Will current tax incentives and grants help develop a competitive solar industry in the United States? During today's OnPoint, Jim Nelson, CEO of Solar3D, says Congress should shift its approach on tax incentives for the solar energy industry and focus its funds on future technologies that will make the industry more efficient and cost-competitive.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Jim Nelson, CEO of Solar3D. Jim, thanks for coming on the show.
Jim Nelson: Good to be here, Monica.
Monica Trauzzi: Jim, your company is taking an interesting approach to the financing and growth of the solar energy growth in the U.S. You feel that government assistance should not be looked at as a permanent solution. In the midst of the tax bill discussions, what role do you think renewable energy incentives should play when it comes to the solar energy industry?
Jim Nelson: The word incentive is an interesting one, because it's all about what the government wants to incent. And part of the problem I have with what Congress does is a lot of what they focus on is what looks good and what's fashionable, as opposed to what really accomplishes an objective that they have. One of the things that they've done over the years has been to subsidize certain green energy projects in things that aren't really economically viable. So, for example, they provide a lot of incentives to the solar industry in a technology that, frankly, doesn't work. It works, it's a miracle, frankly, drawing power from the sun and producing green electricity. But it simply doesn't produce enough power to make it an economic competitor with some of the lower cost alternatives. I think what the government really should be doing is incentivizing new solar technologies that are looking to bring solar to grid parity and making it a legitimate and viable alternative to lower cost alternatives.
Monica Trauzzi: Is that enough though to get the industry moving to get the industry off the ground, for example, if you ignore the technologies that currently exist?
Jim Nelson: I'm not a big fan of looking at an industry just for the industry's sake. I really think you look at the overall world and take an approach of what does the world really need? What the world needs is clean energy that works. The fact is, I'm not worried too much about the solar industry in and of itself. I'm worried about whether the world can get a clean technology that's a result of the solar approach. I think, yes, I think ultimately, right now, with all the things government has done, less than 1 percent of the world's electricity is supplied by solar. And the solar industry beats its chest a lot says we're growing 35 percent a year, we're growing fast and so forth, but it's just an infinitesimal amount of electricity that's being provided, that's needed for the world. The fact is, if you get to grid parity everything changes. You go from being a hundred billion dollar industry to trillions of dollars in a very short period of time if you get a technology that is actually going to bring you to competitiveness with the lower cost alternatives.
Monica Trauzzi: So, specifically then, what kind of technology are we talking about here?
Jim Nelson: Well, if you get solar cells that are less expensive to make, more efficient, and produce more power for the money that's what we're talking about. That's what needs to be the focus of electricity. There are a lot of people who get these incentives and are able to make a lot of money on the government dole to a certain extent. But that's not ultimately what's going to make the world different as a result of green energy.
Monica Trauzzi: Can we do this all without China's help? Can we keep jobs here in the U.S. or is a lot of this going to depend on what China is able to help us with?
Jim Nelson: All, I think this combination there too. I think that there is no bad thing about having China's help and partnering with China in a lot of different ways. I think also that we ought to be able to create jobs within America, but we have to make ourselves competitive with China. A lot of times we think in terms of what we can do to create jobs and to create our industry and so forth, but nobody really thinks a lot about global competitiveness. If we can be competitive with China in the manufacturing of solar cells, then I think we deserve to keep jobs here and I'd like to. But the fact is, until then, I think it's legitimate to partner with China in the things that they're good at.
Monica Trauzzi: Some people may be watching this interview thinking that you have a very interesting approach to your thoughts about the future of the solar energy industry, considering that you're a CEO in that industry. How do you respond to that? I mean why do you take such a different line of thinking from most other solar energy CEOs?
Jim Nelson: Well, I'm not a lifetime green energy guy or a solar guy. I'm new to the solar industry and, frankly, I've been in the finance business for a long time and I've always looked at industries differently than being an industry insider. Part of the reason why I'm looking at it this way is that the reason why I'm involved in the solar industry is that my company is developing a technology which we believe can revolutionize what's going on and change the way people think about the generation of electricity.
Monica Trauzzi: So, basically, you want incentives that will help your technology and your company.
Jim Nelson: I'm not saying we want incentives. We're financed privately and we're happy to continue to finance ourselves privately and we won't ask the government for any money. But I do believe that the government should be looking to new technologies to help revolutionize the production of green energy.
Monica Trauzzi: How did your company manage to go public so quickly?
Jim Nelson: Our approach is public venture capital, if you will. A number of us got together and decided to finance the company privately and our public - the approach with our public shell or our public entity is to allow everyone a chance to invest in a new breakthrough technology that could end up changing the world and end up being extremely profitable in the long run as well.
Monica Trauzzi: So, if the government were to shift the way it's incentivizing or assisting the solar energy industry, what would happen to current companies that are working with the current technologies that are on the market now?
Jim Nelson: Well, I think that they'd have a lot tougher time selling their product. I think that a lot of people install solar because of the incentives. I just think it's not a completely legitimate way of doing it. It is legitimate of course and legal, but it doesn't ultimately end up changing the world. I think that some of those companies would struggle as a result of the moving away of the incentives.
Monica Trauzzi: How do you believe the shift in power in the House will impact the discussion on energy policy and, in particular, renewable energy moving forward into the next session?
Jim Nelson: Let me restate the question and make sure I understand. The question is if the House, as their discussion goes about figuring out whether to continue incentives or not, how is that going to affect solar energy going forward?
Monica Trauzzi: Yes, with Republicans taking over House ...
Jim Nelson: Oh, sure.
Monica Trauzzi: Leadership, how do you think that discussion is going to shift if in any way?
Jim Nelson: Yeah, okay, good question. I'm not sure. You know, clearly the Democrats were more champions of the green energy and green energy for green energy's sake and the Republicans will be less so. I believe that whoever is in charge or whoever is involved should take a very hard look at what their real objectives are in the green energy business and figure out how they should incentivize companies and individuals and private enterprise to get what they want out of the green energy business as opposed to just doing something to sustain the industry the way this.
Monica Trauzzi: Okay, we'll end it there on that note. Thank you for coming on the show.
Jim Nelson: Okay, thank you very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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