Solar energy meets uncertainty principle
Much has been said of the contribution that solar energy can make to our overall energy needs, and rightfully so. Although solar energy is not going to provide this country with the bulk of its electricity any time soon, it is contributing more and more through small systems on individual homes and businesses and larger installations at so-called solar farms.
So it is surprising and more than a little disappointing that the Bureau of Land Management had no bidders last week for its first-ever auction of land leases in Colorado for solar energy development.
One major reason for the lack of response appears to be uncertainty over both the market and the regulatory climate for solar energy. In that regard, solar is not that different from the oil shale industry, where companies have recently retreated from active research projects in large part due to market conditions but also, oil shale supporters say, because changing government rules for the industry.
For the solar leasing, five companies filed preliminary applications for the three parcels up for bid in the San Luis Valley last week, according to The Denver Post. But none of them chose to submit a bid last Thursday, the day of the auction.
One solar expert quoted by the Post said a large part of the problem is market uncertainty — a lack of confidence for the future demand and price of solar energy.
But another industry official said uncertainty over the federal regulatory structure for solar energy is also a problem.
“The ground rules are still very much in question,” Ken Johnson, spokesman for the Solar Energy Industries Association told the Post. “To date, the BLM has yet to finalize any regional mitigation plans. Frankly, it’s not smart to commit to something until you’ve read the fine print.”
We’ve argued before that regulatory uncertainty is one of the greatest deterrents to business investment, whether you’re planning a solar project or conducting oil shale research on federal land, or you’re waiting on local-government land-use decisions.
Government can’t control the markets for things like solar energy or oil shale. But they can provide a stable regulatory infrastructure for industry to rely upon.
The Colorado Oil and Gas Conservation has done a reasonable job of that when it comes to oil and gas drilling in this state, although some state lawmakers and local governments want to add to the industry’s uncertainty by concocting new, overlapping rules.
We hope that doesn’t occur, and we would like to see the federal government take a page from this state by developing and maintaining consistent rules for all types of energy development.