[Senate Hearing 112-253]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-253
 
           RENEWABLES AND DOE ADMINISTRATIVE IMPROVEMENT ACT

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

RECEIVE TESTIMONY ON: S. 1160, THE DEPARTMENT OF ENERGY ADMINISTRATIVE 
  IMPROVEMENT ACT OF 2011; S. 1108, THE 10 MILLION SOLAR ROOFS ACT OF 
  2011; AND S. 1142, THE GEOTHERMAL EXPLORATION AND TECHNOLOGY ACT OF 
                                  2011

                               __________

                             JULY 12, 2011


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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Chalk, Steven G., Deputy Assistant Secretary for Renewable 
  Energy, Office of Energy Efficiency and Renewable Energy, 
  Department of Energy...........................................     3
Dougherty, Douglas A., President and CEO, The Geothermal Exchange 
  Organization...................................................    13
Gordon, Holly, Vice President, Legislative & Regulatory Affairs, 
  SunRun, Inc....................................................    16
Sanders, Hon. Bernard, U.S. Senator From Vermont.................     1

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    29

                              Appendix II

Additional material submitted for the record.....................    37


           RENEWABLES AND DOE ADMINISTRATIVE IMPROVEMENT ACT

                              ----------                              


                         TUESDAY, JULY 12, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
     The committee met, pursuant to notice, at 10 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. OK, why don't we go ahead and get started. 
I'm told that Senator Murkowski is on her way, but asks us to 
proceed in her absence. So we will do that.
    The purpose of our hearing today is to receive testimony on 
3 bills: S. 1108, the 10 Million Solar Roofs Act of 2011, 
introduced by Senator Sanders. I will call on him to make any 
statement he would like here in just a moment. I have co-
sponsored this bill, and Senator Boozman has as well.
    The second bill is S. 1142, the Geothermal Exploration and 
Technology Act of 2011. This was introduced by Senator Tester 
with Senator Murkowski and Senator Reed as co-sponsors.
    The third is S. 1160, the Department of Energy 
Administrative Improvement Act of 2011. This was introduced by 
myself and Senator Murkowski. S. 1060 was part of the larger 
energy bill that we reported out of our committee in the last 
Congress.
    There are 2 panels. First we will hear from the Department 
of Energy with regard to their viewpoint on all 3 bills; and 
second we will hear from 2 experts who will be testifying on S. 
1108 and S. 1142, respectively. So we look forward to the 
hearing, look forward to the witnesses' testimony.
    Senator Sanders, did you wish to make any opening comments 
before we call on the witnesses?

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

    Senator Sanders. I did, and thank you very much, Mr. 
Chairman, for the opportunity, for including the 10 Million 
Solar Roofs Act in today's hearing. I was proud to introduce 
this legislation with Senator Boozman and very much appreciate 
the chairman's support as an original co-sponsor.
    This bipartisan bill will lower the cost of solar energy 
for families and businesses and set strong goals for American 
solar energy production. There is no question but that we have 
made dramatic progress in cutting the cost of manufacturing 
solar panels by 72 percent since 1985, and that is one of the 
reasons why solar, the solar industry, is exploding in this 
country. They saw as I understand it, Mr. Chairman, something 
like a 64 percent increase in their sales just last year alone.
    On the other hand, we have not made the same kind of 
progress on so-called ``soft'' costs of installing solar. It's 
one thing to lower the costs in producing and manufacturing 
solar, another thing in terms of installing, and that includes 
permitting and inspection fees. These fees account for up to 20 
percent of the price of solar and are equivalent to a $1 
billion tax on solar over the next 5 years.
    We can do better. In Germany, solar energy is 40 percent 
cheaper, thanks in part to a simpler permitting process. In 
Vermont, I'm happy to say we have just passed legislation this 
year to streamline solar permitting and eliminate fees. I think 
it's going to lower the cost in Vermont and we'd like to see 
that all over America.
    Secretary Chu's Sunshot Initiative sets a goal of reducing 
permitting-related costs by up to 88 percent to make solar 
cost-competitive with fossil fuels without any subsidies--that 
is the long-term goal--by 2020. That's an ambitious goal that I 
believe we can reach. Our bill will help achieve that goal by 
providing modest competitive grants to local governments who 
commit to cut unnecessary red tape and reduce permitting costs. 
Communities that succeed will be eligible for DOE certification 
as solar-friendly cities and towns, helping them attract solar 
business.
    The grants, which are fully offset, help streamline the 
permitting process by: simplifying and standardizing permit 
forms and creating online permit applications; funding training 
for inspectors to help make the process more efficient; and 
providing modest funds for community solar projects to pilot 
new permitting processes.
    Our bill also sets a goal, of 10 million solar rooftops by 
the end of the decade. We need this ambitious vision to compete 
for solar energy jobs. Germany installed solar in 1 million 
homes in the past 2 years alone. China has doubled its solar 
energy target to 50 gigawatts by 2020, the equivalent of 50 
nuclear plants.
    The bipartisan 10 Million Solar Roofs Act, supported by the 
Solar Energy Industries Association and the National League of 
Cities, will help us lower the cost of solar and create jobs, 
and I look forward to working with my colleagues to achieve 
broad support for this bill in committee.
    Mr. Chairman, thank you very much.
    Senator Menendez. Thank you very much.
    Our first panel is Mr. Steven Chalk, who is the Deputy 
Assistant Secretary in the Office of Energy Efficiency and 
Renewable Energy at the Department of Energy. He is a frequent 
testifier to our committee. We welcome him back.
    Mr. Chalk, who don't you go right ahead and give us the 
views of the Department of Energy on these 3 bills.

 STATEMENT OF STEVEN G. CHALK, DEPUTY ASSISTANT SECRETARY FOR 
  RENEWABLE ENERGY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE 
                  ENERGY, DEPARTMENT OF ENERGY

    Mr. Chalk. OK, thank you, Senator Bingaman and other 
members of the committee. Thanks for the opportunity to discuss 
the Department of Energy's solar and geothermal energy 
programs. Today I'm also pleased to discuss the Department's 
perspective and answer questions on the Department of Energy 
Administrative Improvement Act, S. 1160, as well as the 10 
Million Solar Roofs Act of 2011, S. 1108, and the Geothermal 
Exploration and Technology Act of 2011, S. 1142.
    Now, the Administration is still reviewing these bills, so 
we don't have a formal position on any of them at this time. On 
solar technology, we thank the committee and the sponsors of 
this legislation for your strong leadership on solar 
technologies over the years. The Department has set an 
ambitious goal for solar energy with the Sunshot Initiative 
that Senator Sanders mentioned. Our goal is to reduce the cost 
of solar energy systems by 75 percent, so they're cost-
competitive with other forms of energy without subsidies before 
the end of the decade. Under Sunshot, the Department will 
support research across the development pipeline from basic 
photovoltaics--or PV--cell technologies, to manufacturing 
scale-up, to total system development.
    Reducing the total installed cost of utility-scale solar 
electricity to roughly 6 cents per kilowatt hour without 
subsidies will result in rapid, large-scale adoption of solar 
electricity across the United States. Reaching this goal will 
help reestablish American technological leadership, improve the 
Nation's energy security, and strengthen U.S. economic 
competitiveness in the global clean energy race.
    Sunshot takes a unique approach to developing solar energy. 
Historically, our investments have been on achieving 
incremental efficiency improvements to modules, solar arrays, 
and so forth. Sunshot also focuses on reducing the installed 
cost of the entire system as a whole. For instance, in addition 
to investing in improvements in cell technology and 
manufacturing, Sunshot also focuses on the steps to reduce 
balance of system hardware costs, installation labor and 
permitting costs, which all account for about 40 percent of the 
total installed system price of solar electricity today. This 
includes efforts to streamline and digitize local permitting 
processes and to develop codes and standards that ensure high 
performance over the approximately 20- to 30-year lifetime of 
residential solar products.
    The proposed legislation, S. 1108, employs a bottom-up 
approach so that local teams can identify approaches that are 
best suited for them. The bottom-up approach, coupled with a 
preference for applicants that have partnered on a regional 
basis with States, public utility commissions, other 
stakeholders, could allow not just for local, but also for 
regional variability, while increasing the speed and scale of 
installation across a large geographic area. This approach 
could also allow States to expand existing State programs that 
have been effective in promoting rooftop solar installations.
    On geothermal technology, the Department is committed to 
developing and deploying a portfolio of innovative technologies 
for clean domestic geothermal generation. Geothermal energy is 
a renewable baseload energy resource with a small environmental 
footprint and emits little or no greenhouse gas emissions.
    Despite geothermal's enormous potential, in 2010 only 15 
megawatts of new geothermal power generation was added to the 
grid in the United States. There are 2 principal barriers 
facing the geothermal industry: the high cost and risk of 
exploration, and that most of the identified hydrothermal 
resources have already been developed.
    Currently, drilling costs represent approximately 40 
percent of the geothermal project development costs. The 
financing costs for the drilling phase are significantly higher 
than the financing costs for plant construction. We look 
forward to working with the committee to identify the 
opportunities to bring down these costs and risks and better 
utilize our domestic geothermal resources.
    Finally, on S. 1160, the Department of Energy 
Administrative Improvement Act proposes a variety of changes 
intended to improve the administration of the Department of 
Energy. These changes address five key areas: multi-year budget 
submissions, modification of the department's other transaction 
authority; expanded direct hire and critical pay authority; 
protection and disclosure of transaction information; and 
reemployment of civilian retirees.
    While the department does not have a position on S. 1160 at 
this time, we're happy to work with the committee to identify 
opportunities to enhance the administration of the Department's 
activities.
    I thank the committee for its continued support for the 
Department of Energy and I'm happy to answer any questions the 
committee may have related to the 3 bills under discussion 
today.
    [The prepared statement of Mr. Chalk follows:]

 Prepared Statement of Steven G. Chalk, Deputy Assistant Secretary for 
  Renewable Energy, Office of Energy Efficiency and Renewable Energy, 
                          Department of Energy

    Chairman Bingaman, Ranking Member Murkowski and Members of the 
Committee, thank you for the opportunity to discuss the Department of 
Energy's (DOE's) solar and geothermal energy programs. Today, I am 
pleased to discuss the Department's perspective and answer questions 
related to the Department of Energy Administrative Improvement Act (S. 
1160), the 10 Million Solar Roofs Act of 2011 (S. 1108) and the 
Geothermal Exploration and Technology Act of 2011 (S. 1142). However, 
the Administration is still reviewing these bills and we do not have a 
position on any of them at this time.

                            SOLAR TECHNOLOGY

    We thank the committee and the sponsors of this legislation for 
your strong leadership on solar technologies over the years. The 
Department has set an ambitious goal for solar energy with the SunShot 
Initiative (SunShot)--to reduce the total costs of solar energy systems 
by about 75 percent so that they are cost competitive with other forms 
of energy without subsidies before the end of the decade. In 2012, 
under SunShot, the Department will support solar research across the 
development pipeline, from basic photovoltaic (PV) cell technologies to 
manufacturing scale-up to total system development.
    Reducing the total installed cost for utility-scale solar 
electricity to roughly 6 cents per kilowatt hour without subsidies will 
result in rapid, large-scale adoption of solar electricity across the 
United States. Reaching this goal will help re-establish American 
technological leadership, improve the nation's energy security, and 
strengthen U.S. economic competitiveness in the global clean energy 
race.
    SunShot takes a unique approach to developing solar energy. 
Historically, solar investments focused on achieving incremental 
efficiency improvements to solar cells and arrays. SunShot focuses on 
reducing the installed cost of the system as a whole, including non-
technical barriers. In addition to investing in improvements in cell 
technologies and manufacturing, the SunShot Initiative also focuses on 
steps to reduce installation and permitting costs, which account for 40 
percent of the total installed system price of solar electricity.\1\ 
This includes efforts to streamline and digitize local permitting 
processes and to develop codes and standards that ensure high 
performance over the approximately 20-year lifetime of residential 
solar products. Decreasing the installed cost of solar is one of the 
key goals of SunShot.
---------------------------------------------------------------------------
    \1\ http://www1.eere.energy.gov/solar/sunshot/pdfs/
dpw_white_paper.pdf
---------------------------------------------------------------------------
    As the United States is the world's largest consumer of electricity 
and, at the same time, has the largest solar resource of any 
industrialized country, SunShot is well-positioned to help the Nation 
realize the significant benefits from the wide-scale use of solar 
energy. Sunshot underscores solar energy's benefits to the United 
States and will have multiple positive impacts for the country, 
including:

   Achieving solar energy cost parity with baseload energy 
        rates. Attaining a total installed system cost of utility solar 
        equivalent to the wholesale cost of electricity from fossil 
        fuels ($0.06 per kWh) would likely result in rapid and large-
        scale adoption of solar electricity across the United States
   Increasing solar photovoltaic market share. As recently as 
        1995, the United States manufactured 43 percent of the world's 
        PV materials, whereas today our manufacturers are only 
        responsible for 6 percent.\2\ Expanding the use of solar will 
        help boost the U.S. solar manufacturing industry while driving 
        innovation and providing long lasting, domestic jobs to support 
        global PV demand that will represent a multibillion dollar 
        industry
---------------------------------------------------------------------------
    \2\ PV News (2/1993, 3/2001, 3/2006) and Navigant Consulting (2/
2011)
---------------------------------------------------------------------------
   Reducing greenhouse gas emissions--Solar technologies have 
        the potential to significantly reduce the amount of 
        conventional fossil-based electricity generation necessary, 
        which in turn would reduce the amount of greenhouse gases 
        emitted into the atmosphere.

    Recently, as part of ongoing Market Transformation activities, DOE 
announced a Funding Opportunity Announcement (FOA) which we are calling 
the ``Race to the Rooftop'' to help standardize, streamline and 
digitize the permitting process, while improving interconnection and 
net metering standards, increasing access to financing, and updating 
planning and zoning codes. This national competition engaging teams of 
local and state governments along with utilities, installers, and 
nongovernment organizations, will help standardize processes, cut 
upfront fees and paperwork, and reduce the overall costs associated 
with permitting and installation, making it easier and cheaper for 
homeowners, businesses, and their local communities to deploy solar 
energy. The standardization and uniformity of local permitting efforts 
under the ``Race to the Rooftop'' are similar to the challenge grant 
provision in the 10 Million Solar Roofs Act, which calls for applicants 
to develop best practices for solar permitting.
    The proposed legislation, S. 1108, employs a bottom-up approach so 
that local teams can identify approaches best-suited for them. A 
bottom-up approach, coupled with a preference for applicants that have 
partnered with states, public utility commissions, or other 
stakeholders, could allow for local and regional variability while 
still increasing the speed and scale of installation across large 
geographic areas. This approach could also allow states to expand 
existing state programs that have been effective in promoting rooftop 
solar installations.

