Solar, Smart Grid Advocates: Thanks for Passing the Climate Change Bill

The House of Representatives cleared a big hurdle late Friday by passing a bill that set goals for reducing the United States' greenhouse gas emissions, a first in Congressional history.

The vote wasn't a clear victory for Democrats, however. It passed by 219–212, signaling the tough fight ahead as the bill goes to the Senate for consideration.

The passage nevertheless drew praises from folks in the solar industry and some major environmental groups. Opposition came from organizations such as Greenpeace and the National Association of Homebuilders. Many Republicans have cast the bill as a "job killer" because it would require businesses to pay to emit.

The centerpiece of the legislation, often called the Waxman-Markey bill because of its sponsors, is a program that would cap the amount of greenhouse gas emissions that many industries could emit in the next few decades and what how much they might have to pay to meet the emissions requirements.

The bill also sets mandates for the amount of renewable electricity that must be consumed over time -- 20 percent by 2020.

Roughly 30 states already have similar requirements, which have driven their utilities to sign long-term power purchase agreements for solar and wind electricity or build and operate solar and wind farms themselves.

"This bill will give more Americans the opportunity to install solar on their homes and businesses, spur deployment of utility-scale solar while creating tens of thousands of high-paying domestic jobs and stable careers," said Rhone Resch, president of the Solar Energy Industries Association (SEIA), in a statement.

The legislation also would allow federal agencies to enter into 20-year contracts to buy renewable electricity (see SEIA's summary of the bill)

An industry group representing companies in the smart grid business also applauded the passage of the Waxman-Markey bill.

"This bill provides both direct and organic incentives for smart grid deployment," said Katherine Hamilton, president of the GridWise Alliance, in a statement. "Smart grid technologies will be key enablers in developing renewable energy resources and energy efficiency, both of which are critical to climate change mitigation."

The alliance said the legislation contains provisions that would encourage the use of smart-grid technologies, such as hardware and software that measure energy consumption and make sure the electricity grid doesn't crash during peak hours.

The federal Environmental Protection Agency also would consider appliances with devices to gauge energy use in deciding whether to include them in the Energy Star program.

The homebuilders association, on the other hand, said the legislation puts too much emphasis on improving the energy efficiency of new homes when many existing homes lack the designs and materials to be energy efficient.

The Waxman-Markey bill would require new homes to be 30 percent more energy efficient than what's required by the 2006 International Energy Conservation Code. New homes will have to be 50 percent more efficient by 2014.

"That's simply too far, too fast," said the homebuilder association's chairman Joe Robson, in a statement. "The market is not geared up to supply the necessary materials and equipment, and that's going to drive up costs. The result will be fewer working-class families in these new energy-efficient homes. They'll be relegated to older, less efficient housing stock and face ever higher utility bills."

With the bill, the federal lawmakers are setting greenhouse gas reduction goals . The bill would require the country to cut emissions by 17 percent below 2005 levels by 2020 and 83 percent by 2050.

The government would give most of the permits for emitting greenhouse gases to key polluting industries initially and auction off the rest. Businesses that emit above limits would have to buy permits from those who pollute less.

This cap-and-trade program would begin in 2012, and each permit for emitting a ton of carbon dioxide would cost $13 initially. The prices should go up while the caps on emissions should go down over time.

The details of how this program would still have to be worked out by the EPA and other agencies, and only after the bill bellows law.

Many Democrats in Congress would like to pass the bill and have President Obama sign it before the United States heads to Copenhagen this December to work on an international treaty to succeed the Kyoto Protocol.

That goal could be tough to achieve given the strong opposition the bill already has garnered and the other issues competition for lawmakers' attention, such as the healthcare reform, said David Gergen, a Harvard professor and former advisor to several U.S. presidents, in a speech at the Edison Electric Institute's annual convention in San Francisco Thursday (see China's Big Sway Over U.S.'s Climate Change Fight).

"My sense is that there is a less than 50 percent chance that the Senate will pass this bill before the end of the year," Gergen said.