar is supposed to be unsupported at some point? Solar is an emerging technology and market and should be supported as it grows and to help it continue growing.
Also, solar is no threat to fossil fuels yet, because only about 1% of electricity in America comes from solar power. When the big tax credit expires in about two years, it is also possible that each state legislature might decide to increase its support for solar power. You can already see that Democrat-oriented states like New York, New Jersey, Massachusetts, Vermont, California, and Oregon are all solar power leaders. Republican states with plenty of sunshine like Florida and Georgia are not.
So, if the new Congress won’t support solar, many states will probably continue to do so, and more may come aboard. Any solar CEO would have to be very careful about what statements she or he makes about politics and public policy, because it might be misinterpreted or come across as offensive. Making cautious statements is probably the safest way of communicating publicly.