                         GEOTHERMAL TECHNOLOGY

    The Department is committed to developing and deploying a portfolio 
of innovative technologies for clean, domestic geothermal power 
generation. Geothermal energy is a baseload energy resource with a 
small environmental footprint and emits little to no greenhouse gases.
    Despite geothermal's enormous potential, in 2010, only 15 MW of new 
geothermal power generation was added to the grid in the United States. 
There are two principal barriers facing the geothermal industry: the 
high cost and risk of exploration and most of the identified 
hydrothermal resources have already been developed.
    Drilling costs represent approximately 42 percent of geothermal 
project development costs, and financing costs are significantly higher 
for exploratory drilling than for plant construction.\3\ Removing the 
obstacles to exploratory drilling is vitally important to increasing 
our geothermal power generation capacity. In many cases, geothermal 
resources have no surface expression, leaving our nation's hydrothermal 
potential--estimated at 30 GWe by the U.S. Geological Survey--untapped 
and inaccessible. Exploratory drilling could also identify resources 
for enhanced geothermal systems (EGS), which have the potential to 
produce 16,000 GWe of power in a wide range of geographic areas 
throughout the U.S.\4\
---------------------------------------------------------------------------
    \3\ http://www.nrel.gov/applying_technologies/pdfs/46022.pdf
    \4\ Augustine, Young, and Anderson, Updated U.S. Geothermal Supply 
Curve, National Renewable Energy Laboratory and US Department of 
Energy, February, 2010, http://www.nrel.gov/docs/fy10osti/47458.pdf
---------------------------------------------------------------------------
    Under the American Recovery and Reinvestment Act of 2009 (Recovery 
Act), DOE invested $97.3 million in 24 hydrothermal exploration 
projects, at which 34 exploration wells are planned. It is expected 
that from these wells, 400 MW of new resources will be confirmed by 
2014.
    DOE is also funding seven EGS demonstrations. At Desert Peak, 
Nevada, the initial stages of reservoir stimulation were successfully 
completed--a critical milestone in creating an enhanced geothermal 
reservoir.
    DOE supports projects in low temperature geothermal resources as 
well. For example, DOE is working with industry to develop and field 
test a variable phase turbine which has the potential to generate 30 
percent more power from low temperature geothermal resources than 
current power conversion technologies, at a lower cost.
    DOE's National Geothermal Data System (NGDS) effort is a 
distributed information system for data sharing in its second year of 
development, which will enable the availability of comprehensive and 
accurate data to facilitate geothermal development. The NGDS is 
scheduled to be fully operational in August 2014, at which time it will 
make geothermal data from major geothermal centers, DOE-funded 
geothermal projects and state geological surveys or universities 
publicly available.\5\
---------------------------------------------------------------------------
    \5\ NGDS data sources include: DOE Geothermal Data Repository 
(Boise State University); Energy & Geoscience Institute (University of 
Utah); Geo-Heat Center (Oregon Institute of Technology); Stanford 
Geothermal Program (Stanford University); Great Basin Science Sample 
and Records Library y (University of Nevada, Reno); SMU Geothermal 
Laboratory (Southern Methodist University); and state geological 
surveys represented by Arizona Geological Survey and the American 
Association of State Geologists (AASG).
---------------------------------------------------------------------------
    Geothermal heat pumps (GHPs) for building applications also face 
barriers impeding greater marketplace adoption: high initial cost 
associated with the installation of the ground loop heat-exchanger, 
lack of consumer knowledge in GHP benefits, and limitations in GHP 
design and business planning infrastructure. DOE is developing a 
roadmap that will serve to strategically direct activities in 
geothermal heat pumps.
    Through the Recovery Act, DOE currently funds 26 projects deploying 
geothermal heat pumps. $24M of the $58M Recovery Act funds allocated to 
GHPs have been spent in 15 states in both new and retrofit 
applications. Two projects are completed and several more are already 
providing data for performance analysis. The Recovery Act projects 
incorporate innovative business and financial strategies and/or GHP 
technologies and applications designed to overcome the initial cost 
premium that has prevented GHPs from being directly cost-competitive 
with other HVAC technologies, and from gaining wider marketplace 
acceptance.
    DOE currently has projects in many of the areas identified for 
further RD&D and commercial application in S. 1142, including district 
heating and cooling at large institutions, use of hot water in shaft 
mines, combined GHP-solar PV and desiccant projects, and use of carbon 
dioxide as a refrigerant fluid for heat exchange.
    The Department is also addressing other obstacles to geothermal 
development such as delays in the siting and permitting process which 
increase overall project costs and could further strain economics. 
Currently, it takes approximately seven years for a new geothermal 
project to move from exploration to power generation.
    While the Administration is still reviewing the bill, there are 
serious technical concerns that would need to be addressed. Any new 
program should be consistent with applicable laws, and structured to 
mitigate risks and costs to the taxpayer.

      S.1160--DEPARTMENT OF ENERGY ADMINISTRATIVE IMPROVEMENT ACT

    S.1160 proposes a variety of changes intended to improve the 
administration of the Department of Energy. The Department is still 
reviewing this bill and does not have a position on it at this time. 
However, I will address Sections 4, 6, and 7 as they relate to the 
Department's current authority.
Section 4
    Section 4 of S.1160 concerns the administration of the Department's 
``Other Transactions'' (OT) Authority. Section 4 is similar in many 
respects to DOE's current OT Authority, which is codified at Section 
646(g) of the DOE Organization Act (42 U.S.C. 7256(g)). However, there 
are some important differences.
    Currently, the Department has two kinds of OT Authority: Research 
OT Authority and Prototype OT Authority. Research OT Authority is used 
to carry out a public purpose of support or stimulation (e.g., RD&D 
projects). By contrast, Prototype OT Authority is used for the 
preacquisition development of technology prototypes. Such prototypes 
are used to evaluate the technical or manufacturing feasibility or 
utility to DOE's mission of a particular technology, process, concept, 
end item, or system.
    Section 4 provides DOE with permanent and independent OT Authority 
similar to the authority Congress provided the Defense Department in 
1991. However, the precise scope of DOE's OT Authority is left 
undefined in S.1160.
    Additionally, Section 4 of S.1160 requires the Secretary to 
determine that ``the use of a standard contract, grant, or cooperative 
agreement for the project is not feasible or appropriate'' before the 
Department's OT Authority can be used. Section 4 restricts the 
delegation of this authority to officials ``appointed by the President 
and confirmed by the Senate.''
Section 6 and 7
    Section 6 of S.1160 provides the Secretary with direct hire 
authority for ``highly qualified scientists, engineers, or critical 
technical personnel'' for two years following the enactment of the Act. 
Similarly, Section 7 provides the Secretary with special hiring and pay 
authority for persons with ``expertise in an extremely high level in a 
scientific or technical field.'' The Secretary's authority under 
Section 7 is permanent, but not more than 40 persons may be hired under 
this authority at any time.
    Sections 6 and 7 are analogous to Sections 621(b) and (d) of the 
DOE Organization Act (42 U.S.C. Sec.  7231(b)-(d)). Section 621(b), 
which expired after four years, allowed the Secretary to appoint 311 
scientific, engineering, and administrative personnel without regard to 
civil service laws and to fix their compensation at ``super grades'' 
(formerly GS-18, now Executive Level IV). Section 621(d), which is 
still in effect, authorizes the Secretary to appoint 200 scientific, 
engineering, professional, and administrative staff without regard to 
civil service laws, but subject to a GS-18 pay cap (now Executive Level 
IV).
    Additionally, Congress granted the Department's ARPA-E program 
special hiring authority. The Director of ARPA-E has the authority to 
make appointments of scientific, engineering, and professional 
personnel ``without regard to the civil service laws,'' ``fix the basic 
pay of such personnel'' up to Level II of the Executive Schedule, and 
provide ``additional payments'' up to a certain cap.

                               CONCLUSION

    In conclusion, I would like to again thank this Committee for its 
leadership in supporting both solar and geothermal energy technologies.
    It is important to tap valuable assets like solar and geothermal 
energy to continue growing our economy to expand the Nation's clean 
energy portfolio and energy security.
    I would be pleased to address any questions the Committee might 
have.

    The Chairman. Let me start with some questions. I guess the 
first question would be on this Sunshot Initiative that you've 
talked about and the idea that you have or the main purpose of 
it as I understand from your testimony is to standardize and 
bring uniformity to permitting for the installation of solar 
panels. How do you see that relating to the bill that we're 
talking about today, that Senator Sanders has introduced? What 
concrete steps are you planning to take to bring about that 
standardization and uniformity in the way that these solar 
installations are permitted?
    Mr. Chalk. The steps that we plan to take are very, very 
consistent with the bill as written. Let me explain a little 
bit about the problems we're trying to solve here. These soft 
costs as SunRun will testify later today--amount to 
approximately 33 percent of the costs of a solar installation. 
So it's not just the hardware, the module, and the 
installation, but going through the local jurisdiction for 
permitting--and in the United States, there are 18,000 local 
jurisdictions. They have land use laws, zoning ordinances. 
There are over 5,000 utilities with different interconnection 
and net metering standards.
    So we're trying to harmonize local standards as much as 
possible. Rather than having a top-down approach where the 
Federal Government sets these standards, we want to set them on 
a regional basis. So we now have out a solicitation to do just 
that, covering permitting and interconnection. We're looking 
for transparency, consistency, and most above all expediency in 
permitting solar installations. The solicitation also covers 
net metering standards. We actually have a third party that's 
going to grade the regions on how well they do net metering and 
how well they have standardized processes for interconnection.
    Financing options are another soft cost, because other than 
self-financing there are other ways to finance solar energy 
through third parties, but they have legal issues associated 
with them. Then finally, planning and zoning are also soft 
costs. So through this solicitation----
    The Chairman. Let me ask, on the solicitation, who are you 
soliciting and what are you soliciting them to do?
    Mr. Chalk. We're soliciting local governments to team with 
public utility commissions, State governments, perhaps 
utilities, all to work together in various regions to come up 
with streamlined digitized web-based processes for siting and 
permitting and interconnection, so we can speed that up and 
reduce the cost, which approximately 33 percent today, given 
some references, to under the Sunshot Initiative, those costs 
would fall to about 10 percent of the total cost.
    The Chairman. But that's not in any way insisting that 
anyone standardize their planning process or make it uniform 
with anyone else's planning process, the way I'm understanding 
you.
    Mr. Chalk. Not initially. In the first phase we're asking 
each region to develop best practices. When we get to phase 2, 
we'll start sharing those best practices and perhaps we'll have 
some harmony nationally. Perhaps it will be specific examples 
that are going to drive different standards. But we hope to 
have large metropolitan areas harmonized, so that the solar 
developers in that area know with certainty what's expected of 
them when they're trying to site and install a solar 
installation, so they're not having to deal, as I said, with 
thousands of different jurisdictions.
    The Chairman. Let me switch and ask a question on this 
geothermal heat pump issue. One of the concerns I have had is 
that whenever we have a hearing related to geothermal it's 
always about how much, how many megawatts of energy we're able 
to produce from geothermal sources, and it's all focused on 
power generation from geothermal sources.
    As I understand, in many countries geothermal heat pumps 
have been used as a way to essentially lower the amount of 
natural gas having to be used for regular building heating and 
cooling, and that to me seems like a much greater potential or 
opportunity for us with geothermal heat pumps than constantly 
focusing on how we can generate more power with large 
geothermal projects.
    So I don't know--to what extent are you folks in the 
Department of Energy focused on expanding the use of geothermal 
heat pumps in residences and commercial facilities?
    Mr. Chalk. Under the Recovery Act, we were fortunate to 
invest about $62 million in geothermal heat pumps. We have 
approximately 35 demonstrations going on right now, most of 
which are for very large buildings: universities, prisons, 
local governments. We are now collecting data which we hope to 
use to increase consumer awareness, because geothermal heat 
pumps can achieve about 50 to 60 percent energy savings. So 
it's a way of saving natural gas. It's also very cost effective 
for propane or fuel oil, which you tend to get in remote areas.
    Our program looks at it as building technology, so we're 
weighing various options. Ground source heat pumps are one 
option. We're also looking at improving air source heat pumps, 
which can be very cost competitive. With ground source heat 
pumps, the challenge is, like many efficiency and renewable 
technologies, their up-front costs which sometimes can be 3 
times those of an air source heat pump that's more readily 
available.
    One of the challenges with geothermal is retrofitting the 
building to make it compatible. If a person's heat pump breaks 
down or they need heating or cooling though, they want it in a 
matter of days or sometimes hours. But geothermal heat pumps 
are a very good application for large commercial buildings, 
like universities, or new construction.
    First cost and the cost of drilling equipment is really a 
challenge with ground source heat pumps. So we need to do 
additional research to lower that cost.
    The Chairman. Senator Sanders.
    Senator Sanders. Mr. Chairman, thank you.
    Mr. Chalk, thank you for the work you're doing, and please 
convey my appreciation to Secretary Chu for the outstanding 
work that you guys are doing in this whole area.
    Mr. Chairman, I wanted to mention just something to you. 
Yesterday, yesterday we did an event in Burlington, Vermont, 
and we highlighted five energy programs around the State. Let 
me give you an example of what's happening and what the 
potential is. A low-income school in Burlington, Vermont, 
called the Bond School, as a result of energy efficiency and 
geothermal--and soon they're going to add solar--they have cut 
their fuel bills by 75 percent, 75 percent in a cold weather 
State. That is not insignificant.
    A few blocks away on the other side of town, we have a 
college called Champlain College which has invested heavily in 
geothermal. It is a huge success story, significant reduction 
in their fuel bills.
    In terms of solar, in the southern part of our State we 
have a company called Ivek, a manufacturing company, Mr. 
Chairman, a manufacturer, 60 employees. As a result of the 
installation of PV, they are producing 90 percent of the 
electricity they require in a manufacturing facility.
    So we are seeing in Vermont--and I suspect that same story 
is being told all over the country, about major, major 
breakthroughs in sustainable energy. I applaud the Department 
of Energy very much for the work that they are doing.
    Mr. Chalk, I was very impressed by your remark that you 
thought within a reasonably short period of time, if we get 
legislation passed like this 10 Million Solar Roofs, which will 
cut back on the cost of permitting, that you think we can get 
solar down to 6 cents a kilowatt? Is that what you were saying?
    Mr. Chalk. The levelized cost of energy of a dollar a watt, 
which is our goal, is equivalent to 6 cents per kilowatt hour, 
which is really competitive with conventional baseload energy 
generation from coal.
    Senator Sanders. Just out of curiosity, if I wanted to 
build a new nuclear power plant, which I don't, but if I did, 
how much would that cost me, do you think, comparatively 
speaking?
    Mr. Chalk. That's outside of my expertise, but we feel we 
need to compete with conventional alternatives that are there 
now.
    Senator Sanders. Let me just say for the record, I believe 
that's about half. We think the new nuclear might be 10 or 12 
cents and we're talking about 6 cents. So the potential here is 
enormous.
    Let me just ask you, Mr. Chalk. I understand that the DOE 
is currently under the Sunshot Initiative aiming to pilot some 
best practices on solar permitting through the Rooftop Solar 
Challenge. In your view, would the authorization provided in 10 
Million Solar Rooftops Act for competitive grants help scale up 
local government adoption of these best practices on 
permitting?
    Mr. Chalk. Absolutely it does. Again, our solicitation is 
very, very consistent with this legislation. We believe that if 
we don't address local government permitting practices, we will 
not achieve the Sunshot goals. It's more about the module and 
the power electronics. It's also about what we call soft costs. 
So we have to address this. It has not really been addressed in 
the DOE program to date.
    Senator Sanders. I know this is something Secretary Chu has 
often talked about, is that correct?
    Mr. Chalk. Yes.
    Senator Sanders. Mr. Chalk, as you know, this legislation 
incorporates the goals of the Sunshot Initiative to reduce 
solar energy costs. Can you speak to how we get from where we 
are today with solar installation costs ranging from what I 
understand is about $4 per watt for commercial systems to 5.50 
or $6 per watt for residential to the Secretary's goal of a 
dollar per watt by 2020 and how permitting reforms can play a 
role in that process?
    Mr. Chalk. Yes. Overall, no matter what application we're 
talking about, whether it's utility, which costs a dollar a 
watt because it's on a large scale of 20 or 40 megawatts, or 
commercial or residential, we need to decrease the cost by 75 
percent. So we've developed a road map that divides up what 
we're going to do in the module area, in the power electronics 
area, and in the balance of system.
    The balance of system is not just the soft costs of 
permitting and siting and so forth, it's also the mounting, 
it's developing a method to install solar technologies at scale 
to really reduce costs. The scale is really what's going to 
allow you to get to our goals.
    We have a road map in each of these 3 key areas and we have 
solicitations out now asking folks from industry and academia 
for proposals to address each of these areas. Each of these 
areas has very concrete metrics to measure progress, 
milestones. Everything is in a metric of a dollar per watt, 
even some of these soft costs, where we have goals for what 
goes on in siting and permitting. When we ask for proposals 
from these regions, they're going to have to give us a score 
sheet of where they are now in terms of dollar per watt and 
then where they think they can be in 2 or 3 years.
    So all of this is very, very hard driven toward this dollar 
a watt goal for utility systems.
    Senator Sanders. Mr. Chairman, thank you very much.
    Mr. Chalk, thank you.
    The Chairman. Thank you.
    Senator Franken.
    Senator Franken. Thank you, Mr. Chairman.
    A couple of questions that I was going to ask, really the 
chairman at least broached, on trying to get solar information-
sharing so that municipal authorities don't have to sort of 
reinvent the wheel every time. I understand that DOE plans to 
do this through the Sunshot Initiative. I can go into more 
detail on that.
    Is there going to be a national common application for--
developed to streamline all of this?
    Mr. Chalk. That would be ideal, but recognizing that each 
jurisdiction or region may be different, it may be best for 90 
percent of it to be standard. There's a balance between asking 
the regions to request the information that they need to make 
their decisions and the Federal Government as making top-down 
decisions.
    So we'll hopefully have something nationwide that's 
automated and web-based, so that we're not filling out forms 
and things like that.
    Senator Franken. The streamlining of the process.
    Mr. Chalk. Right, streamlining. But it'll be up to the 
jurisdictions to decide how much they want to adopt best 
practices from other regions.
    Senator Franken. Following up also on the chairman's 
question about geothermal pumps, in Minnesota we don't have 
geothermal resources for these large-scale geothermal projects 
that the chairman was referring to, that you guys were talking 
about. But we use geothermal in the ways that you then start 
talking about, which is like for residential and for larger 
facilities. I think you mentioned prisons and other, 
manufacturing or schools and stuff.
    There's a company called ECONAR in Minnesota that's been at 
it for years and I visited them a while ago and they're doing 
very good business in residential. It made me think about 
something that I saw in southern Minnesota. There's a company 
called McQuay and they make air conditioners and they're one of 
the biggest air conditioner companies in the world. They're 
doing the air conditioners for the World Trade Center. This is 
in Faribault, Minnesota.
    You brought up the up-front costs on geothermal as a 
problem. But you said that it saves an incredible amount on the 
use of propane or whatever is used, so that there's a savings 
once the up-front costs are paid. What McQuay does is they make 
these incredibly efficient air conditioner units and, because 
they're such a big and creditworthy company, they borrow money 
from banks, they lend the money to the commercial buildings 
that they're selling to or whatever they are. Then that company 
uses the loan to buy the unit from McQuay, put people to work 
installing the thing, building the thing. It's like jobs. These 
units pay for themselves in 3 to 5 years.
    So the company pays back the loan it took and pays it off 
in 3 to 5 years and the rest is gravy, and it's gravy, gravy, 
gravy. It's win-win-win.
    Now, what I'm wondering is is there a model like this, with 
$2 trillion sitting on the sidelines that we hear about all the 
time, is there a model to be right now making sure that we are 
investing in things like geothermal and investing in these 
things that we have a proven, have a proven return on 
investment, where we can not spend Federal money, but we can 
leverage private money to have companies make their buildings, 
their commercial factories, their institutions, more energy 
efficient, get people working making these systems, installing 
these systems, pay for it with the energy savings, have a win-
win-win situation?
    Has there been any effort to try to find a model, not like 
this McQuay model, so that we are making America more efficient 
and we are getting people working and it's paying for itself?
    Mr. Chalk. I mentioned the high up-front costs. What I 
wasn't very clear about was--and you made this point--over a 
life cycle, these things pay for themselves in 5 years, 8 
years. Sometimes it may be up to 20 depending on the climate. 
It's very climate-sensitive in this case with ground-source 
heat pumps and it's very sensitive to the price that you're 
paying for electricity.
    But they do pay for themselves, if you look at a life cycle 
cost basis. There are government instruments like loan 
guarantees that people could utilize if they could show they 
had the orders. They could also go to a bank and get that 
financing.
    What we're doing in our building efficiency sector right 
now--not specifically for geothermal heat pumps, but we're 
looking to find those private models for activities like 
weatherization where we're trying to increase home efficiency. 
If you aggregate enough orders--weatherizing a whole 
neighborhood for example--it will help you get to the necessary 
scale. We're experimenting right now with those models in the 
building efficiency area, which could include ground source 
heat pumps, but they're not exclusively geared toward ground 
source heat pumps. They would be geared toward insulation, 
higher efficiency HVAC equipment across the board, hot water 
systems and so forth.
    But we're doing that in our buildings program right now, 
and I expect over the next 12 months that we're going to have a 
lot of data to share with people. Most of these programs are 
very, very highly leveraged with the private sector, so we're 
trying to do the pilot so the industry can stand up itself.
    Senator Franken. My time is up. But I guess what I'm saying 
is, in this budget climate, if we can find ways to duplicate 
the model I'm talking about, in which there's absolutely no 
Federal money being spent, none, zero, zip, and yet people 
being put to work and energy being saved, that would be 
wonderful.
    The Chairman. All right. Mr. Chalk, thank you very much. We 
appreciate your testimony and we will go on to the second 
panel.
    Mr. Chalk. OK, thank you.
    The Chairman. The second panel is made up of 2 witnesses: 
Mr. Douglas Dougherty, who is the President and CEO of the 
Geothermal Exchange Organization in Springfield, Illinois; and 
Ms. Holly Gordon, who is Vice President of Legislative and 
Regulatory Affairs with SunRun Inc. in San Francisco. We very 
much appreciate both of them being here.
    Mr. Dougherty, why don't you go ahead and give us the main 
points that you think we should understand. We will include 
your full statement in the record as if read, but give us your 
views, and then we'll call on Ms. Gordon.

