[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
           SOLAR HEATS UP: ACCELERATING WIDESPREAD DEPLOYMENT

=======================================================================

                                HEARING

                               before the
                          SELECT COMMITTEE ON
                          ENERGY INDEPENDENCE
                           AND GLOBAL WARMING
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 24, 2009

                               __________

                           Serial No. 111-10


             Printed for the use of the Select Committee on
                 Energy Independence and Global Warming

                        globalwarming.house.gov



                  U.S. GOVERNMENT PRINTING OFFICE
62-453                    WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  

                SELECT COMMITTEE ON ENERGY INDEPENDENCE
                           AND GLOBAL WARMING

               EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon              F. JAMES SENSENBRENNER, Jr., 
JAY INSLEE, Washington                   Wisconsin, Ranking Member
JOHN B. LARSON, Connecticut          JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California           GREG WALDEN, Oregon
STEPHANIE HERSETH SANDLIN,           CANDICE S. MILLER, Michigan
  South Dakota                       JOHN SULLIVAN, Oklahoma
EMANUEL CLEAVER, Missouri            MARSHA BLACKBURN, Tennessee
JOHN J. HALL, New York
JERRY McNERNEY, California
                                 ------                                

                           Professional Staff

                   Gerard J. Waldron, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Bart Forsyth, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............     1
    Prepared Statement...........................................     3
Hon. F. James Sensenbrenner, Jr., a Representative in Congress 
  from the State of Wisconsin, opening statement.................     5
Hon. Earl Blumenauer, a Representative in Congress from the State 
  of Oregon, opening statement...................................     6
Hon. Emanuel Cleaver II, a Representative in Congress from the 
  State of Missouri, prepared statement..........................     7

                               Witnesses

Mr. Steve Kline, Vice President for Corporate Environmental and 
  Federal Affairs, Pacific Gas & Electric........................     8
    Prepared Statement...........................................    11
Mr. Frank De Rosa, Chief Executive Officer, Nextlight Renewable 
  Power..........................................................    17
    Prepared Statement...........................................    19
Ms. Nada Culver, Esq., Senior Counsel, The Wilderness Society....    28
    Prepared Statement...........................................    31
Dr. Stephanie A. Burns, Chairman, President and Chief Executive 
  Officer, Dow Corning...........................................    43
    Prepared Statement...........................................    45
Dr. Gabriel Calzada, Economics Professor, King Juan Carlos 
  University.....................................................    49
    Prepared Statement...........................................    51

                          Submitted Materials

Hon. Edward J. Markey letter of July 16, 2009 to the Hon. Ken 
  Salazar........................................................    65
Hon. Edward J. Markey letter of September 8, 2009 from the Hon. 
  Ken Salazar....................................................    67
Hon. Edward J. Markey letter of July 16, 2009 to the Hon. Steven 
  Chu............................................................    70
Hon. Edward J. Markey letter of September 1, 2009 from Steve 
  Isakowitz on behalf of the Hon. Steven Chu.....................    72
National Renewable Energy Laboratory Response to the Report Study 
  of the Effects on Employment of Public Aid to Renewable Energy 
  Sources from King Juan Carlos University by Eric Lantz and 
  Suzanne Tegen..................................................    77


           SOLAR HEATS UP: ACCELERATING WIDESPREAD DEPLOYMENT

                              ----------                              


                      THURSDAY, SEPTEMBER 24, 2009

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 1:37 p.m., in Room 
2318, Rayburn House Office Building, Hon. Edward J. Markey 
(chairman of the committee) presiding.
    Present: Representatives Markey, Blumenauer, Inslee, and 
Sensenbrenner.
    Staff present: Jonathan Phillips.
    The Chairman. Ladies and gentlemen, welcome to the Select 
Committee on Energy Independence and Global Warming. Our 
hearing today is going to focus on solar power, which will play 
a critical role as policymakers around the world promote 
renewable energy as part of the global response to climate 
change.
    It is important to see this hearing in the larger context. 
In his first address, yesterday, to the United Nations, 
President Obama highlighted the unprecedented investment in 
American renewables as a concrete sign of American progress on 
global warming. China's Premier, Hu Jintao, also made an 
important announcement at the U.N., stating China's commitment 
to draw 15 percent of its total primary energy from nonfossil 
sources by the year 2020. The announcement by China's Premier 
has been backed by billions of dollars and there is more to 
come.
    Last week the Speaker and I met with Mr. Wu, who is the 
chairman of the standing committee of the National People's 
Congress. He had just arrived from Arizona, where they had 
signed an agreement with First Solar for a 2,000 megawatt 
photovoltaic farm to be built in the desert of Inner Mongolia. 
This will be the world's largest solar photovoltaic power plant 
project, and is projected to cost nearly $5 billion. But it is 
only a small part of a nearly 12,000 megawatt renewable energy 
park that is planned there as well.
    Thankfully, after years of neglect, America is no longer 
just watching other countries racing ahead. We are now making 
real strides to reclaim a leadership role in a technology that 
was invented on our shores.
    The Bureau of Land Management has received more than 150 
large-scale solar plant applications with a projected capacity 
of 97,000 megawatts of electricity, mostly in the sunny 
Southwest. Imagine that; we have healthy competition for clean 
energy technology between the barren steppe of Inner Mongolia 
and the hot desert of Nevada and Arizona.
    In just over 70 days, the nations of the world will convene 
in Copenhagen to commit to solutions for the common good. Here 
in the United States, the need to position American industry 
for new areas of long-term growth is also urgent. As Americans 
across the country can attest, pink slips at work can be as 
personally devastating as the threat of melting ice caps, 
rising seas and, more frequent, floods, droughts and 
hurricanes.
    The climate and the economy are two challenges facing our 
country that will impact us globally and locally. Clean energy 
technology will be a clean solution to both. The global 
transition to clean energy presents an opportunity for job 
creation in all areas of the country. Solar power in the West 
and Southwest, wind turbines in the plains and Texas, and 
offshore in New England and the Mid-Atlantic. Biomass in the 
South and Northwest.
    All areas of the country have energy resources that can be 
made and be used that are plentiful, clean, renewable, 
affordable and made in America. And that is a statement that 
cannot be said about most of the oil which we consume, because 
that comes marked with ``made by OPEC.''
    We have taken the first step in assuring that these clean 
energy jobs stay in the United States and unleash a global 
energy revolution.
    In June the House passed the Waxman-Markey American Clean 
Energy and Security Act. When enacted, this bill will cap the 
carbon pollution causing global warming, require the widespread 
deployment of renewable energy and energy efficiency, and 
invest $200 billion in energy technology.
    The clean energy revolution will not happen magically. We 
need to put in place the policies that will accomplish that 
goal.
    I am pleased that we have such a distinguished group of 
panelists that will be testifying today.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.001
    
    [GRAPHIC] [TIFF OMITTED] T2453A.002
    
    The Chairman. Let me turn now and recognize the Ranking 
Member of the committee, the gentleman from Wisconsin, Mr. 
Sensenbrenner.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman. There 
is no good or evil with energy sources because every energy 
source carries distinctly different positives and negatives.
    Developing a new energy system from the ground up is 
proving to be an impossible task for policymakers. While solar 
power promises to deliver an endless supply of clean energy, 
high costs and other environmental concerns are raising 
significant problems. State mandates, like California's 
renewable portfolio standard, have led to small amounts of 
growth in the solar energy sector, but that growth is already 
being hindered by environmental concerns.
    Last week, BrightSource Energy was forced to give up its 
plan to build a 5,130-acre solar farm in the Mohave Desert 
after Democratic Senator Diane Feinstein responded with plans 
to make the area a national monument.
    Interior Secretary Ken Salazar has met similar resistance 
with his plan to fast-track solar development on Federal lands, 
because of concerns that the development will disturb the 
habitat of federally protected wildlife. These issues stem from 
mandating the use of an energy source before the ramifications 
are fully understood.
    Spain's experience with renewable energy should serve as a 
cautionary tale. President Obama has frequently argued that we 
should look to Spain as an example of how taxpayer subsidies 
for renewable energy projects will create so-called green jobs. 
But economics professor Dr. Gabriel Calzada of Rey Juan Carlos 
University examined the Spanish policies and advises against 
adopting their approach. Professor Calzada's study questions 
the effectiveness of pumping massive subsidies into renewable 
energy. As the Washington Post reported yesterday Spain's 
subsidies for photovoltaic, solar, or power jumped from $320 
million in 2007 to $1 billion, 600 million last year.
    While the Spanish Government argues that its subsidies 
created 200,000 jobs, Dr. Calzada found that for every job the 
subsidies created, they eliminated up to 2.2 more. Furthermore, 
only one in ten of the newly created jobs proved to be 
permanent. Most were created to build infrastructure, but were 
no longer needed once it was done.
    I have often argued that there is no free lunch in our 
response to climate change. Dr. Calzada's study confirms this. 
He found that each newly created job in the solar industry cost 
the Spanish Government and its taxpayers $855,000.
    Solar energy did initially thrive in response to Spain's 
massive government investment; however, in 2008 Spain withdrew 
the subsidies. With the subsidies gone, the solar bubble burst 
and many of the new jobs were eliminated. In other words, the 
green jobs created by the subsidies proved to be anything but 
sustainable.
    The subsidies have also introduced market volatility. 
Professor Calzada found that Spain's subsidy of solar energy 
was 500 percent higher than the market price. While these 
subsidies thus far only cause modest rises in electricity 
prices, Spanish Government officials are already warning that 
prices might suddenly jump as the true cost of these renewable 
energy projects reach consumers.
    I am not against solar power. I am in favor of an all-of-
the-above approach to energy production that includes solar 
power, along with wind, coal, hydropower, nuclear power and 
increased energy efficiency. But I am also opposed to 
government policies that pick winners and losers based on 
popular sentiments. And I am opposed to policies that will 
increase our energy prices.
    Spain's massive use of government subsidies is not an all-
of-the-above approach but, rather, an attempt to choose winners 
and losers. And the one last thing to consider before following 
Spain's lead on green jobs, Spain's unemployment rate is 
currently 18\1/2\ percent and growing.
    I look forward to hearing from today's witnesses about both 
the positive and negatives about relying on solar power, and I 
thank the Chairman for the time.
    The Chairman. I thank the gentleman. The Chair recognizes 
the gentleman from Oregon, Mr. Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman. And I appreciate 
my good friend from Wisconsin laying out a fundamental 
difference in approach.
    You know, it is ironic. All American energy sources have 
been heavily subsidized at one point or another throughout 
their development. We have a long history of the Federal 
Government subsidizing everything from jet aviation, 
semiconductors, computers, the Internet, global positioning 
systems, laser technology, MRI--the list is extensive--that has 
developed into major job engines in the United States.
    I find it a little frustrating that our friends have chosen 
not really to engage the issue directly of the hearing, but 
they are ignoring information provided by established credible 
experts, and pull out of right field a single report that uses 
unproven theories, unaccepted assumptions, lacks basic 
statistical analysis to show that a program that only does not 
exist in the United States, and is not being proposed by 
anyone, did not work.
    In my home State of Oregon we are watching, even though it 
rains all the time, we are watching an emergence of a solar 
energy industry. We are watching in New Jersey, the Garden 
State, where they have some climate issues, the second largest 
State of installations. We are moving in an era where it is 
expected that the solar photovoltaic will soon achieve grid 
parity.
    And in an era when the United States, unlike what happened 
in the technology explosion, Mr. Chairman, that you were 
involved in, and actually our Ranking Member has been deeply 
concerned with, where the United States was an innovator and a 
global leader in energy technology, today the United States has 
only 4 of the top 30 countries.
    The rest of the world is moving on. I think our witnesses 
here today can help give a picture of where the world is going. 
And I appreciate your having this hearing because I think it is 
an important part of the picture to round out.
    The Chairman. I thank the gentleman very much.
    Time for opening statements of members has been completed.
    [The prepared statement of Mr. Cleaver follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.003
    
    The Chairman. We will turn to our panel. Our first witness 
is Steve Kline, Vice President for Corporate Environmental and 
Federal Affairs for the Pacific Gas & Electric Company. We 
welcome you, sir.

