Rhone Resch left the Natural Gas Supply Association in 2004 to take over a tiny group representing the fledgling American solar industry in Washington, D.C.
It was a national trade organization mostly in name.
The group, called the Solar Energy Industries Association (SEIA), was made up of a loose collection of 65 solar companies with opposing interests and little communication with one another. It had a budget of $350,000. It was losing money. And it was on the verge of losing its tax status because of outstanding paperwork.
The situation was fitting for an industry in the midst of a transition beyond basic government R&D and the passionate, scrappy pioneers building one project at a time. (It was only a year before then that grid-tied PV installations surpassed off-grid installations in the U.S.)
Solar hot water was long since proven. Solar photovoltaics were getting better every year. And the suits with money were taking an interest. But the industry still didn't have a coherent message about solar's economic potential.
"It was made up of companies led by visionaries who had done amazing work -- but who were mostly devoted to talking about the environment. They weren't leading with the economics of solar," said Resch.
So Resch quickly crafted a strategic lobbying plan based on how other successful industries operated in Washington. He wanted to talk about jobs -- even when there were only a handful to talk about in 2004.
Today, SEIA has 1,000 members, 40 staffers and a budget of $12 million, and it co-produces a conference with 15,000 attendees. And while the industry can't yet rival the lobbying budgets of the Edison Electric Institute or the American Petroleum Institute, it does have a currency nearly as valuable as money: over 200,000 jobs around the country.
The solar industry's early success was the result of boots-on-the ground work by organizations on the local and state level. But many of the crucial national policies that brought solar to scale were spearheaded by SEIA's strategic plan -- a plan guided by economic arguments.
Earlier this month, Resch said he will soon step down from his role as president of SEIA. GTM sat down with him to talk about how the organization's lobbying efforts have evolved over the last 12 years.
The origins of a national political strategy
Rhone Resch: When I started, we didn't have a strategic plan. So one of the first things we did when I became the executive director was to put forward a multi-year strategic plan about how we advance the industry. It gave us a very clear goal to go after.
I entered in 2004, a time when we were working on an energy bill in Congress. Our tax policy when I took over SEIA was pathetic. It was a 10 percent residential tax credit, capped at $2,000. That year, we got solar included in the Production Tax Credit through a separate bill that wasn't in the energy bill. We were able to show our board and members that we could be successful in Washington.
We went into those discussions based on an economic argument about driving down costs. We didn't lead with environmental arguments. We had a Republican House, we had a Republican Senate and a Republican president at the time. If we led with our green-chin, so to speak, we would have had our head knocked off.
Once we had the PTC as an eligible tax credit for solar, it gave us an ability to do rudimentary analysis about project financing -- to understand if it was going to work, and if not, what changes needed to be made. We did that while the energy bill was being developed. We fundamentally changed our tax from that 10 percent residential ITC to a 30 percent tax credit. The key piece to this deal was going to developers with big projects and asking them what it would take to get them financed. They agreed on a 30 percent credit.
A 30 percent tax credit is a huge provision to try to get included for any industry. We were fortunate enough to be a very small industry at the time so the cost to the Treasury was pretty small.
We then had an energy bill that was being developed. It didn't pass in 2004 and carried over to 2005. We had our sponsors for a 30 percent tax credit. We built support -- Republican support. Our main lead was Lamar Alexander, out of Tennessee. We were very fortunate enough to have a fellow working in his office from Oak Ridge National Laboratory who was working on solar, who really encouraged the senator to lean on it. He was anti-wind at that time so he was looking for a clean energy alternative to his position there.
We ended up being successful because we focused on the economics and jobs -- speaking with one voice and gaining Republican support.
Stephen Lacey: You had select Republican champions, but I'm assuming it was a struggle to get through the doorways of many members of Congress. How was it different then -- in terms of getting meetings and having people take you seriously -- back in 2004 or 2005 versus where we're at today? You now have so much more solar deployed in congressional districts.
Rhone Resch: There were no Washington offices. We didn't have a solar company that had a single representative in Washington. We had BP Solar, but all of their focus was on the oil and gas provisions in the energy bill, and they were unwilling to lift a finger to help us out. We had the same thing with Shell, which was manufacturing solar at the time -- and a few other companies, energy companies -- that were in Washington with bigger interests in an energy bill than solar.
We focused on where the manufacturing existed. We had Sharp manufacturing in Tennessee, which proved to be significant because it allowed us to develop Lamar Alexander as our champion at that time. In the House, we worked with J.D. Hayworth, out of Arizona. In fact, we employed Matt Salmon, who's now a congressman from Arizona. He was a contract lobbyist in Arizona at the time.
Again, this was an entirely Republican play initially. It was based on economics. It was based on supporting an industry. We were not asking for R&D funding -- we were asking for tax credits, which Republicans historically support to increase capital, to deploy technology.
It was me and two staffers running around the Hill, doing what we could. We tried to be constructive. We worked with other energy industries. We worked with the oil and gas industry.
I think it gave us an element of credibility. Just as they were fine-tuning the bill, our champions were there to make sure we stayed in, and when asked, the other industries didn't oppose solar. I think that made a huge difference in initially creating the ITC in 2005.