   STATEMENT OF DOUGLAS A. DOUGHERTY, PRESIDENT AND CEO, THE 
                GEOTHERMAL EXCHANGE ORGANIZATION

    Mr. Dougherty. Good morning. I am Doug Dougherty, President 
and CEO of the Geothermal Exchange Organization, a nonprofit 
trade association representing the U.S. geothermal heat pump 
industry. On behalf of GEO and our more than 200 members, I 
would like to thank Chairman Bingaman, Ranking Member 
Murkowski, and the other distinguished members of the committee 
for the opportunity to share our views on S. 1142, the 
Geothermal Exploration and Technology Act.
    GEO strongly supports S. 1142 and its many provisions to 
expand the use of geothermal energy. We are especially 
interested in those that deal with geothermal heating and 
cooling technologies. A geothermal heat pump is a 50-State 
clean, renewable energy technology that uses solar energy 
stored just below the Earth's surface to heat and cool 
residential and commercial buildings and to provide hot water.
    Let me briefly describe how the technology works. Unlike 
conventional systems that use the outside air to take and 
release heat, geothermal heat pumps transfer heat from and to 
the ground. They do that through closed loops of fluid-filled 
plastic pipes buried either horizontally or vertically in the 
ground below the frost line, where the temperature is 
consistently between 40 to 75 degrees year-round.
    While a conventional air source heat pump struggles to 
scavenge heat from freezing winter air or dump it into the 
summer swelter, the ground source heat pump utilizes the 
constant temperature for fluid circulating through its loop in 
the ground. Once installed, the ground loop lasts indefinitely 
and the inside unit has a life span of greater than 20 years.
    Geothermal heat pumps use 20 to 50 percent less electricity 
than conventional heating or cooling systems and, according to 
the Environmental Protection Agency, they can reduce energy 
consumption and corresponding emissions by 44 to 72 percent 
compared to traditional heating and cooling equipment.
    Geothermal heat pumps are a fully scaleable technology. 
They are effective in residential homes and commercial 
buildings. The largest project in the country is currently 
under way at Ball State University in Indiana, where more than 
4,000 bore holes will host ground loops to heat and cool 45 
buildings for an annual energy savings of $2 million per year.
    Despite the well documented energy efficiency, our industry 
is still relatively nascent, with less than 5 percent market 
penetration for new construction. GEO agrees with Senators 
Tester and Murkowski that geothermal heat pumps can make a 
significant contribution to the use of renewable energy, but 
are under-represented in research, development, demonstration, 
and commercialization.
    The primary barriers to expanding the industry include: a 
lack of consumer awareness; high initial cost, primarily due to 
the installation of the underground loop; a need for more 
qualified design and installation professionals; a need for 
builders, developers, realtors, lenders, and appraisers to 
value energy savings; and a lack of a home at DOE.
    GEO is pleased that the geothermal heat pump effort 
specified in S. 1142 will focus on cost, a key barrier to wider 
geothermal heat pump installations, and we agree that the 
research should be directed at improving ground loop efficiency 
through more efficient heat transfer fluids and thermal grouts, 
better loop design, and improved variable pumping rates, 
reducing ground loop installation costs through improved 
drilling techniques and equipment, exploring innovative uses of 
wastewater and mine water for geothermal systems, demonstrating 
the viability of large-scale commercial and residential 
neighborhood projects, and integrating geothermal with solar 
systems to balance loads and to store energy.
    The Geothermal Exploration and Technology Act will help 
drive down the cost of installing geothermal heat pumps. It 
will also fuel a U.S.-based industry that generates thousands 
of jobs. The installation of ground loops create well-paid jobs 
not found in the conventional heating, ventilation, and air 
conditioning industry. We estimate that expanding our industry 
by ten times to create one million installations per year by 
2017 would create more than 100,000 new well-paying jobs.
    S. 1142 will help us reach this goal by making geothermal 
heat pumps more affordable and further demonstrating the 
efficiency of the technology in large-scale projects. GEO 
strongly urges the committee to support this legislation.
    We also hope to work with the committee to address the 
other barriers that have limited the growth of our industry, 
particularly the lack of a home for our industry at the 
Department of Energy. Over the years we have been moved from 
one program to another within the Office of Energy Efficiency 
and Renewable Energy. We believe that it's important for the 
Department to have a dedicated staff to promote geothermal heat 
pumps and to provide technical assistance to other agencies 
such as the Environmental Protection Agency, the Department of 
Department of Defense, the Department of Education, the 
National Park Service, and the General Services Administration 
that are all considering geothermal heat pump projects.
    Thank you for the opportunity to testify this morning, Mr. 
Chairman.
    [The prepared statement of Dougherty follows:]

  Prepared Statement of Douglas A. Dougherty, President and CEO, The 
                    Geothermal Exchange Organization

    Good morning. I am Doug Dougherty, President and CEO of the 
Geothermal Exchange Organization, a non-profit trade association 
representing the U.S. geothermal heat pump industry.
    On behalf of GEO and our more than 200 members, I would like to 
thank Chairman Bingaman, Ranking Member Murkowski, and the other 
distinguished members of the Committee for the opportunity to share our 
views on S. 1142, the Geothermal Exploration and Technology Act.
    GEO strongly supports S. 1142 and its many provisions to expand the 
use of geothermal energy. We are especially interested in those that 
deal with geothermal heating and cooling technologies.
    A geothermal heat pump is a 50-State, clean, renewable energy 
technology that uses solar energy stored just below the earth's surface 
to heat and cool residential and commercial buildings and to provide 
hot water.
    Let me briefly describe how the technology works. Unlike 
conventional systems that use the outside air to take and release heat, 
geothermal heat pumps transfer heat from and to the ground. They do 
that through closed loops of fluid filled, plastic pipes buried either 
horizontally or vertically in the ground below the frost line where the 
temperature is consistently between 40 to 75 degrees year round. While 
a conventional air source heat pump struggles to scavenge heat from 
freezing winter air or dump it into the summer swelter, the ground 
source heat pump utilizes that constant temperature for fluid 
circulating through its loop in the ground. Once installed, the ground 
loop lasts indefinitely and the inside unit has a lifespan of greater 
than 20 years.
    Geothermal heat pumps use 25 to 50 percent less electricity than 
conventional heating or cooling systems, and according to the 
Environmental Protection Agency, they can reduce energy consumption--
and corresponding emissions--by 44 to 72 percent compared to 
traditional heating and cooling equipment.
    Geothermal heat pumps are a fully scalable technology. They are 
effective in residential homes and commercial buildings. The largest 
project in the country is currently underway at Ball State University 
in Indiana, where more than 4,000 boreholes will host ground loops to 
heat and cool 45 buildings, for annual energy savings of $2 million per 
year.
    Despite the well-documented energy efficiency, our industry is 
still relatively nascent, with less than a five-percent market 
penetration for new construction. GEO agrees with Senators Tester and 
Murkowski that geothermal heat pumps can make a significant 
contribution to the use of renewable energy but are underrepresented in 
research, development, demonstration, and commercialization.
    The primary barriers to expanding the industry include: lack of 
consumer awareness; high initial cost, primarily due to the 
installation of the underground loop; need for more qualified design 
and installation professionals; need for builders, developers, 
realtors, lenders, and appraisers to value energy savings; and lack of 
a ``home'' at DOE.
    GEO is pleased that the geothermal heat pump efforts specified in 
S. 1142 will focus on cost, a key barrier to wider geothermal heat pump 
installations. We agree that research should be directed at:

   Improving ground loop efficiency through more efficient heat 
        transfer fluids and thermal grouts, better loop design, and 
        improved variable pumping rates;
   Reducing ground loop installation cost through improved 
        drilling techniques and equipment;
   Exploring innovative uses of wastewater and mine water for 
        geothermal systems;
   Demonstrating the viability of large-scale commercial and 
        residential neighborhood projects; and,
   Integrating geothermal with solar systems to balance loads 
        and to store energy.

    The Geothermal Exploration and Technology Act will help drive down 
the cost of installing geothermal heat pumps. It will also fuel a U.S.-
based industry that generates thousands of jobs. The installation of 
the ground loop creates well-paid jobs not found in the conventional 
heating, ventilation, and air conditioning industry. We estimate that 
expanding our industry 10 times--to a million installations per year--
by 2017 would create more than 100,000 jobs.
    S. 1142 will help us reach this goal by making geothermal heat 
pumps more affordable and further demonstrating the efficiency of the 
technology in large scale projects. GEO strongly urges the Committee to 
support this legislation.
    We also hope to work with the Committee to address the other 
barriers that have limited the growth of our industry, particularly the 
lack of a home for our industry at the Department of Energy. Over the 
years, we have been moved from one program to another within the Office 
of Energy Efficiency and Renewable Energy. We believe it is important 
for the Department to have dedicated staff to promote geothermal heat 
pumps and to provide technical assistance to other agencies such as the 
Environmental Protection Agency, Department of Defense, Department of 
Education, National Park Service, and the General Services 
Administration that are considering geothermal heat pump projects.
    Thank you again for the opportunity to testify this morning.

    The Chairman. Thank you very much.
    Ms. Gordon, please go ahead.

   STATEMENT OF HOLLY GORDON, VICE PRESIDENT, LEGISLATIVE & 
                REGULATORY AFFAIRS, SUNRUN, INC.