    STATEMENTS OF STEVE KLINE, VICE PRESIDENT FOR CORPORATE 
ENVIRONMENTAL AND FEDERAL AFFAIRS, PACIFIC GAS & ELECTRIC, SAN 
FRANCISCO, CALIFORNIA; FRANK DE ROSA, CHIEF EXECUTIVE OFFICER, 
  NEXTLIGHT RENEWABLE POWER, SAN FRANCISCO, CALIFORNIA; NADA 
     CULVER, ESQ., SENIOR COUNSEL, THE WILDERNESS SOCIETY, 
WASHINGTON, D.C.; STEPHANIE A. BURNS, CHAIRMAN, PRESIDENT, AND 
CHIEF EXECUTIVE OFFICER, DOW CORNING CORPORATE CENTER, MIDLAND, 
   MICHIGAN; GABRIEL CALZADA, ASSOCIATE PROFESSOR OF APPLIED 
 ECONOMICS, KING JUAN CARLOS UNIVERSITY, UNIVERSIDAD REY JUAN 
  CARLOS, FACULTAD DE CIENCIAS JURIDICAS Y SOCIALES, MADRID, 
                             SPAIN

    The Chairman. Whenever you are ready, Mr. Kline, please 
begin.

                    STATEMENT OF STEVE KLINE

    Mr. Kline. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner and members of the committee. I am delighted to 
appear before you on behalf of PG&E Corporation and its 
subsidy, Pacific Gas and Electric Company, to offer some 
thoughts on this very important subject.
    As PG&E's chief sustainability officer and Vice President 
of Corporate Environmental and Federal Affairs, I lead PG&E's 
climate change strategy programs as well as our habitat 
conservation planning programs. Investments in renewable 
resources, including solar resources, create jobs, reduce air 
pollution and greenhouse gas emissions, and move us toward a 
low-carbon economy.
    Vitally important is the support and role of the Federal 
Government in expanding the development of solar energy, 
including policies related to Federal lands, that could help or 
hinder renewable energy development.
    The Federal Government in the economic recovery package has 
made important investments to support and lay foundation for 
expanding renewable energy resources, including financial and 
program support, but there is an opportunity and a need to do 
more.
    Before going further, let me tell you just a bit about 
PG&E's support and development of solar and other renewable 
resources. We provide electric and gas service to approximately 
15 million people throughout a 70,000 square mile service area 
in northern and central California. We deliver some of the 
Nation's cleanest energy. On average, approximately one-half of 
the power that we deliver to our customers is carbon-free. In 
2008 approximately 12 percent of the electricity delivery mix 
was from California eligible renewable resources, and we 
forecast that to rise to 15 percent this year.
    We are actively pursuing a diverse portfolio of renewable 
generation resources on behalf of our customers, and I think 
the critical word there is ``portfolio.'' Since 2002 we have 
signed more than 66 contracts with existing and new facilities 
that use or plan to use wind, geothermal, biogas, biomass and 
solar as their fuel. Solar energy is an especially attractive 
source for us because it is available when power is needed most 
in California during the peak midday summer period. Our 
portfolio includes both solar PV and solar thermal 
technologies.
    Since early 2008 we have entered into 14 solar contracts, 5 
using solar PV technology and 9 using solar thermal or 
concentrated solar power technologies. In addition, we have a 
500-megawatt photovoltaic program pending before the California 
Public Utilities Commission to help stimulate immediate 
renewable energy development through both distributed utility-
owned generation and power purchase agreements with third 
parties.
    Given the current state of the capital markets, we strongly 
recommend further extending tax credits, grant programs and 
loan guarantees. To help assure that we will have the renewable 
energy resources we need to meet California's RPS--and we 
assume, soon, a Federal RPS obligation--we are also exploring 
the possibility of developing commercial-scale projects 
ourselves.
    In addition, we support exploration of a ``Green Bank'' to 
provide longer-term certainty and expanded options for 
financing renewable energy programs. Establishing a clean 
energy deployment administration, as is being discussed in both 
the House and the Senate, would assist in reaching those goals.
    We are encouraged by the Department of Interior's actions 
to facilitate large-scale production of renewables. A positive 
step has been BLM's recent release of its draft scoping 
document or the programmatic environmental impact statement for 
development of renewables on public lands in the West. This 
study will capture 24 solar energy study areas to expedite 
technologies that are ready for deployment at utility scale.
    Given the dual imperatives of reducing greenhouse gas 
emissions as soon as possible and of bringing renewables on 
line while protecting natural and cultural resources, we 
believe that Federal agencies and their State agency analogs 
must proceed along two parallel paths. One path in the short 
term is identifying and permitting the solar projects most 
likely to be shovel-ready in time to be eligible to receive 
stimulus funds. The other path is longer-term; namely, 
developing a process to manage solar development on public 
lands in a more orderly and comprehensive fashion. Clearly a 
great deal is being asked of BLM staff in connection with this 
effort, which we strongly support, to get more renewable energy 
generated on line to consumers.
    It is critical that BLM have sufficient resources to ensure 
that these efforts can move forward in a timely and efficient 
manner, while ensuring robust environmental review. A 
significant challenge.
    And it won't be a surprise to this committee that what we 
face in bringing renewable energy on line is the lack of 
transmission lines located where resources are located. Across 
the West, thousands of miles of transmission lines will be 
needed to significantly expand renewable energy production and 
link those remote resources to areas where electricity is 
needed most, where people live, including paths on or around 
Federal lands.
    It would be no exaggeration to say that only with increased 
transmission capacity can the benefits of renewable resources 
be fully realized. One way to facilitate that would be through 
better coordination among agencies.
    In addition to better coordination, streamlining the 
reviews required by State and Federal agencies to remove 
unnecessary overlap and duplicative requirements could greatly 
enhance the development of transmission lines needed to link 
renewable resources to the grid.
    The Chairman. Can you please summarize.
    Mr. Kline. We appreciate the subcommittee's interest in 
these vital issues and look forward to working with you and 
other policymakers and stakeholders on this journey to find 
consensus. I thank you for the opportunity to appear before 
you.
    The Chairman. Thank you, Mr. Kline, very much.
    [The statement of Mr. Kline follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.004
    
    [GRAPHIC] [TIFF OMITTED] T2453A.005
    
    [GRAPHIC] [TIFF OMITTED] T2453A.006
    
    [GRAPHIC] [TIFF OMITTED] T2453A.007
    
    [GRAPHIC] [TIFF OMITTED] T2453A.008
    
    [GRAPHIC] [TIFF OMITTED] T2453A.009
    
    The Chairman. Our next witness is Frank De Rosa. He is the 
Chief Executive Officer of NextLight Renewable Power. We 
welcome you sir.

                   STATEMENT OF FRANK DE ROSA

    Mr. De Rosa. Thank you for the opportunity to speak about 
the progress and the challenges we face in developing large-
scale solar generation.
    NextLight Renewable Power is a developer of competitively 
priced utility-scale solar generation. We are not a technology 
company, we are power plant guys. Our expertise is in the 
siting, permitting, financing, construction and operation of 
power plants. We apply the technologies to our projects so as 
to provide the best products to our utility customers.
    NextLight has approximately 1,000 megawatts of solar 
generation in development and permitting in the West, in 
Arizona, California, Nevada and the other Western States. That 
is sufficient to meet the needs of approximately 200,000 
residential homes. It would create about 1,500 construction 
jobs and 100 to 200 permanent jobs during operation.
    I have three main points today. First is to restore the $2 
billion that was transferred to Cash for Clunkers back to the 
DOE Loan Guarantee Program. The second is to extend the ITC 
grant beyond the December 2010 expiration date. And the third 
is to establish the Green Bank.
    Now, why do we need these programs? Our biggest obstacle in 
developing these projects is the upfront capital cost of 
renewable energy generation. Without carbon costs explicitly 
included, when a utility looks at their supply portfolio, they 
see renewable generation as more expensive than fossil. If we 
can close that gap, utilities would gladly procure more 
renewable generation and more generation would get built 
without impacting electric rates.
    These three measures go a long way to close the gap, at 
little taxpayer expense, by reducing the financing costs of 
these projects.
    So, very briefly, the Loan Guarantee Program, $2 billion 
would accelerate $20 billion of renewable generation. The ITC 
grant was enacted to address the current shortage of tax 
equity, but the fact is that the ITC grant is more efficient 
than the investment tax credit. Every dollar of the grant goes 
to a project, as opposed to the investment tax credit where we 
need to bring in tax investors who require more than a dollar 
for a dollar of tax offset, and it requires a substantial 
structuring transaction cost to do these very complicated 
financing arrangements. We estimate a 15 to 20 percent loss 
with the investment tax credit compared to the ITC grant.
    Lastly, the Green Bank, which was passed by this House and 
is in the Senate here, like the Export-Import Bank, the purpose 
would be to lend to renewables at rates--basically at Federal 
rates. And if you compare, say, a 5 percent rate, long-term 
debt rate, under something like the Green Bank to the 8 or 9 
percent interest rates in the market today, that translates to 
about 4 cents a kilowatt hour reduction in the cost of 
renewable generation. That is a lot. That is enough to close 
the gap between renewables and fossil generation. So it is the 
most cost-effective way to build renewable generation with 
minimal impact on electric rates or on the Federal budget.
    So in conclusion, our biggest obstacle is the upfront cost 
of these very capital-intensive projects. And Congress can 
materially reduce that cost, without significant taxpayer 
expense, by enacting the three points that I mentioned before.
    The Chairman. Thank you, Mr. De Rosa, very much.
    [The statement of Mr. De Rosa follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.010
    
    [GRAPHIC] [TIFF OMITTED] T2453A.011
    
    [GRAPHIC] [TIFF OMITTED] T2453A.012
    
    [GRAPHIC] [TIFF OMITTED] T2453A.013
    
    [GRAPHIC] [TIFF OMITTED] T2453A.014
    
    [GRAPHIC] [TIFF OMITTED] T2453A.015
    
    [GRAPHIC] [TIFF OMITTED] T2453A.016
    
    [GRAPHIC] [TIFF OMITTED] T2453A.017
    
    [GRAPHIC] [TIFF OMITTED] T2453A.018
    
    The Chairman. Our next witness is Nada Culver. She is the 
senior counsel at the Wilderness Society. She has many years of 
experience in environmental law. We welcome you.

