The bad news for green energy entrepreneurs? President Trump seems to side with the dinosaurs: He's a fossil-fuel guy. Nowhere in his published plan for his first 100 days in office do the words "wind" or "solar" appear. Not once. The good news, according to business owners and policy experts? The green energy revolution is on, most importantly because there's a real market for it that can't be stopped by politics, policy or Trump.
Barry Jacobson and his wife, Elaine, launched Solar Impact, a rooftop solar installer, in Gainesville, Florida, in 2007. "It was supposed to be a weekend project," Jacobson says. Today it's a nearly $3 million business, one of many small companies around the country driving the rapid expansion of solar energy businesses. According to the Department of Energy (DOE), solar's share of overall electricity production in the United States grew 52% between September 2015 and September 2016--faster than any other power source.
Solar's rise has not been a smooth one. Solar and its green cousin, wind, are highly sensitive to variables such as fluctuating interest rates, commodity fuel prices, and the ever-shifting whims of policymakers. "Every year we have something that threatens our industry," Jacobson says. "That's why we call it the 'solar coaster.'"
The new administration has a clear set of policy priorities aimed at promoting brown energy at the expense of green. President Trump has vowed, for instance, to greenlight the Keystone pipeline project. He has promised to "lift the restrictions on the production of $50 trillion dollars worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal." And he has declared climate change a "hoax." He wants to gut DOE to save money, especially the part that promotes renewable energy.
Then again, Trump says a lot of things. At a campaign rally last summer he declared: "I know a lot about solar. I love solar." And nominees for key cabinet positions have denied that they are climate deniers. Business owners are understandably anxious. "Do I know what will happen?" asks Ben Mayer, a co-founder of SunBug Solar, an eight-year-old solar installer in Arlington, Massachusetts. "I have no idea. And when you try to run a company based on utter confusion, that is a problem."
Sunbug at least operates in a state with a strong commitment to green energy. Jacobson in Florida doesn't have that advantage.
But here's the thing: The green energy train has already left the station and it can't be stopped. If Trump's serious about his commitment to jobs and infrastructure, he may well figure out that green energy is his best friend.
Some points to keep in mind:
Federal tax incentives are secure. There is no question that the federal government's investment tax credit (ITC) has helped renewable energy grow and prosper during its development phase. In solar's case, it amounts to a 30% discount off the purchase price of any new installation, making rooftop solar affordable for millions of homeowners. The ITC was set to expire at the end of 2015 when the Obama administration reached an 11th hour accord with Republicans in Congress to extend it in full through 2019, with gradual step-downs thereafter. Wind's credits work slightly differently but the consumer benefit is comparable.
The ITC was never designed to be permanent. This latest and likely final extension gives the industry ample time to prepare to go it alone, without subsidies. "Solar and wind have a very robust understanding of what the economics will look like for the next five years," says Jules Kortenhorst, CEO of the Rocky Mountain Institute.."
Renewables are getting more price competitive every day. Wind and solar needed those tax credits in the beginning because they couldn't compete on price with fossil fuels. That's no longer true. As the number of green installations grows, and technologies advance, the price falls. It's not unlike the dramatic increases in computing speed at lower cost governed by Moore's Law. Solar-generated electricity costs 80% less today than it did seven years ago, according to Greg Wetstone, CEO of the American Council on Renewable Energy, and wind power costs 65% less. "The unrelenting falling cost of wind and solar," says Kortenhorst, "is not going to slow down." Lower prices mean more demand, and more business for installers.
Gas is cheaper, too, but for how long? Natural gas prices have fallen in recent years, thanks to the production boost provided by fracking. That won't last. When Congress re-upped tax credits for renewables, part of the deal was lifting the ban on oil and natural gas exports. As American gas seeps into the global market, where prices are higher, domestic prices will likely rise. That will further boost wind and solar's advantage.
Green jobs are vital to the economy, and growing. According to the U.S. Energy Information Administration, the solar workforce grew by 25% in 2016, to 374,000. That's a whopping 43% of the overall electric power generation workforce, or nearly twice the number employed in fossil fuel generation. Another 102,000 work at wind firms. What's more, those green jobs are disproportionately found in red states, such as Iowa, Kansas, Oklahoma, and Texas--states that benefit also from cheaper electricity for homes and businesses. Texas alone has a $32.7 billion investment in wind energy, according to American Wind Energy Association.
Trump would face a windstorm of resistance from his base if he tried to roll back any of it. And perhaps from his cabinet, which includes two Texans and a billionaire who has invested in U.S. manufacturing. Says Kortenhorst: "I cannot fathom that [Secretary of State] Rex' Tillerson, [Commerce Secretary nominee Wilbur] Ross, and Trump would want to want to bet the future of the United States on the energy technology of the 19th and 20th centuries, when global competitors like China, India, Europe, and the Middle East are rapidly switching to the technology of the future."
Bottom line for green energy entrepreneurs: proceed as normal. "Honestly," says Jacobson, "I'm cautiously optimistic that they'll leave us alone."