    Ms. Gordon. Chairman Bingaman, Ranking Member Murkowski, 
and members of the committee: I appreciate the opportunity to 
testify on behalf of SunRun in support of the 10 Million Solar 
Roofs Act of 2011, also known as S. 1108. As the fastest 
growing company in the United States residential solar 
industry, SunRun applauds the bill's aims to reduce 
installation costs of residential solar systems by reducing 
soft costs associated with wide variations in local permitting 
processes.
    A recent study authored by SunRun and other solar industry 
leaders shows permitting costs at the local level are 
equivalent to a $1 billion tax on the solar industry over the 
next 5 years. SunRun believes that the bill's provisions 
represent the most efficient way to mitigate unnecessary costs, 
cut through the red tape, and give solar the ability to fairly 
compete with other energy technologies on the open market.
    SunRun is the largest owner of residential solar in the 
United States, with over 11,000 customers and operations in 9 
States as of today. This morning we announced our launch in the 
Maryland market. We're very excited to be in the D.C. Metro 
area and we are actively looking at a number of additional 
States.
    SunRun offers a solar power service, typically referred to 
as a lease or power purchase agreement, known as a PPA, which 
allows homeowners to get solar energy without a big up-front 
investment and pay for the energy as it is produced. SunRun 
monitors, maintains, and insures the solar system for no 
additional cost to the homeowner. We currently invest a million 
dollars a day in solar energy systems and install 3 megawatts 
per month.
    However, SunRun's ability to enter new markets, increase 
investment dollars, and offer competitive long-term rates for 
clean solar energy is dependent on reducing the cost of solar 
installations. While a number of factors have dramatically 
reduced the cost of solar projects, there are still many costs 
associated with purchasing and installing residential solar 
systems.
    The cost of residential solar systems can range from 
$15,000 to upwards of $60,000. This includes fees for panels, 
construction, interconnection, and permitting, which vary 
widely among States and municipalities. SunRun has found that, 
while panel prices have come down significantly over the last 5 
years, permitting costs have stayed high.
    Germany, France, and Japan have all eliminated permitting 
fees for residential solar installs and have costs up to 40 
percent lower than the United States. If we could reduce these 
permitting costs, the price homeowners would have to pay for 
solar products like SunRun's would correspondingly drop and the 
size of the addressable market for such products would 
proportionately increase.
    SunRun commissioned AECOM, an independent third party, to 
analyze the fiscal impacts on State and local governments and 
the economic impacts on State and regional economies that a 
streamlined permitting regime would provide. While the study is 
not yet complete, preliminary numbers show that in California 
alone a streamlined planning regime would add over 130,000 
residential solar systems, equal to approximately 730 
megawatts, resulting in 4,000 new jobs between 2012 and 2020.
    The bulk of these permitting costs come from local 
processes and variations in local processes, not from the 
electrical code itself. Inefficient local processes waste time 
and money and local variation forces installers to spend time 
and money customizing plans for each jurisdiction. According to 
the Solar American Board for Codes and Standards, or Solar 
ABCs, standardizing this process makes sense because most 
installations share many similarities of design that allow for 
a nationally standardized, expedited permit process.
    However, jurisdictions often design cumbersome processes to 
account for the minority of complicated installations that 
require more in-depth review. A streamlined, consistent process 
for basic installations, like the common application for 
college admissions, eliminate waste and variability across 
jurisdictions.
    The Department of Energy is funding development of these 
standards through the Solar ABCs to allow jurisdictions to 
streamline permitting for most installations while following 
code and maintaining safety. This simplified process, combined 
with process improvements such as imposing fair fees, allowing 
for email submission, and providing faster turnaround and less 
inspection waiting time, will help reduce unnecessary costs and 
delays.
    The Department of Energy has also taken a first step in 
addressing local regulatory barriers. The Sunshot Initiative's 
Rooftop Solar Challenge will gather examples of best practices 
for local permitting.
    S. 1108 enables the critical second phase of establishing 
industry best practices by authorizing a scaleable program to 
focus on streamlining and standardizing local permitting 
processes across more communities.
    In closing if our goal is to increase the deployment of 
solar installations by decreasing costs and eventually 
achieving grid parity, we believe that reducing unnecessary red 
tape and costs associated with local permitting represents the 
lowest hanging fruit in our efforts to get there.
    Germany currently holds a 40 percent cost advantage over 
the U.S. for solar installations and it's clear that the U.S. 
permitting costs are the major driver of that difference. In 
discussions with experts on the permitting process, there does 
not seem to be a specific technical or policy reason why 
jurisdictions cannot agree to the same procedures. Permitting 
costs are immune from price reduction activities that the solar 
industry is driving, such as making technology advances and 
installation practice improvements, and therefore should be a 
top priority for our government.
    Thank you for the opportunity to discuss this bill with the 
committee today and I look forward to answering any questions 
you may have.
    [The prepared statement of Ms. Gordon follows:]

   Prepared Statement of Holly Gordon, Vice President, Legislative & 
                    Regulatory Affairs, SunRun, Inc.

    Chairman Bingaman, Ranking Member Murkowski, and Members of the 
Committee, I appreciate the opportunity to testify before the Committee 
on behalf of SunRun, Inc., in support of the 10 Million Solar Roofs Act 
of 2011, S. 1108. As the fastest growing company in the residential 
solar industry in the United States, SunRun would first like to applaud 
the bill's aim to reduce installation costs of residential solar 
systems by reducing ``soft costs'' associated with wide variations in 
local permitting processes. As documented in a study authored by SunRun 
and other leaders in the solar industry, and covered by major media 
outlets around the country, permitting costs at the local level are 
equivalent to a $1 billion tax on the solar industry over the next five 
years. (The report and several articles about the report are attached 
at the end of this testimony).* SunRun believes that the provisions 
included in this bill represent the most efficient way to mitigate 
these unnecessary costs, cut through the red tape, and give solar the 
ability to fairly compete with other energy technologies on the open 
market.
---------------------------------------------------------------------------
    * Documents have been retained in committee files.
---------------------------------------------------------------------------
    SunRun is the largest owner of residential solar in the United 
States with over 11,000 customers and operations in Arizona, 
California, Colorado, Hawaii, Massachusetts, New Jersey, Oregon, and 
Pennsylvania. We are actively considering launching operations in a 
number of other states. SunRun offers a solar power service typically 
referred to as a lease or Power Purchase Agreement (PPA), which allows 
homeowners to get solar energy without a big upfront investment, and 
pay for the energy as it is produced. SunRun monitors, maintains and 
insures the solar system for no additional cost to the homeowner. 
SunRun currently invests $1 million per day in solar energy systems and 
installs 3 MW per month. However, SunRun's ability to enter new 
markets, increase the investment dollars, and offer competitive long-
term rates for clean solar energy is dependent on reducing the cost of 
solar installations.
    While decreasing panel prices, efficiencies in the installation 
process, and creative financing structures like SunRun's have already 
dramatically reduced the cost of solar projects, purchasing and 
installing solar systems on residential roofs still requires high 
upfront costs. Even with existing federal and state incentive programs, 
the cost for residential solar systems can range from $15,000 to 
upwards of $60,000. These costs are attributed to the cost of panels 
and other hardware components, constructions costs, interconnection 
fees, and permitting fees, which vary widely from state-to-state and 
municipality-to-municipality, as well as marketing costs. In the study 
referenced above, and released earlier this year, SunRun found that 
while panel prices have come down significantly over the last 5 years, 
permitting costs have stagnated. In 2007, local permitting and 
inspection added 13% to what a homeowner would spend on panels, today 
they add 33% and within a few years, they will add 50%. Other countries 
like Germany, France, and Japan have eliminated permitting fees for 
residential solar installs and have installation costs up to 40% lower 
than the United States.
    The average ``turnkey price'' per watt to install residential solar 
is the baseline metric SunRun uses to assess the financial impact of 
permitting. The higher the turnkey price, the greater the electricity 
rate (measured in kilowatt hours (kwhs)) PPA providers, such as SunRun, 
must charge its customers. High turnkey prices limit the size of the 
solar market because solar companies are best able to sell to 
homeowners when the price for clean energy is at or below their current 
utility rate. The residential solar industry's addressable market grows 
or shrinks based on the relationship between the turnkey prices, as 
expressed in a cents-per-kwh rate, and the cost of traditional utility 
electricity. A reduction in the permitting cost component of the 
turnkey price will increase the number of economically viable solar 
homeowners and the amount of savings each homeowner will realize from 
investing in a solar system.
    As a growing solar company, SunRun cannot understate the positive 
economic impact of this increase in the number of economically viable 
solar homeowners and savings achieved by the homeowner through 
investment in solar. SunRun commissioned AECOM,\1\ an independent third 
party, to analyze the fiscal impacts on state and local governments and 
the economic impacts on state and regional economies that a streamlined 
permitting regime would provide. While the study is not yet 
complete,\2\ AECOM provided a draft indicating that in California 
alone, a streamlined permitting regime would add over 130,000 
residential solar systems (approximately 730 MW), resulting in 4,000 
new jobs between 2012-2020. In addition, the study will analyze fiscal 
impacts such as additional sales, property, and payroll tax revenue to 
state and local governments as well as other direct, indirect, and 
induced economic effects.
---------------------------------------------------------------------------
    \1\ www.aecom.com
    \2\ We anticipate the study to be complete before the end of July, 
2011 and will submit it as part of the record for S. 1108.
---------------------------------------------------------------------------
    The bulk of these permitting costs come from local processes and 
variation in local processes, not from the electrical code itself. 
Inefficient local processes waste time and money, and local variation 
forces installers to spend time and money customizing plans for each 
jurisdiction. According to the Solar America Board for Codes and 
Standards (Solar ABCs), an organization funded by the Department of 
Energy (DOE), standardizing this process makes sense because most 
installations are relatively similar and ``share many similarities of 
design... that allow for a nationally standardized expedited permit 
process.'' However, jurisdictions often design cumbersome processes to 
account for the minority of complicated installations that require more 
in-depth review.
    A streamlined, consistent process for basic installations, like the 
``Common Application'' for college admissions, will eliminate waste and 
variability across jurisdictions. DOE has already funded development of 
these standards through the Solar ABCs to allow jurisdictions to 
streamline permitting for most installations while following code and 
maintaining safety. Jurisdictions can use this process to simplify the 
structural and electrical review of a small PV system project and 
minimize the need for detailed engineering studies and unnecessary 
delays. In addition, jurisdictions can make process improvements, such 
as imposing fair fees, allowing for email submission, and providing 
faster turnaround and less time waiting on site for inspections, to 
reduce unnecessary cost and delay.
    In addition, DOE has taken a first step to gather examples of best 
practices for local permitting through the DOE SunShot Initiative's 
Rooftop Solar Challenge. The Rooftop Solar Challenge will be collecting 
examples of best practices from over 25 local and regional entities in 
order to give the industry a better understanding of the permitting 
landscape. This effort represents DOE's first phase in addressing local 
regulatory barriers, and the ``Ten Million Solar Roofs Act of 2011'' 
enables the critical second phase of establishing industry best 
practices by authorizing a scalable program to focus on streamlining 
and standardizing local permitting processes for solar installations 
across many more communities.
    In closing, if our goal is to increase the deployment of solar 
installations by decreasing costs and eventually achieving grid parity, 
we believe that reducing the unnecessary red tape and costs associated 
with local permitting represents the lowest hanging fruit in our effort 
to get there. Germany currently holds a 40% cost advantage to the U.S. 
for solar installation costs, and it is clear that permitting costs in 
the U.S. are a major driver of that difference. In discussions with 
experts on the permitting process, there does not seem to be a specific 
technical or policy reason why jurisdictions cannot agree to the same 
procedures. Permitting costs are immune from price reduction activities 
that the solar industry is driving (such as making technology advances 
and installation practice improvements), and therefore should be a top 
priority for our government.
    Thank you for the opportunity to discuss this bill with the 
Committee today, and I look forward to answering any questions you may 
have.

    The Chairman. Thank you very much.
    Mr. Dougherty, let me ask you first, and this demonstrates 
my ignorance of what I'm asking about here. But you point out 
in your testimony that the Department of Energy ought to do 
more to provide technical assistance to other agencies, such as 
the Energy Protection Agency, Department of Defense, Department 
of Education, National Park Service, GSA, that are considering 
geothermal heat pump projects.
    One of the successes, I think, that we've been able to 
legislate over the last decade or so is the provisions for 
energy-saving performance contracts. A lot of government 
agencies enter into those energy-saving performance contracts 
in a way that works for the taxpayer, works for the agency, 
works for the private sector that does the installation.
    Are you using energy-saving performance contracts? Are 
developers coming in, members of your association, and doing 
this kind of geothermal heat pump installation through energy-
saving performance contracts for Federal agencies?
    Mr. Dougherty. Mr. Chairman, I don't know specifically the 
answer to that question. I'd be happy to research it with my 
members. I do know I have several members that have done 
Department of Defense retrofits of existing facilities with 
geothermal heat pumps, but I don't know if it was under that 
contract that you referred to. But I'd be happy to research 
that and get back to staff.
    The Chairman. How extensive is the use of this technology 
by the Department of Defense, for example, or by the National 
Park Service, for example?
    Mr. Dougherty. It's growing. I would like to use the 
example of the educational institutions that Senator Sanders 
referred to. We have hundreds of examples of schools that have 
retrofitted with geothermal heat pumps, and we're currently 
working with the Department of Energy and the Environmental 
Protection Agency on a new initiative called a Green Ribbon 
School Initiative, recognizing those schools that put in energy 
efficiency equipment and technologies and, furthermore, put the 
teaching of energy efficiency and renewables into the 
curriculum within that school. We support that. We're working 
with them on a national webinar that will be broadcast in the 
fall to all school administrators across the country 
highlighting the benefits of retrofitting a school with 
geothermal heat pumps.
    The other example is many schools that were built in the 
1950s and 1960s do not have air conditioning, and we've got 
examples of schools that retrofitted a school and now they can 
heat and cool their building for summer school, all year round 
classes, less than what it was just to heat the building. So as 
those are adopted school by school, we're seeing a real 
initiative by the Department of Education to promote 
retrofitting schools with geothermal heat pumps.
    The Chairman. OK. Now, does the Department of Education 
have a specific program with dedicated funding to do this 
promotion, or is this just having press conferences and urging 
people to do it?
    Mr. Dougherty. No, I think it's a credible program. I don't 
believe there's any money involved, but what it is, it's an 
awareness program for school administrators that are looking to 
save money, because if you can reduce the energy cost of the 
school building, the thermal load of that building, that's 
extra dollars to be put into the education of those children 
through computers and teacher salaries and hiring new people.
    So I think it's very important for school administrators to 
understand the newer technologies. My point would be that if 
the Department of Education were to contact the Department of 
Energy, I don't know that the Department of Energy actually has 
the resources and the references and the documentation that can 
prove what we're saying in terms of the data that we have 
internally within the industry. I don't know that the 
Department of Energy has that dedicated staff to be able to 
articulate the benefits of installing that technology in a 
school building.
    The Chairman. Ms. Gordon, let me ask you a question. I 
guess I'm concerned, after hearing Mr. Chalk's testimony, that 
we're encouraging local entities to develop these permitting 
processes and get up to speed and find ways to streamline, and 
then the second stage is going to be focusing on standardizing 
that. It seems to me that we might have the stages backward, 
that it would make more sense to put in place some 
standardization before we get everybody too far down the road 
developing their systems in this area.
    Am I missing something there? It just strikes me we're 
likely to have a lot of ownership on the part of all of these 
entities and governmental entities around the country that have 
developed their permitting processes, and then we're coming in 
during the second stage and saying: OK, now we want you to do 
it in a standardized way that we've determined makes more 
sense.
    What's your reaction to that?
    Ms. Gordon. First I think there actually is a program in 
place already to standardize these systems. The Solar America 
Board for Codes and Standards, the Solar ABCs that I mentioned 
in my testimony, has already put together a pretty robust 
document to streamline permitting for small systems. So that is 
really in place and we applaud the Department of Energy for 
working with the Solar ABCs on that.
    So that is actually already in place, and what we're 
suggesting is that local jurisdictions look to that document 
and build off of that. The funding opportunity that the 
Department of Energy has put out I view as a pilot program that 
has seed money to start the process of adopting the Solar ABCs, 
and that S. 1108 would scale that process.
    I think standardizing how permit applications are done and 
how permitting is done is just one piece of the process. So 
there are many things that are troubling about the permitting 
process right now. The first problem is that you have 
inspection windows that potentially are 8 hours during the day.
    So I should back up just a moment. While the reason why 
SunRun got involved in this permitting issue is because we went 
to our local installers--we have 30 installers across our nine 
States. Last year, we asked them, what is the one thing that we 
can help you do on a high-level policy issue to help you bring 
down the installation costs?
    SunRun finances solar energy systems. We own those systems 
and the homeowner pays for the electricity per kilowatt hour 
per month. So we're solving the up-front cost. In fact, what 
Senator Franken was asking about earlier from the geothermal 
industry's perspective, the solar industry is actually doing 
that right now. Private industry is investing dollars in 
business models that allow for a low up-front down, where the 
homeowner doesn't have to have 30 or $40,000 to buy a solar 
system. They can put a low amount down, pay per kilowatt hour 
per month. That's what SunRun's business model and our 
competitors' offer.
    So in order to compete with traditional utility rates, we 
need to be able to offer a kilowatt hour rate that is at least 
equal to or lower than that kilowatt hour rate, and there are 
many markets in the country where we won't be able to do that 
unless we're able to reduce those soft costs.
    So when we asked our installers, how can we reduce that 
kilowatt hour rate, they said, please work on permitting. 
Universally, everyone answered that question, please work on 
permitting. So that's why we put this report together and how 
we learned that this is not something the industry can take on 
on its own. It really is a local jurisdiction issue.
    In talking with some of our installers, some of the stories 
that they told me were pretty surprising. Verango, which is one 
of our largest solar installers in southern California, has 24 
employees out of their 400, so well over 5 percent of their 
employee base, works on permitting and inspection by 
themselves. That's all they do. They have 4 what they call 
``permit runners.'' Those people drive from place to place 
every day dropping off and picking up permit applications. They 
have 20 inspection sitters. Those people drive every day to one 
homeowner's house and sit outside of that house because the 
homeowner's at work and wait for an inspector to show up. They 
can't inspect more than one system in a day.
    So I think, aside from standardizing the permitting 
process, you could also streamline by having shorter inspection 
windows, 2 hours at a time. The inspection only takes 15 
minutes right now. You could have on-line permitting 
applications that wouldn't require these permit runners to 
drive all over their local jurisdictions to pick them up.
    So there are a number of different things that can happen 
to streamline the process.
    The Chairman. Thank you very much.
    Senator Murkowski, why don't you go ahead with any opening 
statement you'd like to make and also any questions, and then 
we'll go to Senator Sanders and Senator Franken.
    Senator Murkowski. Thank you, Mr. Chairman. I do have an 
opening statement, but in the interest of time and deference to 
our witnesses I'll just ask that it be submitted as part of the 
record.
    I've been attending an Arctic energy conference this 
morning and I apologize for not being here for the full 
hearing. But at that conference, obviously, one of the issues 
of great interest when you're talking about Arctic energy is 
geothermal. Iceland generates about 80 percent of their energy 
as a Nation from geothermal. I was told this morning that $35 a 
month is what a typical home in Iceland is paying for their 
heating costs with geothermal. If we could only get to a place 
like that, it would give us so much more hope as an Arctic 
nation. We are an Arctic Nation, even though it's 100 degrees 
out there this morning. But thanks to my State, we are one and 
we're going to figure out how we can capitalize on some of our 
energy options, geothermal, solar, certainly.
    [The prepared statement of Senator Murkowski follows:]