                    STATEMENT OF NADA CULVER

    Ms. Culver. Thank you, Chairman Markey and members of the 
committee. And thank you for pronouncing my name correctly. 
Wandering around the Southwest with a name like this has been a 
challenge.
    I work in the public lands campaign of The Wilderness 
Society. Our mission is to protect wilderness and inspire 
Americans to protect our wild places. For more than 70 years we 
have worked to ensure that land management practices are 
sustainable and based on sound science.
    I lead a part of the organization called the BLM Action 
Center which tracks land-use planning and policy and is 
dedicated to helping the public effectively engage and 
participate.
    We appreciate the leadership that Chairman Markey and 
others on the committee have demonstrated in seeking clean 
energy solutions to the impacts of climate change to recently 
passed legislation. You have asked us to present testimony 
today regarding how public lands can contribute to these 
solutions through large-scale solar energy development. My 
written statement lays out in a lot of detail the key 
considerations for The Wilderness Society.
    Today my testimony is going to focus on our optimism 
regarding the direction that Secretary Ken Salazar is already 
leading us in. Our wildlands in our communities are threatened 
by global warming and our reliance on fossil fuels. We see 
solar energy development and other sources of renewable energy 
as an important part of responding to these threats, and the 
public lands have a role to play.
    Secretarial Order 3285 set the stage for a new approach to 
energy development on the public lands, focusing on development 
and transmission of renewable energy from appropriate areas. 
This thoughtful approach is reflected in the ongoing efforts of 
the Department on solar energy, and we hope honestly to see it 
applied to other types of energy development.
    The key elements of this strategy are identifying the 
places that are most appropriate for large-scale development, 
while protecting places that are not appropriate or needed, and 
providing the financial tools needed to incentivize responsible 
development and proactive involvement of other interested and 
knowledgeable parties. A robust program in this model would be 
able to increase the likelihood of timely approval of projects 
and decrease the unacceptable environmental impacts and the 
resulting controversy and opposition to projects that come with 
that.
    Secretary Salazar has committed the Department to 
identifying and prioritizing the specific locations in the 
United States best suited for large-scale production. This is 
really the centerpiece for responsible development, locating it 
in the right places and with the right protection.
    The Department has commenced a programmatic environmental 
impact statement for solar energy and is designating solar 
energy zones that will be prioritized. These zones are being 
designated with important criteria, both for proximity to 
transmission and suitability of terrain and potential for 
energy; but also by, from the start, excluding sensitive 
resources from consideration, resources like the BLM's National 
Landscape Conservation System and critical habitats for 
endangered species.
    Because solar energy development involves long-term use of 
land, damaged natural resources, and really effectively 
precludes other uses, it is extremely important for it to be 
directed to lands that do not have other sensitive resources. 
And, for example, NextLight's Silver State North and South 
projects in Nevada are being sited to avoid BLM areas of 
critical environmental concern in lands proposed by citizens 
for wilderness protection.
    Another key element of the strategy is that once energy 
zones are identified, development is limited to those lands. 
This stands in stark contrast to the Department's approach to 
oil and gas development, which has been to make all lands 
available for leasing without considering other values or 
strategically prioritizing these lands. This has resulted, as 
we have all seen, in significant controversy, and precluded 
thoughtful management of the public lands.
    Focusing on lands that don't have sensitive resources and 
are close to transmission will minimize environmental damage 
and loss of other uses that is honestly associated with large-
scale solar development.
    An important siting option is found on brownfields and 
other already disturbed lands, like abandoned mines or fallow 
agricultural lands. These are found on both public and private 
lands. Both the EPA and the National Renewable Energy Lab have 
estimated that these types of lands could provide up to 950,000 
megawatts of utility-scale solar. These sites are close to 
population centers and transmission, and they are already zoned 
for industrial uses. They actually improve communities by 
reducing blight. They were in place already in Colorado at Fort 
Carson, and, in my home State of New Jersey, a landfill has 
recently approved a brownfield as well.
    Both the EPA and Arizona BLM have active brownfield 
programs, and these really could and should be expanded and 
incentivized, including through a renewable electricity 
standard.
    Chairman Markey, you raised a profile of this earlier in 
this year in a letter to EPA Administrator Lisa Jackson, and we 
hope to see this continue. But because development of a solar 
utility scale will transform the land and preclude most other 
uses, it is important that we look at all types of onsite and 
offsite litigation measures based on credible science, and take 
into account the many other uses and values of the public 
lands; things like wilderness values, wildlife habitat and 
recreation. Everything from backcountry hunting and mountain 
biking should be accounted for. A new transmission is needed, 
but, again, this must be done with a thoughtful approach to 
protect the environment and avoid further contributions.
    We would also encourage that while the Department of 
Interior is hard at work, simultaneously developing a program, 
identifying zones and analyzing many pending applications, 
including those receiving stimulus funding, they will need to 
be assisted with additional resources so that they can actively 
manage this program. Similar funding was assigned in the prior 
administration to fund oil and gas permitting, and the BLM will 
need similar funding from this administration. They have a 
unique opportunity, although a challenge, to develop this from 
the ground up.
    In conclusion, we believe that we can move forward with 
large-scale solar energy development while protecting and 
valuing other resources. I just wanted to note that the 
Secretary's order specifically noted that additional policies 
might be needed to fully support renewable energy, including 
revising Geothermal, Wind, and West-Wide Corridors Programmatic 
EISs. We believe it is imperative that we improve those, as 
well as the oil and gas development program.
    Thank you. I look forward to your questions.
    The Chairman. Thank you, Ms. Culver, very much.
    [The statement of Ms. Culver follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.019
    
    [GRAPHIC] [TIFF OMITTED] T2453A.020
    
    [GRAPHIC] [TIFF OMITTED] T2453A.021
    
    [GRAPHIC] [TIFF OMITTED] T2453A.022
    
    [GRAPHIC] [TIFF OMITTED] T2453A.023
    
    [GRAPHIC] [TIFF OMITTED] T2453A.024
    
    [GRAPHIC] [TIFF OMITTED] T2453A.025
    
    [GRAPHIC] [TIFF OMITTED] T2453A.026
    
    [GRAPHIC] [TIFF OMITTED] T2453A.027
    
    [GRAPHIC] [TIFF OMITTED] T2453A.028
    
    [GRAPHIC] [TIFF OMITTED] T2453A.029
    
    [GRAPHIC] [TIFF OMITTED] T2453A.030
    
    The Chairman. And our next witness is Dr. Stephanie Burns. 
Dr. Burns is the President, Chairman, and Chief Executive 
Officer of Dow Corning. She is the recipient of the 2008 
Commercial Development Marketing Association Award for 
Executive Excellence. We welcome you.

                STATEMENT OF STEPHANIE A. BURNS

    Ms. Burns. Thank you very much. Good afternoon. And thank 
you, Chairman Markey and Representative Sensenbrenner, for 
extending an invitation to join today. It is an honor and a 
pleasure to be here.
    As you know, America is at the dawn of a new energy era, a 
transformation that will provide us with more clean energy-
producing options like solar, wind and other renewable energy 
sources.
    Dow Corning is one of the world's leading producers of 
polycrystalline silicon which powers the solar industry. I know 
firsthand that America's energy transformation is inexorably 
linked to our Nation's economic and manufacturing future. Such 
a transformation will require that we forge a new path forward 
through Federal leadership, the investment and innovation of 
private industry, and integrated policy prescriptions that 
address each step in the renewable energy value chain, from 
education and workforce development to raw material and end-
product manufacturing to deployment and market readiness. With 
forward-thinking leadership and management, this transformation 
could bring with it a whole new set of industries, hundreds of 
thousands of new jobs, a sustainable source of economic growth 
and a reduced carbon footprint that is good for our country and 
for our global environment.
    Other nations have enacted aggressive policies to support 
the growth of the renewable energy industry. For example, 
China--as you mentioned--India and Germany offer large 
subsidies for solar manufacturing facilities. As a result, the 
U.S. global market share of solar manufacturing has dropped 
from about 45 percent to only 7 percent in 12 years. It is time 
for America to enact policies that will keep the solar industry 
here and at home.
    With that in mind, let me thank you for including the 
alternative energy investment credit in the American Recovery 
and Reinvestment Act. This credit is a significant first step 
towards establishing new clean energy technology manufacturing 
jobs here in the U.S., and encouraging companies such as Dow 
Corning to manufacture solar and other renewable energy-related 
materials in America with the potential to create more than 
315,000 jobs in construction, engineering, science, skilled 
trades and others. I hope that this credit can be made 
permanent in an energy bill now under development, or in any 
other tax extender packages, as it will propel America into an 
era of sustained renewable energy use and help put Americans 
back to work.
    Dow Corning is already leading by example. We are one of 
the only companies in the world that is able to provide 
advanced silicon-based materials and services throughout the 
entire solar value chain, from solar cell and panel 
manufacturing, to modular assemblies, right on through the 
panel installations, and we are making significant progress.
    Earlier this month we announced the commercial availability 
of a breakthrough solar cell encapsulation technology that 
improves performance of solar panels and effectively lowers the 
cost for a kilowatt hour of solar power, making solar power 
less expensive to both produce and to use.
    In the past 4 years we have announced more than $4\1/2\ 
billion in investments in solar technology, including last 
December's announcement of more than $2.2 billion to increase 
polysilicon production, creating 1,800 construction jobs and 
more than 1,000 permanent jobs in the months to come, all of 
this to be put in America.
    And we have begun construction on a new manufacturing 
facility for use in thin film solar production which will 
produce even more solar-related jobs and help attract other 
supply-chain investments to the U.S.
    This is a start, but in order to truly implement the 
transformation which is before us, Dow Corning proposes a four-
point plan to address the technical, legislative, regulatory, 
manufacturing, and workforce-related factors. America's ability 
to develop a thriving domestic renewable solar power depends on 
this.
    First, we encourage Congress and the Obama administration 
to enact new Federal policies and regulations that will 
encourage the rapid growth of a viable renewable energy 
industry and consumer adoption of renewable energy, through 
Federal tax incentives for domestic manufacturing, a robust 
Federal renewable electricity standard and Federal 
interconnection and net metering standards.
    Second, we advocate increased Federal funding for research 
and development to accelerate solar technology innovation in 
advanced solar manufacturing jobs.
    Third, we support the need to develop a green-collar 
workforce by supporting training programs like the programs Dow 
Corning has cosponsored with local colleges in Michigan and in 
Tennessee.
    Fourth, we need the Federal Government to lead by example 
in the implementation of clean technologies through procurement 
of onsite generation, building retrofits for energy efficiency, 
and new, green building standards.
    Finally, but certainly no less important, Congress must 
ensure that new policies to reduce greenhouse gas emissions, 
such as carbon tax or cap-and-trade, do not inadvertently 
discourage growth in the manufacturing and production of 
renewable energy resources.
    In closing, as I said earlier, America is at a dawn of a 
new energy era. My company is doing its part to encourage a 
climate of collaboration, creativity, and commitment to greener 
energy security. It is more than just smart business. As a 
global company, we know it is fundamental to protecting our 
Nation's competitiveness in the decades to come. Thank you.
    The Chairman. Thank you, Dr. Burns, very much.
    [The statement of Ms. Burns follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.031
    
    [GRAPHIC] [TIFF OMITTED] T2453A.032
    
    [GRAPHIC] [TIFF OMITTED] T2453A.033
    
    [GRAPHIC] [TIFF OMITTED] T2453A.034
    
    The Chairman. And our final witness today is Dr. Gabriel 
Calzada. Dr. Calzada is an Associate Professor in the 
Department of Economics at King Juan Carlos University in 
Spain. He is also the author of the report ``Study of the 
Effects on Employment of Public Aid to Renewable Energy 
Sources.''
    We welcome you, Doctor. Whenever you are ready, please 
begin.

