[Senate Hearing 111-1221]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 111-1221
 
                        SOLAR ENERGY TECHNOLOGY 
                         AND CLEAN ENERGY JOBS

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

                             JOINT HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON GREEN JOBS
                          AND THE NEW ECONOMY

                                AND THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 28, 2010

                               __________

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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota             CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania

                    Bettina Poirier, Staff Director
                 Ruth Van Mark, Minority Staff Director
                              ----------                              

             Subcommittee on Green Jobs and the New Economy

                   BERNARD SANDERS, Vermont, Chairman
THOMAS R. CARPER, Delaware           CHRISTOPHER S. BOND, Missouri
KIRSTEN GILLIBRAND, New York         GEORGE V. VOINOVICH, Ohio
BARBARA BOXER, California (ex        JAMES M. INHOFE, Oklahoma (ex 
    officio)                             officio)
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                            JANUARY 28, 2010
                           OPENING STATEMENTS

Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     1
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     2
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     7
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     8
Boxer, Hon. Barbara, U.S. Senator from the State of California...    39
Cardin, Hon. Benjamin L., U.S. Senator from the State of 
  Maryland, prepared statement...................................   105

                               WITNESSES

Salazar, Hon. Ken, Secretary, U.S. Department of the Interior....    10
    Prepared statement...........................................    13
    Responses to additional questions from:
        Senator Boxer............................................    22
        Senator Sanders..........................................    24
        Senator Inhofe...........................................    25
        Senator Vitter...........................................    28
Rogan, Robert, Senior Vice President, Americas, eSolar...........    40
    Prepared statement...........................................    43
    Responses to additional questions from Senator Boxer.........    54
    Response to an additional question from Senator Sanders......    54
Morriss, Andrew P., H. Ross & Helen Workman Professor of Law and 
  Business, University of Illinois College of Law; Senior Fellow, 
  IER............................................................    55
    Prepared statement...........................................    58
    Responses to additional questions from Senator Inhofe........    71
Gillette, Rob, CEO, First Solar..................................    72
    Prepared statement...........................................    74
Wolfe, Jeff, CEO, groSolar.......................................    81
    Prepared statement...........................................    83
    Responses to additional questions from Senator Boxer.........    86


                        SOLAR ENERGY TECHNOLOGY 
                         AND CLEAN ENERGY JOBS

                              ----------                              


                       THURSDAY, JANUARY 28, 2010

                               U.S. Senate,
         Committee on Environment and Public Works,
            Subcommittee on Green Jobs and the New Economy,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 9 a.m. in 
room 406, Dirksen Senate Building, Hon. Barbara Boxer (chairman 
of the full committee) presiding.
    Present: Senators Boxer, Inhofe, Lautenberg, Sanders, 
Klobuchar, Whitehouse, Udall, Merkley, Barrasso, Bond, and 
Alexander.

          OPENING STATEMENT OF HON. BERNARD SANDERS, 
             U.S. SENATOR FROM THE STATE OF VERMONT

    Senator Sanders [presiding]. Good morning. We are convening 
the hearing, and I want to take this opportunity on behalf of 
Senator Boxer and myself to welcome all of our panelists, and 
especially the Secretary of the Interior, Ken Salazar.
    At about 10:30, as I understand it, there are going to be 
votes on the floor, and we thought it would be appropriate to 
wrap up the entire hearing before then rather than to keep the 
second panel for an extra hour. We didn't think that would be 
fair. So we are going to try to move this along pretty quickly. 
We will start off with brief opening statements, then we are 
going to give the floor to our distinguished Secretary of the 
Interior.
    Let me begin by suggesting that this hearing and this whole 
topic that we are discussing today, the need to move to 
sustainable energy, in particular solar today, is of 
extraordinary importance to our country and in fact to the 
entire planet. In my view, we are on the cusp of an energy 
revolution, a revolution which ends the absurdity of the United 
States importing some $350 billion of foreign oil every single 
year.
    And as I think we heard last night from the President, we 
have heard from the Secretary, and we have heard from experts 
all over this country, we have the potential to move toward 
energy independence, to create over a period of time millions 
of good paying jobs. We have the potential to substantially cut 
back on greenhouse gas emissions and clean up our entire 
environment as we move toward energy efficiency and as we move 
toward sustainable energy.
    I have a chart--which will suddenly appear--which shows 
that fossil fuel subsidies from the Federal Government totaled 
nearly $71 billion, $71 billion between 2002 and 2008, compared 
to $1.2 billion for solar and $11 billion for other renewable 
energy sources.
    We have another chart--because we have talk a lot about 
nuclear--which suggests that nuclear plants have received 
subsidies amounting to $625,000 per megawatt, compared to new 
solar plants, which receive $186,000 a megawatt.
    If there is one point that I hope is made clear as a result 
of today's hearing, solar energy is no longer a fringe idea, it 
is mainstream, and every single year solar energy is becoming 
less and less expensive and more and more competitive with the 
older energy technologies. And we as move forward--and I hope 
we will move forward very boldly in solar and other sustainable 
energies--the cost is going to go down, down, down, as it has 
in recent years. And in the midst of a major recession, what 
excites me very much is the potential of creating a significant 
number of jobs in these new technologies.
    Today the solar industry in the United States has more than 
1,000 companies, and we are going to hear from several of them 
today, and they employ more than 40,000 workers, and those 
numbers are going up every single year. Every megawatt of solar 
installed annually in the United States creates 25 jobs. 
Compare that to nuclear, where you need 50 megawatts of nuclear 
capacity to create 25 jobs, or coal, where you need more than 
100 megawatts to create 25 jobs.
    Now my hope is that as a Nation--and the President has been 
very strong on this issue, we will understand the extraordinary 
potential out there. I will soon be introducing legislation 
calling for 10 million solar rooftops throughout this country, 
and that, in a significant way, will take us forward in solar.
    So let me just conclude by thanking all of our witnesses. I 
look forward to an illuminating panel and illuminating 
discussion.
    Let me now yield, give the mic over to Senator Bond.

        OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, 
            U.S. SENATOR FROM THE STATE OF MISSOURI

    Senator Bond. Thank you very much, Chairman Sanders.
    Welcome, Secretary Salazar and the other witnesses.
    I appreciate you, Mr. Chairman, and Chair Boxer, in holding 
the hearing on green jobs and solar panel.
    Last night, the President spoke of providing incentives for 
clean energy. I support incentives from the Government for 
nuclear power, accessing offshore energy reserves; biofuels, 
clean coals, and yes, solar power, the subject of today's 
hearing. However, we must guard against proposals that use the 
promise of these jobs but actually end up killing jobs and 
raising energy taxes, such as cap-and-trade legislation or back 
door EPA regulations.
    American workers desperately need new jobs. U.S. 
unemployment rates are too high. Too many workers are suffering 
with no work or low wages. Green jobs are good, but Americans 
still really need red, white, and blue jobs. Unfortunately, 
most of the new good paying, middle class supporting 
manufacturing jobs in the solar industry are going overseas to 
countries like China and Malaysia. U.S. taxpayers are asking 
why they should subsidize big Government green jobs proposals 
to explode the debt, raise energy taxes, and kill traditional 
manufacturing jobs when the good green manufacturing jobs they 
need will go mostly to Asia.
    First Solar of Tempe, Arizona, is testifying here today. 
This is a poster of some of their newest employees. They are 
very proud of those new employees, but they are based not in 
the United States, but at the new First Solar plant in 
Malaysia. First Solar just finished construction of four solar 
manufacturing plants, employing 2,000 Malaysians, and have 
announced plans to add eight more production lines in Malaysia 
by 2011.
    Well, that is good news for Malaysia, they are good 
friends, but what is reflected here in the chart of First 
Solar's manufacturing capacity shows that First Solar has some 
manufacturing in the U.S.--that is the blue line underneath--
some in Germany, but most of the new solar manufacturing 
capacity, the red on top, is overseas in Malaysia.
    Now, eSolar, also testifying today, may be a U.S. company 
but it imports most of its solar components from China. eSolar 
uses panels from China, gear boxes from Shinzan, and they just 
signed a new deal to outsource manufacturing to Pen-Gly, China, 
as you see in this poster.
    Evergreen Solar, another prominent U.S. solar company that 
has taken millions of dollars in taxpayer subsidies, recently 
announced that it is expanding its solar manufacturing not at 
its Massachusetts home but instead in Wuhan, China, as shown in 
this.
    BP is closing their manufacturing operations in Maryland 
and moving that work to China.
    GE is shutting down its Delaware solar facility.
    An Evergreen Solar executive put it succinctly: ``It's 
much, much less expensive inherently to produce in China. All 
of our expansion will be in China.''
    Indeed, China is a country where they pay electrical 
engineers $7,000 per year; manufacturing workers a fraction. 
Power is subsidized, financing is subsidized, and government 
regulations are nonexistent.
    The few solar manufacturing jobs we are getting in the 
United States come at extreme expense to the taxpayer. United 
Solar took $96.9 million in taxpayer subsidies for one plant in 
Michigan that created a mere 350 jobs. Evergreen took $44 
million and created 700 jobs. That is tens of millions of 
dollars in taxpayer subsidies for only hundreds of green jobs 
when we lost 2 million manufacturing jobs and 7 million jobs 
total since the recession began.
    Now, don't get me wrong, I am not critical of the companies 
here today. They are doing what they do, which is find where 
they can manufacture their products the cheapest. Likewise, I 
am sure that the workers they employ in Malaysia and China are 
fine workers who will do a good job for their employers, and 
they will strengthen ties between our countries. But at a time 
of great economic need for America's workers we need proposals 
that will maximize the creation of jobs here in America, not in 
Asia, when we are talking about Federal subsidies.
    Granted, some American workers will get jobs installing 
solar panels as we will hear today. Those are not the high end 
manufacturing or engineering jobs. But we cannot sit here and 
honestly say that solar power will create the high number of 
blue collar, good paying, middle class supporting manufacturing 
jobs that America needs. Thus, green solar jobs certainly 
cannot justify imposing massive job killing and energy tax, 
raising cap-and-trade legislation or back door EPA climate 
regulations.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Bond follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you, Senator.
    Senator Lautenberg.

        OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman, for holding this 
hearing. I know what an advocate you have been, and it is with 
respect and support that we gather here today, and it is good 
to see our friend, Ken Salazar, in his position. Can we call 
him the warden of the environment? We really appreciate what he 
has done. We miss him here.
    I think that Senator Bond made a very clear picture of 
where we are going with the jobs and our money, but the 
President last night I think made it clear that putting jobs 
out of the country cannot simply be rewarded by bringing 
cheaper products into our society, lowering the standard of 
living here as we do that. When we reduce incomes here, we 
commensurately lower standards of living.
    One of the best ways to stop global warming and to get our 
economy back on track would be a wind farm environment, wind 
farm economy. We can create thousands of new clean energy jobs 
while protecting our planet against health threatening 
temperature increases, rising sea levels, resource shortages, 
and declining species. Fossil fuels are not only dirty, but 
they are finite; eventually we are going to run out, leaving us 
dependent on other nations and with outdated technology. On the 
other hand, renewable energy--wind, solar, and geothermal 
power--is endless.
    Renewable technologies are clean, they will free us of our 
dependence on other nations, and they will create jobs. These 
new technologies need workers to build the components, install 
them, keep them up and running. These are skilled, good paying 
jobs that will last for decades to come.
    I now want us to look for a moment at what is already 
happening in New Jersey. New Jersey, by the way, where the 
solar panels were developed in 1954, New Jersey took an active 
and an early lead in developing clean energy technology. In 
fact, solar panels, as I mentioned, invented in our State more 
than 50 years ago, and forward thinking laws have helped keep 
New Jersey at the forefront of solar technology and creating 
clean energy jobs.
    In our State, New Jersey, for example, it requires 22.5 
percent of electricity comes from renewable sources by 2021. 
Since that law was enacted in 2001, the number of solar 
installations in our State has grown from simply 6 to more than 
4,000 since 2001, making us second in the Nation in solar 
capacity to power our homes and businesses.
    In July 2007, former Governor Corzine signed a law calling 
for New Jersey's greenhouse gas emissions to be reduced to 1990 
levels by the year 2020 and 80 percent below the 1990 levels by 
2050. New Jersey was one of the first States to adopt such a 
law, and the laws span innovation across our State, innovation 
that has created jobs.
    The Pew Environment Group found that more than 2,000 clean 
energy companies in New Jersey employ more than 25,000 people. 
That was in 2007. Right now, Atlantic City is installing the 
country's largest roof mounted solar array on top of its 
convention center. This massive project will clean up the air 
by reducing pollution and putting New Jerseyans to work.
    If States like New Jersey are acting, then the Federal 
Government must act, too. That is why I am proud to be an 
original sponsor, cosponsor of Senator Sanders' 10 Million 
Solar Roofs bill. While the bill is a good start, what America 
needs is a comprehensive solution to this environmental and 
economic challenge. Putting a cap on global warming pollution 
is the fastest, cheapest way to clean up our atmosphere, reduce 
our dependence on oil, and create jobs. That is what we have 
been fighting for, and that is what we must ultimately do.
    I thank you.
    Senator Sanders. Senator Lautenberg, thank you.
    Senator Inhofe.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman.
    You know, I am trying to get an earlier flight out today 
because today we are going to set the second all-time record in 
Oklahoma for cold weather. I just would tell my good friend 
from New Jersey, where is global warming when you need it?
    Chairman Sanders, let me thank you for scheduling the 
hearing today to examine whether solar energy can fuel our 
economic recovery. As I have stated many times, I support all 
of the above approach.
    Oh, let me also say welcome to my good friend, Secretary 
Salazar. You are one of the real bright places in this 
Administration. I always enjoy visiting with you.
    I also want to mention that while we don't have much solar 
in Oklahoma, we are a leader in Oklahoma in wind and geothermal 
technologies. I take people all the time in my little airplane 
going out west in Oklahoma. In any one place you can see 500 of 
these generators cranking away in Oklahoma. On January 8th, the 
Oklahoma Corporation Commission issued two orders authorizing 
OG&E, Oklahoma Gas & Electric, to purchase electricity from two 
new wind farms currently being developed in northwest Oklahoma. 
Both are expected to be in production by year's end, will 
provide an additional 280 megawatts to the State's already 
existing 1130 megawatts of capacity.
    I welcome all the witnesses, especially Secretary Salazar, 
to this hearing, as well as Professor Andrew Morriss. Professor 
Morriss will focus his comments on current and proposed 
policies to promote solar and other types of renewable energy 
rather than on the technologies themselves.
    We know that cap-and-trade and other schemes that raise 
energy prices are not the solution that America wants. We know 
the votes aren't there also, speaking practically. But to 
promote clean energy you don't have to hammer conventional 
energy sources. The notion that energy companies will not 
invest in clean technology without Government programs is a 
myth. According to the Pacific Research Institute, the U.S. 
based oil and gas companies invested an estimated $121.3 
billion from 2000 to 2007 on emerging energy technologies in 
the North American market, and I know there are several more 
partnerships under development.
    Mr. Chairman, we need an all-of-the-above energy strategy 
including renewables but not at the expense of other domestic 
sources. Last fall, the Congressional Research Service released 
a report which revealed that America is No. 1 in combined 
recoverable oil and natural gas and coal resources. No. 1. Not 
China. This is America. The largest recoverable resource on 
earth. CRS shows that if America opened access to its own 
resources, we could produce 167 billion barrels of oil. 167 
billion barrels of oil. That is the equivalent of replacing 
America's current imports from OPEC nations for 75 years. The 
report also shows that at today's rate of use, America 
possesses a 90-year supply of recoverable natural gas.
    I have to tell you I was excited last night when the 
President said we are going to start drilling offshore. If 
people are serious about being energy independent, all we have 
to do is develop our own resources. There is not another 
country in the world that doesn't develop its own resources.
    While I appreciate the opportunity to talk about this issue 
today, I am hopeful, Mr. Chairman, that you will begin to 
schedule hearings on other issues, especially those concerning 
infrastructure. I have been concerned about this committee. We 
have the largest jurisdiction in the Environment and Public 
Works Committee of any of the committees; we have the WRDA 
bill, we have the transportation and reauthorization bill, all 
these things that we need to be paying attention to.
    I should also note that we have 11 nominees pending before 
this committee. Four of those are for the TVA alone, while 
three more are for the Nuclear Regulatory Commission, the NRC. 
It is imperative that we get these guys on the job. If the 
majority wants to create green jobs, let's proceed with these 
nominees so that the NRC can effectively complete reviews of 17 
applications pending before the agency for new reactors. The 
nuclear industry has already created 15,000 jobs and has yet to 
begin actual construction of a new plant, which could create 
3,000 to 4,000 jobs per site.
    This is our first hearing in 2010. We know enough about 
climate change and cap-and-trade to put that aside. We know 
that cap-and-trade means fewer jobs and higher energy prices, 
so let's focus instead on advancing issues that will put people 
back to work and adopt an all-of-the-above policy that will 
make us independent here in the United States.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Inhofe follows:]

                  Statement of Hon. James M. Inhofe, 
                U.S. Senator from the State of Oklahoma

    Madam Chairman, Chairman Sanders, thank you for scheduling 
this hearing today to examine whether solar energy can fuel our 
economic recovery. As I've stated many times, I support an all-
of-the-above energy policy, which includes using renewable 
resources such as solar energy to power our economy. While we 
don't have much solar in Oklahoma, my State has been a leader 
in wind and geothermal technologies simply because it makes 
economic sense to do it there. In fact on January 8th the 
Oklahoma Corporation Commission (OCC) issued two orders 
authorizing OGE to purchase electricity from two new wind farms 
currently being developed in northwestern Oklahoma. Both are 
expected to be in production by year's end and will provide an 
additional 280 megawatts to the State's already existing 1,130 
megawatts of capacity.
    I welcome all the witnesses, including Secretary Salazar 
and representatives from the various solar energy companies as 
well as Professor Andrew Morriss. Professor Morriss will focus 
his comments on current and proposed policies to promote solar 
and other types of renewable energy rather than on the 
technologies themselves.
    We know that cap-and-trade or other schemes that raise 
energy prices are not the solutions that America wants or 
needs. To promote clean energy you don't have to restrict or 
penalize other energy sources. And the notion that energy 
companies will not invest in clean energy without Government 
programs is a myth. According to the Pacific Research 
Institute, U.S. based oil and gas companies invested an 
estimated $121.3 billion from 2000 through 2007 on emerging 
energy technologies in the North American market.
    Madam Chairman, we need an all-of-the-above energy policy 
that includes renewables but not at the expense of other 
domestic resources. Last fall, the Congressional Research 
Service released a report on America's combined recoverable 
oil, natural gas, and coal resources. CRS found that they are 
the largest recoverable resources on Earth. CRS shows that if 
America opened access to its own resources we could produce 167 
billion barrels of oil, which is the equivalent of replacing 
America's current imports from OPEC for more than 75 years. The 
report also shows that at today's rate of use America possesses 
a 90-year supply of recoverable natural gas. To remain 
competitive we need access to this resource base, which will 
help fuel our economic recovery and create thousands of jobs.
    While I appreciate the opportunity to talk about this issue 
today, I am hopeful, Madam Chairman, that you will begin to 
schedule hearings on other issues, especially those concerning 
infrastructure. As I've said repeatedly, building highways and 
bridges can provide an immediate economic stimulus and create 
thousands of new jobs.
    This is our first hearing in 2010. We know enough about 
climate change and cap-and-trade to put them aside--we know 
cap-and-trade means fewer jobs and higher energy prices. So 
let's focus instead on advancing issues that will put people 
back to work and get our economy moving again.

    Senator Sanders. Thank you, Senator Inhofe.
    We are very pleased to have with us our former colleague 
and Secretary of the Interior, Ken Salazar.
    Mr. Secretary, thanks for being with us.