  Prepared Statement of Hon. Lisa Murkowski, U.S. Senator From Alaska

     Mr. Chairman: Thank you for scheduling this hearing. Let me talk 
first about a bill that Sen. Tester introduced, a former member of this 
panel, and that I have co-sponsored, the Geothermal Exploration and 
Technology Act of 2011.
    In both 2005 and 2007, this panel took steps to aid research to 
expand geothermal energy production nationwide. We provided aid for 
research, encouraged work on low-temperature technology and provided 
tax incentives. I In 2007, we pushed to encourage the Department to 
further enhanced geothermal system technology--a step that should make 
geothermal energy economic and accessible for large portions of the 
nation.
    We also set up a high-cost geothermal grant program under Sec. 625 
of EISA, that unfortunately DOE has yet to really implement. But that 
is an issue for another day.
    This bill closes most of the remaining gaps the nation's strategy 
for helping geothermal energy expand from the roughly 2.2 gigawatts 
that it produces today, to the up to 100 gigawatts of electricity that 
M-I-T has suggested could be possible in coming decades.
    The bill sets up a revolving loan program to help overcome the 
costs of high-risk geothermal exploration wells--the biggest cost and 
risk in geothermal development. It's a sliding scale cost-share formula 
that should incentivize developers while protecting U.S. taxpayers from 
long-term losses, as developers will have to put significant ``skin'' 
in all such projects.
    The bill of special interest in Alaska and other hydrocarbon-
producing states will allow for co-leasing of geothermal production at 
the time that permits are issued for drilling of oil and gas wells. 
That will make it easier for companies to generate the estimated 11,000 
megawatts of power that could come from tapping the hot water co-
produced in oil production through the use of generally low-temperature 
geothermal technology. An Alaska developer, a pioneer in low-
temperature development at Chena, Alaska, Bernie Karl, proved the 
efficiency of such systems just last year as a result of a DOE grant.
    And this bill provides substantial aid to spur investment in 
geothermal heat pumps and the direct use of geothermal energy to heat 
and cool buildings in large-scale applications. That provision is 
really the piece that has been less emphasized so far by DOE in its 
geothermal development program and will be helped most by this bill.
    This bill at likely little additional cost should help geothermal 
energy continue to expand its market share and help the U.S.--the world 
leader in geothermal energy production--continue in the lead in 
development of geothermal technology. I thank Sen. Tester and his staff 
for developing the bill and I suspect we will hear testimony supporting 
its passage today.
    We are also considering today S. 1108, the 10 Million Solar Roofs 
Act of 2011. A bill by the same name was considered by this Committee 
last Congress, but I understand this bill is substantially different as 
it mainly addresses permitting barriers, which add a considerable 
amount to the cost for a homeowner to install solar energy. I'm 
interested to hear what our witnesses have to say about the proposals 
contained within the bill.
    I am also pleased to join with the Chairman in introducing S. 1160, 
the Department of Energy Administrative Improvement Act of 2011. This 
bill would provide the Department with greater flexibility in its 
hiring and transactions authorities in order to ensure the government 
has the ability to bring on board the best and brightest talent 
available. It also would require a five-year budgetary outlook from the 
Department of Energy to give Congress greater insight into the purpose 
and progress of Departmental programs. I am hopeful these provisions 
will help make the Department of Energy more effective in its missions 
and will get the most mileage out of the taxpayers' dollar.
    I thank all of our witnesses for taking the time to prepare 
testimony and appear today.

    Senator Murkowski. Mr. Dougherty, I wanted to ask you a 
question about geothermal heat pumps and the costs associated 
with them. In your written testimony, you talk about the 
importance of funding research to help cut the costs that are 
associated with the thermal pump and the installation, and the 
need to improve the drilling techniques and improve the 
efficiency of the heat transfer.
    Can you speak about any promising areas that we can be 
looking to that can help to reduce some of these costs, and are 
we close to solutions in how we can advance the research to see 
some of these breakthroughs?
    Mr. Dougherty. Yes, I thank you, Ranking Member Murkowski. 
In my testimony I talked about what DOE is doing pursuant to 
the bill in terms of looking at greater efficiencies on the up-
front costs from a drilling perspective, better heat transfers 
in fluids, better loop design, better drilling techniques, 
better drilling equipment. There is a lot of research to be 
done, I believe, in lowering that up-front cost.
    So we applaud S. 1142 for asking the DOE to spend more 
resources on that research in terms of lowering that up-front 
cost, due in large part to the installation of the loop.
    Senator Murkowski. So we just need more research? We're not 
on the verge of breaking into something new here?
    Mr. Dougherty. No. Unfortunately, the technology, it's 
incremental improvements, and there's no real, we don't 
believe, anything on the horizon that's going to transform the 
way this technology works.
    Senator Murkowski. Let me ask you about Alaska and the 
possibility, the physics of using geothermal heat pumps in 
colder climate locations. Just last week there was an article 
from the University of Alaska that said that geothermal heat 
pumps could be economic for use even in northern Alaska, even 
in areas where they have incidence of permafrost.
    Can you speak to that application?
    Mr. Dougherty. Yes. I'll answer it this way. I believe the 
market is very nascent in Alaska in terms of geothermal heat 
pump installations. But we do have statistics for Canada 
installations, Canadian installations, and it's pretty 
prevalent in Canada. I think a lot of their geology and a lot 
of their temperatures are the same as Alaska.
    I think if you use vertical drill bore holes and you can 
get below the frost line, the technology does work. The 
paybacks may be a little longer on a new home or a retrofit, 
but the technology is proven to work in very cold temperature 
climates. Sweden is one of the leading installers of geothermal 
heat pumps for buildings. We're at 5 percent market penetration 
for geothermal heat pumps. Sweden is at 90 percent market 
penetration. So it is a proven technology in cold climates.
    Senator Murkowski. Mr. Chairman, I have a series of 
questions that I had for the first panel that I'll also be 
submitting for the record, if they can take them at that time.
    Thank you to the witnesses.
    The Chairman. Thank you.
    Senator Sanders.
    Senator Sanders. Thank you very much, Mr. Chairman.
    It's just very exciting to hear from both Ms. Gordon and 
Mr. Dougherty about the potential of transforming our energy 
system in a cost-effective way.
    Let me start off with Ms. Gordon, if I might. You touched 
on this issue, but I'll maybe get into it at a little bit 
deeper level. You do business now, your company does business, 
in nine States, but no doubt you have some familiarity with 
what's going on in the other 41 States. On a day to day basis, 
what is the permitting process like for a company like yours, 
that wants to help, say, homeowners install solar? What is it 
like?
    Ms. Gordon. Yes, I did talk about that a little bit, but I 
can go into some further detail. Some of the examples that 
Verengo Solar gave to us were, they have these inspector 
sitters and permit runners that are a large part of their 
employee base, and it really impacts the customer experience. 
So when you have an inspection that's supposed to occur and the 
inspector doesn't show up, or they're supposed to come in the 
morning and they don't come until the afternoon, it's----
    Senator Sanders. Let me just ask you this. I want solar in 
my rooftop. I go to work, right? Can't be home. This is already 
a major impediment, is it not?
    Ms. Gordon. It shouldn't be, but in some places it is. The 
solar installer should be able to go to your home, wait for the 
inspector to show up, ideally within a 2-hour window, and have 
the inspection done within 15 minutes. However, for example, in 
southern California right now some cities are coming out to do 
a solar inspection and wanting to know if there's a smoke 
detector in the home. If the homeowner isn't home when that 
inspection occurs, they can't--the installer can't get into the 
home to determine whether there's a smoke detector there are 
not, which is really unrelated to whether or not you have a 
solar system on your home.
    Senator Sanders. Your company's report on solar permitting, 
which was endorsed by a number of solar energy companies, 
including groSolar in Vermont, indicates that countries like 
Germany can install solar energy at prices 40 percent lower 
than we do here in the U.S., thanks in part to simpler and less 
expensive permitting processes. If we achieve solar permit 
reforms as this legislation attempts to do, what will that mean 
for the average homeowner who wants to install solar panels in 
terms of lower costs and less hassle?
    Ms. Gordon. Certainly. So the dollars per watt in Germany 
is about $3.50 per watt and it's about $5.50 on average in the 
United States. Streamlining permitting could reduce that 
dollars per watt by about 38 cents, just streamlining 
permitting inspection, and that will unlock other parts of the 
soft costs that go into that installation. For example, 
customer acquisition, marketing, sales, telling your neighbors 
that you had a good experience so that your neighbors will get 
solar. If you're frustrated, you're not going to tell your 
neighbor that they should do this. You want it to be a good 
experience for that customer, and that's going to help us 
unlock those soft costs, those stubborn soft costs that have 
been hard to bring down.
    Senator Sanders. Thank you.
    Let me ask, Mr. Dougherty, a question. As I mentioned 
earlier, even in my State, a cold weather State, we are 
beginning, beginning, to see an increased utilization of 
geothermal with, as I understand it, some good success. What is 
the potential? If we got our act together, people--and we had a 
conference, you may know, just over a year ago for precisely 
the purpose of educating people and builders about the 
potential of geothermal. We had a couple of hundred people out 
to that conference.
    But if we got our act together as a Nation, what do you see 
the potential of geothermal for residential and business 
buildings?
    Mr. Dougherty. I think 2 things would happen. In my 
testimony I talked about growing our industry from 100,000 
residential units to a million by 2017, and we estimate that 
that would create 100,000 new jobs, both at the manufacturing 
plants of the geothermal heat pumps, at the component 
manufacturers that are mostly domestic in terms of pumps and 
fans and coils that go into the machine, but also that job-
creating aspect that we have that no other part of the HVAC 
industry has, which is the installation of the loop. So you 
have the manufacturers of the pipe, the manufacturers of the 
grout, the manufacturers of the drilling equipment.
    So we estimate that just by going from a tenfold increase 
to a million units a year of the 6 to 7 million that are done 
on an annual basis now, and we only have 100,000--if we can get 
to a million, we'll create 100,000 new jobs by 2017.
    Senator Sanders. What about reductions in greenhouse gas 
emissions?
    Mr. Dougherty. We would have a tremendous impact on 
lowering the carbon footprint of those homes and nationally as 
a Nation in terms of carbon footprint. The other thing is it's 
lowering the demand for additional generation. Because we 
significantly reduce the amount of kilowatt energy used in the 
summer, we are deferring the need for new construction of power 
plants. So we estimate that if we can put in a million 
geothermal heat pumps, we will shave the need--shave peak and 
reduce the need for additional capacity significantly, and 
reducing the strain on the transmission grid.
    Senator Sanders. Let me ask you this. Ms. Gordon, in terms 
of solar, referred to the permitting processes as a major 
obstacle for us to lower costs. What are the obstacles--I think 
if the average person heard what you have to say they'd see 
this as a win-win-win situation. What would you say are the 
major obstacles right now in terms of going forward in a very 
aggressive way with geothermal?
    Mr. Dougherty. I think consumer awareness is No. 1.
    Senator Sanders. People just don't know about it?
    Mr. Dougherty. People just don't know. There also is this I 
think misimpression of the up-front cost. I think Mr. Chalk 
mentioned 3 times. That is debatable. I in fact am retrofitting 
my home as we speak with a geothermal heat pump----
    Senator Sanders. If I'm building an average size home in 
Vermont right now, in English how much is it going to cost me 
to put in geothermal?
    Mr. Dougherty. Probably double. So if you were looking at a 
$10,000 conventional system, high efficiency gas furnace, a 
high efficiency air conditioning unit, probably $10,000 for an 
average home. This would probably cost you 18 to $20,000.
    Senator Sanders. What are my savings over a 10-year period?
    Mr. Dougherty. But if you put that, you put the extra cost, 
that $10,000, into your 30-year mortgage, your energy savings 
are greater than your debt service, so the day you walk into 
your new home it's positive cash-flow.
    Senator Sanders. Is one of the impediments, getting back to 
Senator Franken's point, helping people come up with that 
additional $10,000?
    Mr. Dougherty. Correct. We're working with the electric 
utility industry. We believe they're the players that can 
really help in terms of deferring the up-front costs with 
something called on-bill financing. If you can lend money to 
the homeowner and have that debt service put on your electric 
bill, your energy savings are greater than that debt service 
added to your electric bill.
    We think it's a no-brainer for electric utilities to----
    Senator Sanders. It's true for geothermal. It's true for 
solar. It's true for wind. This is I think one of the great 
impediments that we face, getting that up-front money and 
paying it back with reduced fuel costs.
    Mr. Dougherty. Absolutely, Senator.
    Senator Sanders. Thank you very much, Mr. Chairman.
    The Chairman. Senator Franken.
    Senator Franken. I like this on-bill financing. I take note 
of this about the need for--or getting rid of the need for 
excess, for building new utilities. That's an important thing. 
For lower carbon footprint.
    We had a hearing in here the other day about the forest 
fires in the Southwest and it was very clear the expense of 
that. The testimony was that climate change was adding to the 
intensity of these fires and the costs. So when we're really 
talking about cost savings, we've got to talk about the whole 
picture here.
    First of all, I just want to applaud the chair and the 
ranking member for focusing on streamlining the administration 
of the department in S. 1160. I want to thank you both for 
doing that.
    Also, I want to applaud Ms. Gordon and SunRun for finding a 
way to finance this and for owning this and finding a way of 
creating more solar energy in this country in a way where you 
find a financing model where it doesn't cost the government 
money, but private industry is doing it. That's what I'm 
looking for here. So I really like this electric utility on-
bill financing. I think that's brilliant and I want to pursue 
that.
    $35 a month for heating in Iceland. Now, Iceland I believe 
is a cold climate country, judging by the name. I'm not great 
with geography, but ``Iceland.''
    I think I want to tell a little bit of a story, and I 
hope--so I go to this place ECONAR. This is like a couple years 
ago. It was while I'm running. I'm going on a green jobs tour. 
I talk to the guy who started the company. It's a geothermal 
company and they do the coils and the pumps. They do the heat 
pumps. They do the whole system.
    He told me that he had just believed in geothermal for 
years and years and years. You've talked about getting the 
message out to folks and people not knowing about this. It just 
wasn't going anywhere, and he was making these heat pumps in 
Appleton, Minnesota, and he just had been doing this for years. 
Finally it's starting to take off a little bit, and he gets 
this offer from this company in Indiana to buy him out. This is 
like his payday. Finally, after years and years of doing this, 
it's his payday.
    So he's going to sell it to this company in Indiana, but 
the guy in Indiana wants to take the business in Appleton, 
Minnesota, and take it to Indiana. So he's driving out to 
Appleton to tell the people who work in the factory there, I'm 
sorry, I'm selling it to this business in Indiana.
    On the way--he's telling me this story in his office in Elk 
River. On the way he just says: No, I'm not going to do this, 
I'm not going to do it. So he goes there and he tells them: I'm 
not selling the company.
    So he's telling me this story and he said: So I kept the 
company. So while he's telling me this story, every once in a 
while this bell goes off. I'm sitting there and this bell goes 
off. Finally, I just go: What are those bells? He says: Oh, 
that's every time I sell a system a bell goes off. He's doing 
fabulously, and he made the right decision.
    This is the right decision for our country. I want to thank 
you guys for being in the business that you're in and finding 
ways that we can be saving electricity, saving greenhouse gas 
production, and finding ways to finance these that aren't--it 
isn't about the government spending money. It's about, if 
anything, us facilitating how the private sector can be 
financing us with these $2 trillion sitting on the bench 
famously. We're always talking about this money sitting on the 
bench.
    The utilities, you're so right--and, Mr. Chairman, I think 
that if we can find a way when we finally get to a clean energy 
standard or a renewable energy standard that we can reward 
utilities for lending money for all kinds of things, for solar, 
for geothermal, for more efficient units, air conditioning 
units, etcetera, that you reward the utilities, that the 
efficiency that they're creating through their own financing 
can be represented in this energy standard and rewarded, so 
that the financing is coming from the private sector, that we 
will be doing a great thing for the country and for future 
generations.
    So I want to just thank you both, and I want to thank the 
chair and the ranking member, who I'll thank her personally, 
for the bill, for 1160 on increasing the efficiency of the 
administration of the Department.
    Thank you.
    The Chairman. Thank you very much.
    Thank you both for your excellent testimony. I think it's 
been useful and we hope we can move ahead with these various 
bills.
    Mr. Dougherty. Thank you, Mr. Chairman.
    The Chairman. So that will conclude our hearing.
    [Whereupon, at 11:11 a.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Steven G. Chalk to Questions From Senator Bingaman

