Witnesses
Panel 1 
Steven Chalk
Chief Operating Officer and Acting Deputy Assistant Secretary, U.S. Department of Energy

 

Panel 2
Douglas Dougherty
President and CEO, The Geothermal Exchange Organization
Holly Gordon
Vice President, Legislative and Regulatory Affairs, SunRun Inc. 

Committee Members Present
Jeff Bingaman, Chairman (D-NM)
Lisa Murkowski, Ranking Member (R-AK)
Al Franken (D-MN)
Bernard Sanders (I-VT)

 

On July 12, 2011 the Senate Committee on Energy and Natural Resources held a hearing regarding the Department of Energy Administration Improvement Act of 2011 (S. 1160), the 10 Million Solar Roofs Act of 2011 (S. 1108), and the Geothermal Exploration and Technology Act of 2011 (S. 1142).

 

Chairman Jeff Bingaman (D-NM) briefly introduced the hearing, welcoming the witnesses and stating his sponsorship of S. 1160 and co-sponsorship of S. 1108. Ranking member Lisa Murkowski (R-AK) submitted an opening remark for the record, though she was not available to give her statement at the beginning of the hearing. Bernard Sanders (I-VT), who introduced S. 1108, spoke of the progress that has already been made to reduce “hard costs” of solar energy (such as materials and infrastructure), yet pointed out how installation fees for solar units, “soft costs,” have not been reduced. Sanders pressed the need for simpler permitting, which would allow for an easier implementation of ten million solar roofs by the end of the decade. He stressed the importance of installing more solar and geothermal energy sources in order to keep up with production in countries such as Germany and China.

 

In his testimony, Steven Chalk stated the Department of Energy (DOE) had not fully reviewed the bills and did not have an official stance on them. Nevertheless, Chalk spoke of the DOE’s SunShot Initiative scheduled to be implemented in 2012. “In addition to investing in improvements in cell technologies and manufacturing, the SunShot Initiative also focuses on steps to reduce installation and permitting costs,” which Chalk told the committee, “account for 40 percent of the total installed system price of solar electricity.” Additionally, DOE is making efforts to standardize local permitting under the “Race to the Rooftop” challenge. Chalk stated the efforts of these programs “are similar to the challenge grant provision in the 10 Million Solar Roofs Act, which calls for applicants to develop best practices for solar permitting.” He continued, “The proposed legislation, S. 1108, employs a bottom-up approach so that local teams can identify approaches best-suited for them.” Regarding geothermal energy, Chalk expressed disappointment in how slow the development of geothermal power has been. “Despite geothermal’s enormous potential, in 2010, only 15 megawatts of new geothermal power generation was added to the grid in the United States.” He said the main challenges towards increasing geothermal production are the high costs and risk involved in exploration and that the hydrothermal resources that have been identified are already developed.

 

During questioning, Bingaman mentioned that other countries are using geothermal energy to reduce natural gas consumption for heating and cooling of buildings. He stated that replacement of natural gas is a more compelling argument than simply adding wattage to total energy use. Bingaman asked how much focus the DOE was putting in to expanding geothermal production in residences and commercial facilities. Chalk stated the DOE, under the American Recovery and Reinvestment Act (P.L. 111-5), is investing $62 million in geothermal heat pumps for large buildings, universities, and local government buildings. The DOE, he stated, is in the beginning stages of expanding geothermal use for residential buildings. Upfront costs of installing geothermal units can be up to three times the cost of traditional air source heat pumps. Additionally, retrofitting houses can be problematic for residents if problems arise with the pumps. With traditional air source heat pumps, the pump can be fixed and accessed within hours. Due to geothermal pumps being underground, the timeline for repair is much longer. Currently, the most effective and plausible option is to install geothermal units for larger buildings.

 

Though DOE is investing in geothermal energy, Senator Al Franken (D-MN) emphasized the importance of private sector investment. He wondered if there was a model already in place for private investing in which the geothermal units would pay for themselves. Chalk responded that geothermal units have high upfront costs, but that in five to six years (20 years for smaller scale units) the units would pay for themselves. In response to questioning from Sanders, Chalk described that the role of government reform would be to decrease those costs by increasing the scale at which geothermal energy is produced.

 

In the second panel of witnesses, Douglas Dougherty testified that geothermal energy results in 44 to 72 percent fewer total emissions. He described geothermal energy as a “fully scalable technology” and that despite the proven efficiency, there is a less than five percent market penetration. Other benefits from geothermal energy are the constant temperatures of the fluid running through the pump (40 to 75 degrees year round) and the longevity of the system. “A conventional air source heat pump struggles to scavenge heat from freezing winter air or dump it into the summer swelter,” he said. The benefits are known, but challenges remain. Some of the challenges he stated for greater production are lack of public awareness, lack of a “home” within DOE, and high upfront costs. Dougherty stressed he would like to see a set position within DOE for geothermal energy. Additionally, he estimated more than 100,000 jobs could be created by 2017 with the expansion of the geothermal industry to ten times its current production (to one million installations). He continued, “S. 1142 will help us reach this goal by making geothermal heat pumps more affordable and further demonstrating the efficiency of the technology in large scale projects.”

 

In her testimony, Holly Gordon focused on the importance of reducing the cost of solar installation. She cited Germany, France, and Japan as countries that have waived permitting fees for installation. She stressed the importance of creating a national expedited installation process and reducing unnecessary red tape.

 

Ranking Member Murkowski spoke briefly during questioning, stating support for geothermal exploration. “Geothermal is one of our most promising sources of renewable energy,” she said. “This bill [S. 1142] will spur investment in geothermal, further expanding its market share to allow the United States to remain a world leader in development of geothermal technology.” She cited that Iceland generates 80 percent of its heating from geothermal sources and consumers pay an average cost of $35 per month on heating. She questioned what could be done to lower upfront costs in the United States. Dougherty stated that better drilling equipment and better loop designs would reduce costs and he stressed the need for more research. Murkowski asked about the potential for developing geothermal energy in colder climates such as Alaska. He noted that Sweden, which has a 90 percent market penetration of geothermal energy, and Canada are effectively using geothermal energy in colder climates.

 

Though the witnesses focused on improving research and increasing production of solar and geothermal energy, they stressed the importance of an expedited permitting and installation process. Franken stated that while development is important, it would seem more logical to create a standardized process before increasing production. Gordon described the current installation process for solar roofs. Typically, the installer must wait all day until the inspector comes, after which installation can begin. The process is lengthy, and involves much waiting which generates an unpleasant experience for the customer. Gordon stressed the importance of improving the customer experience in order to increase the demand for renewable sources of energy such as solar roofs.