           STATEMENT OF HON. KEN SALAZAR, SECRETARY, 
                U.S. DEPARTMENT OF THE INTERIOR

    Mr. Salazar. Thank you very much, Chairman Sanders. And 
thank you to my good friends, Senator Inhofe and Bond and 
Senator Lautenberg. It is good to see you all here this 
morning.
    Let me say at the outset, from day 1, the President's 
priority with respect to coming up with a comprehensive energy 
and climate change legislation has not changed. We believe we 
need to have that framework for the long term. We understand 
that there is still a lot of work to be done, and obviously our 
hope is that we will get to bipartisan legislation that will 
address these issues. Our impetus for getting to that kind of 
framework is simple and clear: we want to create millions of 
jobs here in America; we want to get us to energy independence 
as a Nation; and we want to protect our children and our planet 
from the dangers of pollution.
    Now, how we move forward and address the issue of energy is 
obviously a complex matter, and I believe, as all of you heard 
President Obama last night in his presentation, he spoke to the 
Nation in the State of the Union about the importance of a 
broad array in the portfolio of energy that we must address, 
and in that portfolio of energy one of the things that we are 
focused on is what we can do with respect to solar energy 
development, and it is in that context, Chairman Sanders, that 
I very much appreciate your giving us the opportunity to put 
the spotlight on the potential on solar energy for our country.
    Let me say that as the Secretary of the Department of the 
Interior, I have the important responsibility to be the 
protector of America's natural resources and America's 
heritage, and I work on that very hard every day. As we look at 
how we protect America's resources, part of it is development, 
including the development of our oil and gas resources and 
other resource that we have but also our opportunity to use 20 
percent of the land mass that we have in the United States of 
America to develop renewable energy. And how we develop solar 
energy on the public lands really is what I would like to spend 
some time speaking with this committee this morning, today.
    If I may, Chairman Sanders, at this point, I would ask the 
Chairman and the committee consent to have Bob Abbey, the 
Director of the Bureau of Land Management, join me at the 
table.
    Senator Sanders. Without objection.
    Mr. Salazar. Bob Abbey, by the way, is the Director of the 
Bureau of Land Management, and he oversees 250 million-plus 
acres of public lands where many of these facilities will be 
located. Thank you, Bob.
    Let me say that we have over the last year been working 
hard to stand up renewable energy on our public lands, and 
today, at the beginning of 2010, I can report to you that we 
have 128 applications for solar energy facilities on our public 
lands. These applications, if they were to be brought to 
fruition, would generate some 77,000 megawatts of power; they 
would cover an area that would be a very significant area 
within our public lands. In addition to solar energy 
applications, we 95 pending geothermal energy applications; we 
have 24 pending wind project applications on our public lands.
    With respect to solar energy, we believe that there are 23 
million acres on our public lands which are highly suitable for 
solar energy production. This last year we set aside, through 
an order which I executed, 1,000 square miles of that land for 
a programmatic environmental impact statement because what we 
want to do is we want to stand up these renewable energy 
projects in the right places. We don't believe that we ought to 
put these renewable projects everywhere, and I am sure if 
Senator Alexander were here he would remind us that there are 
important landscapes that we need to protect, as well as 
Senator Feinstein, who has been very instrumental in helping 
guide us on this issue.
    Let me say that at this point we are moving forward with a 
set of applications which we are fast tracking for permit 
approval, and by the time that we get to December of this year, 
2010, we hope to have permitted 13 commercial scale solar 
energy projects which will have the capacity of producing 4,500 
megawatts of power by the time that they are built out.
    When you compare 4,500 megawatts of power in terms of just 
a generic comparison to coal, that would be the equivalent of 
about 15 mid-sized coal-fired power plants. We also believe, as 
the President said last night, that we have a future for clean 
coal technology and are deploying significant resources in the 
development of clean coal.
    But looking at just solar energy alone, by the end of this 
year, our hope is that we will have permitted 4,500 megawatts 
of solar energy power.
    Those projects as they are built will, in our estimation, 
create over 40,000 jobs here in America. That is 40,000 jobs in 
the construction of these solar energy facilities that will 
help us move our way toward energy independence, that will help 
us create jobs here at home, and that will help us deal with 
the dangers of pollution.
    Besides the solar energy projects which we are fast 
tracking in the States of Arizona, California, and Nevada--it 
is in those States that we accumulate the projects to the 4,500 
megawatts of power--we also are fast tracking applications for 
transmission because we know that we must find a way of taking 
the energy from the place that it is produced to the place 
where it is going to be consumed. So we have applications for 
about 5,000 miles of transmission lines on public lands and we 
are fast tracking those applications as well.
    So let me just conclude, Mr. Chairman, by saying that we 
very much appreciate your and this committee's putting the 
spotlight on solar energy as one item in the portfolio of 
renewable energies and other energies that we believe very 
strongly will be a part of this Nation's future.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Salazar follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you, Mr. Secretary, and thank you 
for your very exciting work that you are doing.
    Let me begin. The last time you were before this committee 
I believe you mentioned that you thought that solar thermal 
itself, concentrated solar, could provide something like 29 
percent of the electrical needs of households throughout this 
country. Is that something that you--can you say a word about 
the potential of solar thermal in the Southwest and its 
capability both in producing electricity and creating jobs?
    Mr. Salazar. Mr. Chairman, we do believe that the solar 
potential, if we can realize the full solar potential, can 
provide that kind of energy for the entire energy demand of the 
Nation. How much of that will come from concentrated solar 
versus other kinds of technologies is something that the 
industry can speak to. The fact is the projects that we are 
permitting on public lands now use both technologies, they use 
the concentrate solar technology as well as the photovoltaic 
technology, and there is great technology progress that is 
being made with respect to capturing the sun.
    Senator Sanders. I hope everybody understands what the 
Secretary is saying. What he is saying that over a period of 
time we can produce 30 percent of the electricity that homes in 
America need from solar. What an extraordinary development that 
will be.
    Mr. Secretary, talk for a moment, in your judgment, about 
the future of solar. We have seen that in recent years the cost 
of photovoltaic panels, for example, have gone down very 
substantially. Do you see a time in the near future when the 
creation of solar energy will be competitive with the more 
conventional technologies?
    Mr. Salazar. Mr. Chairman, as I have visited the National 
Renewable Energy Lab in Colorado probably now a half-dozen 
times, I have watched how the technology is evolving there, as 
well as having visited a number of solar manufacturing places 
around the country, I think that there is great interest, and 
there is great capacity that is emerging to build solar 
products and to build them here in America. I think the fact 
that we have, just within our public land portfolio--this is 
not dealing with private lands in America--128 applications for 
major solar facilities by itself should send a strong and clear 
message that there is great interest in developing these solar 
energy facilities.
    And I would add, Mr. Chairman, that it is not pie-in-the-
sky stuff. As I have traveled, as I know you have, Mr. 
Chairman, to different places in California, I can go to a 
place where I can show you a solar energy facility that is 
already generating several hundred megawatts of power. So we 
have the technology. What we need to do is have the policies in 
place over the long term so that we don't have the mistakes of 
the past repeated, which are fits and starts with respect to 
our energy policy.
    Senator Sanders. In that light, we are, with Senator 
Lautenberg and others, going to be introducing legislation 
which would call for incentives and tax credits for 10 million 
rooftops in this country to be able to have solar. What do you 
think about that?
    Mr. Salazar. I think there is a potential for solar at all 
levels. There is a potential for solar with respect to 
residential applications; potential for solar with respect to 
small commercial scale applications, as well as large utility 
scale applications. The ones that we are talking about on these 
public lands are some of the larger facilities which would 
generate up to 350 megawatts of power. That is a very huge 
utility facility.
    But you also, as Senator Lautenberg spoke about what they 
have done in New Jersey, including at the stadium, the 
facilities in New Jersey, where you have solar energy already 
connected there, you can see how solar energy has a national 
application; it is not an application that is just suited just 
for the Southwest.
    Senator Sanders. No, that is exactly right. Not only is it 
not just for the Southwest, it is going to work in New England 
as well. We have a large National Guard base in the Burlington, 
Vermont, area. They are going to be installing a whole lot of 
solar to try to make that base as energy independent as 
possible. We are seeing solar going up in schools and 
businesses all over the State of Vermont. Senator Lautenberg 
mentioned New Jersey as being one of the leaders. So I think 
people have to understand this is not just in the sun States; 
this is applicable, more or less, in every region of our 
country.
    Can you give us a projection, Mr. Secretary, in terms of 
what you see the potential of job creation in solar? Where do 
you see jobs going as we expand solar technology?
    Mr. Salazar. I think the potential is immense, and I think 
it is not at all an understatement for us to talk about 
hundreds and thousands of jobs and, in fact, millions of jobs 
if we can move forward with a clean energy economy, which the 
President is so committed to making happen. And we are making 
that happen, and I think the demonstration for us lies in these 
applications that are we processing.
    Yes, while we have more than 100 applications, there are 
about 15 of those that we are fast tracking, and those ones 
that we are fast tracking are projections through the Bureau of 
Land Management is that they will create over 40,000 jobs, and 
they will be permitted, our hope is, our fervent hope is that 
we will have those projects permitted by December of this year.
    Senator Sanders. OK, thank you.
    Senator Lautenberg.
    Senator Lautenberg. Thanks for your testimony. I can't help 
but think about some music that says that the environment is in 
the best of hands, and we thank you for presenting that kind of 
an attitude and the kind of suggestions that you have been 
making all along since you left the fold, so to speak. It is 
good to see you.
    New Jersey now requires that, as I mentioned, 22.5 percent 
of its electricity must come from renewable sources by 2021. 
Since putting this requirement in place the number of solar 
installations in our State has grown from simply 6 to more than 
4,000. Is that a national renewable standard that could develop 
across the country in that period of time?
    Mr. Salazar. Senator Lautenberg, having been a supporter of 
a national renewable portfolio standard and as the President 
and the Administration have been supporters of moving forward 
with a national RES, that is one mechanism in which we have 
seen, at the State levels, significant progress being made with 
respect to a renewable energy portfolio. It is interesting to 
note that perhaps the place that has advanced the farthest is 
Texas, where one of the--I think it was the first renewable 
energy portfolio standard that was passed for that particular 
State.
    In my own home State of Colorado, Senator Lautenberg, our 
renewable energy portfolio, which was created by Citizens 
Initiative in the first place, was actually doubled because the 
utility companies 2 years out came back in and said that they 
could produce significantly more renewable energy than what had 
been planned in the Citizens Initiative.
    So there is great potential in the way that you have done 
in New Jersey to do that across the country.
    Senator Lautenberg. Your home State of Colorado leads the 
way in Government research into clean energy with its National 
Renewable Energy Lab. Has there been any effect on the local 
economy as a result of that in terms of job creation there and 
in terms of reductions in the use of fossil fuels?
    Mr. Salazar. The answer is that the economic injection into 
Colorado is very evident and very obvious from the clean energy 
economy. In the last year, I have been to places like Pueblo, 
Colorado, and know about places in Brighton and others where 
just one wind energy company alone has built facilities for the 
manufacturing of wind turbines that will create thousands of 
jobs just from wind energy. And I have watched what has 
happened in what I call the forgotten America, the rural parts 
of the State of Colorado, where you have seen a new economy 
that has been created because of the new renewable energy 
installations that are going into these rural areas where they 
need an injection of additional economic wherewithal.
    Senator Lautenberg. We hear a lot about the cost of passing 
a global warming bill, but the report by the former chief 
economist at The World Bank found that inaction on global 
warming could cost 10 times as much as transitioning to a clean 
energy economy. How could the unchecked global warming hurt the 
economy, and what dislocation might occur with job losses in 
the country if we don't pass a global warming bill?
    Mr. Salazar. Senator Lautenberg, from the point of view of 
the Department of Interior, I see the impacts of climate change 
and the warming of the climate firsthand in the places that I 
have responsibility to manage on behalf of the American people. 
I see it in places such as the Apostle Islands in Lake 
Superior, where the temperatures there have already increased 
by 5 degrees from where they were 30 years ago. I see it in 
places such as the Glacier National Park, where our scientists 
have told us that the glaciers at Glacier National Park will be 
gone by the year 2020.
    And for those who worry about water, which is a particular 
issue of great importance in the West, when you look at the 
Colorado River Basin that essentially is the underpinning of 
the great economies of California and Nevada and Arizona and 
Wyoming and New Mexico, Colorado, the seven States, Utah, the 
scientists are projecting a 20 percent decline in the water 
availability from the Colorado River Basin.
    The consequence of that economically to each of those 
economies in those seven States would be huge. It would be huge 
in large part because of the complexity of how water is 
allocated along that river system, which I would be happy to 
discuss with you in further detail. But just the impacts with 
respect to water supply would be huge, in the billions of 
dollars that would be affected to the economies just in the 
Southwest alone.
    Senator Lautenberg. Thanks very much, Mr. Secretary.
    Thanks, Mr. Chairman.
    Senator Sanders. Thank you, Senator.
    Senator Alexander, do you have some questions?
    Senator Alexander. Thank you. I am sorry I missed the 
testimony; I was in a budget hearing.