    Question 1. The Advanced Research Projects Agency--Energy or ARPA-E 
was given exempt hiring authority similar to that in S. 1160 to quickly 
hire scientific and technical personnel similar to DARPA, has the 
Department found this authority useful to date?
    Answer. While ARPA-E has only existed for three years, to date, 
this hiring authority has been very useful within ARPA-E. ARPA-E has a 
unique R&D model within DOE and was set up to be a lean and agile 
organization. ARPA-E has used its hiring authority to quickly hire 
scientific, engineering, and professional personnel pursuant to its 
statute, including people to serve limited terms as Program Directors 
and Fellows. The hiring authority helps quickly recruit some of the 
best technical/professional talent in multiple energy research fields. 
Further, limited terms also lead to a sense of urgency and efficiency 
to effectively execute new programs.
    Question 2. The Nuclear Regulatory Commission has authority to 
rehire retired personnel who are receiving their retirement annuity--
can you please explain how the Department would use the re-hire 
authority as described in S. 1160 for retirees?
    Answer. The Nuclear Regulatory Commission was granted the authority 
to rehire retirees in situations where there is exceptional difficulty 
in recruiting or retaining qualified employees or when a temporary 
emergency hiring need exists. Under S. 1160, and as required therein, 
the Department of Energy would limit the rehiring of retired personnel 
to only those positions that are necessary to carry out a critical 
function of the Department and for which it has encountered exceptional 
difficulty in recruiting suitably qualified candidates. In addition, 
the appointments would be limited to a maximum of four years.
    Currently, the Department has been delegated the authority to 
rehire reemployed annuitants for a limited period of time (not exceed 
1040 hours over one year).
    As its technical and scientific workforce ages and retires, the 
Department is losing valuable experience and knowledge. The recent 
budget restrictions and the impact on Federal salaries, awards, and 
benefits are already beginning to decrease retention of experienced, 
senior-level employees. Individuals, who in the past may have continued 
their Federal employment, are finding it more advantageous to retire 
and are leaving at a faster rate than anticipated. This is resulting in 
gaps in locating highly qualified individuals to assume the most 
specialized positions in science, nuclear engineering and safety, 
energy efficiency, renewable energy, environmental management, and 
other critical mission areas of the Department. Recruitment efforts for 
these positions can frequently take longer than six months as the 
positions are sufficiently specialized that longer announcement periods 
and more proactive recruitment efforts are needed. Recently, one 
position in the Office of Energy Efficiency and Renewable Energy's 
Geothermal Technologies office was advertised three times over one year 
before suitably qualified candidates were found. It is not unusual for 
positions in the Office of Science to be routinely advertised for three 
months or more to locate fusion, genomic science research, high energy 
physics, or other scarce scientific applicants.
    Question 3. The Department currently has Other Transactions 
Authority based on that used by the Department of Defense in title 10 
of the U.S. Code. Can you please explain how the modifications proposed 
in S. 1160 would be helpful to the Department?
    Answer. [No response received at the time the hearing went to 
press.]
    Question 4. S. 1160 proposes a section titled ``Critical Pay 
Authority'' based upon similar authority used by NASA to hire highly 
qualified scientific and technical personnel for up to 4 years. Can you 
please explain how the Department would use this authority?
    Answer. Many potential candidates from academia and private 
industry have salaries that are significantly greater than the current 
cap of $179,700 for Senior Executive Service position. It is not 
unusual for candidates with salaries of $250K to $450K who also enjoy 
stock options and large bonuses to apply for the Department's 
positions. Most decline our offer when they learn that the top salary 
and relocation bonuses may only equate to half of their salary.
    To ensure that their programs are attracting candidates with 
cutting edge technical knowledge and expertise, some managers are 
utilizing offers of Intergovernmental Personnel Assignments (IPA) to 
individuals from academia. The IPA authority permits a much higher pay 
rate--usually equivalent to their current salary--which makes the 
assignments more attractive to the highly qualified candidates. 
However, IPAs are very temporary in nature. Individuals who accept IPAs 
come to the Department through a short-term leave of absence from their 
employer. As result, they usually return to their employer within 1 or 
2 years. This can create volatile skills gaps in critical mission 
areas.

    Responses of Steven G. Chalk to Questions From Senator Murkowski

                                S. 1160

    Question 1. Could you provide some examples of how greater 
flexibility in hiring and transactions authority, such as S. 1160 
provides, would benefit the Department of Energy?
    Answer. The Department needs greater flexibility to attract and 
recruit a highly skilled and technical workforce in the science, 
nuclear engineering and safety, energy efficiency, renewable energy, 
and other critical mission areas of the Department. Under current 
requirements of Title 5, United States Code, recruitment actions must 
follow very specific competitive procedures. Although we have cut our 
time to hire in half, this process can still take up to three months 
and in critical specialties it can take longer. The direct hire 
flexibility would allow the Department to quickly extend job offers to 
these highly skilled individuals who often have competing or more 
lucrative job offers, yet have a strong desire to work for the 
Department. Under the American Recovery and Reinvestment Act, the 
Department was authorized with direct hire authority for positions 
supporting electricity delivery and energy reliability. This was very 
useful in quickly obtaining the critical skills necessary for the 
Department to execute its responsibility under the Act.
    Question 2. Section 3 of 1160 requires the Department of Energy to 
implement a 5-year estimate of program content as part of the annual 
budget request. Does the Department of energy already prepare future 
year's estimates in preparing for the budget request, and if so, how 
many years out?
    Answer. For internal planning purposes only, the Department does 
prepare estimates for five years into the future as part of developing 
the current year budget request.
    Question 3. Section 5 of S. 1160 allows the government to protect 
against the public release of results from cooperative research and 
development agreements for five years. Given that some portion of the 
research and development programs are funded by U.S. taxpayer dollars, 
what is the justification for not publicly releasing the results when 
they are available?
    Answer. Section 5 of S. 1160 provides the Secretary with the 
ability to protect certain data generated under transactions with DOE--
including grants, contracts and cooperative agreements--from public 
disclosure. The data subject to protection would be protected from 
disclosure under the Freedom of Information Act as if it had been 
developed using private funds. The period of protection for such data 
is not to exceed five years. This provision would more broadly apply 
the data protection authority already provided in statutes such as the 
Energy Policy Act of 1992 (EPAct 1992) and the Stevenson-Wydler 
Technology Innovation Act of 1980 (Stevenson-Wydler), which are both 
limited to certain programs and applications. The limited period of 
data protection strikes a balance between two of the Department's 
missions. First, the Department is generally required by statute to 
disseminate the results of research it funds, subject to applicable 
law. Second, the Department seeks to facilitate commercialization of 
those research results. Commercialization, when successful, can 
increase the U.S. domestic manufacturing capacity, provide jobs to 
American workers, and advance the state of the art in economically 
critical energy technologies.
    Data developed under Department-funded research often provides 
companies with some of the most commercially valuable assets arising 
from those efforts. To commercialize these results effectively, those 
who enter into transactions with the Department may need a limited 
period of exclusivity during which they can pursue those endeavors. The 
need for such a limited period was recognized and codified in 
Stevenson-Wydler. Section 12(c)(7) of Stevenson-Wydler (15 U.S.C. 3710a 
(c)(7)) states that data generated under a cooperative research and 
development agreement (CRADA) may be protected against dissemination 
for a period of up to five years.
    Congress recognized that providing a limited period for data 
protection would also benefit the Department's R&D financial assistance 
recipients, such as grantees, and applied the same data protections 
found in Stevenson-Wydler to those recipients in EPAct 1992, in Section 
3001(d). However, even when data is protected from disclosure for a 
limited period, DOE typically requires some level of data (e.g. 
performance data) to be available for immediate dissemination.
    The statutes allow for protection for up to five years, or, as in 
the case of S. 1160, for a period ``not to exceed 5 years.'' These 
provisions provide the Secretary with the discretion to limit data 
protection even further, to a shorter time limit, or even requiring all 
data to be disseminated immediately. They are flexible so that the 
Department may consider individual programs and even individual 
financial assistance awards on a caseby-case basis to determine how the 
needs for wide dissemination versus protection to enhance 
commercialization may best be balanced.

                               ON S. 1108

    Question 4. This committee has been focusing on the issue of 
overlap and duplication amongst federal authorities. How is S. 1108 
different from The Rooftop Solar Challenge that just started at DOE? 
Would it make more sense to amend the Solar Technologies Program if we 
want it done differently, or to make sure that funds are appropriated 
for this purpose, instead of passing a new law?
    Answer. Phase 1 of the Rooftop Solar Challenge is an initiative 
launched by DOE in June 2011 to make PV more accessible and affordable 
for residents and businesses by emphasizing streamlined and 
standardized permitting processes. With this first phase, DOE has 
committed up to $12.5 million total for up to 25 teams from across the 
country. DOE has required that teams represent minimum populations of 
500,000, so the Challenge can reasonably be expected to impact at least 
12.5 million residents. The funding opportunity is currently open, with 
applications due August 31, 2011.
    Phase 1 of the Rooftop Solar Challenge represents a first step in 
streamlining and standardizing permitting processes to drive down the 
non-hardware Balance of Systems costs for installed rooftop PV. S. 1108 
describes a more widespread effort.
    Reaching an ambitious 10 million solar rooftops target, such as 
that set out in S. 1108, would likely require jurisdictions across the 
country to draw upon lessons learned in Phase 1 of the Challenge and 
significantly scale them. It would also likely require jurisdictions to 
go further than they will in Phase 1.
    Question 5. When do you expect we will get some significant 
feedback from localities as a result of the Rooftop Solar Challenge? 
How will the Department use the information gained from various 
localities?
    Answer. Awardees under the Rooftop Solar Challenge will complete a 
market assessment at the beginning of their project, and then again a 
year later at the completion of their period of performance. This 
market assessment will identify the status of the region/locality with 
regard to PV permitting and interconnection processes, net metering and 
interconnection standards, PV financing options, and planning and 
zoning restrictions. DOE will use the initial market assessments to 
identify the range of existing policies and practices and refine our 
estimates of the cost reductions and increase in solar deployment that 
can be achieved through improving and standardizing practices.
    DOE expects to make awards under this Challenge by the end of 
calendar year 2011, and expects to have qualitative and quantitative 
evidence of the progress of each of the awardees by the end of their 
period of performance 12 months later, at the end of calendar year 
2012. DOE will use the information from this second round of market 
assessments to evaluate the impact this Challenge has had on PV market 
development in the first year, and determine how best to allocate 
funding in future years to achieve additional reductions in PV system 
costs and increases in market penetration.
    Throughout the Challenge, DOE will share the best practices 
developed by each team with the other participating teams, and with 
thousands more local jurisdictions through a national outreach effort. 
This will enable local and state governments to leapfrog the complexity 
common in immature solar markets and move directly to implementation of 
more efficient, low-cost permitting practices.
    Question 6. Have there been any statewide initiatives to streamline 
solar permitting processes? If so, how have these fared?
    Answer. Several states have made efforts to simplify solar 
permitting processes for small-scale systems. Three examples of states 
that took very different approaches are:

          1) In October 2010, Oregon adopted a statewide Solar 
        Installation Specialty Code, which specifies the building and 
        electrical standards with which PV installations in the state 
        must comply. The code eliminates the requirement for structural 
        engineering for most PV systems, significantly reducing the 
        time and complexity of the permitting process. It also provides 
        a standard permitting fee calculation methodology. This 
        standard statewide code reduces the inter-jurisdiction 
        variability in permitting processes, which reduces PV system 
        costs by simplifying business processes for solar installers.
          2) In May 2011, Vermont adopted a statewide PV system 
        registration process under which customers complete a system 
        registration form and submit it to the state Public Service 
        Board. The Board and any relevant parties have 10 days to 
        express concerns with the installation. If the customer does 
        not hear from the Board within 10 days, the customer is granted 
        the right to proceed with the installation and interconnection 
        of the system. This is perhaps the simplest PV permitting 
        process enacted in any state, and is scheduled to take effect 
        in January 2012. Vermont has several unusual characteristics 
        that enable Vermont to implement such a unique permitting 
        process. Characteristics such as:

      --No local inspections: With the exception of Burlington, local 
            jurisdictions do not have electrical inspectors and do not 
            conduct inspections of electrical projects on private 
            properties.
      --Centralized interconnection approvals: Unlike most states, the 
            state utility regulatory authority (VT Public Service 
            Board) is responsible for approving all interconnections of 
            generating facilities, whether a 2 kW residential system or 
            a nuclear reactor. This authority supersedes both utility 
            and local jurisdiction approval (except for the Burlington 
            electrical inspector).
      --Low registration volumes: In a small state like Vermont, where 
            the population is 620,000, and only 623 PV installations 
            are currently installed, the PSB is equipped to process the 
            relatively low volume of registrations.