                  STATEMENT OF GABRIEL CALZADA

    Mr. Calzada. Chairman Markey, Congressman Sensenbrenner, 
and members of the Select Committee, thank you for the 
invitation to testify today on the Spanish experience in 
renewable energies and, specifically, in solar energy 
production.
    Spain, as you know, has become a world leader in the 
production of solar and renewable energy, thanks to a mix of 
political determination and a huge amount of subsidies. In the 
year 2004 Mr. Zapatero promised, and I quote, ``a reorientation 
of the energy model towards renewables and particularly solar 
energy.'' And he added, quote, this is the model of the future, 
end quote. And we did it.
    From the year 2000 to 2008, we went from having almost no 
megawatt in solar energy, to be one of the world leaders. How 
we did it? The way we did it is through subsidies, as I said, 
public aid and specifically primes. In the case of solar we 
went so far as giving 575 percent prime over the market price 
in the so-called feed-the-entire-system. In this way, we 
provided $40 billion to the renewable industry and $13 billion 
to the solar industry. So we are talking about an industry, the 
solar, that provides less than 1 percent of the electricity and 
gets committed 13 billion Euros to that industry.
    Obviously, every Spaniard wanted to enter this business and 
we got waiting lists. We have a large waiting list from 
Spaniards wanting a license to produce solar energy; and, 
related to this, a lot of corruption. You may have read in the 
newspapers a lot of corruption arose because nobody wants to be 
at the end of the queue, everybody wants to be on the front.
    But even worse than this has been the bubble, the renewable 
bubble and the solar bubble that was created. In order to 
understand the bubble, you just have to think that most of the 
jobs, the so called ``green jobs'' that has been created are an 
installation of those. So if you want to keep those jobs, you 
cannot maintain a level of subsidy, you have to increase it. 
You have always to increase it because you have to keep them 
working, so it means you have to keep them producing new plans. 
But if they produce new plants, you will have to subsidize more 
more electricity that is produced by those plans. In this way 
it is a bubble that grows and grows.
    And the Spanish Government now has a lot of problems 
related with this bubble. Nobody knows exactly how to solve the 
problem.
    Another big question is who pays for this, all these 
billions. The first thing a Spanish politician did is look to 
the consumer, but they thought this was not a good idea because 
the price of electricity would have to be increased quite a 
lot. Then they looked at taxpayers. But politicians do want to 
be reelected, and they thought the taxpayers are also voters, 
and they dismissed this possibility.
    The third possibility was the distributors of energy. And 
finally they obliged the distributors of energy to pay these 
high primes. However, the distributors said immediately, Wait a 
minute, if we have to pay these very high primes to the 
producers of renewables, but you, government, set the very low 
price in the electricity that we have to sell, we will go 
bankruptcy. And the government immediately said, Don't worry, 
what we will do is that we will repay you, we promise we repay 
you in 15 years, in 15 years from now when I am not going to be 
here anymore, another politician is going to repay you. And 
they encouraged the companies to do securitization, 
securitization of this debt.
    However, since year 2007, the utilities have not been able 
to sell the securitization, these packages, in the market, and 
a lot of troubles have arose in the Spanish electricity market. 
And many many so-called ``green jobs'' has been fired since 
then, because the government had to change a little bit the 
subsidies to the solar industry.
    Thanks to this scheme 50,000 green jobs have been created. 
However, if you take into account the huge amount of resources 
that I just mentioned that has been taken away from the rest of 
the economy and put into this sector, you can see that for 
every job that has been created, these same resources and the 
rest of the economy would have created 2.2 jobs for every job. 
So it means that, in fact, you are losing jobs and you are not 
creating them. For every solar megawatts that was installed, 
nine jobs were lost.
    This is the sad experience that your President suggests 
should be taken as a model. I am sure that Spain has many many 
good things to show, many economic good things to show your 
country, but I believe as an economist that this policy related 
to renewables, specifically solar industry, is not one of them. 
Thank you.
    The Chairman. Thank you, Doctor, very much.
    [The statement of Mr. Calzada follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.035
    
