Bringing Coal to Newcastle

by Rob DeLine on 05/13/10

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If anyone has any doubts about the difficulties of the solar business in the U.S. then the recent decision to use a Canadian company to furnish the 3.4 acres of solar panels atop San Jose’s International Airport’s new rental car garage should come as no surprise.

According to a recent news article, the contract — for enough solar panels to produce electricity for 1,000 homes — was given to the Canadian company who met all the criteria: including a requirement to have been in business for five years, as well as having previously provided panels for a 1 megawatt system.

So, with its list of requirements that may have stifled emerging local companies and caused others not to bid, San Jose, who wants its new moniker to be the ‘green capital,’ may have in essence just brought the proverbial coal to Newcastle.

What do you think? What criteria should government or quasi-government entities use for these types of large contracts and why?

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Comments

Be Careful What You Ask For

Submitted by Bruce Klafter on Thu, 05/13/2010 - 10:44.

It is rather disappointing that only three firms bid on this contract and none were local. Clearly something was amiss in terms of San Jose's bid package - the criteria don't seem to have meshed well with the current marketplace for PV. On the other hand, you cannot blame a cash strapped municipality for seeking a proven product or service from a company that has a real track record. The danger lurking in this story is that alternative energy and green jobs will get caught up in protectionist policies. If every country around the world insists that projects have to be sourced locally, that will potentially threaten development and innovation in many other parts of the globe. I think it would be reasonable to specify a certain percentage of local content, as many government programs already do. I believe China utilizes this kind of approach and the U.S., states and local governments should feel free to take the same track.

Bruce, great comments,

Submitted by Rob DeLine on Thu, 05/13/2010 - 17:47.

Bruce, great comments, thanks. I agree this is a tricky issue and requires a balancing act. Today, solar is an industry subsidized on local taxpayers, so for projects like these in times like these it's only natural that the local community would want to benefit from the clean energy produced, as well as from the economic development generated. The danger as you rightly point out is protectionism, which is a drag on innovation, cost, and market size. I have been advocating a solar deployment model, called fab2farm, which links local solar PV manufacturing with utilities to build out multiple, ground-mounted solar farms serving the local community. It's a self-contained, permanent ecosystem that not only provides the maximum benefits for local communities but also happens to yield the lowest cost per KWh. Check it out.