          3) In June 2011, Colorado enacted the Fair Permit Act, which 
        caps permit fees and clarifies that local and state agencies 
        must clearly identify all solar-related fees and taxes for 
        customers. Prior to this Act, a study showed that permit fees 
        in Colorado were as high as $2,000 for a residential system. 
        The Act capped fees at $500 for residential systems and $1,000 
        for commercial systems under 2 MW. This Act has the potential 
        to be easily replicated in other states.

    DOE's Rooftop Solar Challenge is designed to build on the best 
practices developed by states and localities and accelerate the further 
development and implementation of these practices across the U.S. By 
coordinating efforts at the national level, DOE can help states and 
local jurisdictions learn from each other while still ensuring that the 
policies implemented are locally appropriate.

                                S. 1142

    Question 7. Issues from testimony: In the key comment from your 
testimony, you say the Administration is still reviewing the bill (S. 
1142), but that there are ``serious technical concerns that would need 
to be addressed.'' Could you please discuss those technical problems? 
It would also be helpful if you would suggest any potential fixes if 
there are any. What are you specifically saying are the problems with 
the bill?
    Answer. There are aspects to the proposal that are inconsistent 
with the requirements of the Federal Credit Reform Act of 1990 (FCRA). 
While the Administration is still reviewing this proposal, any new 
program should be designed consistent with Federal credit policies, to 
ensure efficient and effective use of Federal support, and to protect 
taxpayers from undue cost and risk.
    Question 8. Loan guarantee program: Could you address the 
Department's view of the direct loan program for high-risk geothermal 
exploration wells called for in the bill? Do you have any estimates 
internally for how many high-risk wells might be drilled in a year, if 
the program is implemented, now much aid the Department on average 
might be asked to provide, and how much federal loan funds might be 
outstanding before repayments begin and the program's revolving loan 
fund process is fully implemented? What, in the Department's view, is 
the definition for high-risk well? Your testimony largely ignored the 
loan program; can you talk about het Department's willingness to see a 
new program set up?
    Answer. The Administration is still reviewing this proposal, and 
its implications for furthering geothermal exploration, including 
potential costs to the Government. Any new legislation should be 
designed consistent with the Federal Credit Reform Act and Federal 
credit policies, to ensure efficient and effective use of Federal 
support, and to protect taxpayers from undue cost and risk. Revolving 
fund credit programs are inconsistent with the FCRA, and can lead to 
inefficient funding mechanisms, where the available support is more 
reliant on the performance of initial awards than on the form and 
amount of assistance needed to meet the policy goal.
    Past DOE-sponsored programs, such as the Geothermal Resource 
Exploration and Definition project (GRED), have helped confirm new 
resources. Under the program, drilling was supported at 26 different 
sites and seven of those sites now support geothermal power plants. It 
is possible that the data developed under GRED can still be used to 
support power plant development (either conventional or EGS), so the 
benefits of this work may continue well into the future.
    In DOE's view, all exploratory geothermal drilling is ``high risk'' 
because success rates for the initial wells range from 25% to 50%. The 
success rate will be lower for undiscovered hydrothermal or 
``greenfield'' development and on the higher end for sites where some 
preliminary drilling has already occurred. The number of exploratory 
geothermal wells drilled in a year is likely to be limited by the 
following additional factors: 1) the small size of the industry (less 
than 10 developers); 2) limited availability of drill rigs; 3) the fact 
that most of the currently identified resources have already been 
developed; and 4) the time needed for permitting requirements.
    Question 9. Co-Energy production from oil and gas wells: This bill 
includes a provision to allow for co-leasing of geothermal production 
with approved applications to drill and gas wells. I know this is 
probably not a purely DOE area and in some respects more a question for 
the BLM that handles petroleum leasing on shore, but can you say how 
much time and money should be saved for applicants by co-leasing and is 
this a useful policy change to increase geothermal electricity 
production from the waste water produced in oil and gas extraction?
    Answer. Co-leasing could save time and reduce costs associated with 
leasing. As BLM handles geothermal leasing and would implement those 
provisions of the bill, BLM is in the best position to estimate time 
and money savings from a non-competitive geothermal leasing process.
    Question 10. Geothermal Heat Pumps: Can you talk a bit more than 
your prepared testimony about how the geothermal heat pump provisions 
in the bill mesh with current Department efforts to promote geothermal 
heat pump technology? Does this bill that directs the Secretary to 
establish a program to improve heat pump applications and direct use of 
geothermal, especially in large-scale applications, tie into the 
Department's existing research and development plans for geothermal? 
Does it dovetail well? If not, is there anything that should be changed 
in the bill?
    Answer. The Department is in the process of determining the role of 
geothermal heat pumps in its research and development plans. Under the 
American Recovery and Reinvestment Act of 2009 (Recovery Act), the 
Department invested more than $60 million in geothermal heat pump 
demonstration and deployment projects. These projects incorporate 
strategies to overcome the first-cost premium that has prevented 
geothermal heat pumps from gaining wider marketplace acceptance. The 
Department expects that information and lessons learned from those 
projects will encourage wider market acceptance of geothermal heat 
pumps for residential and industrial buildings. The information will 
also be used to determine the role of geothermal heat pumps in the 
Building Technologies Program's roadmap. It may also be used to help 
define a geothermal heat pump roadmap establishing a set of high-
priority research and development (R&D) activities.
    Direct use geothermal is not a major focus in the Department's 
research and development portfolio. Under the Recovery Act, the 
Department invested in three direct use geothermal projects--a 
greenhouse operation and fish farm in Canby, California; a tilapia 
business in Paisley, Oregon; and district heating in Klamath Falls, 
Oregon. However, the Department can have the most impact on the role of 
geothermal energy in our nation's clean energy supply by reducing the 
cost of baseload geothermal energy so that it is competitive with other 
energy sources. Therefore, the emphasis of our Geothermal Technologies 
Program is on overcoming the technical challenges associated with 
supplying geothermal energy to the grid rather than on highly 
localized, distributed generation geothermal technologies.
    Question 11. General Cost Question: Obviously S. 1142 hasn't been 
scored yet by CBO. I have my guesses what it will cost to adequately 
implement the provisions in the bill, but I would be interested in 
hearing if the Department has come up with any estimates for what this 
bill would cost to implement initially? How would it affect the 
existing geothermal office budget, which I know is getting for $38 
million for FY11, about $6 million cut from last year?
    Answer. The proposal is still under review by the Administration. 
The Department can have the most impact on the role of geothermal 
energy in our nation's clean energy supply by reducing the cost of 
baseload geothermal energy so that it is competitive with other energy 
sources. Therefore, the emphasis of the Department's Geothermal 
Technologies Program is on research and development of technologies 
that improve performance and lower cost.
                                 ______
                                 
  Response of Douglas A. Dougherty to Question From Senator Murkowski

                               MINE WATER

    Question 1. In your testimony you talk about exploring innovative 
uses of wastewater and mine water to fuel geothermal systems. Coming 
from Alaska where we do have underground mines, that point interested 
me. Could you talk more about how geothermal heat pump technology can 
work with processed mine water and what are its future potentials?
    Answer. To best answer the question, I will refer you to a 
presentation done by the National Energy Technology Laboratory (NTEL) 
of DOE in 2007. The presentation explains how mine water can be used as 
the heat exchange for geothermal heat pump technology. Using mine water 
can significantly reduce the upfront cost of installing a geothermal 
heat pump by decreasing the need for an extended loop. The NTEL refers 
to the exploitation of geothermal energy from underground mine pools as 
an ``unconventional application'' and in need of further research. 
Specifically NTEL identifies several areas of the application in need 
of further research: water quality and the effects of corrosion and 
scaling; use of a secondary heat exchanger; legal issues involving mine 
water ownership and the return of water back into the mine; lowering 
the costs of wells and improving pumping costs; and most importantly, 
the need to demonstrate the technology. To GEO's knowledge, DOE has not 
undertaken any of these research items relating to the use of mine 
water for geothermal heat pump technology and it is why I testified in 
support of S.1142 on this particular issue. The link to the NTEL report 
can be found at: http://www.netl.doe.gov/energy-analyses/pubs/
EUEC_07_Ackman.pdf
    Thank you for the opportunity to testify in support of S.1142 and 
to provide additional clarity on why GEO believes it important for the 
DOE to spend greater resources on the research and development of 
geothermal heat pump technology.
                                 ______
                                 
     Responses of Holly Gordon to Questions From Senator Murkowski

    Question 1. This committee has been focusing on the issue of 
overlap and duplication amongst federal authorities. How is S. 1108 
different from The Rooftop Solar Challenge that recently started at 
DOE? Would it make more sense to amend the Solar Energy Technologies 
Program if we want it done differently, or to make sure that funds are 
appropriated for this purpose, instead of passing a new law?
    Answer. As I indicated in my testimony, there is no second phase 
funding identified in the Rooftop Solar Challenge. S. 1108 would 
provide the necessary funding to take the best practices identified in 
phase 1 of the Rooftop Solar Challenge and implement these best 
practices in phase 2 to spread those improvements to other 
jurisdictions in the region. DOE is limiting the regional coalitions to 
25 groups to undertake phase 1 of the Challenge and split the $12.5 
million in funding. The majority of jurisdictions will be watching 
closely to gauge whether the federal initiative is real or symbolic and 
whether they too will have to improve. Putting the phase 2 funding into 
legislation in the form proposed in S. 1108 solidifies the federal 
commitment to reducing soft costs by incentivizing local bureaucratic 
reform related to soft cost reduction. This message will sharply reduce 
inertia related to participating in the initial phase of the Challenge 
and get all cities prepared to embrace the phase 2 reform. Leaving 
phase 2 funding ambiguous and uncertain will taint and slow phase 1 
efforts.
    To put this in business terms, the Challenge is a research and 
development project aimed at ways to reduce soft costs. The funding 
from S. 1108 will go toward bringing what's developed in the Challenge 
to the mainstream market.
    The economic benefit of this effort is substantial and the reason 
we asked AECOM to assess the California market. Just using the direct 
savings of $.38 per watt from streamlined permitting will result in an 
18% growth of economic output over 9 years, and an additional 4,000 
jobs in California alone. The reason permitting reform accelerates the 
economic impact is because the pricing reduction it generates grows the 
market by lowering costs for customers where solar simply wasn't 
economicially viable and creating greater savings for those customers 
for which solar already made sense. As I explain in response to 
question 2 below, the cost reduction from permitting is just the tip of 
the potential soft cost savings which will result from permitting 
reform. For these reasons, the AECOM numbers are understated. Lastly 
while the AECOM report assessment was limited to California, each state 
will get a similar economic boost. The specific benefit will vary by 
state and be based on its particular tax treatment for equipment sales, 
corporate and personal income tax, property tax rules and rates, and 
taxation generated by increased customer spending from utility savings.
    Question 2. In your testimony you mention that while solar panel 
prices have come down significantly over the last 5 years, permitting 
costs have stagnated. In 2007, local permitting and inspection added 
13% to the installation, today they add 33% and within a few years, you 
are predicting that they will add 50%. Is this rising percentage a 
result of the proliferation of residential solar use? That is, are 
these increased costs a result of successful growth in the industry?
    Answer. The increases in the percentages of permitting as compared 
to the total cost shows that permitting costs will become an 
increasingly larger part of the total costs as the hard costs are 
reduced. The permitting costs are stubborn and are unlikely to go down 
as they are impervious to the market forces that are currently causing 
hard costs reductions. Permitting effectively bars installers from 
reducing other soft costs and getting even greater reductions through 
efficiencies of scale. That is to say, if we can solve the permitting 
issues, installers can attack other inefficiencies related to 
operational deployment, costs to convert sales, capital expenses, 
etc... Without permitting reform, permitting costs will continue to 
grow as a percentage of total costs, as will activities that make up 
the remaining soft costs.
    Question 3. Have there been any statewide initiatives to streamline 
solar permitting processes? If so, how have these fared?
    Answer. There are a few states that have statewide initiatives 
related to permitting, such as Oregon, Vermont and Colorado. While 
Vermont's process is low cost and significantly streamlined it is 
unlikely to be replicable in other states. Vermont's permitting 
structure is very different from other states in that there are limited 
permitting activities performed locally. This makes it relatively easy 
to reform the process through legislation impacting the state agencies 
involved in permitting. Colorado undertook legislation that capped 
fees, which is a good step, but does not impact consistency, 
complexity, or submittal, review and timing of approval of 
applications--components that impact installer's operational costs. In 
Oregon, they have some consistency in state level codes and processes, 
which is a good start. Unfortunately, Oregon has not experienced 
significant enough volume to test these processes to see if they make a 
significant operational difference under load. Most states in which we 
operate believe code implementation is inherently local and the state 
must incentivize, instead of legislate, the solution. We believe the 
Rooftop Solar Challenge will result in taking the best examples of what 
works well and generating reasons why deploying these practices is 
appropriate. S. 1108 would fund that deployment.
    Finally, replicating the German cost structure, which has little to 
no soft costs, should be the policy objective and we applaud DOE for 
recognizing this goal in the SunShot Initiative. German soft costs are 
only a fraction of those in the U.S., while the hard costs are 
generally equivalent. Once widespread permitting reform is implemented 
the market can independently attack the other soft costs significantly 
lowering the cost barrier to residential solar deployment.