    [GRAPHIC] [TIFF OMITTED] T2453A.036
    
    [GRAPHIC] [TIFF OMITTED] T2453A.037
    
    [GRAPHIC] [TIFF OMITTED] T2453A.038
    
    [GRAPHIC] [TIFF OMITTED] T2453A.039
    
    [GRAPHIC] [TIFF OMITTED] T2453A.040
    
    [GRAPHIC] [TIFF OMITTED] T2453A.041
    
    The Chairman. Now I will turn and recognize the gentleman 
from Oregon, Mr. Blumenauer.
    Mr. Blumenauer. Thank you very much, Mr. Chairman, for your 
courtesy. I appreciate the interest from a number of our 
witnesses dealing with our current tax policies. And as a 
member of the Ways and Means Committee, I am very interested in 
our being able early in the game to extend the investment tax 
credit, working with you, and welcome any suggestions or 
assistance to make sure that investment funds that include tax-
exempt entities are in fact eligible, so we can dramatically 
increase the pool of investment that is available--which seems 
to me to be very common sense and would have effectively no 
economic impact as far as the Federal Government is concerned, 
but open up a pool of capital.
    I was interested--and Mr. De Rosa or others might have some 
information for us about the effectiveness of the various tax 
credits as opposed to using a direct grant. You mentioned the 
effectiveness, where you are not paying a premium to other 
investors, you are not having as much complication in terms of 
accountants and attorneys, some of whom are my best friends--I 
have nothing against them--but if there would be a way that you 
might be able to help us clarify the impact. And I am not 
expecting that you have something here that you can pull out of 
your briefcase, but if you could help us just generate 
information about what the difference is for projects that you 
are involved with, with the grant versus tax credit; at a 
minimum, maybe some suggestions that we might simplify the tax 
credit application as we move forward, I would appreciate it.
    I do appreciate Dr. Burns' notion about the Federal 
Government leading by example, as the largest consumer of 
energy in the world--the Department of Defense or GSA. There 
are lots of things that potentially we could work on together.
    I was interested, Dr. Calzada, as I am listening to your 
comments and I am looking at information that we have been 
provided, we find that the United States National Renewable 
Energy Lab, which we think is pretty reputable and 
straightforward, repudiates your report, suggesting it lacks 
transparency in reporting statistics, fails to compare 
renewable energy technologies with comparable energy industry 
metrics. It fails to account for issues such as the role of 
government in emerging markets, fails to account for the 
success of renewable energy exports in Spain, fails to account 
for the fact that renewable energy deployment creates 
additional indirect jobs in communities where renewables are 
being deployed and produced.
    I am from a community that benefits from one of your 
renewable energy companies that has its American headquarters 
in Portland, Oregon.
    But I would like to focus on one element that concerns me. 
An account of your report in the Wall Street Journal says, and 
I quote, ``The study doesn't actually identify those jobs 
allegedly destroyed by renewable energy spending.'' Could you 
elaborate on specifically what jobs were destroyed and provide 
the committee with a list of them?
    Mr. Calzada. Yes, sir. Well, the first or the second----
    Mr. Blumenauer. A list of the jobs that are destroyed.
    Mr. Calzada. About the NREL, this agency, this State 
agency, what they have criticized, they criticize us for using 
consensus economics about the crowding-out effect. They 
criticize us for not speculating about this year or future 
years. But it turns out that this year has been very bad for 
green jobs. Many have been fired.
    They criticize us for not speculating about hypothetical 
export sales, when the reality is that we have taken them into 
account, we have incorporated them. We looked at what is and 
what was, but an export was part of it. And they criticized us 
specifically for----
    Mr. Blumenauer. Excuse me, Doctor. The question I asked you 
was: What are the jobs that were destroyed?
    Mr. Calzada. What are the jobs?
    Mr. Blumenauer. Yes, what are the jobs? Do you have a list 
of the jobs that were destroyed?
    Mr. Calzada. The jobs destroyed are 2.2 jobs for every job 
created, because you took the resources away. This is an 
opportunity cost analysis, this is a real-world analysis, and 
it is a way the companies do their analysis.
    The other way of doing it, as NREL suggests, is using a 
methodology that was designed for central planning, economic 
central planning, this methodology. You might want one or the 
other. But ours is a real-world methodology and shows that for 
every job, 2.2 jobs were destroyed. If I take all your 
resources away that you use for your staff, you cannot hire 
your staff.
    Mr. Blumenauer. My time is expired. I would appreciate it 
if you would provide to the committee--I don't want to put you 
on the spot and limit you just to a minute or two--if you could 
provide to the committee a list of the jobs in Spain that were 
destroyed by virtue of this, we would appreciate it. Thank you 
very much.
    Mr. Calzada. Congressman, you will have to ask this to the 
Spanish trade unions or to the Spanish Government. I can 
provide you with what has happened, with what has been the 
reality. How many jobs--this is standard economic procedure--
how many jobs would have been created in the rest of the 
economy if we wouldn't have taken the resources away from the 
economy. It is very standard, and I am sure you understand.
    Mr. Blumenauer. Thank you, Mr. Chairman.
    The Chairman. The gentleman's time is expired. The Chair 
recognizes the gentleman from Washington State, Mr. Inslee.
    Mr. Inslee. Thank you. Excuse me.
    The Chairman. The gentleman can have as much as time as he 
would like.
    Mr. Inslee. Thank you. I am most appreciative. I am very 
embarrassed because I can't recall which is--and I missed your 
testimony--the folks from the NRDC; is there someone from NRDC 
here? The Wilderness Society, excuse me. And that is Ms. 
Culver. Thank you very much. My apologies.
    I just want to ask you a question. I have read your 
testimony, I just missed your name. But I have actually been 
reading your testimony, and you were talking about having a no-
net-loss policy on a variety of characteristics on Federal land 
for habitat, for recreational activities, those kind of things. 
I just wonder if you could address to what extent you think we 
are doing that in the current permitting process and how you 
would suggest we move forward to, in fact, effectuate that 
idea?
    Ms. Culver. I don't think it has been explicitly laid out 
in the permitting process. I think it has been happening; it 
may be happening in an informal way. More of the permitting 
process to date has focused on the siting issues where we have 
been able to have input about relocating or redesigning 
projects. It is coming up more in California already, I would 
say, where we are having more anticipated losses of habitat 
that we can quantify. So I haven't seen it happening to date.
    The BLM has some internal guidance on both onsite and 
offsite mitigation that is very broad and allows them to design 
offsite mitigation policy that can take into account a myriad 
of ways to--as long as they identify the values that are being 
lost, be it habitat or recreation opportunities, they can 
design ways to do the mitigation. It could be done through a 
fund that was created as part of a project, it could be done by 
identifying additional lands that could be acquired for the 
agency to manage. It could also be done at a level of 
identifying similar areas that could be protected or managed 
specifically for a lost resource.
    One of the analogies that I had heard was for instance when 
FERC permits dams, they also require an applicant to build boat 
ramps so that the recreational opportunities can be replaced. 
Now, it doesn't fit quite as well for solar energy, but that 
type of model I think could work.
    Mr. Inslee. So is the Bureau doing that at least to some 
degree now? Are they looking to mitigate some of these?
    Ms. Culver. They are not doing it at this point, that I 
have seen, but I talk to them a lot and they are thinking about 
how best to do it. And they could use some direction about how 
to move forward with using this very broad guidance they have 
on mitigating impacts, which, as you can imagine, is extremely 
broad.
    Mr. Inslee. Thank you.
    Dr. Calzada, I read some criticisms that I had proposed 
essentially a Feed-in Tariff--we use a different name on this 
side of the water, but we will use this name because it is one 
you have used for the moment--suggesting that it was unwise for 
us to pursue, that since Spain had had this bubble developed. 
And I am not the total expert on the Spanish system, but I 
think that our proposal has learned from the Spanish 
experience.
    We have in our proposal incorporated some measures that 
would prevent a bubble. One, a step-down of the price to take 
into consideration the economics of the situation. I think our 
proposal has a more realistic time frame as far as the rate of 
acceleration. I would characterize the Spanish acceleration, as 
you have to some degree, as precipitating a bubble that was 
unsupportable and just the rate of acceleration was too great. 
And in our legislation we have sought to learn from that 
experience, build in some safeguards.
    And I think looking at the German experience, we can 
succeed in this. The Spanish experience I don't think should be 
taken as, you know convicting a Feed-in Tariff for all time and 
should never be pursued; it is just that you need to design it 
correctly. That is what I would take from the Spanish 
experience.
    So if you want to comment on that, feel free. Is that 
really what the lesson should be? We should show some care when 
we design a Feed-in Tariff system.
    Mr. Calzada. I would say that what has started is the 
Spanish case, obviously. And as long as the other cases, other 
new cases, are similar to our case, the results should be very 
similar to the one. The warning of my team, of my researchers, 
is this.
    Mr. Inslee. So just to let you know, at least from my 
review, I think the NREL research is credible. It is the one we 
will be looking to to guide us in this regard. And I think they 
have concluded that your research, although I am sure sincere, 
was not necessarily the gold standard on evaluating this issue. 
And we are going to be following their conclusions and going to 
be moving forward with this.
    By the way, the Chinese are now looking. They have 
indicated they will be adopting a similar policy. This has been 
spectacularly successful in many places in the world, not the 
least of which is Germany, and I hope that we will be able to 
pursue this. Thank you.
    The Chairman. I recognize the gentleman from Oregon, Mr. 
Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman. I appreciate Mr. 
De Rosa's point about the Cash for Clunkers. I found myself 
voting against that, even though I think it is probably a nice 
thing to do. But tripling that program when we didn't know what 
we were penalizing gave me pause.
    I am wondering if you have some thoughts about how we 
rebalance the equities in terms of replacing that money? Do you 
have any targets as subsidies for other types of energy? 
Anything come to mind to put the money back in the bank?
    Mr. De Rosa. I appreciate the question. I have not looked 
into that. We would be happy to look into it and see if we can 
come up with some ideas for your consideration.
    Mr. Blumenauer. Well, let me elaborate, because we have got 
three witnesses who are very much in the business of trying to 
develop an American presence in one of the most rapidly growing 
areas of economic activity globally, which the majority of us 
on the committee think is critical to the survival of the 
planet, the way that we know it, and our economic 
competitiveness.
    A recent Environmental Law Institute study suggests that--
well, it didn't suggest, it found that the United States 
provide fossil fuels with about 2\1/2\ times the subsidy of 
renewables.
    Any thoughts about sort of rebalancing the playing field 
here so that we aren't in the position--which my friend Mr. 
Sensenbrenner talked about--in terms of picking wilderness and 
losers, but trying to promote sustainable evolution, 
particularly of emerging important technologies for the future?
    Ms. Burns. I would just support the concept that you are 
putting forward. I mean, we sell our starting material to 
almost all of the manufacturers in the value chain. Over 65 
percent of what we make goes offshore to someone in Asia or 
Europe, or someplace else, to convert into the finished module. 
Then it comes back onshore, and these guys install it.
    And I think anything we can do, number one, to grow the 
market demand for solar and renewables in America, shift from 
fossil to incentivizing this growth, and secondly, attract the 
solar manufacturers in the value chain to this country, those 
two things to me are a winning combination.
    Mr. Blumenauer. Any further thoughts?
    Mr. Kline. I would offer, sir, that just one way of 
thinking about it is looking forward, as we seek to decarbonize 
the entire economy, one way of looking at evaluating the need 
for incentives would simply be on carbon content that would 
naturally move you towards investments in clean energy.
    Mr. De Rosa. If I could echo that, we consider ourselves 
market participants. And this committee has documented the 
consequence of climate change. The--I will say simple, it is 
the most difficult thing--but is to account for the 
externalities. And then you are not picking winners and losers. 
What you are doing is you are making an economy more efficient.
    Right now our economy is not efficient. We are using too 
much energy because the true cost of that is not accounted for. 
So that is the challenge, is to put a price on carbon. I mean, 
I would argue that of all of the alternatives out there to 
reduce carbon emissions, the one that is most proven is 
renewables.
    [2:36 p.m.]
    Mr. De Rosa. And we are just starting in things like carbon 
sequestration. So I would say that it is renewables that is 
actually the market clearing price for what the true cost of 
carbon reduction is. Now, you have a difficult task of stepping 
into 200 years of precedent and trying to figure out how to 
make that right, given the hand that we are dealt, but to me it 
is the--it is not--framing it is not difficult.
    Mr. Blumenauer. Thank you very much.
    The Chairman. The Chair recognizes the gentleman from 
Washington State Mr. Inslee.
    Mr. Inslee. Thank you.
    I am very appreciative of the emphasis to make sure we get 
this money taken out of a renewable account restored. I know 
the Speaker is totally committed to this. I think we all up 
here are committed to this. I spoke to the Chief of Staff of 
the White House last week. They are committed to this. We are 
going to be diligent in making sure that happens.
    I have a question about the cost of solar power has 
declined on a real basis with increase in volume in a fairly 
consistent level and gradient. Is there any reason to believe 
that that will not continue at that same gradient per volume? 
Is there some hope that it will actually go down faster? Can 
you give us any predictions in that regard, or thoughts?
    Ms. Burns. Yeah. The cost is declining with volume and with 
investment in research that is showing how to make these cells 
more and more efficient. And our view of it is a linear line. 
What will help is if we do increase demand, and that increases 
significantly and exponentially, then those costs should go 
down even greater than the linear line today, because you are 
going to start to get some efficiencies of scale and more 
investment in new technologies. You have seen this in the 
electronics industry as we become more and more efficient in 
semiconductors and other things. So I anticipate that would 
happen. And you have seen great changes.
    I just read the Department of Energy payback analysis, 
which was from 2004. Their assumption in that analysis was a 12 
percent efficiency cell. People are up to 16, 18 percent, and 
then film is even higher than that. So I would anticipate any 
time you put this much research investment into a field, you 
are going to continue that trend.
    Mr. Inslee. Of course, the Boeing subsidiary, Spectra Lab, 
is even higher than that, but they are the world leader. I want 
to get the parochial local plug in that regard.
    One of the attractions of the feed-in tariff, I think, is 
that it has an incentive that is appropriate to the state of a 
given technology. A renewable energy portfolio we have is a 
great tool, we are going to adopt it, but it is really sort of 
a one price for all technologies, and technologies are at 
different levels of development. So it really is an incentive 
for the next most affordable renewable energy, not the second 
most affordable energy. Right now, frankly, wind is still 
cheaper in most places than solar.
    One of the benefits of a feed-in tariff is that it provides 
an incentive for multiple technologies appropriate to the level 
of maturation of that particular technology, and this has been 
successful in places that have done that. By the way, 
governments have been successful in ramping down that price. I 
was talking to a solar cell manufacturer in Dresden, Germany, 
last year, and he was tearing his hair out because the German 
Government was forcing down the price. That was appropriate to 
do with increasing scale and decreasing cost.
    Is that a fair assessment? Is that a virtue we should pay 
attention to, move forward with the feed-in tariff? Any 
thoughts in that regard?
    Mr. De Rosa. Sure. The best--I think the biggest advantage 
of a feed-in tariff is its predictability. You know what the 
price is. I think we need to be careful about where we set 
that, and, in fact, the California Public Utility Commission is 
grappling with that issue right now. They have issued a report 
that is recommending a feed-in tariff for a certain category of 
renewables. I believe it is up to 10 megawatts with another 
caveat for 20, and they are inviting comments on how to set 
that price.
    So I think that the--so far what we have done in the United 
States--and Steve Kline can speak to this--is we have had a 
competitive process where we have an RPS, and people like us 
bid competitively to meet that demand. I think that that has 
been slower than people's expectations. And so something like a 
feed-in tariff carefully drafted, I think, could address that.
    Mr. Inslee. Let me tell you, here is my concern. My concern 
is if we rely exclusively on the renewable energy standard, it 
will develop ultimately the next technology in line for cost 
quite effectively, which, frankly, is wind at the moment in 
most places, but it will not in a time-sensitive manner develop 
the second, third and fourth technologies in line of 
maturation. And it is clear to me that we are going to have to 
have technologies three, four and five to get to that 80 
percent reduction by 2050 that we need. So I believe that it is 
imperative that we adopt another tool that will jump-start 
numbers 2, 3, 4 and 5, that I believe this is really the best 
mechanism for doing that.
    The alternative is to continue with our RES, and 10 years 
from now we will get to technologies 2, 3, 4 and 5. But we 
don't have 10 years to wait in that regard. We have to start 
now on all of these. So I will be looking to your advice on how 
to pursue that, and I hope that we do so.
    Thank you.
    The Chairman. The gentleman's time has expired.
    The Chair will recognize himself for a round of questions. 
And first I ask unanimous consent to have included in the 
record correspondence with the Department of the Interior and 
the Department of Energy on solar development, and ask for 
unanimous consent that these letters be included in the record. 
Without objection, so included.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.042
    
    [GRAPHIC] [TIFF OMITTED] T2453A.043
    
    [GRAPHIC] [TIFF OMITTED] T2453A.044
    
    [GRAPHIC] [TIFF OMITTED] T2453A.045
    
    [GRAPHIC] [TIFF OMITTED] T2453A.046
    
    [GRAPHIC] [TIFF OMITTED] T2453A.047
    
    [GRAPHIC] [TIFF OMITTED] T2453A.048
    
    [GRAPHIC] [TIFF OMITTED] T2453A.049
    
    [GRAPHIC] [TIFF OMITTED] T2453A.050
    
    [GRAPHIC] [TIFF OMITTED] T2453A.051
    
    [GRAPHIC] [TIFF OMITTED] T2453A.052
    
    The Chairman. And I also ask for unanimous consent to have 
a report from the U.S. National Renewable Energy Laboratory 
responding to the Spanish jobs report study also be included in 
the record at the appropriate point. Without objection, that 
also is so ordered.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T2453A.053
    