    I wanted to explore the question of subsidies and see if I 
could get, Mr. Secretary, from you or the other panelists some 
guidance about kind of subsidies for solar power and clean 
energy Congress--what kind of principles we ought to use when 
we fashion these subsidies, thinking specifically about solar 
technology.
    My bias would be that for emerging technologies, that the 
subsidies should be technology neutral and temporary. But that 
has not been the case over the last several years. For example, 
a production tax credit was created in the early 1990s, which 
is often touted as a renewable energy tax credit, but basically 
it went for wind turbines. They were the only ones that really 
benefited from it, and it is a very generous subsidy. If you 
take the President's goal of making 20 percent of our 
electricity from wind, one calculation I did was figuring that 
it would cost the taxpayers about $170 billion over 10 years to 
subsidize that.
    Solar energy got left out of those early years of the 
protection tax credit. I remember when I first came to the 
Senate, it was trying to get into the game and I was the 
sponsor of an early investment tax credit for solar energy. And 
then we are considering other policies such as renewable 
electricity standards which basically amount to a subsidy by 
narrowly defining certain types of energy and not other types 
of energy. For example, would geothermal be in or out, or will 
new hydroelectric power be in or out? So, in effect by 
requiring certain types of energy to be bought that is a 
subsidy for that energy. And then there are certain subsidies 
that utilities give called feed-in tariffs to subsidize other 
energy.
    So as we think, particularly given the President's call 
last night and our own calls for having a limited amount of 
extra money over the next 5 or 10 years and wanting to see our 
country have more clean energy, how do we make--what principles 
should we follow in making these choices?
    Mr. Secretary, I will start with you because you used to be 
here. We have an X amount of dollars we can put, say, into 
research and development to try to lower the cost of solar 
power, so it can be more competitive; or we can subsidize 
homeowners; or we can subsidize manufacturers. Which should we 
do, and how long should we do it? And especially what about the 
idea of having subsidies that are technology neutral so that we 
don't end up encouraging one form of carbon free electricity 
production, but leaving out another? What advice would you have 
for us about that?
    Mr. Salazar. Thank you very much, Senator Alexander, and 
thank you for your leadership on these issues as well as your 
leadership in terms of making sure that we are protecting the 
landscapes of America as we move forward with renewable energy 
development. We very much have enjoyed our work with you on 
that front.
    Let me respond in several ways. First, I think that we 
ought to avoid the mistakes of the past, and the mistakes of 
the past have been that we have not had a legislative or 
regulatory framework with respect to renewable energy in place 
long enough to be able to get to a result. You saw the great 
growth, for example, that occurred with renewable energy, 
including solar energy, in the late 1970s. Then it was 
abandoned.
    Now Germany and other countries, Spain, have essentially 
taken the lead in terms of moving forward because we haven't 
been there with a policy that has been in place long enough to 
be able to allow these new energy forms to get to the 
maturation point where they can stand on their own. So my first 
and most important piece of advice is that we need to have a 
long-term policy in place.
    Senator Alexander. While you are doing that, I forgot to 
mention in Germany there is some call to reduce or end some of 
the solar subsidies because they are in effect encouraging a 
high price, and Germans are buying Chinese solar panels, and it 
is not helping the German manufacturers. So if you could think 
about that in terms of your answer as well.
    Mr. Salazar. I recognize that the trade issues and the 
costs of doing business are something that have to be 
addressed, but I also--and you will hear it from some of the 
companies who will testify--the technology that we are 
developing here is now allowing companies to be able to produce 
solar panels much cheaper today than they were 5 or 10 years 
ago, and we need to continue to support those companies as they 
search for ways of being able to produce solar panels in a way 
that is much more cost effective here.
    The long-term set of incentives really are two options, or 
maybe three. One would be for us to move forward with a cap 
with respect to carbon emissions because a cap on carbon 
emissions at the end of the day will start driving the energy 
supply needs of this country to these less carbon emitting 
energy supplies. So that is one way of developing the long-term 
energy policy.
    The second, which we have had many debates here in the U.S. 
Senate in the past, is whether we can move forward with a 
national renewable energy standard. Many of the States have 
done that; I think it is now over half of the States have done 
that, and they have been effective, whether it is Texas or 
Colorado or New York, they have moved forward with very 
significant renewable energy standards. The fourth point I 
would make in response to some of your comments and questions, 
with respect to neutrality on the different kinds of energy 
supplies, I think that is a very good point to make, because I 
do believe that there are some aspects of renewable energy that 
have been treated differently and have been placed at a 
disparity vis-a-vis others.
    We, for example, believe that there is significant 
potential with respect to small hydro, and that would be 
harnessing the power that we already are seeing produced except 
not in the form of electrical generation, through pipelines 
that run under the streets of cities and through small dams 
that are already out there and simply don't have an electrical 
generator.
    So I do think that there has to be--I think that when we 
look at the portfolio of renewable energies, I think the 
conversation and the consensus that I see here in Washington 
is, yes, everybody agrees on solar. Everybody agrees on wind in 
the right places with limitations to protect the landscapes. 
People will agree and may be a little more contentious with 
respect to some of the biofuels, but there are some other 
energies that are out there, including hydro, that I think that 
we need to be more neutral with respect to looking at those 
potential sources.
    Senator Alexander. Thank you, Mr. Chairman.
    Senator Sanders. Senator Barrasso is here; I am going to 
call on him in a second.
    My hope is that because of the votes that are going to take 
place we can get to the second panel fairly soon.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman. And 
with your permission, Mr. Chairman, I would just like to 
introduce my statement for the record, so to not go through all 
of that.
    Mr. Secretary, great to see you again. Enjoyed seeing you 
always. Welcome back to the Senate. I was encouraged by the 
President's comments last night about nuclear energy, about oil 
and gas, about different issues, and specifically with clean 
coal, which is so important in Wyoming. You have spoken about 
creating green jobs as a way to rescue our economy, and I 
support green jobs. We have wind turbines going up around our 
State, transmission lines continue to be an issue, but I have 
always believed that equally important to those green jobs are 
the red, white, and blue jobs that continue to power this 
country and will continue to do that for the next century.
    Our Wyoming Department of Employment reports that 
employment in our oil and gas industry increased slightly in 
November, but we have lost thousands of jobs over the previous 
14 months. Many families in the West, as you know, rely on oil 
and gas development for good paying jobs. I think you have 
characterized some of these families as kings of the world, and 
I have concerns about that. My constituents that work in the 
oil and gas industry are hard working men and women; many of 
them are small business owners or their employees. So I would 
encourage you to work together to find some common sense 
solutions that foster job growth and promote our energy 
security in not just the green jobs, but in the red, white, and 
blue jobs.
    I have concerns that the Administration's oil and gas 
leasing reforms are only going to make it more difficult to get 
these jobs back on track. Governor Freudenthal, I know, was 
here recently to visit with you. He and I are of the opposite 
parties, but we both agree that the new requirements on oil and 
gas are burdensome, and he said in a letter to you that it puts 
a stranglehold on an already cumbersome process.
    So the specifics of your proposed reforms, to me, remain 
unseen, but it creates greater uncertainty for development in 
Wyoming. When do you plan to make the specifics of these 
reforms available to the public? And I don't know if you have 
that ready on that yet, Mr. Secretary.
    Mr. Salazar. Senator Barrasso, let me just say, first, that 
I very much appreciate the men and women who work in the oil 
fields, because they are real people whose families very much 
rely on oil and gas development. Indeed, I think when you look 
at the numbers, if you want to be objective about our efforts 
on oil and gas, we had a 14 percent increase in oil and gas 
from our public lands, both onshore and offshore, in 2009 over 
what they were in 2008. So I think the rhetoric that you 
frankly see not from the men and women in the oil fields, but I 
would say from the executives of some of the companies, I think 
is misplaced.
    But having said that, I think the important thing is that 
we are trying to move forward with energy development, both 
onshore and offshore, in the right places, and wanting to make 
sure that the landscapes, such as some of the very beautiful 
ones you have in Wyoming, are in fact protected. There is an 
instruction memorandum that has gone out with respect to the 
oil and gas reforms on the ground, and I am going to have 
Director Abbey speak to those instruction memorandum, if I can, 
for just a couple of minutes to bring you up to date on what 
the process is.
    Senator Barrasso. Thank you.
    Director Abbey.
    Mr. Abbey. Good morning, Mr. Chairman, Senator Barrasso. We 
have forwarded our draft memorandum to our field offices for 
their comments. We have received the field's comments this 
week. We are going through analysis of those comments. We do 
believe that there may be some minor modifications to what we 
have proposed in the draft. We do not believe that there will 
be any significant modifications required. Again, the intent of 
our new guidance to our field offices is to provide greater 
assurance to everyone that the parcels that are offered for 
lease are likely to be leased and ultimately developed.
    So, again, in response to your specific question, I would 
imagine that we would have our final policy ready to be 
disseminated within the next probably 2 weeks to 3 weeks.
    Senator Barrasso. I don't know if you have had a chance to 
read Governor Freudenthal's letter; it is 5 pages, it is very 
detailed, and I think it is right on point on the issues that 
are affecting the jobs in our community and our ability to 
continue to aim toward energy security in our Nation and in 
Wyoming, which continues to be a place where there are huge 
energy resources, both renewable and nonrenewable. So I would 
appreciate that and would appreciate it if you could take a 
second look at that letter.
    Mr. Chairman, you had mentioned the issue of time. I see my 
time has expired. I have a number of additional questions, and 
with your permission I would like to submit those in writing 
for later response.
    Senator Sanders. Of course. Without objection. Thank you, 
Senator.
    [The prepared statement of Senator Barrasso was not 
received at time of print.]
    Senator Sanders. Senator Udall, did you want to briefly ask 
some?
    Senator Udall. I know, Mr. Chairman, you would want to get 
to the second panel, and I do also, because both eSolar and 
First Solar are very active in New Mexico, and I want to have 
the opportunity to question them.
    But just a brief question to Secretary Salazar. Secretary 
Salazar, you have done a marvelous job, I think, at targeted 
with Federal land where you are going to do renewable energy 
development, and your testimony includes some useful 
information about the number of applications and the scale of 
renewable energy projects that the Department of Interior is 
working on. When do we expect to see these projects reach the 
construction stage, and how many do we think we will see move 
forward over the next several years, and what is going to be 
the impact on jobs? As we all know the President last night 
spoke about clean energy jobs, and you are right in the 
forefront of that, so if you could give me a little bit of an 
idea that would be great.
    Mr. Salazar. Thank you very much, Senator Udall, and thank 
you for your leadership on these issues and other natural 
resources issues in New Mexico. We look forward to working with 
you on all of them.
    With respect to your question, there are over 100 
applications that we have for major commercial scale solar 
utility projects on our public lands. We are moving forward on 
a fast track basis, in part because we want to meet the 
December 1st deadline under the American Recovery Act for these 
projects. There are 13 of those projects that we have 
identified and we estimate that those 13 projects, permitted 
hopefully by December the 1st or before, will generate about 
4,567 megawatts and will create over 40,000 jobs.
    Senator Udall. Thank you very much.
    And I would yield back at this point, Mr. Chairman.
    Senator Sanders. The Chair of the full EPW Committee is 
here, Senator Boxer, who has been a long-time champion of 
sustainable energy, and she wants to make a brief statement.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Yes, Mr. Chairman. I am so sorry; I was off 
the Hill.
    And I so appreciate your coming earlier so we could hear 
from you, Mr. Secretary. I have looked over your statement, and 
I listened to the President last night, and I just think it is 
so clear that to launch this economy and to lead the world we 
are going to have to be the leader here on alternative energy, 
clean energy. As the Chinese leader once told me, he said, the 
world is going green, and he said we hope you sit on your hands 
because we are ready to go. And the President is not going to 
sit on his hands, and I don't think we are going to sit on ours 
either.
    I wanted to put my statement in the record, Mr. Chairman, 
if I might, and just simply say that clean energy and energy 
efficiency jobs continue to be one of the bright spots in the 
California economy.
    On December 9th, the Los Angeles Times reported an analysis 
released by Collaborative Economics for the Next 10 
Organization that found green jobs increased by 5 percent while 
total jobs declined by 1 percent in California from January 
2007 to 2008, and we are waiting for the latest numbers. But we 
know that green jobs grew at three times the rate of the 
overall California economy between 1995 and 2008, so it is 
absolutely key. It is obvious you can't outsource the 
installation of a solar roof or utility scale solar facility 
located here in the U.S., and those jobs are right here.
    So thank you very much, and we look forward in this 
committee to working with you as we move forward.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Boxer was not received 
at time of print.]
    Senator Sanders. Thank you, Senator Boxer.
    Mr. Secretary, thank you very much. And, Mr. Abbey, thank 
you as well.
    Now we welcome our new panel, second panel.
    OK, we welcome very much our second panel. The expectation 
is still that votes will take place at about 10:40, so we are 
going to move as quickly as we can.
    We welcome Robert Rogan, who is the Senior Vice President 
at America's eSolar; Rob Gillette is the CEO at First Solar; 
Andrew P. Morriss, who is a Professor of Law and Business at 
the University of Illinois College of Law; and Jeff Wolfe, who 
is the CEO at groSolar.
    Let's begin with Mr. Rogan. And we thank you very much for 
being with us.

