Revisionist History and the poignant SDHW historic parable [RE-wrenches]

[Joel Davidson]

Bill,

I am not a revisionist.

I appreciate and share your desire for better PV systems, but don't try to
re-write history to make "too large" and "too loose" tax credits the reason for
the end of the federal tax credits. Reagan Republicans racked up one of the
largest budget deficits in the nation's history and cut spending on solar and
other programs that they did not like.

>From Solarex's booklet "Everything you always wanted to know about Solar Power"
copyright 1993, "Solar energy seemed popular about fifteen years ago, then
disappeared. What happened?

"The energy crises of the 1970s (really oil supply crises) promoted an intense
interest in finding alternatives which peaked in the late 1970s under the Carter
administration. At that time, oil was expensive ($40/barrel) and the U.S.
government was supporting PV directly with an R&D budget of $150 million and
indirectly with a 40% tax credit for residential solar system installations up
to $10,000. These factors resulted in substantial investment and growth in the
PV industry and dramatic growth in the solar thermal industry.

"By the mid 1908s all of these factors had reversed. Oil was cheap ($10/barrel),
R&D funding was slashed (down 75%) and residential tax credits were eliminated.
The number of systems was dramatically reduced and the industry shrank
accordingly - 90% of solar thermal manufacturers went out of business.

"In the PV industry sales were never largely dependent on tax credits but direct
government purchases were slowed down and the reduced R&D funding slowed cost
reduction efforts. Most of the oil companies that had invested heavily in PV
sold out or closed down their PV operations. The net effect was a flat period
for PV. During the 1980s, the PV industry made dramatic cost improvements (PV
modules today cost only 1/3 of what they sold for ten years ago in real dollars)
and developed a variety of economic markets.

"At the same time, the 1980s brought a renewed awareness of the environmental
impact of energy production. The Chernobyl accident in particular brought home
to Europeans the need for cleaner and safer forms of energy.

"These factors have combined to create an expanding market for PV and a greater
interest in the technology. The recent change in U.S. administrations may also
lead to greater emphasis on PV by the U.S. Government."

>From the 1987 edition of my book: "On January 1, 1986, the 40% federal tax
credit, worth up to $4000 of the cost of a residential solar electric power
system, was repealed. Every now and then there are unsuccessful efforts to
revive solar energy tax credits. Few in Congress wanted to give credits because
of the growing deficit. We had a good law on the books and now it is gone.

"Taxpayers have been subsidizing non-renewable energy businesses for years.
Worse, we are forced to pay billions of dollars each year to prop up a failing
nuclear power industry. Needless to say, to compete with other forms of energy
production in the marketplace PV needs the same tax breaks allowed
non-renewables. It's not a bad idea to write your representatives in Congress
and let them know how you feel. I also want to encourage you to support and use
the various state and federal energy information services."

>From the 1983 edition of my book: "As of this writing (1982), there has been
talk around Washington to repeal the federal energy credits. Unless that
happens, we have a good law on the books. For years taxpayers have been
subsidizing nonrenewable energy businesses. Worse yet, we are forced to pay
millions of dollars each year to prop up a failing nuclear power industry.

"It is important for all of us to know about and use the federal energy tax
credits. These savings alone can cut 40% from the initial cost of a PV home
power system. In addition, almost all states have some form of energy credit,
refund or rebate program to further reduce initial costs. These credits can mean
savings as high as 80%.

"One reason given by the Administration for eliminating the energy credits is
that very few people are using them. In 1979 nearly 5 million Americans spent
over $3 billion on energy and conservation and, using the tax credits allowable
under the law, each saved an average of $100 - a total of almost $500 million
stayed in the pockets of these energy-conscious people."

Joel Davidson

Bill Brooks wrote:

> Joel and Jeff,
>
> I think you both may have a somewhat revisionist view of history. The demise
> of the SDHW was caused by many factors. First, the rebates became too large
> (not unlike the $4.50/Watt numbers in California). Second, the limits on the
> funds were far too loose providing for all sorts of fly-by-nights, bad
> system designs, systems that never worked (not unlike today--however, the
> CEC program requires inspection certificates and UL-listed components--two
> requirements directly linked to the problems with the SDHW industry). Third,
> the fluctuations and final abrupt loss of federal tax credits. The bad news
> also fed the political intentions of those who wanted the credits to go
> away.
>
> With all the bad experiences the public had with those bad systems and bad
> people, the industry could not survive the abrupt loss of tax credits.
> These are not independent variables. Certainly, if we lost the rebates
> today, we would lose the market in California because of that loss. However,
> the PV industry is still struggling with many of the public perceptions
> about solar energy that were formed in the 80's. The PV industry is also
> starting to reinforce those bad memories and that is tragic. I have been
> labelled a prophet of doom in the midst of the PV boom in California. This
> is a very unpopular and often painful position to take, but the message has
> to be sent out. It doesn't require a supernatural gift to see that things
> need to change to promote a healthy and sustained industry for PV. There are
> aspects of the existing program that need somewhat painful, but healthy
> change.
>
> My view is that you look at companies that doing things properly and
> representing the industry well and observe how they do things. Take the
> essential elements of a quality approach put limits in place that reward
> those companies for doing the right thing and force those companies that cut
> corners for the fast buck to come up to an appropriate level of
> professionalism or leave the industry. Since we have a very real limit on
> the available funds in California (and anywhere there are rebate programs
> for that matter), it would serve all of us to work to improve the quality of
> systems overall in the program. Education is a key element of that and since
> I spend much of my time doing just that, I clearly see it as valuable.
> However, not giving incentives to folks that are not willing do things the
> right way is a way of freeing that money up of those companies that will do
> things properly.
>
> We are such a numbers oriented society that everyone becomes euphoric when
> the numbers are good and forgetting that quality is more important than
> quantity.
>
> Bill.
>
> -----Original Message-----
> From: Joel Davidson [mailto:joeldavidson at earthlink.net]
> Sent: Sunday, December 22, 2002 9:26 AM
> To: RE-wrenches at topica.com
> Subject: Re: NABCEP [RE-wrenches]
>
> Jeff,
>
> Right on. A bad day PVing is better than the best day fossil fueling.
>
> It wasn't bad solar water heaters or inflated prices that killed the 40%
> federal
> tax credit (circa 1978 to 1985). It was the Republicans with actor Ronald
> Regan
> as their front man. It took them 5 years to do kill the credit, but they are
> persistent little buggers. So keep your bug spray handy for 2003.
>
> Happy holidays
> ***snip***
>
> - - - -
> To send a message: RE-wrenches at topica.com
>
> Archive of previous messages: http://www.topica.com/lists/RE-wrenches/
>
> List rules & etiquette: http://www.mrsharkey.com/wrenches/etiquete.htm
>
> Check out participant bios: www.mrsharkey.com/wrenches/index.html
>
> Hosted by Home Power magazine
>
> Moderator: michael.welch at homepower.com
>

- - - -
To send a message: RE-wrenches at topica.com

Archive of previous messages: http://www.topica.com/lists/RE-wrenches/

List rules & etiquette: http://www.mrsharkey.com/wrenches/etiquete.htm

Check out participant bios: www.mrsharkey.com/wrenches/index.html

Hosted by Home Power magazine

Moderator: michael.welch at homepower.com

==^================================================================
This email was sent to: michael.welch at homepower.com

EASY UNSUBSCRIBE click here: http://topica.com/u/?bz8Qcs.bz9JC9.bWljaGFl
Or send an email to: RE-wrenches-unsubscribe at topica.com

T O P I C A -- Register now to manage your mail!
http://www.topica.com/partner/tag02/register
==^================================================================