    [GRAPHIC] [TIFF OMITTED] T2453A.054
    
    [GRAPHIC] [TIFF OMITTED] T2453A.055
    
    [GRAPHIC] [TIFF OMITTED] T2453A.056
    
    [GRAPHIC] [TIFF OMITTED] T2453A.057
    
    [GRAPHIC] [TIFF OMITTED] T2453A.058
    
    [GRAPHIC] [TIFF OMITTED] T2453A.059
    
    [GRAPHIC] [TIFF OMITTED] T2453A.060
    
    [GRAPHIC] [TIFF OMITTED] T2453A.061
    
    [GRAPHIC] [TIFF OMITTED] T2453A.062
    
    The Chairman. Let me turn to you, Dr. Burns, if I may. 
Could you explain the relationship between Dow Corning and the 
fiber optic revolution of the 1980s?
    Ms. Burns. That would be Corning, Incorporated, and 
actually using our materials in fiber optics. But Corning is a 
shareholder of our company.
    The Chairman. But they used your technology.
    Ms. Burns. They used our technology.
    The Chairman. Your fiber optic technology.
    Ms. Burns. Our advanced materials that they converted into 
fiber optics.
    The Chairman. That is a very interesting story, is it not, 
that up until 1983, the only way in which we transmitted 
information--AT&T, of course, was the only meaningful 
telecommunications company in the United States--was over 
copper wires. And then we broke up AT&T as a Nation, and the 
first call that went from MCI went to Corning to use your 
materials that Corning of New York was putting into these new 
fiber optic technologies, using light as a means of 
transmitting information. And that is where the fiber optic 
revolution began, using your materials.
    Ms. Burns. Yes.
    The Chairman. And it seems kind of funny that you look back 
and you say, well, Alexander Graham Bell, who invented the 
phone 100 years before, by the way, using lights, but he 
couldn't figure out a way of dealing with weather and other 
circumstances. So he was kind of waiting for the kind of 
materials that you were developing so that it could be 
transmitted in a way that wouldn't be subject to weather and 
other sources. So all of a sudden, Alexander Graham Bell up 
until 1983 is actually still able to recognize the phone system 
because it was the way he invented it. It is the way a phone 
call had been moving all those years.
    And in a lot of ways, that is really what we are talking 
about over here with the smart grid. The smart grid makes it 
possible for us to use the telecommunications revolution to 
bring in the sun and the wind from the deserts and the 
prairies, off of the ocean, off of people's rooftops, and to 
begin to integrate it more into the totality of the grid that 
we have in our country. It makes it a lot more affordable. Of 
course, it took the Dow Corning revolution in fiber optics in 
order to make all of that possible so ultimately we could move 
to a broadband technology, but now we have this next 
revolution, and people are arching an eyebrow and saying, well, 
could we have the same kind of revolution here in energy that 
we had in the telecom sector?
    So my question to you is this: You have heard the 
conversation, Dr. Burns, about solar, and you talked about a 
thin-film solar technology, which Dow Corning has. Could you 
expand a little bit upon that and what your hopes are for thin-
film solar, and especially in terms of its price point as each 
year goes by, and maybe using 2020 as kind of an outside year 
in terms of what you believe the price of solar-generated 
electricity can be using thin-film solar?
    Ms. Burns. Well, first of all, I think there is going to be 
a lot of different solutions to this renewable challenge, from 
wind to photovoltaics. And I think there is going to be a place 
for thin-film in that equation as well as the more rigid 
modules, depending on the needs and the building design, if you 
are putting it on a building.
    The Chairman. So the reason we are having this hearing is 
just solar. Can we try to put--bring in the sunshine and put it 
on the solar issue? Wind gets a lot of attention, and hybrid 
vehicles and batteries.
    Ms. Burns. Solar cells have come a long ways from the one 
that is hanging behind your chair. We are marching on a path 
where we are going to reach grid parity with these 
technologies.
    The Chairman. When do you think that will happen?
    Ms. Burns. There is a lot of variables in that whole 
equation, and I believe we are going to find it in the next 2 
to 5 years.
    The Chairman. Two to five years?
    Ms. Burns. Yes. It depends on where you are located and how 
much sunshine you get, et cetera, et cetera. But these 
solutions are moving more and more efficiently and----
    The Chairman. Now, when you say grid parity, are you 
talking about equating the cost of generating electricity from 
solar with generating electricity from coal?
    Ms. Burns. Yes, from traditional sources, from coal, 
natural gas, hydro.
    The Chairman. So 2 to 5 years did you say?
    Ms. Burns. In some countries, as you know, like Japan, they 
are at grid parity now, and certainly at grid parity during 
peak use hours.
    The Chairman. Yeah. So that is a big news story. People 
don't talk in those terms. People still think of solar as some 
distant dream that might be achieved in the next generation, 
not something that is basically right over the hill and could 
be in place within 5 years competing effectively with coal.
    So where do you think that would be possible? That is, in 
what percentage, for example, of American consumers do you 
think could benefit from those kind of breakthroughs?
    Ms. Burns. These guys probably have a better answer than I 
do because I am so far up in the value chain. But my view is 
that where solar right now is less than 1 percent of our energy 
contribution, that should be up in the 5 to 7 percent over 
time. And I don't know how much time that is going to take, but 
that is a huge expansion in solar power as a source of 
electricity.
    The Chairman. We had Dr. Emanuel Sachs testify in July 
before our committee, and he is the founder of the company 
Evergreen, and now he has founded a new company called 1366 
Technologies. He testified that he believed that 7 percent of 
all electricity in the world could be generated from 
photovoltaics by the year 2020. Do you think that is just some 
Panglossian number that is pulled out of the sky, or do you 
think there might be some basis in that?
    Ms. Burns. I think if we are smart about it, we could 
achieve that.
    The Chairman. That is just amazing, because again, people 
focus so much, as Mr. Inslee said, on wind. And even in our 
deliberations on the bill, we spent so much time on biomass and 
other issues. But this solar issue really has a capacity with 
the proper funding and public policy?
    Ms. Burns. Exactly. The right investment in research, 
policies to grow the market, and policies to encourage 
manufacturing investments.
    The Chairman. And do you believe that your technology at 
Dow Corning is at the cutting edge in terms of thin-film solar?
    Ms. Burns. I think our specialized silicon-based materials 
are at the cutting edge. There are other companies that design 
the cells, design the modules, design the thin films, who--you 
know, there is a whole array of companies.
    The Chairman. So you are--you provide the materials. You 
are like the arms merchant. All these solar companies will come 
to you, and they are going to have their----
    Ms. Burns. We hope they do.
    The Chairman. Are they coming to you?
    Ms. Burns. Yes, absolutely. And they are coming to us to 
get advice on investing in the U.S., to make their--whether it 
is their cells or their modules.
    The Chairman. And how many companies have come to you?
    Ms. Burns. I would say more than five.
    The Chairman. More than five.
    Ms. Burns. Five major players.
    The Chairman. Major players. How do you define a major 
player?
    Ms. Burns. Either as a cutting-edge innovator or a leader 
in their segment.
    The Chairman. Okay. And amongst the--are they well-funded 
companies?
    Ms. Burns. Uh-huh.
    The Chairman. Yeah. And are they buying into this idea that 
there is a 2- to 5-year horizon on thin-film solar?
    Ms. Burns. They are making some tremendous investments, and 
that is always based on your business evaluation of your 
potential.
    The Chairman. So this is private-sector venture capital 
money being put up to place money on this bet?
    Ms. Burns. Or large public companies who are choosing to 
invest as part of their portfolio. We do have some smaller 
companies coming and working with us, and to echo some of the 
issues that were raised here, they do have an issue with access 
to capital and ability to get the loans that they need to make 
their investments.
    The Chairman. So as you use 2 to 5 years as the horizon to 
establish parity between photovoltaics and coal as a source of 
generating electricity, even if you are wrong, do you think 10 
years from now there is a chance that you would be wrong?
    Ms. Burns. No.
    The Chairman. By 10 years it is a done deal?
    Ms. Burns. I think so. I think so.
    The Chairman. Yeah. Do you agree with that, Mr. Kline?
    Mr. Kline. I think that it is very possible. I think one of 
the challenges will be--it will be somewhat dependent on two 
things: One, on the extent to which we use wise land planning 
and are able to actually take advantage of areas where there is 
great solarity; and secondly, on building the transmission----
    The Chairman. I guess we are talking about two different 
technologies. You are talking about thin-film solar, which 
isn't as dependent upon the Bureau of Land Management.
    Ms. Burns. I am talking about the absolute efficiency of 
the technology.
    The Chairman. Of solar in general?
    Ms. Burns. Yes, exactly. These are even bigger and more 
important issues in terms of how--where do you put it, how do 
you transmit it and how do you consume it?
    The Chairman. So you are saying--just so we can divide the 
question, you are saying the technology is going to be there, 
the breakthroughs that are just happening so quickly, the 
improvement and the efficiency, the lowering of the cost? And 
then the question becomes, where are we going to put it? How 
quickly can we do it, and how do we raise the capital in order 
to ensure that we do it in a way that we capture the benefits 
here in the United States?
    So--then we come back--let me go to Ms. Culver, if I may, 
for a second. We will go over here to our Bureau of Land 
Management expert. Let me ask this: What is the land 
requirement for a large solar project, Ms. Culver?
    Ms. Culver. That might be something better for our friends 
from NextLight to----
    The Chairman. I will come back to you with a related 
question.
    Ms. Culver. It is significant.
    The Chairman. Give us an idea in terms of square miles.
    Mr. De Rosa. Sure. So our Antelope Valley, California, 
project with which we have a power purchase agreement with 
Pacific Gas & Electric, It is 230 megawatts, and it will cover 
about 2,100 acres.
    The Chairman. Twenty-one hundred acres.
    Ms. Culver. Yes.
    The Chairman. So let me come back to you, Ms. Culver, if I 
could. How much acreage does the Bureau of Land Management have 
under its control; do you know?
    Ms. Culver. Well, that I do know. Over 260 million. About 
260----
    The Chairman. Two hundred sixty million acres?
    Ms. Culver. Yes.
    The Chairman. Do you know how much of that acreage it 
leases out to the oil and gas industry for its----
    Ms. Culver. I believe at last count we were well over 40 
million.
    The Chairman. So 40 million acres of public land under the 
control of the Bureau of Land Management is now leased to the 
oil and gas industry, 40 million?
    Ms. Culver. Yes, over 40----
    The Chairman. Mr. De Rosa, what are you looking for?
    Mr. De Rosa. Twenty-one hundred acres, the size of a farm.
    The Chairman. Twenty-one hundred acres. Okay. Wow. So that 
is quite a difference in terms of the use of public lands in 
the United States, and you will be able to generate how much 
electricity?
    Mr. De Rosa. Two hundred thirty megawatts. It is a midsized 
power plant. It is a good-sized power plant.
    The Chairman. So out in California, Diablo Canyon is 
probably a 1,000-megawatt nuclear power plant?
    Mr. Kline. Twenty-two hundred.
    The Chairman. Twenty-two hundred. It ruins my train of 
thought here. San Onofre is 1,000 megawatts?
    Mr. De Rosa. I think that is right.
    The Chairman. Thank you, Mr. De Rosa. That is the correct 
answer, 1,000 megawatts.
    So you are going to produce approximately a quarter of a 
nuclear power plant's generating capacity with your use of 
essentially a farm to install your solar technology?
    Mr. De Rosa. Yes, based on capacity.
    The Chairman. Based upon capacity, yes. Thank you for that 
clarification, but yes.
    So I am just trying to tell a story here so the people can 
have an idea of the ballpark we are in. It is Fenway Park, it 
is not Yellowstone Park. But just so people are in the 
conversation and they can understand the scale of what we are 
talking about.
    Again, going back to Ms. Culver, 44 million acres for oil 
and gas industry, and over here we are looking for some policy 
that allows for wind and solar, but solar today, to also be put 
on public lands and to be giving them that opportunity.
    Mr. Kline, why don't we come back to you and talk a little 
bit about the amount of space, acres, square miles that you 
think PG&E is going to need in order to generate the solar that 
you are going to need to meet your goals for renewable 
electricity in California.
    Mr. Kline. Mr. Chairman, I would have to go back and 
actually look at those numbers and add them up and give you a 
precise number. But I think if you used Mr. De Rosa's acreage 
as an example, and you multiply that by about 20, say--again, 
this is off the top of our collective heads, but----
    The Chairman. Okay.
    Mr. Kline [continuing]. That would give you an idea.
    The Chairman. But very knowledgeable heads. So in terms of 
megawattage, what are you talking about?
    Mr. De Rosa. Well, 20 would be about 4,500.
    The Chairman. Forty-five hundred megawatts.
    Mr. De Rosa. And if you just scaled up the amount of acres, 
it would be 20 times 2--40,000 acres.
    The Chairman. Forty thousand acres to match two Diablo 