                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                             Geothermal Energy Association,
                                      Washington, DC, July 5, 2011.
Hon. John Tester,
U.S. Senate, Washington, DC.
    Dear Senator Tester,

    Thank you for introducing S 1142, the Geothermal Exploration and 
Technology Act of 2011 along with Senators Reid and Murkowski. This is 
important legislation for the future of geothermal energy.
    Geothermal electrical generation is base load renewable power that 
uses the heat of the earth to create electricity. The U.S. Geological 
Survey has estimated that the geothermal industry has the potential to 
produce as much as 89,000 Megawatts of electricity in the United State 
using readily available conventional geothermal technology. This 
represents nearly a 30-fold increase from today's geothermal generation 
levels. But this tremendous potential for additional clean, baseload 
renewable energy is not being realized because today's economics do not 
support exploratory geothermal drilling to discover and unlock the 
potential of new geothermal areas. Exploratory drilling includes 
drilling to identify, prove and develop an untapped geothermal resource 
in order to construct a geothermal generation facility.
    Geothermal exploration is simply too risky for conventional 
financing sources. A geothermal exploratory well typically costs $5 to 
$8 million to drill, and may not be usable if it does not encounter 
proper conditions. There are no sources of debt capital available for 
this type of exploratory drilling; therefore this drilling has to be 
done with limited equity capital. Even once a resource has been 
identified, it is not unusual for development wells to prove 
unproductive.
    Senate bill S. 1142 proposes a new federal loan program to promote 
exploratory geothermal drilling and promote mapping and development of 
the nation's substantial untapped geothermal potential. GEA is strongly 
supportive of S. 1142, and applauds the sponsors for taking the 
initiative to introduce this legislation. The economic obstacles to 
geothermal exploration are substantial and an effective program to 
promote exploratory drilling is critical to the long-term growth of 
geothermal energy in the United States. A successful national 
geothermal exploration initiative could unlock tens of thousands of 
megawatts of undeveloped power potential.
    Again, thank you for introducing S 1142, and we look forward to it 
receiving further consideration by Congress.
            Sincerely,
                                               Karl Gawell,
                                                Executive Director.
                                 ______
                                 
    Metropolitan Washington Council of Governments,
          Climate, Energy and Environment Policy Committee,
                                     Washington, DC, July 27, 2011.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 204 
        Dirksen Senate Building, Washington, DC.
RE: Support Amended S 1108 10 Million Solar Roofs Act of 2011

    Dear Senator Bingaman:

    On behalf of the Climate, Energy and Environment Policy Committee 
of the Metropolitan Washington Council of Governments (COG), I am 
writing to urge you to support S 1108 10 Million Solar Roofs Act of 
2011, with an extension of the technologies that the program considers 
for permitting and regulation streamlining to include other clean 
energy technologies. This bill and its established competitive grant 
program would remove numerous barriers to adoption of domestic energy 
options and create incentives for market development that will reduce 
the cost of domestic clean energy.
    COG is dedicated to increasing the adoption of solar and other 
clean energy technology solutions. COG's Climate and Energy Action 
Workplan has a goal of 10,000 solar roofs in the region by the end of 
2012. At the end of 2010 there were over 1,000 solar roofs installed in 
the Washington region for a capacity just under 10 megawatts (MW). COG 
members Arlington and Loudoun Counties have community energy plans that 
call for over 260 MW of solar installations by 2040. The region is 
working with EPA's Green Power Partnership to conduct a cooperative 
solar procurement which could develop 30-40 MW of solar generation. The 
COG region is committed to solar power as a solution to reducing the 
region's dependence on foreign energy sources.
    COG's Integrated Community Energy Taskforce is considering the use 
of other clean energy technologies such as district energy, combined 
heat and power and microgrids, in addition to solar power. These 
technologies face similar zoning, permitting and regulatory hurdles 
that will slow adoption. We believe this proposed grant program could 
be used to reduce the hurdles to adopting a variety of solutions that 
will work together to increase the production and reliability of 
domestic clean energy.
    Local governments are an integral piece in the adoption of these 
technologies because of their control of permitting and zoning 
requirements, as well as influence over groups such as homeowners 
associations. A grant program that would encourage streamlining the 
regulatory and permitting processes for clean energy technologies 
across regions, states and the nation would help achieve market 
certainty and catalyze market growth, just as the Energy Efficiency and 
Conservation Block Grant Program helped to stimulate the widespread 
adoption of energy efficiency and renewable energy technologies.
    We urge you to support an amended S 1108 10 Million Solar Roofs Act 
of 2011 and lessen the burden of regulatory and permitting barriers to 
implementing and developing the market for a variety of clean energy 
solutions that will increase our nation's energy independence.
    Thank you for giving this your consideration.
            Sincerely,
                                               Jay Fisette,
                                                             Chair.
                                 ______
                                 
                                  Ormat Technologies, Inc.,
                                                          Reno, NV.
Hon. John Tester,
U.S. Senate, Washington, DC.
    Dear Senator Tester,

    On behalf of Ormat Technologies, Inc., I thank you for your 
interest in our views on S 1142, the Geothermal Exploration and 
Technology Act of 2011.
    Ormat Technologies is a world leader in the geothermal power plant 
sector. The company has four decades of experience and is responsible 
for the development of over 1,000 MW of geothermal generation 
throughout the world and over 400 MW of generation in the United 
States. Important to this bill is that Ormat is engaged in the largest 
effort undertaken by a single company, within the last 20 years, to 
categorize, map, sample and drill Greenfield prospects in the US making 
it quite knowledgeable on the issues facing exploratory drilling risks.
    Geothermal electrical generation is a base load renewable power 
that uses the heat of the earth to create electricity. The U.S. 
Geological Survey has estimated that the geothermal industry has the 
potential to produce as much as 89,000 Megawatts of electricity in the 
United State using readily available conventional geothermal 
technology. This represents nearly a 30-fold increase from today's 
geothermal generation levels. But this tremendous potential for 
additional clean, baseload renewable energy is not being realized in 
part because today's economics do not support exploratory geothermal 
drilling to discover and unlock the potential of new geothermal areas.
    Exploratory drilling includes drilling to identify, prove, and 
develop untapped geothermal resources in order to construct a 
geothermal generation facility. Geothermal exploration is simply too 
risky for conventional financing sources. A geothermal exploratory well 
typically costs $5 to $8 million to drill, and may not be usable if it 
does not encounter proper conditions. In addition, even if it did 
encounter the commercially viable resource, it will take many years 
before it can generate revenues that will service a loan. There are no 
sources of debt capital available for this type of exploratory 
drilling; therefore this drilling has to be done with limited equity 
capital.
    Senate bill S. 1142 proposes a new federal loan program to promote 
exploratory geothermal drilling and promote mapping and development of 
the nation's substantial untapped geothermal potential. Ormat is 
supportive of S. 1142, and applauds the sponsors for taking the 
initiative to introduce this legislation. The economic obstacles to 
geothermal exploration are substantial and an effective program to 
promote exploratory drilling is critical to the long-term growth of the 
geothermal sector in the United States. A successful national 
geothermal exploration initiative will be the first and necessary step 
in unlocking tens of thousands of megawatts of undeveloped power 
potential.
    Thank you for your attention to this important legislative effort.
            Best Regards,
                                           Paul A. Thomsen,
                                                          Director.
                                 ______
                                 
                                      Terra-Gen Power, LLC,
                                       Bethesda, MD, July 19, 2011.
Hon. Jeff Bingaman,
Chairman, U.S. Senate, Committee on Energy and Natural Resources, 304 
        Dirksen Senate Office Building, Washington, DC.
    Dear Chairman Bingaman,

    I am writing on behalf of Terra Gen Power, one the nation's leading 
renewable energy companies, to convey our strong support for S.1142, 
the Geothermal Exploration and Technology Act of 2011. I respectfully 
request that this letter be including in the record of the Energy 
Committee's hearing on this important bill.
    As you know, geothermal electrical generation is base load 
renewable power that uses the heat of the earth to create electricity. 
The U.S. Geological Survey has estimated that the geothermal industry 
has the potential to produce as much as 89,000 Megawatts of electricity 
in the United State using readily available conventional geothermal 
technology. This represents nearly a 30-fold increase from today's 
geothermal generation levels. But this tremendous potential for 
additional clean, baseload renewable energy is not being realized 
because today's economics do not support exploratory geothermal 
drilling to discover and unlock the potential of new geothermal areas. 
Exploratory drilling includes drilling to identify, prove and develop 
an untapped geothermal resource in order to construct a geothermal 
generation facility.
    Senate bill S. 1142 proposes a new federal loan program to promote 
exploratory geothermal drilling along with the mapping and development 
of the nation's substantial untapped geothermal potential. Terra Gen 
Power is strongly supportive of S. 1142, and applauds the bill's 
sponsors for taking the initiative to introduce this legislation. The 
economic obstacles to geothermal exploration are substantial and an 
effective program to promote exploratory drilling is critical to the 
long-term growth of geothermal energy in the United States. A 
successful national geothermal exploration initiative could unlock tens 
of thousands of megawatts of undeveloped power potential.
    S 1142 provides a helpful framework for reducing the risks and 
costs associated with mapping and developing the nation's geothermal 
resources. However there are two important areas where the measure can 
be improved.

   First, if the program is to be successful in promoting 
        geothermal exploration, developers will need certainty in 
        advance of the level of cost and risk share that DOE will 
        assume under the program. Such certainty is essential in order 
        to secure the needed financing to develop a project, 
        particularly with regard to the terms for repayment if a well 
        proves to be unproductive. Where possible, loans should be 
        forgiven when a well cannot be commercially developed.
   Second, the program should be designed and implemented to 
        maximize the development of the nation's geothermal resources 
        and the number of new geothermal megawatts added to the grid. 
        Most specifically, this means that the ``preference'' provision 
        in section 2(d)(2) should be rewritten to include a preference 
        for ``projects likely to lead to successful new geothermal 
        development'' instead of the current preference for 
        ``previously unexplored, underexplored, or unproven geothermal 
        resources in a variety of geological and geographic settings.'' 
        Improving the success rate to fully develop and prove a 
        geothermal field will help ensure that program funds are able 
        to bring more renewable megawatts to the grid, be fully repaid, 
        and go further to support more projects.

    Also, while authorization of this new initiative is an important 
step, it is of course essential that sufficient funds are appropriated 
for this program to be effective.
    Thank you for your attention to this important legislative effort. 
Please feel free to have your staff contact me for any additional 
information. I can be reached at 202?486?1103 or via email at 
[email protected]
            Sincerely,
                                       Gregory S. Wetstone,
                           Vice President for Governmental Affairs.
                                 ______
                                 
                                                       GEO,
                                      Washington, DC, June 6, 2011.
Hon. Jon Tester,
U.S. Senator, 724 Hart Senate Office Building, Washington, DC.
    Dear Senator Tester:

    On behalf of the Geothermal Exchange Organization, a non-profit 
trade association representing the interest of the geothermal heat pump 
industry, I am writing to thank you for your leadership on energy 
efficiency issues.
    We strongly support the legislation you recently introduced with 
Senators Murkowski and Reid that, among other things, authorizes a new 
program to help develop innovative technologies to enhance the use of 
geothermal heat pumps in commercial applications. Your legislation will 
help address some of the key barriers in our industry, including 
reducing the cost of installing the geothermal ground loop and 
integrating geothermal heat pumps with other building systems.
    Thank you again for your leadership. We also want to express our 
gratitude to your staff, particularly Stephenne Harding. We look 
forward to continuing to work with you to promote this legislation as 
well as other initiatives to improve the efficiency of residential and 
commercial buildings.
            Sincerely,
                                         Douglas Dougherty,
                                                 President and CEO.
                                 ______
                                 
                     Southern Methodist University,
                                     Geothermal Laboratory,
                   Huffington Department of Earth Sciences,
                                          Dallas, TX, July 1, 2011.
Hon. Jon Tester,
U.S. Senate, 724 Hart Senate Office Building, Washington, DC.
    Dear Senator Tester,

    The SMU Geothermal Laboratory is pleased to write this letter in 
support of Senate Bill S 1142, the Geothermal Exploration and 
Technology Act of 2011 you recently introduced with co-sponsors Harry 
Reid and Lisa Murkowski amending the Energy Independence and Security 
Act of 2007. In particular, Section 4 of the bill, which addresses the 
Facilitation of Coproduction of Geothermal Energy on Oil and Gas 
Leases, will be very helpful towards removing one of the key barriers 
to entry for this clean, renewable energy source.
    In Texas, we have several hundred thousand oil and gas wells, many 
of which are no longer producing hydrocarbons at an economically viable 
rate. Every year more wells are `plugged and abandoned' to be never 
used again. Our country's environment benefits from using even a small 
percentage of oil and gas wells as a source for geothermal electricity 
generation and your support of this bill will help make that possible.
    Geothermal energy is one of the few renewable energy sources that 
are always available, independent of the weather conditions. To develop 
this resource requires an understanding of both the business model and 
the geologic structures involved. The existing infrastructure of the 
oil and gas industry affords us the opportunity to leverage that 
investment and combine geothermal energy production with hydrocarbon 
and waste heat production. It presents an opportunity for the oil and 
gas industry to be part of a clean energy solution, rather than a 
source of pollution. The interest from the business community is 
evidenced by the successful SMU conferences `Geothermal Energy 
Associated with Oil & Gas Development,' which draw enthusiastic 
support. Even with the low price of natural gas, the number of oil & 
gas industry attendees increased from prior conferences. Additional 
information on our most recent conference in June 2011, including 
copies of the presentations, is available at: http://smu.edu/
geothermal/Oil&Gas/GeothermalEnergyUtilization.htm
                               conclusion
    The next five years will be crucial to gain enough momentum to 
establish a geothermal industry. There are currently over 200,000 
active wells in Texas alone, representing 200,000 potential sources of 
cost-competitive, renewable, base-load, and clean energy in just our 
one state. We have a window of opportunity to leverage our country's 
investment in the oil and gas industry while the economic forces, 
political pressures, and available technology are aligned towards a 
common goal of renewable energy. Additional resources of time and 
dollars would be well spent on exploiting America's geothermal energy 
potential. We encourage the full Senate to vote in support of S 1142.
            Sincerely,
                                   David D. Blackwell, PhD,
                            W. B. Hamilton Professor of Geophysics.
                                            Maria Richards,
                             SMU Geothermal Laboratory Coordinator.
                                 ______
                                 
                        National Ground Water Association,
                                    Westerville, OH, June 28, 2011.
Hon. Jon Tester,
U.S. Senate, 724 Hart Senate Office Building, Washington DC.
    Dear Senator Tester:

    The National Ground Water Association (NGWA) thanks you for your 
leadership on energy issues as evidenced by the introduction of S. 
1142. NGWA strongly supports the bill and geothermal heat pump 
technology as a step toward energy Independence, reduced costs for 
consumers, and jobs for American manufacturers and installers.
    We appreciate your efforts and those of Senators Murkowski and Reid 
to ensure the United States maintains a leadership position in 
geothermal heat pump technology. The bill's focus on enhancing 
research, development, demonstration and commercial application of 
geothermal heat pumps and the direcfuse of geothermal energy while 
maintaining environmental protections will help address the nation's 
energy needs in a sustainable manner.
    NGWA is a nonprofit professional society and trade association. Our 
12,000 members from a11 50 states include some of the country's leading 
public and private sector groundwater scientists, engineers, drilling 
contractors, manufacturers, and suppliers of groundwater related 
products and services. The groundwater industry has multiple roles in 
assisting in energy production--from drilling to water resource 
assessment and water management. Thank you again for your leadership.
            Sincerely yours,
                                      Kevin B. McCray, CAE,
                                                Executive Director.
                                 ______
                                 
    Web site link to access the ``Economic and Fiscal Impact Analysis 
of Solar Permitting Reform'' and ``Economic and Fiscal Impact Analysis 
of Solar Permitting Reform--Executive Summary'' reports: http://
www.sunrunhome.com/uploads/media_items/aecom-executive-
summary.original.pdf