  STATEMENT OF ROBERT ROGAN, SENIOR VICE PRESIDENT, AMERICAS, 
                             ESOLAR

    Mr. Rogan. Madam Chairwoman Boxer and Chairman Sanders, 
distinguished members of the Environment Public Works Committee 
and the Green Jobs Subcommittee, I am proud to appear before 
you today to address the important role a robust and growing 
solar energy industry can play in driving our economy. My name 
is Robert Rogan. I am the Senior Vice President of American 
Markets at eSolar.
    eSolar was founded in 2007 with the goal of creating a 
solar technology that could compete with fossil fuels. eSolar's 
technology was developed in California, and today we have 
almost 130 employees in the greater Los Angeles area. We opened 
our first commercial scale fully operating power plant this 
past summer in Lancaster, California. It is a 5-megawatt sun 
tower facility, and it employs over 21 people on a full-time 
basis.
    eSolar technology is a different variety of solar 
technology than conventional photovoltaics. There is room for 
both technologies in the market; both have certain applications 
in which they do better. eSolar's particular technology uses 
tens of thousands of tiny mirrors to concentrate sunlight at 
the top of a tower, much like a magnifying glass. We use this 
concentrated heat to boil water, produce high pressure steam, 
and then drive a conventional steam turbine as you would find 
in any traditional power plant.
    As a result of this design, the eSolar technology produces 
jobs in similar ways that the traditional power plant industry 
does today. To build one of our power plants, you need welders, 
you need turbine technicians, and you need power plant 
engineers that the fossil industry has been using. In fact, we 
actually have more pipe in our facilities than an average coal 
plant; thus, we actually need more welders at our facilities.
    Because our technology is primarily made of steel and glass 
and requires no special exotic materials, we have the ability 
to scale up our business very rapidly. In the last 12 months, 
we have announced 3,500 megawatts of commercial contracts 
globally. These are for projects in the United States, China, 
and India. This is approximately the same amount of megawatts 
as three large nuclear facilities. Five hundred megawatts of 
these contracts are for projects in the United States.
    Our first project, in New Mexico with our partner NRG 
Energy is scheduled to break ground later this year. NRG has 
applied for a Department of Energy loan guarantee to support 
the project, and if the loan process is completed, the project 
can break ground in 2010 and could be the first solar thermal 
facility built in the United States using Department of Energy 
funds.
    As I mentioned, eSolar launched its first commercial 
facility in California earlier this year. The project created 
more than 300 jobs over a year construction process and now 
permanently employs 21 people. Many of the plant employees were 
formerly fossil-fired plant employees and have been working 
long careers at coal or natural gas facilities before coming to 
the eSolar facility.
    Our 92 megawatt facility in New Mexico with NRG Energy will 
generate nearly $23 million in direct economic benefits to the 
local community and State during the development, construction, 
and operation process. During construction over the period of a 
year, over 400 full-time positions will be created and 20 full-
time permanent positions will be created at the facility over 
its 30-year lifetime.
    According to the Solar Energy Industry Association, today 
there are over 10,000 megawatts of solar facilities in the 
Southwest United States under contract, PPAs, with utilities 
who are waiting to buy the power. These projects have the 
potential to generate literally tens of thousands of jobs; they 
are good paying jobs in engineering, construction, operations, 
and maintenance of power plants.
    It is also important to understand that for every project 
that eSolar puts into the ground, there are ripple effects in 
job markets across the country. For our New Mexico project we 
will need to deliver almost 1,500 containers of materials to 
the site. This will provide a boost to the shipping and 
trucking industries across multiple States in the Southwest. 
Each of our projects flexes the supply chain and creates jobs 
as a result.
    As one example, the mirrors for our New Mexico project are 
manufactured in Naugatuck, Connecticut, and our vendor there 
estimates that he will need to hire 10 additional staff at his 
factory just to support our order for the New Mexico project. 
When counting the materials and processes needed to face their 
glass factory, there are 10 additional jobs that this vendor 
will need to support in Pennsylvania, New York, Michigan, and 
Texas.
    The towers for our California facility were manufactured in 
North Dakota, and the boilers were made in the Midwest. This is 
how solar energy can benefit the Nation, not just the Southwest 
United States.
    Like many young and growing energy industries we need 
stable Federal policy to support and ensure the success of the 
solar industry in the future. In particular, I would like to 
draw attention to two programs that are beneficial, the 
extension of the Treasury Grant Program and the DOE Loan 
Program. I am running out of time, but I would be happy to talk 
more about that during questioning.
    [The prepared statement of Mr. Rogan follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Sanders. Thank you very much.
    I apologize to the panel. I have to be on the floor, and I 
am going to hand the Chair over to Senator Boxer.
    Senator Boxer [presiding]. Thank you.
    I guess, Mr. Morriss, we will call on you. We welcome you. 
You are an H. Ross & Helen Workman Professor of Law and 
Business at the University of Illinois College of Law, a Senior 
Fellow, IER. Is that all correct?
    Mr. Morriss. Yes, ma'am.
    Senator Boxer. Well, we welcome you, sir.

    STATEMENT OF ANDREW P. MORRISS, H. ROSS & HELEN WORKMAN 
 PROFESSOR OF LAW AND BUSINESS, UNIVERSITY OF ILLINOIS COLLEGE 
                   OF LAW; SENIOR FELLOW, IER

    Mr. Morriss. Thank you, Madam Chairman and members of the 
committee. Thank you for the opportunity to testify before your 
committee as you consider these important questions about the 
role of public investment in alternative energy sources.
    An aggressive push for public investment in alternative 
energy programs is underway in the United States and in some 
other countries. The appeal of these proposals is easy to 
understand because they promise both increased employment and 
other economic benefits and improvements in environmental 
quality. As a lawyer and an economist who studies regulatory 
programs, I cannot speak to the technical details of converting 
sunlight to electricity, but I can make suggestions on issues 
you should consider as you exercise oversight in determining 
when and where to invest public money in such programs.
    In my written testimony I suggest five questions about 
investments in alternative energy programs, the answers to 
which I believe will help you distinguish among potential 
programs seeking support. These questions are drawn from my 
research together with my coauthors, William Bogart, Andrew 
Dorchak, and Roger Meiners. I believe asking these questions 
would enable Congress to exercise better oversight over public 
investment strategies for alternative energy. As my time is 
limited, I will focus on two in my remarks.
    First is the question of comparing proposals based on net 
job numbers. If our goal is to help the economy recover through 
energy investments it is crucial that these investments produce 
a net gain in employment. When alternative energy investment in 
solar technology is successful it will likely increase 
employment in the solar energy industry, but it will also 
likely produce a decline in employment in the energy industries 
that solar energy displaces.
    To evaluate proposals in terms of job creation both 
Congress and the executive branch must focus on the net 
employment effect, not just on the jobs created. Unfortunately, 
relatively little of the literature supporting public 
investment in alternative energy addresses this point.
    In addition, the impacts of shifting energy technologies 
are likely to be significantly different in different regions. 
I believe Congress could use its oversight powers, staff 
resources, and the Government Accountability Office to improve 
the policy debate by creating a demand for standards that could 
be applied to evaluating proposals in this and other respects.
    For example, as I discuss at length in my written 
testimony, there are important questions about the appropriate 
methodology for calculating employment projections and 
circumstances where significant technological change and shifts 
in relative prices are occurring.
    The second is the question of how the technologies that 
receive public investment are being chosen. The green energy 
literature calls for massive shifts in power generation 
technologies. The danger is that we will construct a 
sustainable energy sector that relies on public subsidies to 
exist rather than based on success in the marketplace. We must 
avoid choosing technologies that will fail to develop into 
viable industries, which is a difficult task. Based on prior 
predictions of viability by proponents there are reasons to 
worry about this with respect to solar energy in particular, as 
I outline in my written testimony.
    Fortunately, an alternative model for spurring private 
sector innovation and investment in alternative energy 
technologies like solar is for Congress to provide prizes 
modeled on the Ansari X Prize for space flight. My former 
colleague at Case Western Reserve University Law School, 
Professor Jonathan Adler, has argued that a prize approach 
would resolve many of the difficulties Congress faces in 
choosing which technology to back. While cautioning that prizes 
are not a panacea, Adler argues that prized induce innovation 
in the same way the patent system does while imposing costs 
only when they produce results.
    Similarly, Thomas Kalil of the University of California at 
Berkeley, and a former Clinton administration official, 
explained in his 2006 Brookings paper that prizes offer a means 
to ``help blend the best of public purpose and the creativity, 
energy, and passion of private sector entrepreneurial teams'' 
without committing the Government to choose particular 
recipients or strategies. Prizes, he said, ``allow the 
Government to establish a goal without being prescriptive as to 
how that goal should be met or who is in the best position to 
meet it.'' Since, by definition, we do not know what will be 
the successful technology that delivers a new energy source, 
prizes offer the advantage of not precluding any promising 
directions for innovation.
    Our energy future is a subject of vital importance to our 
Nation. Congress should have the best information available to 
analyze potential strategies for meeting the challenges that 
lie ahead. Even with the best information possible, however, 
our energy future contains many unknowns.
    In 1870, coal heated people's homes, natural gas provided 
light and street lights, electricity had little practical 
application, and gasoline was a waste product of kerosene 
refining. The great energy policy debates of that era concerned 
whether the world would run short of coal. No one in 1870 would 
have predicted that coal would become an almost entirely 
industrial fuel in plentiful supply, that natural gas would be 
used primarily to generate electricity and provide residential 
heat, that electricity would be in widespread use in homes and 
industry, or that gasoline would become an expensive commodity. 
We know as little about our energy future as our predecessors 
did about theirs, and so we must put a premium on strategies 
that can adapt to new information, new circumstances, and new 
ideas.
    In making its energy policy choices, Congress ought to 
exercise due diligence in reviewing both the methods and the 
predictions offered in support of particular technologies and 
strategies. I hope the material I provided today will assist 
you in making those choices.
    Thank you for giving me the opportunity to testify. I would 
be happy to answer any questions.
    [The prepared statement of Mr. Morriss follows:]
    
    
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    Senator Boxer. Thank you very much, Mr. Morriss. You got a 
lot into that 5 minutes. Thank you very much.
    Now we are going to call on Rob Gillette, CEO, First Solar.
    Welcome.

          STATEMENT OF ROB GILLETTE, CEO, FIRST SOLAR

    Mr. Gillette. Thank you. It is a pleasure to be with you 
today to talk about the opportunities that exist for clean 
energy and solar energy specifically. My name is Rob Gillette. 
I am the CEO of First Solar. First Solar is the largest 
manufacturer of photovoltaic solar modules in the world, so as 
a business we have grown a lot over the last several years.
    Between 2005 and 2009 we started with 20 megawatt of 
production and now have 1.1 gigawatt of production worldwide as 
a business. That is an increase of over 50 times in just 4 
years. So a lot of growth for us. 1.1 gigawatt is enough 
electricity to power about 160,000 homes, if you kind of do 
that math back; reduce 30 million tons of CO2 over a 
25-year life of our module. So good contributions in general.
    We employ over 4500 people, over 1500 of them in the United 
States, and we manufacture and build product. In our business, 
we have invested about $1 billion in total in capital 
technology, and we install power and generate power in the 
range of between 12 cents and 15 cents per kilowatt.
    The critical component of our success is the technology we 
call thin film, and it was developed here in the United States. 
Our successes in growth really have been driven by overseas 
growth and specifically sold much of our product outside of the 
United States. This has enabled us to grow and reduce our total 
cost and drive scale in our business and drive competitiveness 
in solar electricity.
    It is no surprise that although we expanded our plant in 
Ohio last year most of our plants are outside of the United 
States, as we build products, build our facilities where the 
demand is. We are still a net exporter from the United States 
in our facility in Perrysburg, Ohio.
    Germany remains an excellent example of increased renewable 
energy use and creation of green energy jobs. Renewable energy 
consumption in Germany increased from 4 percent of their total 
demand to 15 percent as a result of renewable energy feed-in 
tariff that created growing and transparent and predictable 
renewable markets.
    The German market reports that there is roughly 280,000 
jobs in the renewable energy sector that have been created over 
the last several years and driven by the feed-in tariff which 
was adopted, and 53 billion tons of CO2 emissions 
have been avoided because of it. So adoption of similar support 
programs across most European countries exists, and the 
consideration of such programs is also in place in both China 
and India.
    So our resources in the United States are abundant. We have 
a lot of sun. We have a lot of opportunity to grow our 
business, as the Secretary described earlier. About less than 1 
percent of our energy today is provided by solar power, so we 
have a lot of opportunity to provide.
    We have some suggestions, I think, that will help us grow 
the business, and I would like to cover a few of them. They are 
similar to my colleagues' on the panel, but the first is extend 
the expiring Treasury Grant Program. As you know, one of the 
solar energy's most significant constraints is to gain and have 
efficient access to capital, so our ability to fund and develop 
these sites is important.
    In 2009, the American Recovery and Reinvestment Act 
included a grant in lieu of the investment tax credit for solar 
generation. However, the grant program will expire at the end 
of this year just as it is critically needed to bring these 
projects to market.
    So from a business standpoint and overall, we would like to 
see that extended to the end of 2012 and allow us to get these 
programs executed and in place. Senator Feinstein in California 
has introduced legislation to extend and expand the grant 
program there and also help with that, so that is a definite 
plus.
    Second, to extend and streamline the Department of Energy 
Loan Guarantee Program. Approximately 85 percent of the power 
price received from large scale solar power plants goes to 
repay the capital invested to build the project. Even though we 
are the leading solar power plant developer in the United 
States with over 1.5 gigawatts of projects in development, 
First Solar has only one project that can meet the deadline for 
this project.
    Due to the 2011 sunset date, permitting redundancy, and 
complexity of the program, we anticipate having to seek private 
sector funds and loans to drive the rest of the projects in our 
portfolio. So this will end up costing more for the utilities 
and others to buy the electricity generated from solar power, 
so we think it is critical that we align that with the overall 
policy and extend it to 2016 and at least 2 years going 
forward.
    Federal and State solar initiatives from a business 
standpoint are also going to help us as a business to grow and 
to help to drive the adoption and ease of execution in land use 
as was mentioned earlier.
    Thank you for the opportunity to present, and I am open to 
questions.
    [The prepared statement of Mr. Gillette follows:]
    
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    Senator Boxer. Thank you so much.
    We will now hear from Mr. Jeff Wolfe, CEO of groSolar.
    Welcome, sir.

