Wednesday, January 23, 2013

Secretary Kerry's Solar Surge

SolarOn Monday PresidentObama made it crystal clear that his Administration "will respond to thethreat of climate change, knowing that the failureto do so would betray our children and future generations." But he alsomade clear taking action is much more than an obligation to posterity, it isalso an issue of American leadership:

"The path towards sustainable energysources will be long and sometimes difficult. But America cannot resist thistransition; we must lead it."

Now, with SenatorKerry's nomination for Secretary of State, President Obama has a uniqueopportunity to make good on this rhetoric by leading a solar surge.

Solar power hasundergone a historic transition from expensive niche technology to a rapidlyexpanding cheap technology that is experiencing dramatic growth rates. The bestpart is that the technology is ideally suited for many developing countriesmaking it an integral part of any U.S. international clean energy strategy. Whetherit's reducing peak power deficits, replacing costly diesel, or providing energy access to the ruralpoor, solar power can deliver. As conventionalenergy costs soar, and solar's benefits are more widely understood, it isplaced to grow dramatically. But to truly take advantage of this historicopportunity the U.S. administration needs to lead a solar surge and no one isbetter placed than Secretary Kerry.

A solar surge requiresfour tactical moves that, taken together, would constitute big change:

1) Leverage cheapExport Import Bank (Ex-Im) Bank finance to spur solar development in emergingmarkets;

2) Expand OverseasPrivate Investment Corporation's (OPIC) renewable energy portfolio with a focuson increasing its off grid solar lending;

3) Work with the IFCto establish a $500 million solar PV funding facility for emerging markets; and

4) Push the World Bankto establish a $500 million off grid clean energy access fund (like the oneentrepreneurs demanded at Rio+20).

This may seem like alaundry list of asks but most of these pieces are already moving. All that isneeded is leadership -- just like the kind President Obama offered on Monday.

So here's howSecretary Kerry builds off Obama's leadership. The first step is to work withOPIC and Ex-Im Bank (the two agencies that contribute the majority of U.S.climate finance) to dramatically increase solar lending in emerging markets. Rightnow it's a tale of two agencies, OPIC is a clean energy champion and Ex-Imis a basket case. With Ex-Im's cheap finance to catalyze deployment, and strugglingdomestic U.S. solar manufacturers seeking new markets, this should be anobvious way to support and expand on previous stimulus package investments.

Solar panel installation lowThe next step is totake on the World Bank. The U.S. is one of the largest financial contributorsto this institution and much like President Obama, the Bank's president Dr. Kimhas made clear his desire to lead on climate change. Secretary Kerry can takeadvantage of this opportunity to work with him to establish a $500 million fundingfacility that will catalyze distributed solar investment in emerging markets by offering public funds that will leverageprivate capital. Think third-party finance for rooftop solar in the U.S., butin countries with hundreds of millions of roofs. Given how competitive solar istoday this should have already happened. Working with Dr. Kim to establish thisfund is an easy win for Kerry and the administration.

The final step will bethe toughest but most crucial. Solar and other distributed clean energytechnologies are the only way the vast majority of the rural poor will everreceive power -- at least according to the International Energy Agency (IEA). The World Bank has already helpedBangladesh install one million solar home systems so it's clear they can do this. But they alsorefused a call from the world's leading social entrepreneurs for a $500 millionoff grid clean energy access fund at the recent Rio+20 conference. The Bank says energy access andsustainability are a priority. Secretary Kerry needs to help them put theirmoney where their mouth is.

These relativelysimple steps will put concrete actions behind President Obama's words and setthe tone for Secretary Kerry's tenure. A tone defined by his embrace of cleanenergy and his conviction to take on climate change. Establishing thiscredibility will be critical because his much larger climate fight --eliminating coal and other international fossil fuel financing -- looms large. Startingwith a solar surge will rally the troops to his side and set the stage for theState Department to move from climate villain to climate hero and once and forall silence those who question the reality behind the rhetoric.

-- Justin Guay, Sierra Club International


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