Exiting the Bush years, entering the Obama years
Stephen Lacey: Let's talk about 2007 and beyond. During that time, the ITC got multiple extensions -- a short-term one in the 2007 energy bill and an eight-year extension in the 2008 bank bailout bill. There was also a lot in the 2009 stimulus package for solar. How did SEIA specifically influence those accomplishments?
Rhone Resch: Every step of the way, SEIA was the lead on every initiative in Washington. Again, there was no other voice.
During the in-between years, we went back to our champions and explained what was happening -- perhaps a third shift running at a manufacturing plant in Tennessee because of the increased growth of solar. People in Arizona were really in tune with what was happening.
By the time we got to 2008 and we got the TARP bill [Troubled Asset Relief Bill], we already had a bill that was introduced by Senator Cantwell and a couple of other people in the House that would extend the ITC for eight additional years.
At that time, we did not think we needed it to be permanent. We thought that we could scale up the industry and drive down our cost if we got an eight-year extension. That's what the models showed. That's what we advocated for. It ended up really being Senator Cantwell, who was on the Senate Finance Committee, who made a huge difference in ensuring that we were included in the TARP bill.
It was quite a ping-pong process with that bill. We were not in the original version that was sent over to the House. But they didn't pass the bill, so it came back to the Senate. The Senate modified it, added our provisions back in and then jammed it over to the House. It was a "take it or leave it" scenario, and the House agreed to it.
Last-minute maneuverings got us in the bill. But it was several years' worth of advocacy -- why we needed the tax credit and what it meant to the economy -- that ultimately put us in play when that bill was going through.
Stephen Lacey: And how did you set yourself up for the stimulus?
Rhone Resch: We had a policy retreat after the eight-year ITC extension was passed. We had the entire industry -- SEIA's board, state SEIA chapters, and some others who had an interest in helping us create this policy vision for the industry. We came up with hundreds of options. We had real-time voting and we went through every possible scenario.
So when the Recovery Act came up, we were prepared. We got 17 separate provisions included, including the Treasury grant program, the loan guarantee program, tax credits for manufacturing, and so on.
We had done our homework. The industry figured out what made the biggest difference, and were prepared to provide it to the administration as they were putting the stimulus together.
The White House had some of their own ideas, and we had to politely tell them that those wouldn't work. It was important for the administration to listen to the industry -- to understand the U.S. market and not use some of the structures from European markets that wouldn't work here in the U.S. And they did.
I think the Recovery Act made a huge difference in allowing solar to continue to grow, even though the rest of the U.S. economy was in a deep recession.
On SEIA's structure, past and future
Stephen Lacey: You came to the organization with a good understanding of Washington and lobbying. How do you describe your style as the leader of SEIA?
Rhone Resch: I think the one thing I focused on, from the very beginning, was branding the voice of the solar industry, from day one. I wanted us to be the voice so that when Congress had questions, they would come to us. When the president or the administration had questions, they would come to us. When the media had issues, they'd come to us.
What we needed to do was make sure we spoke in one voice as an entire industry -- residential, commercial, utility-scale, PV, concentrating solar power, solar heating and cooling. That was essential.
The second was being relentless in spending time on the Hill, educating members of Congress and their staff, building coalitions, and making sure the environmental community knew what our task was.
We really took a page from the playbook of the oil and gas industry, the automotive industry, and other great industries that had been successful in Washington. Even though we were small, we were very disciplined and we didn't get sidetracked.
Stephen Lacey: What kind of person do you think your successor needs to be?
Rhone Resch: You've got to have passion. This is a tough industry. You've got to have a long-term vision. And you've got to have tremendous patience -- both in dealing with the industry and dealing with Washington.
Ultimately, all that is secondary to having the passion to see this industry succeed. You can be a good lobbyist, but if you're not passionate, it shows every time they're having a meeting.
Also, they'll need to have really thick skin to be able to deal with all the arrows that are shot at you from every angle.
Stephen Lacey: Now that the ITC has been extended and we have policy stability in Washington, many people believe that the industry should put more resources into state and local battles. That's been a tough area to balance as you maintained focus on the ITC. Should SEIA's priorities change?
Rhone Resch: Just because the ITC is passed, doesn't mean we can shift our focus. There is a lot to deal with at the state level, and there's a lot to deal with at the federal level.
We continue to be involved at the state level and plan to continue applying the strategic action plans that helped with the ITC to state efforts. But we need to maintain discipline in Washington. There's no other organization that represents solar in D.C. And if we turn our back, we're leaving the door open for troublemakers to undo some of the hard work that we've been able to accomplish.
However, I do think the industry needs a lot more money into advancing state policies if we're going to be successful. We are going up against some very well-funded opponents that don't want to see solar be successful. And there are going to be even more of them in the future.
Stephen Lacey: Why leave SEIA now? And where are you going next?
Rhone Resch: We are going to pump $150 billion into the U.S. economy in the next five years. I want to be part of that. I just think it might be time to be on the private side -- not on the trade association side.
I feel very good in leaving SEIA in the position it's in. But there's a lot of opportunity out there that isn't just purely on the policy side.
I don't have an announcement to make yet about where I'm going, but I will stay in the industry. I think there are some incredible innovations in this industry in the next couple of years that I want to be part of. I've spent 12 years working with some of the best people I've ever met and some of the great leaders of the solar industry -- I think this will be an opportunity for me to work closer with them on a day-to-day basis.