             STATEMENT OF JEFF WOLFE, CEO, GROSOLAR

    Mr. Wolfe. Thank you, Madam Chairman, for holding the 
hearing and for all of your leadership on energy issues. I am 
Jeff Wolfe, co-founder and Chief Executive Officer of groSolar. 
I am also the elected Chair of the Photovoltaic Division of the 
Solar Energy Industries Association, a founding Board Member of 
several renewable energy associations, and a registered 
professional engineer with a mechanical engineering degree from 
Cornell University.
    groSolar is one of the Nation's largest residential solar 
installation companies. We are also the largest 100 percent 
U.S. owned distributor of solar electric systems and also an 
installer of large commercial solar systems. We were founded in 
1998 in Vermont and now directly operate in 12 States and the 
District of Columbia and provide distribution services to most 
other States.
    I came here today to speak about solar energy. Solar energy 
is one of those unusual technologies that can solve a bunch of 
problems at once. Since I started groSolar with my wife 11 
years ago the technology has been able to provide American-made 
energy, decrease our dependence on foreign oil, increase our 
national security, reduce pollution, and fight climate change. 
And while it is doing all those things it is also creating 
jobs--good jobs. Each megawatt of solar photovoltaic systems 
deployed annually in the U.S. creates 25 jobs, and most of 
these jobs are impossible to send offshore, since they are on 
the ground and on the roof installing and selling these 
systems, and it is simply hard to install a solar system on a 
roof in this country unless you are in this country.
    While many of our solar panel manufacturers are exporting 
overseas the U.S. is still a net exporter of solar panels, 
creating more jobs here. As an example, while groSolar is 
smaller in terms of businesses in the United States groSolar's 
overall territory includes direct jobs in over a third of the 
States represented by members of this committee. When added 
with indirect jobs, groSolar has created jobs in California, 
Delaware, New Jersey, Maryland, Vermont, Minnesota, Rhode 
Island, New Mexico, Oregon, New York, Pennsylvania, Ohio, 
Idaho, Missouri, and Tennessee. Looking beyond groSolar, every 
State represented here has multiple solar energy companies in 
it. Solar is one of the renewable energy sources that can 
provide jobs and economic benefit to every State in the Union.
    It is a difficult time for small business in America. It is 
difficult to get credit, financing for projects, and working 
capital. But with the incentives put in place under the 
American Reinvestment and Recovery Act and other recent 
legislation we are not only retaining existing jobs, we and 
other solar companies are helping to create new jobs. The ARRA 
funding for State energy programs has injected new life into 
many States and created solar programs where little existed 
before. The funding for public works projects has also created 
good business opportunities. And most importantly the Federal 
Grant in lieu of the solar investment tax credit has been 
fundamental in moving solar projects forward in 2009 and now in 
2010. While we create jobs we are also securing our longer term 
future. Stable energy prices are an important element of 
economic stability and solar provides long-term stable electric 
prices.
    But we need to do more. The 10 Million Solar Roofs bill to 
be introduced by Chairman Sanders would help homeowners and 
small businesses stabilize their energy costs by defraying 
enough of the cost of a solar electric or solar hot water 
system to allow the homeowner or business to fund the rest with 
cash flow similar to their electric bill, resulting in 
potential reductions in their energy costs.
    To wrap up and urge the Senate to do some more things to 
help create more jobs quickly, first and foremost, we need to 
have the investment tax credit grant extended, as my colleagues 
have said, for another 2 years, to help stabilize the industry 
and stabilize the project flow that we all need, the long-term 
project flow. And this grant extension is at no added cost to 
the Government in this time of budget troubles.
    Second, we request the tax credit for any solar installed 
on a residence be expanded to 50 percent of the cost of the 
eligible solar energy system. Homeowners are most in need of 
assistance to stabilize their monthly bills. This provides an 
economic benefit to a very broad range of working Americans, 
which continues to assist the homeowner for more than 25 years, 
stabilizing and reducing their energy bills, helping the 
homeowners to continue to make their mortgage payments.
    Third and last is to open up the ability to finance small 
projects as part of the proposed Green Energy Bank. Giving 
large banks the ability to lend has not created within them the 
desire to lend. Thus, we ask that the Government step in and 
set up a lending organization. Strikingly, the existing 
programs that the Export/Import Bank is able to provide for 
U.S. solar companies selling products overseas if made 
available for projects in the U.S. would do a lot to spur 
domestic manufacturing and domestic job creation. These loan 
programs would be provided by domestic banks in normal times, 
but these are not normal times. Thus, some method to drive 
lending to small business is critical.
    In summary, solar technology is ready now. I thank you for 
your time and attention to the matter.
    [The prepared statement of Mr. Wolfe follows:]
    