Canyons or four San Onofres, nuclear power plants. So that is 
big news. That is incredible. And you are committed to doing 
that, your two companies?
    Mr. Kline. Yes.
    Mr. De Rosa. Yes.
    The Chairman. You would not be going down this path if it 
was not economically viable?
    Mr. Kline. Well, with the caveat that in California we have 
an RPS.
    The Chairman. That is a renewable electricity standard. A 
certain percentage of your electricity has to come from 
renewables, yeah.
    Mr. Kline. Yes. So we are driven to find the most cost-
effective renewables, and that is where they are right now.
    The Chairman. Solar is----
    Mr. Kline. Is where we are focusing a huge amount of our 
attention, yes.
    The Chairman. Again, a lot of people think that wind is the 
future. But you have chosen solar.
    Mr. Kline. The issue for us is there is bountiful wind in 
California, but it tends to all blow at night, and frequently 
very late at night. And until we get a means of storing that 
energy and being able to use it when we need it--the beauty of 
solar for us is that it is right at the time we need it 
absolutely the most.
    The Chairman. And again, that is why we put so much money 
into the stimulus package for battery technology and why we 
will continue to fund battery technology.
    Again, the good news here is that if we could store the 
electricity generated from wind and solar, and then use it when 
we need it and have battery technology, massive battery 
technology, which makes that possible, then we have really got 
a good thing going, and the good news here is that we are not 
talking about putting a man on the moon and sending them up 
there.
    By the way, that was 49 years ago President Kennedy was 
talking about that, can you believe that? And we put a man on 
the moon and brought him back 8 years after the President 
challenged our Nation to that. And by the way, they were up 
there all alone. It was tough up there. They were riding 
around--remember they were riding around in their vehicle up 
there, and whatever was powering that probably--some renewable 
energy was definitely powering that vehicle as they were 
bouncing around on the moon, and then they figured out how to 
get back in that thing without Houston ground control right 
next to them, and they came back.
    So we are not actually challenging people to do that. We 
are just asking people to build a better battery. It seems like 
a more prosaic job; we just don't pay attention enough to it. 
And once we put our minds to it, it seems like we should be 
able to develop batteries that can store electricity.
    Mr. Kline.
    Mr. Kline. I would just offer that it is even broader than 
batteries. I mean, there is a whole assortment of compressed 
air and other technologies that we and others are experimenting 
with. So I think the beauty is--again, we have technologies 
competing against each other. It may be batteries, or it may be 
compressed air.
    The Chairman. Yeah. But again, once you say there is going 
to be a renewable electricity explosion in California and 
across the country, you give a huge incentive to private-sector 
companies to start investing in the storage technology, because 
those companies are going to become very, very wealthy, whoever 
can provide the storage capacity to all 50 States and to every 
utility in the country that is now going to be generating 
electricity.
    So again, one revolution begets the next. So the telecom 
revolution creates the fiber optic broadband revolution that 
then makes the electricity Internet possible because all it is 
a broadband management of electricity. And then that revolution 
begets the smart grid revolution, starts to beget the battery 
revolution and other revolutions, because you have to--now 
private sector companies can see the opportunity as to where 
they are going to make a fortune, maybe become the wealthiest 
people in the history of the world, whoever can develop the 
battery technology, competing, of course, with the people who 
become the thin-film solar leaders in the world. They might--
everyone is going to be in a race here to pass Bill Gates as 
the wealthiest person in the world. It is whoever makes the 
breakthrough, patents it and starts selling it to everyone 
else. And you have to believe this in order to move in this 
direction.
    But again, we are not talking about putting a man on the 
moon. We are talking about things that are relatively prosaic 
and incrementally--Dr. Burns referred to this drop, this kind 
of Moore's law in photovoltaic, how it drops 18 percent in cost 
with every doubling of production and improvements in 
efficiency, and it has occurred steadily since 1979. So this is 
not something that is fantastical. It is something that is 
happening in the real world and has reached a point where she 
is saying in 2 to 5 years it will match coal and match natural 
gas in terms of the cost if we can create the marketplace.
    Mr. De Rosa.
    Mr. De Rosa. We at NextLight, we believe that, and we think 
that not only will there be cost reductions due to technology 
efficiency, but there will be cost reductions for the other 
half of the cost, which is the construction of these 
facilities. The construction of it, the balance of plant, is 
half of the cost, and those economies are just getting started.
    I think the obstacle we face now is--and I agree with Dr. 
Burns, we are going to need all the applications. We are going 
to need the smaller rooftop applications. We are going to need 
the smaller, more urbanized solar applications, as well as the 
large power plants. Those large power plants have not been 
built yet. And so it is not a technology question. It is a 
financial--it is a financing question. We need to demonstrate 
to the people who are going to put up the money that they will 
get their--that they will get their money back.
    The Chairman. What are the financial people concerned about 
right now?
    Mr. De Rosa. Lenders, equity investors are--they are 
cautious of investing in something that hasn't been done 
before.
    The Chairman. So are they most concerned about--Dr. Burns 
talked about kind of the incredible advances made in the 
technology. You have as well. Is it the technology that they 
are uncertain about, or is it the BLM regulations, the ability 
to get access to the land, the guarantee that it is a 
predictable investment, tax policy? Could you go down the list 
of the things that you think are most important in terms of 
creating uncertainty in the minds of the private sector?
    Mr. De Rosa. Sure. So at NextLight we deal with proven 
technologies. We are not trying to advance that second or third 
generation. We want to get that first generation in first. And 
we need to deliver to investors a project with four corners 
around it that does not have environmental problems, that has 
its permits, that is a good product for the utility, that has 
an interconnection, viable interconnection. So that is a given.
    Then what the investor will look at is has it been done 
before on this scale, and that is the hurdle that we are at 
right now. It has been done in 1-megawatt blocks. It has been 
done in 5-megawatt blocks. But a 230-megawatt project--and it 
is not just our company. There are many companies out there 
developing utility scale, and we all think that is what we need 
to meet our goals.
    Even though one could say, well, it is just 230 times the 
1-megawatt project, but it--if you are the one putting up the 
money, there is a lot of questions that you ask. And you ask 
about supply chains, and you ask about construction process and 
all of those things. And so that is our challenge. It is to 
take this proven technology and convince the investors that it 
is proven, and it will--just by scaling up, there is nothing 
different about it. And that is where--if I could just--one 
more thing. That is where the DOE loan guarantee program comes 
in; that is where the ITC grant comes in as well.
    The Chairman. And by the way, on that Cash for Clunkers 
temporary depletion of the renewables program, on the House 
floor, the Speaker and the Chairman of the Appropriations 
Committee did promise that the money would be completely 
restored. So that was all part of that very same-day debate 
that included the Cash for Clunkers in this room. So the 
commitment was made in the floor debate at that time. So I 
think you can pretty much take that to the bank.
    So let me come back to you again, Ms. Culver. The Interior 
Department estimates that there are 2.9 million megawatts of 
solar potential in the Southwest on public land. We have in the 
whole country right now, we have 1 million megawatts of 
electricity that exist. That is the capacity. And we use about 
450,000 megawatts of that on a daily basis.
    It is about 1 million megawatts of capacity that is out 
there. And the Department of Interior has estimated again that 
there are 2.9 million megawatts of solar potential in the 
Southwest on public lands. So that would be almost three times 
the total electrical-generating capacity over the whole country 
today. It is a fantastic number. So the Department of Interior, 
including BLM lands, equals about 500 million acres.
    So talk a little bit, Ms. Culver, about kind of the 
regulatory tensions that exist here between the preservation of 
the environment and the installation of these technologies that 
put us on a very fast path towards energy independence and 
solving the problem of global warming.
    Ms. Culver. Sure. I think there has been a lot made of the 
tension that has not quite come to bear. We have, of course, 
had a few conflicts over project siting, but the solar energy 
study areas that were recently identified and where the 
comments have been pouring into the Bureau of Land Management 
are looking at 670,000 acres that have been identified as close 
to existing transmission, not having a lot of environmental 
conflicts, and being very much suitable for solar energy 
development at the utilities scale in terms of both the 
potential it would generate and the terrain.
    So I think at the first stage that the tension has--the 
tension is interesting for people to write about, but the 
tension in the actual process itself has not been quite as 
high. And we are talking about 260 million acres, as we just 
talked about. Of that, the BLM's National Landscape 
Conservation System, which is basically the crown jewels of the 
wilderness, wilderness study areas, national monuments, 
conservation areas, it is about 26 million acres. So we are not 
talking about a giant portion of the public lands that are 
currently locked up from energy development.
    The Chairman. Could you again give those numbers again, the 
denominator and the numerator?
    Ms. Culver. Of the 262 million acres of the Bureau of Land 
Management's lands, approximately 26 million, a little bit more 
has been added in the last omnibus, but of those are dedicated 
to the National Landscape Conservation System, which 
incorporates wilderness, wilderness study areas, national 
monuments, national conservation areas, wild and scenic rivers, 
and national and historic trails. So we do not have a situation 
where the vast majority of the lands are somehow locked up, and 
we are going to have to do drastic measures of things like 
fighting over wilderness study areas. It doesn't need to come 
to that. It shouldn't come to that.
    The Chairman. Okay, great.
    Let me come back to you, Mr. De Rosa. How much public land 
are you going to be using?
    Mr. De Rosa. We have a combination. Our projects--some of 
them are on public lands, and some are on private land. We have 
two active BLM projects right now roughly in the 2,000- to 
4,000-acre range, about the same size as we mentioned before, 
250 megawatts.
    The Chairman. Are there any environmental issues 
surrounding those, the land under the management of the BLM, 
the projects that you are focused on?
    Mr. De Rosa. Those are going well. We have one in southern 
Nevada that was designated by the BLM and the Department of 
Interior as a fast-track project in southern Nevada, and we 
have one in Arizona that is in the second tier of the package 
of projects.
    The Chairman. And is this all part of the 230 megawatts 
that you are talking about?
    Mr. De Rosa. No. These are separate projects.
    The Chairman. Talk about the 230-megawatts project.
    Mr. De Rosa. That is in the Antelope Valley of California. 
It is on private land that we own. It is a former farm that is 
not being farmed anymore because there is not enough water, so 
it is fallow land. It is a great location, great site for 
solar, because as we would describe it, it is previously 
disturbed land; it has been cultivated before. So far we have 
unanimous community support and support from the environmental 
community as well.
    The Chairman. So what are the obstacles then? You don't 
appear to have any land management issues, environmental 
issues. What are your issues that are remaining in terms of the 
construction of that project?
    Mr. De Rosa. It is financing.
    The Chairman. Financing. And the financing is contingent 
upon? Again, if you can just say the words: ``The confidence of 
the private sector.'' And they are waiting for what?
    Mr. De Rosa. They are looking for--they are looking for a 
demonstration that they will--they will get their money back; 
it will work, and they will get their money back.
    The Chairman. What can demonstrate that to them?
    Mr. De Rosa. I think it is a combination of, as I said, a 
solid--a rock solid project with a creditworthy off-taker for 
25 years and----
    The Chairman. An off-taker is--can be differentiated from 
an undertaker? I have never heard of that before.
    Mr. De Rosa. Sorry for the trade lingo. It is the purchaser 
of the power, the electric utility who purchases the power.
    The Chairman. Thank you.
    And so what is your level of--what level of confidence, Mr. 
Kline, can PG`E give to Mr. De Rosa and his project and to 
the--are you the principal investor in this project?
    Mr. Kline. We are the purchaser of the power. We are the 
off-taker.
    The Chairman. So are you partnered with the investors, or 
are you just standing on the sidelines waiting for the project 