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    Senator Boxer. Thank you very much.
    We will go in order of arrival, so we will start with 
Senator Udall.
    Senator Udall. Thank you very much, Madam Chair.
    I very much appreciate the testimony of the entire panel 
here, in particular, Mr. Gillette and Mr. Rogan, talking about 
the solar projects that you are working on, and I realize the 
great impact that that is having in New Mexico and across the 
West. The solar power industry, I think, has tremendous 
potential in New Mexico and many, many other western States. In 
fact, just yesterday a Spanish company announced plans for a 
300-megawatt plant in Eastern New Mexico, in Guadalupe County. 
So we are seeing what you all are testifying about here today.
    One of the things that I wanted to ask you about, and it 
goes directly to Federal policy and the policies that we put in 
place to further develop solar energy. We are kicking around in 
various committees a renewable electricity standard. The Senate 
and the House have passed bills that set a standard by 2020 of 
12 percent. The President has actually called for a renewable 
electricity standard of 25 percent by 2025, and I have 
introduced that piece of legislation here in the Senate.
    What would be the impact on your hiring if Congress enacted 
a national renewable energy standard at one of these levels? 
Any of you that want to jump in on that.
    Mr. Rogan. I can start. I think that the impact would be 
tremendous. As I stated, we have 3,500 megawatts of global 
contracts right now. Only 500 megawatts of that is in the 
United States. So because our technology is an installation and 
construction intensive process the majority of the jobs flow 
with where the projects are built and ultimately operated, and 
right now a national RPS would help get more projects developed 
in the United States more quickly.
    As a quick addition to that, I think that it is also 
important to continue the existing policies that are in place, 
allowing for the time for these projects to develop, as has 
been mentioned, the Treasury Grant Program, which Senators 
Feinstein and Merkley have introduced legislation on, as well 
as some of the stanzas on the DOE Loan Guarantees that are in 
place now but need to continue to be in place to support the 
market.
    Senator Udall. Mr. Gillette or any of the others, would you 
like to----
    Mr. Gillette. I would just second what my colleague just 
said. Also, the emphasis on the financing aspects of the 
situation, because if we can put together a good financing 
business transaction, a lot of people are willing to invest in 
it, that drives growth. In terms of jobs and our cost-down, we 
have managed to reduce our cost by half in the last 3 to 4 
years, so as a business what drives that is scale, and what 
drives our scale is increasing opportunities installation. So 
it would help to drive a lot of job growth.
    Senator Udall. Now, one of the other things that we have 
been considering specifically in this committee is limiting 
greenhouse gas pollution. Would it be positive for job creation 
to put that policy also in place?
    Please, Mr. Gillette.
    Mr. Wolfe. It is our firm belief that fighting climate 
change, limiting greenhouse gas emissions actually creates one 
of the biggest economic opportunities that the U.S. has ever 
seen. In terms of spurring innovation, spurring research and 
development jobs, spurring engineering and high level project 
jobs, it is one of the biggest opportunities I think we have 
ever seen and, as Chairman Boxer mentioned, other countries are 
hoping we sit on our hands. I hope we don't because it will in 
fact drive our economy.
    Senator Udall. Mr. Gillette or Mr. Rogan.
    Mr. Rogan. Generally speaking, I would agree. Every 
megawatt of eSolar power plants that are built is a lesser 
amount of coal or natural gas power plants that would have to 
be built, and as I said, in our particular case, because we use 
much of the same equipment that a coal or natural gas-fired 
facility would have to buy and have to install, much of the 
same infrastructure of those industries is used in the 
construction of our facilities. So, in general, yes, it would 
spur a widespread development of renewable energy.
    Senator Udall. Thank you. I thank the panel. Apologize for 
having to go, but I think that you have driven home the point 
that if we put some good sound policies in place, like an RES 
and limiting greenhouse gas pollution, we can really drive the 
industry forward and create a lot of clean energy jobs here in 
America.
    Thank you, Madam Chair.
    Senator Boxer. Thank you so much.
    Senator Alexander.
    Senator Alexander. Thanks, Madam Chairman. Thanks to the 
panel.
    Mr. Rogan, you said that your 3500 megawatts of solar power 
was equal to three nuclear plants. It would be more like one 
nuclear plant, wouldn't it, because nuclear plants operate 90 
percent of the time and solar is 35 or 40 percent?
    Mr. Rogan. That is true, on a capacity factor basis.
    Senator Alexander. In fact, in terms of actual electricity.
    Mr. Rogan. Energy produced, yes, sir.
    Senator Alexander. Mr. Morriss, if I were king, I would 
pick nuclear power as a winner for the future, but of course I 
don't know the future, as you have suggested. Our energy needs 
have changed over a long time, and I am trying to keep all of 
this in perspective. We have in Tennessee two big new 
photovoltaic plants to make--I mean two big new polysilicon 
plants, and they each use 120 megawatts of power, massive 
amounts of electricity. If they had to rely on solar or any 
other form of renewable energy for that electricity, they 
wouldn't be in Tennessee, they would be somewhere else, because 
they need lots of low cost electric power.
    So as we look ahead to a time when perhaps solar power can 
be cheap enough to be a supplement to base load power or even 
provide some base load power, I would like to ask you what 
lessons we can learn from two things, one thing you cite and 
one other fact. One is you cite that a Spanish researcher 
showed that in fact green jobs might kill more net jobs than 
they create because if you add jobs for solar plants you might 
lose jobs for coal plants, for example, and that is one thing 
we ought to at least have in mind.
    A second is the effect of subsidies on emerging 
technologies. In Germany, according to a chief energy economist 
of a research institute there, consumers are paying 5 billion 
Euros additionally per year to subsidize renewable energy. They 
basically pay consumers double the price of electricity if they 
will put solar panels on their houses and sell it back to the 
grid, as I understand it.
    Well, the effect of that is that the Germans are buying 
Chinese panels, so there are big subsidies going to Chinese 
solar manufacturers by German people, and that also, would it 
not, mean that the German manufacturers, because of the high 
prices, aren't encouraged to lower their cost? And would it not 
also mean that the cost of electricity is high, and as a result 
of that, big plants like the polysilicon plants or aluminum 
plants or automobile plants or other plants with high 
electricity costs might choose to locate in some other country 
because their electricity costs are low?
    So what are the lessons from other countries about 
subsidies to solar? How long should they last? What should they 
be? What are the most effective? And what about the concern 
about net jobs, as we try to keep a clear idea about all this 
talk about green jobs and whether in fact there is a cost to 
all these green jobs that might outweigh the benefit if we are 
just measuring it in terms of jobs?
    Mr. Morriss. Yes, sir. On the net jobs point, I think it is 
absolutely crucial that if you are focused on employment you 
actually have to look at both jobs created and jobs lost, and 
if we are talking about creating new energy industries, we will 
definitely be losing jobs in old energy industries. Now, some 
of those people may well go to work making the same kind of 
equipment, but we need to do those calculations, and those 
haven't been done, and that is a place that I think Congress 
can really have an impact on the debate by getting that 
information out there.
    With respect to subsidies, the danger is that we create an 
industry that is dependent on subsidies. So Congress, again, 
has to be very careful in how it structures programs to make 
sure that the programs it does will not simply, as you pointed 
out in Germany, create an incentive to buy a piece of 
equipment----
    Senator Alexander. Well, how long should subsidies last?
    Mr. Morriss. Well, I am an economist, so they shouldn't 
last very long at all, in my professional opinion. But I think 
what you really want to do is you want to make sure that the 
subsidies are not designed to lock us in to a technology that 
turns out to be inferior 10 years down the road when we have 
done more development. Secretary Chu said last year that solar 
has to get five times better before it is cost competitive. So 
if we have to get the technology five times better, then I 
think the effort Congress puts in should be in funding 
development of improvements in the technology, not in 
installing inefficient technology today.
    Senator Alexander. Thank you, Madam Chairman.
    Senator Boxer. Thank you very much.
    You know, I really sometimes wonder about things. If you 
are a fan of nuclear energy, which most of the members here 
are, and I think all members believe it is going to be very 
important in our fight against carbon pollution, and it has a 
bright future if there is a price on carbon. So if you are a 
fan of nuclear energy, I would be careful about making the case 
that solar displaces other forms of energy because you say the 
same thing about nuclear. If there is a lot more nuclear 
energy, there is going to be less coal. So let's not get into 
that.
    The important thing is what is best for the people here. 
And if you ask about subsidies and how long subsidies ought to 
last, I don't know when Price Anderson passed, but it has 
been--1957. It is still in place. It is a huge subsidy. So I 
just think, if I might finish----
    Senator Alexander. [Remarks off microphone.]
    Senator Boxer. If I might finish. No, we are going to go on 
the regular order here. So here is the point----
    Senator Alexander. But you are commenting on my questions.
    Senator Boxer. Senator, everybody has a chance. and we will 
have a second round for you.
    I want to make this point, that if you pick one area that 
you think is best--now, I may think it is clean energy; 
somebody else might say, well, clean energy is nuclear, and 
that is what I think is best. You are taking a side here on 
what is best. So, for me, as I look at where we are right now, 
and I see an economy that is struggling, and I look at the 
world, and I see China getting ready to clean our clocks on 
this, as we have been warned, essentially, by them, and 
frankly, if you read Thomas Friedman's book, Hot, Flat and 
Crowded, that is their whole intent.
    When you talk, Mr. Morriss, about displacing other workers, 
I think that is a fair point, but remember we are going to 
export these technologies. Am I right?
    Mr. Wolfe, are you exporting any of the things that you do?
    Mr. Wolfe. We are exporting some of our ideas and 
installations. We are not a manufacturer.
    Senator Boxer. Right.
    Mr. Wolfe. We are helping to grow manufacturing here.
    Senator Boxer. But you are working with other countries.
    How about you, Mr. Gillette?
    Mr. Gillette. We do. We export, from a panel standpoint, 
approximately half the production of our Perrysburg facility.
    Senator Boxer. OK. So you are exporting--and I think it is 
interesting, last night, when the President said he wants to 
double our exports, everyone stood up and cheered. So I think 
we have to step back here and realize that the world is going 
green, and either America will lead this, or we will not lead 
this. I just feel we ought to approach this from the standpoint 
of what is best for the people of this country and the jobs for 
this country. And I know that there are certain factors that 
don't get into play here. I mentioned Price Anderson Act. That 
is one. The fact that there are coal ash spills. The cost of 
that is enormous.
    Now, I know that there are costs of solar and wind, and I 
know there is no question about that, and geothermal, but that 
is fair. But we can't just say, because it is old energy, that 
there is nothing else in our future. That is not the American 
way. We always make progress.
    I want to ask in terms of this New Mexico plant that you 
are building, Mr. Rogan, how many homes will you be able to 
power when that is done?
    Mr. Rogan. When the sun is shining, it will power--sorry to 
be caught flatfooted on the math. It will be about 92,000 homes 
when the sun is shining. When the sun is not shining, we can't 
power anything, obviously. But on the top of----
    Senator Boxer. In New Mexico, the sun shines how much of 
the time?
    Mr. Rogan. Quite a bit.
    Senator Boxer. That is what I thought.
    Mr. Rogan. The capacity factors for that plant are expected 
to be some of the better in the Nation. California, Nevada, 
Arizona, and New Mexico typically are the best places to cite 
solar facilities. But as I mentioned, just by virtue of the 
fact that they are being built in the United States, there are 
widespread job impacts across the Nation.
    Senator Boxer. Mr. Gillette, I believe the United States 
has the technological expertise and drive to lead the world in 
the development of clean energy industries, and that is to me 
what is so exciting about this.
    Mr. Gillette. It is exciting.
    Senator Boxer. Yes. Because you are not only producing 
clean energy, which helps our families and makes them 
healthier, the other issue is all of our importation of foreign 
oil and the fact that I am sure, Mr. Morriss, you would agree--
I shouldn't say that--I hope you would agree that if we have a 
way to get past this $1 billion a day foreign oil importation 
habit, that would be good for our society, would it not, for 
our country?
    Mr. Morriss. I think it would be great if we could have 
domestically produced cheap energy. That would be great.
    Senator Boxer. I agree with you so much.
    What is First Solar's experience in using U.S. workers to 
produce products that can compete against renewable energy 
systems made in other countries?
    Mr. Gillette. Very successful. Most all of our technology 
development for all of our facilities globally is done in 
Perrysburg, Ohio, and as I mentioned during testimony we have 
reduced the cost from $1.50 to $1.60 a watt to 80 cents a watt 
in the last 3 years, so all of that driven through our 
technology developments and capabilities here in the United 
States.
    Senator Boxer. OK.
    Senator Merkley.
    Senator Merkley. Thank you very much, Madam Chair.
    Thank you all for your testimony.
    Mr. Rogan, I want to ask you a few questions about the 
industry that you are in. One is you are involved in tower 
technology. Are you also involved in trough technology? Has the 
technologies evolved, are they roughly competitive, or is the 
industry going to go one direction or the other?
    Mr. Rogan. Well, I think right now we are seeing a mix of 
both tower and trough solar thermal technology depending upon 
which market you are participating in. Currently, in the 
Southwest United States there is a healthy mix of both tower 
and trough projects under development. Ultimately, when 
projects close financing and actually break ground, I think in 
a few years hopefully there will be a lot of eSolar tower 
plants sprinkled across the Southwest. But our company is based 
solely on tower technology, that is the approach we took to 
lowering the cost of the overall system.
    Senator Merkley. And are the mirrors you are using, they 
look to me to be flat mirrors, or do they have a concave aspect 
to them?
    Mr. Rogan. No, they are actually small flat mirrors. They 
are about the size of your average--well, I shouldn't say 
average, a fairly large flat screen TV, about 1 square meter.
    Senator Merkley. And they are driven by a central computer 
program, or do they have some kind of--each mirror has its own 
tracking device?
    Mr. Rogan. They are driven by a centralized computer 
system, and the software that we use to have the mirrors track 
and focus the sunlight is part of our core technology.
    Senator Merkley. One of the things in the concentrated 
solar power discussion is the storage of solar energy, in part 
to address the rhythm of the power production. Is that 
something that you all are involved in? Are you using any type 
of heat storage to continue generating until the sun goes down, 
if you will?
    Mr. Rogan. Our current systems that we have under contract 
do not have storage capabilities, they just directly generate 
steam. However, we have applied for a Department of Energy 
research program to perform analysis on storage technologies. 
Additionally, we have several senior staff at eSolar who ran 
the solar thermal program at Sandia National Laboratories for 
the past several decades, all of whom are very familiar with 
storage technology and have encouraged us to continue looking 
in that direction. As a long-term solution, it is very 
important to have storage.
    Senator Merkley. And what are you using for your cooling 
strategy?
    Mr. Rogan. Right now, our plans are water cooled. There is 
always a tradeoff between having to use water to cool plants 
and the performance of the plants. So this is always--it is an 
economic and environmental tradeoff. All of our current 
facilities in California are cited on private property that is 
formerly agricultural land, so the net impact on the water use 
of that property is actually going down as a result of us 
building a power plant there. In the future, as the technology 
efficiency improves I think that moving toward lower water 
impact technology is possible.
    Senator Merkley. There are some, are there not, that are 
going to solely--especially where water is a limited commodity, 
as it often happens to be in places where the sun shines a 
lot--are going to a dry strategy?
    Mr. Rogan. It is possible to do so, yes, and that is again 
a difference between solar, thermal, and photovoltaic and why 
there is usually a mix of these technologies in certain areas.
    Senator Merkley. But there are concentrated solar plants 
that are using dry technology cooling as well, is my 
understanding.
    Mr. Rogan. Yes, some of them are, yes.
    Senator Merkley. OK.
    Mr. Rogan. They are proposed----
    Senator Merkley. Which would increase the footprint of the 
locations that they could be placed in, if you will, if water 
is not a limiting factor.
    Mr. Rogan. Yes. By using air to cool the plants, you lower 
the efficiency of the power plant output at the exact time of 
day that you want it most, which is when it is hottest outside. 
So the footprint of the plant expands and the cost of the 
electricity generated by the plant goes up----
    Senator Merkley. What kind of percentage factor there in 
terms of loss?
    Mr. Rogan. It depends on which market you are in, but in 
the United States you would typically see a 10 percent 
reduction in efficiency of the plant and up to a 10 percent 
capital cost increase in the plant. Those combined effects can 
make the electricity several cents more expensive.
    Senator Merkley. Thank you.
    Mr. Wolfe, are you familiar with Bernie Sanders' 10 Million 
Solar Roofs bill modeled on the California bill? If you are, 
could you comment a bit on the impact that that might have?
    Mr. Wolfe. I am familiar with it; it is a tremendous bill. 
What it does is it helps to incentivize distributed generation, 
smaller scale solar across the entire country, which is an 
important element. We think that we need the very large scale 
solar farms in the Desert Southwest as well as the smaller 
scale solar on my rooftop, your rooftop, and warehouse and 
large flat roofs around the country. Incentivizing it helps to 
stabilize our transmission grid, which needs more help; helps 
to implement the smart grid; and distributes the jobs and the 
employment and the economic effect of solar nationwide.
    Senator Merkley. I believe it is structured around a per 
watt capacity rebate.
    Am I out of time?
    Senator Boxer. Yes.
    Senator Merkley. OK.
    Senator Boxer. But I'm very impressed with your line of 
questioning.
    Senator Merkley. I will look forward to following up the 
conversation. Thank you very much.
    Senator Boxer. OK.
    Senator Klobuchar.
    The votes started about a minute ago, but we have time.
    Senator Klobuchar. OK. Well, perhaps I should follow up on 
that line of questioning with the small solar, Mr. Wolfe. Do 
you want to go into a little more detail about just the 
advantages of that? Obviously, we want both, and I get 
concerned as well in my State. We have a lot of people 
interested in small wind and small solar. They argue you don't 
have to have transmission lines and that they can--or at least 
as long ones, and they can do things right in the home bases. 
Do you want to talk a little bit about that? And is it really--
when does it become cost-effective if you put a solar panel in 
when you get--what is the average of getting your money out of 
it?
    Mr. Wolfe. It very much depends upon your State. It depends 
upon the electric grids we are competing against, it depends 
upon the sunshine in the State and the installation costs, 
which all vary. In some States it makes sense, given simply the 
Federal tax credit today, with the prices we are seeing on 
residential solar, which is a change from last year, prices 
have decreased by over 35 percent in the last year for 
residential solar.
    The 10 Million Solar Roofs bill is structured very similar 
to how the Million Solar Roofs in California was structured in 
that it is a per watt rebate for small systems, which declines 
over time. So as we have more and more solar, the price is 
expected to decline, which will reduce the incentives, which is 
unlike pretty much any other energy source, any traditional 
energy source in the U.S. which have had stable and long-term 
high incentives for many, many decades. So the 10 Million Solar 
Roofs program allows individual homeowners, small business 
owners to take advantage of solar, help to create economic 
benefit in many diverse areas, while also creating economic 
benefit by stabilizing power costs.
    Senator Klobuchar. Have you heard about this issue about 
the testing of the solar panels and how there was limited 
places that they could be tested, including one in Canada? I 
had some manufacturers in our State that were very concerned 
about how long it took to get some new products approved.
    Mr. Wolfe. The U.S. requires certification by a NRTL, 
national research and test lab, and there are limited numbers 
of those labs that can test solar panels to the U.S. standards, 
which are unique and different than any other worldwide 
standard, and that time period has increased dramatically over 
the last 4 or 5 years and is a significant hurdle in bringing 
new products to market quickly.
    Senator Klobuchar. Ideas on how you can fix that?
    Mr. Wolfe. Additional testing laboratories would be greatly 
appreciated; potentially looking at the whole testing and 
certification regime for solar equipment, which has tended to 
be far more burdensome and excessive than almost any other 
electrical device found in a home or a business.
    Senator Klobuchar. I chair the Commerce Subcommittee on 
Export Promotion. What would be some of the things that would 
be helpful in terms of getting our--we have been importing so 
many products, whether it is wind or solar, from other places--
getting our manufacturing going and then have us start 
exporting, especially in light of the weak dollar in some of 
the growing economic markets across the world?
    Mr. Wolfe. Well, I will let my colleagues speak more to 
that, but I just want to note first that we are a net export, 
the U.S. is a net exporter still of solar photovoltaic panels. 
We want to encourage more and more manufacturing, but we are 
already a net exporter of those products.
    Senator Klobuchar. OK. I didn't know that.
    Mr. Gillette. For solar and our business, we talked about 
it earlier, has continued to grow the opportunities for 
installations in the United States and we are still exporting 
half of our capacity here out of our Ohio facility. So anything 
that we develop in new opportunities here with some support of 
the Government and Congress will help us grow scale and grow 
jobs and ship product as well.
    Senator Klobuchar. I think I will give my remaining----
    Mr. Wolfe. I would like to add, if I could, that if you 
look at the countries that are exporting the most panels 
worldwide, they are the ones that typically have the best 
domestic markets. And then I would also add that even to China 
we are exporting equipment that makes solar panels from the 
U.S. to China, so we have a net benefit even of Chinese 
production, oddly enough.
    Senator Klobuchar. Very good. I am going to give my 
remaining time to Senator Whitehouse here, since we have a vote 
going on. Thank you.
    Senator Boxer. Thank you so much.
    Senator Whitehouse.
    Senator Whitehouse. Yes. I understand that the vote was 
just called a few moments ago, so I only have one quick 
question for whichever would like to answer it, more than one, 
if you wish. I would like you to put Government support for 
solar industry in the context of the development of that 
industry in international competition and the role of 
technological leadership in securing future economic 
opportunity and advantage.
    In a nutshell, get behind, fall behind versus get ahead, 
stay ahead. Is that an accurate principle, and is it something 
that we should be--in your experience, is that something that 
we should be justifying investment in this early stage 
technology for competitive reasons against foreign competition?
    Mr. Rogan. Well, I think currently it could be argued that 
the United States is still the technology leader in most 
aspects of the solar industry. However, because countries such 
as Spain and Germany put in place large development incentives, 
they have seen explosive growth and a volume drive that is 
currently unparalleled. Recently, China and India have both 
taken steps in this direction. As a result, there is going to 
be a huge bloom of solar development in those nations.
    Senator Whitehouse. Just to interrupt, it is in that growth 
and volume drive where the economic advantage and the jobs are 
really located. We have seen a considerable number of 
technologies in which American ingenuity invented the 
technology, but foreign countries took advantage of the 
development phase and actually put it into significant 
production, and the jobs associated with that technological 
invention manifested themselves to an unfortunate degree 
overseas rather than at home.
    Mr. Rogan. And the corresponding carbon benefits of 
installing the technology. So that volume drive is what reduces 
pricing, and it is not just the pricing of the underlying 
technology, it is the cost of constructing and operating the 
plants as well. So more developments in the United States will 
drive those costs down here and bring down the costs of solar 
development inside U.S. borders.
    Senator Whitehouse. It is fair to conclude that investment 
in this emerging technology provides cumulative benefits as we 
enhance our competitive position not only for the invention of 
the technology but for its volume and deployment.
    Mr. Rogan. Absolutely.
    Mr. Gillette. Senator Whitehouse, I would add that the 
investment is not only just the plants and the capacity, it is 
also the technology development. So we continue to focus on 
driving the efficiency of our panels up, sort of conversion of 
energy in to energy out, and we also continue to focus on the 
drive and yield out of our facilities, which drives the cost 
down.
    But not only that; it comes down to the complete 
installation of the solar power plant. So we also focus on what 
is called BOS, or the rest of the components that go into the 
installation of the facility, whether it is the racking system 
or the inverters that go into it or the number of coupling 
boxes that are there, and improve the cycle time and the cost 
as well. So the total cost of the installed system is the 
combination of the panel and the rest of the costs.
    Senator Whitehouse. So what you are saying is that in the 
economic race to remain dominant in this emerging and fast 
growing international market, there are actually two races we 
need to win. One is the technological race, to always be a step 
ahead with the technology, and the second is the implementation 
and deployment race so that the volume and the jobs and the 
productivization--if that is a word--of the technology takes 
place under our leadership.
    Mr. Gillette. Yes, the innovation side, whether it is the 
installation or the panel itself, and how well it operates and 
what the yield of the asset is in the end is driven by the 
irradiation or the amount of sunlight, but also the cost to 
install it and operate it.
    Senator Whitehouse. Well, I appreciate very much the 
panel's interest, and I think I am getting anxious about 
getting over to the vote, so I am going to end my questioning.
    Senator Boxer. I know. I understand.
    I just want to thank the panel. I am sorry--he really did 
have some time, but he and I usually debate this issue of 
whether or not Price Anderson is a subsidy, but that is fine; 
we just don't agree on it.
    But I just want to say to all of you thank you very much 
for your clear testimony. I continue to believe that we are on 
the right track if we move to clean energy on every single 
level, from the health of our families to the competitiveness 
of our Nation, and a lot of you are right there doing it, and I 
am very proud of your entrepreneurial spirit. Thank you very 
much, all of you, for being here today, including Mr. Morriss, 
who was very polite and very clear in his views. Thank you, and 
we stand adjourned.
    [Whereupon, at 10:55 a.m., the committee was adjourned.]
    [An additional statement submitted for the record follows:]

                 Statement of Hon. Benjamin L. Cardin, 
                U.S. Senator from the State of Maryland

    Thank you, Chairmen Sanders and Boxer, for holding this 
hearing today on the job growth potential of the solar industry 
and jobs in the clean energy sector.
    I firmly believe that the development, manufacture and wide 
scale deployment of innovative renewable energy technologies 
will be critical to long-term job growth in the U.S. and the 
recovery of the nation's economy.
    Maryland clearly sees the potential for renewable energy 
development in our State, and the State legislature and 
Governor O'Malley have taken several notable steps to bring 
clean energy and the jobs that come with them to Maryland. This 
includes:
     A robust 20 percent by 2020 renewable energy standard, 
which includes a 2 percent solar electric standard by 2022.
     Maryland's RES requires that renewable sources be located 
within the State to count toward the RES.
     Enactment of tax incentives and grants program for solar 
energy development and geothermal heating.
     And Maryland's commitment to reduce CO2 levels 
by 10 percent of 2006 levels by 2009 under the Regional 
Greenhouse Gas Initiative.
    I am happy to see that my State along with many others 
across the country recognizes the need to change how we get our 
power. The individual and disparate actions of individual 
States in encouraging action at the Federal level to reduce our 
dependence on foreign and dirty energy sources and create 
business incentives for clean tech companies is essential to 
creating a national and globally competitive market for clean 
energy technologies to base themselves and create jobs in the 
United States.
    A study conducted by the Political Economy Research 
Institute and the Center for American Progress estimates that 
investing just a little over 1 percent \1\ of the annual U.S. 
gross domestic product into clean energy technologies 
nationwide would generate 26,000 new jobs for Maryland and 
hundreds of thousands of jobs nationwide.
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    \1\ Or $150 billion.
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    Maryland's recent history with Clean Energy Jobs growth is 
reflective of how disparities in State policies that call for 
positive energy reforms like a robust renewable energy standard 
and reductions in carbon emissions lack the reinforcement of 
strong Federal policies call for the same positive reforms.
    In 2007 BP Solar completed a $25 million expansion of its 
manufacturing facilities in Frederick, Maryland, and was 
preparing to embark on a second facilities expansion. This was 
excellent news for the State and the employees of this state-
of-the-art facility which employs nearly 2,000 people.
    However, a year after breaking ground on the second 
expansion of their Frederick headquarters, BP Solar reevaluated 
the expansion plans and put off the expansion and ultimately 
shed 140 jobs from this plant.
    I want to bring those jobs back to Frederick, and I want to 
see similar job opportunities for communities around the 
country, but it's going to take a national commitment to clean 
energy to get us there.
    Solar energy in particular provides tremendous small 
business opportunity. As Jeff Wolfe from groSolar, which 
operates throughout Maryland employing solar installation 
technicians and supply managers, can surely testify, small 
scale use of solar provides tremendous opportunities for 
entrepreneurs and consumers.
    In Maryland there are more than 50 small businesses 
registered as members of the Solar Energy Industries 
Association. These are local solar retailers, installers, 
engineering firms and energy consultants working in my State to 
bring clean energy solutions to the people of Maryland.
    Additionally the power generation company NRG Energy is 
retooling its Vienna, Maryland, power plant to utilize biomass 
and solar energy, and plans are underway to bring offshore wind 
throughout the mid-Atlantic States.
    Despite the lack of an international greenhouse gas 
emissions agreement, it is clear that our global competitors 
are not waiting for an international agreement to ramp up 
production of clean energy technologies.
    There are many other countries around the world competing 
for these industries to do business on their soil, and they are 
implementing policy frameworks that make it much easier for 
clean energy companies to do business abroad than to do 
business here in America.
    These are not foreign governments with lax environment or 
labor standards; rather countries like Spain, France, Japan and 
Germany have merely established robust renewable energy 
standards creating lucrative markets for companies to do 
business. It is unfortunate that we import so much of our 
finite energy resources from abroad as it is, and it is 
unconscionable that we would do the same with renewable energy 
sources in the future.
    Given America's historical ingenuity and manufacturing 
capacity we can become the world's leading supplier of 
essential renewable energy technologies. Revamping the American 
economy for the 21st century will put us in charge of our own 
energy supplies. The Clean Energy and Green Jobs legislation we 
pass will put us on a path to energy independence, and that's a 
path to improved national security, increased GDP and increased 
job growth.
    I thank Chairmen Sanders and Boxer for holding this 
hearing.