to work, and then you will take it if they can get it done?
    Mr. Kline. It is the latter. And historically when the 
markets were working, projects like Mr. De Rosa's, when they 
had a signed contract from a creditworthy entity like PG`E, 
could take those to the bank and finance them. And the issue 
right now is they cannot.
    The Chairman. They cannot. Well, and the reason they 
cannot, Mr. Kline?
    Mr. Kline. Because the credit markets are frozen, and that 
kind of lending project financing just isn't occurring.
    The Chairman. I see. So in this state of the economy--it is 
kind of cryogenically frozen right now, and we are waiting for 
it to warm up. But let me just ask this: But you are basically 
saying--PG`E is saying to--your company's name again?
    Mr. De Rosa. NextLight.
    The Chairman. NextLight--you are saying to NextLife--
NextLight. NextLife gets back into undertaker. But NextLight--
you are saying to NextLight, if you build it, Mr. NextLight, we 
are buying it from you?
    Mr. Kline. That is correct.
    The Chairman. You are saying that to them?
    Mr. Kline. Yes.
    The Chairman. Then you are saying, Mr. De Rosa, to the 
investment community, PG`E says if we build it, they are going 
to buy it, we have a letter promising us that. Huh? So this 
cryogenically frozen credit market is in pretty sad shape; if 
you can't rely upon this Rock of Gibraltar, which is PG`E, it 
is not going anywhere. It has a State law saying they have to 
buy renewable electricity. You are going to be able to produce 
it. And if you get it done, you have got a guaranteed market, 
and your investors are smiling all the way to the bank, right?
    Mr. De Rosa. It is our job to get it done, as you say.
    The Chairman. So that introduces, then, the importance of 
the DOE loan guarantee program, huh?
    Mr. De Rosa. Yes. Absolutely.
    The Chairman. So if you have got a loan guarantee program 
that you can also rely upon, then that gives more confidence to 
the private sector investors that they are not in this alone, 
huh?
    Mr. De Rosa. Absolutely, absolutely.
    The Chairman. Yeah. So I actually--I am kind of heartened 
by this.
    Ms. Burns is--Dr. Burns is--I am married to a doctor, so I 
apologize for that. Dr. Burns is telling us that the technology 
is there, it is moving along, she has got the materials, she is 
willing to sell to anyone, and she is guaranteeing improvements 
as the years go by. Ms. Culver is saying there is public land 
available, 90 percent of it, that would be usable for solar 
technology, and that it is out there and wouldn't have a lot of 
environmental or regulatory problems in using it. Mr. De Rosa 
is saying that he believes that utility-scale technology is the 
way to go, and that if you can have a marketplace--and 
California is building it here--with the mandate that the 
utilities have to come--we have to receive a high percentage of 
their electricity from renewables, that--and with the DOE loan 
guarantee program, that it might not be today, it might not be 
tomorrow, but it is happening pretty soon. It is a lot like 
Corning Dow back in 1983 with the fiber optic revolution. It is 
just now a question of when this inevitable revolution just 
breaks through, because we are going to continue to see the 
dramatic decline in the cost of producing this solar-generated 
electricity.
    Mr. De Rosa. For this and other projects, it will be 2010, 
it will be next year, that many--hopefully many projects will 
start construction.
    The Chairman. Now, why do you point as 2010 as the date 
that you think kind of the dam breaks?
    Mr. De Rosa. 2010 is the--December of 2010 is the deadline 
for the Investment Tax Credit grant, and that is an important 
component in the financing because it makes the financing just 
that much more streamlined. It eliminates the need for this 
complicated tax equity investor in the projects.
    The Chairman. So the combination of State renewable 
electricity standards and the existing--and the existence of an 
investment tax break is going to put a lot of pressure on 
investors to kind of close the deal to get the benefits?
    Mr. De Rosa. We are spending millions of dollars at risk 
developing these projects, and I think the investors and 
lenders would be eager to invest with that combination.
    The Chairman. That is great.
    You know what I am going to do? I am going to ask each one 
of you to give us your summary of 1 minute of what you want us 
to remember about this hearing and what the takeaway is from 
this incredibly optimistic view of the role that solar can play 
that I take from this hearing. We will go in reverse order and 
begin with you, Dr. Calzada.
    Mr. Calzada. I would say that when you look at the new 
investments, especially when there are technologies that are 
not ready now, you should have the feet in the air and look at 
past experience. And, of course, there is a place for new 
technology. This is wonderful. But there is an institutional 
place for those, this venture capital. This is the stock 
market. And I think that those technologies have to be improved 
there because forecast--they have many, many forecasts in the 
history. For example, I have here a forecast that President 
Carter was making in 1978 saying that by year 2000, 20 percent 
was going to be solar, and forecast--there are--forecasts when 
the private citizen does the forecast and makes a bet, nothing 
happened, because it is money. But when a politician does this, 
the problem might be that it puts people's money there. And I 
would say keep feets in the air and look at past experience not 
only in Spain, but in other countries, too, to see what has 
happened in reality.
    The Chairman. Thank you, Dr. Calzada.
    And since there is no one else here, I am going to alter 
what I was already putting in process here of getting the final 
statements just to say to you Dr. Calzada that, yes, Jimmy 
Carter did say that, and he was putting the policies in place 
to do that. He did not predict that he was going to lose to 
Ronald Reagan in 1980, however, and he did not predict that 
Ronald Reagan would name a dentist, James Edwards, as the 
Secretary of Energy in February of 1981, and that Doctor, 
quote--dentist--Dr. Edwards would then pledge to abolish the 
Department of Energy by May of 1981, which was his cause.
    That was his goal, to abolish the Department of Energy, 
because he did not want any national planning for energy 
policies. And while there was a beautiful analogy there between 
Doctor--Dentist James Edward and the drilling that he had 
perfected in that profession and kind of the affinity that he 
had for an equivalent technology in oil and gas that also had 
drilling, it did exclude, unfortunately, wind and solar and 
geothermal and biomass from his vision.
    And unfortunately, the Reagan administration lasted 8 
years; also something Jimmy Carter did not predict. And 
unfortunately, the next Bush administration and the Republican 
control of the House and Senate for 12 years did not 
accommodate that technology either.
    And so if you look backward, you can learn from history, 
but you have to understand that sometimes history does not 
repeat itself. And here it is not going to repeat itself. Okay? 
We are actually on day 1 at 8 a.m. of the Obama administration. 
It is going to last at least 4 years. The States now have, in 
the absence of Federal action, put their own renewable 
electricity standards on the books. And last year there was 
9,000 new megawatts of wind and solar installed in the United 
States and 9,000 new megawatts of natural gas and only 1,500 
new megawatts of coal. So the revolution is on. Okay? It is 
just how quickly now we are going to accelerate it, as Dr. 
Burns said. It is 2 to 5 years if we are optimistic and it 
continues to move at this pace. But in 10 years, it is a done 
deal.
    So that is a different world. And while I love the Carter 
focus on these issues, that was 30 years ago, and we did miss a 
huge opportunity. We should have already completed the 
revolution now, but we were focusing too much on drilling and 
not enough on relatively prosaic technologies if they had been 
given the right kinds of incentives.
    So I turn to you, Dr. Burns, for your final word.
    Ms. Burns. I believe we are in a new era of renewable 
energy, and solar is extremely promising. I encourage us to put 
in policies and regulatory practices that grow demand, because 
we are on the precipice of achieving energy efficiency and 
parity.
    I think we should do more to attract manufacturing 
investments. I think it is a crime that most of the 
manufacturing is done offshore for our needs. And I can tell 
you green jobs are real. I look them in the face every day with 
the investments that we are putting in place.
    The Chairman. And just to follow up here on Dr. Burns, 
China is already the leading exporter of solar technology. So 
it is no longer just Jimmy Carter talking about the United 
States. China is now industrialized. India is industrializing. 
Germany has targeted solar as one of their principal long-term 
manufacturing sectors. So we no longer have the luxury of just 
sitting on the sidelines here; otherwise we will end up 
importing it all anyway because we are going to have all these 
State and national requirements that we have renewable 
electricity, and the only question now is where is it going to 
be manufactured, here or overseas? Because these laws are not 
only not going to go away, they are going to get strengthened 
as the green generation of young people come along and demand 
that they be strengthened as every year goes by.
    So that is the challenge for us. It is to make sure that 
Dow and other American companies are producing the jobs here.
    Ms. Culver.
    Ms. Culver. Well, on the BLM lands, we do have under--44 
million or so acres under lease for oil and gas, and we don't 
have large-scale solar projects. So what this really shows is 
we are starting from the ground up. It is an opportunity. There 
is a challenge. But there is an opportunity, and I really want 
to encourage us to learn the lessons that some of us have 
learned from the oil and gas program and to embrace this 
opportunity.
    The program that is being built right now is a revolution 
of its own in management, and I think we need to support it and 
go forward with this approach of actually identifying and 
prioritizing and targeting the right lands for development and 
acknowledging that there are lands that are not appropriate for 
development right from the start.
    What we have been seeing here is a very different approach 
where we have multiple opportunities for participation from the 
public and from the State and local experts. So we have people 
who know and people who care, and some of us actually both know 
and care, and we are getting a chance to improve the projects 
and to be able to support them. So I think if we continue down 
this path, we are going to be able to achieve some development.
    The Chairman. And, Ms. Culver, do you know how many acres 
the BLM leases for coal development?
    Ms. Culver. I don't know that number off the top of my 
head.
    The Chairman. That is a large number, huh?
    Ms. Culver. It is a large number.
    The Chairman. Powder River Basin, et cetera, that is a lot 
of area. I bet you that area alone is enough to generate a 
lower----although it probably isn't as sunny as it could be in 
Powder River Basin.
    Ms. Culver. I think you could ask them to share their land. 
There is a lot of land that is under lease that is not being 
developed, and they could share it with our solar industry.
    The Chairman. Sharing. Kind of a good ``king to garden'' 
concept. We could try to apply that here to solar and coal and 
oil and gas.
    Mr. De Rosa.
    Mr. De Rosa. Thank you, Representative Markey.
    The ingredients are in place for near-term, I think, 
dramatic acceleration of solar energy development, that the 
market demand is there. We have heard today the technologies 
are there today, with even more impressive technologies coming 
in the future. We have a determined Department of Interior and 
Bureau of Land Management to utilize Federal lands for 
renewable development, and we have a DOE loan guarantee 
program. We have an ITC grant. Let us keep those in place, and 
let us pass the green bank so that this isn't just a first 
wave, but it is a sustainable development of solar energy.
    The Chairman. And the green bank that you are referring to 
is the provision in the Waxman-Markey bill which will leverage 
upwards of $75 billion worth of investment in advanced 
technologies, not just solar and wind, but nuclear and other 
advanced technologies, but that green bank would be there as a 
permanent fund to be used in order to fund these new 
technologies.
    Mr. Kline.
    Mr. Kline. Three things, Mr. Chairman. The first, 
mechanisms to create scale nationally. As Dr. Burns suggested, 
that is some form of a national RES. That is a very well, 
carefully constructed feed-in tariff. It is something that 
creates national scale beyond California and a few other States 
who are doing this. Continued financial support, as Mr. De Rosa 
described; and predictable transparent land use programs for 
Federal land that allow these projects to get constructed and 
the transmission related to them get constructed.
    The Chairman. Thank you, Mr. Kline, very much. And we thank 
all of you. This was a 2-hour hearing to the minute, And it was 
very helpful. It will be on the record. And it is going to help 
us a lot over these next several months to ensure that we put 
the right permanent policies on the books to ensure that we 
complete this revolution.
    Thank you all so, so much for your help.
    [Whereupon, at 3:31 p.m., the committee was adjourned.]

    [GRAPHIC] [TIFF OMITTED] T2453A.063
    
    [GRAPHIC] [TIFF OMITTED] T2453A.064
    
    [GRAPHIC] [TIFF OMITTED] T2453A.065
    
    [GRAPHIC] [TIFF OMITTED] T2453A.066
    
    [GRAPHIC] [TIFF OMITTED] T2453A.067
    
    [GRAPHIC] [TIFF OMITTED] T2453A.068
    
    [GRAPHIC] [TIFF OMITTED] T2453A.069
    
    [GRAPHIC] [TIFF OMITTED] T2453A.070
    
    [GRAPHIC] [TIFF OMITTED] T2453A.071
    
    [GRAPHIC] [TIFF OMITTED] T2453A.072
    
