National Defense Authorization Act

Floor Speech

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Mr. SCHATZ. Mr. President, climate change is real, it is caused by humans, it is urgent, and it is solvable. Climate change is real, it is caused by humans, it is urgent, and it is solvable. This year we have had some debates about climate change on the Senate floor and a majority of Members, including more than a few Republicans, have admitted that climate change is real and caused by humans. We have passed bipartisan amendments calling for the United States to reduce carbon pollution and to fight human-induced climate change. That is a necessary step in the right direction, but it is not enough.

We need to take real action. We need to focus on real solutions, and here is the exciting part. There are plenty of real-world cost-effective solutions to climate change. A lot of them empower every day Americans, giving them more control in terms of how they get their energy.

One of these solutions is distributed energy generation, or DG. DG is creating a real revolution in the energy sector by putting individuals and homeowners in control. The ability to own carbon-free power generation is helping everyday Americans realize that even though Washington is slow in the extreme on these questions, they can be part of the solution.

DG systems are small, but they provide major benefits. They can be more efficient, help promote national security, reduce electricity and fuel bills, and provide power during blackouts. Most important for fighting climate change, distributed generation lets us take advantage of major advances in clean energy. Through the use of renewable DG, such as small-scale wind, solar, and geothermal, Americans can take simple steps to reduce their carbon footprint.

This is the important thing about distributed generation, and we are seeing it across the country in red States and blue States, among conservatives and liberals. You don't have to be as passionate as I am about climate change to be enthusiastic about distributed generation, because nobody wants to pay more than is necessary on their electricity bill. The idea of generating your own electricity is very attractive to individuals--regardless of their ideology, regardless of their partisan affiliation. This has tremendous potential to save individuals, business, and institutions real money.

DG is changing the nature of the U.S. energy system. It is especially true in Hawaii, where more than 12 percent of our residents have rooftop solar, which is by far the highest rate in the United States. Rooftop solar is the most well-known renewable DG resource--and for good reason. The price of solar panels has come down 80 percent since 2008, and the cost to install residential systems has dropped by about half since 2010--80 percent cheaper since 2008 for the panels and about half as expensive just to get them on a roof since 2010. The prices are going down and down, and the economics are changing. What we thought was possible with respect to distributed generation a couple of years ago is changing everything we know about the U.S. energy system.

In 2006, about 30,000 homes in the United States had rooftop solar. By 2013, that number had risen to over 400,000 homes. According to the Energy Information Administration and the Department of Energy, as many as 4 million homes could have solar panels within 5 years. But DG is far more than just rooftop solar. Small wind systems sized for homes, schools, farms, and remote communities are taking off, with over 74,000 turbines installed in all 50 States.

One family in upstate New York installed a small wind turbine on its farm in 2012. Rated at 50 kilowatts, it will actually run at 60 or 70 when the wind is strong. They liked it so much, three branches of the family decided to lease three 10-kilowatt turbines for their homes, expecting to make back their initial investment within 5 years and to make a profit after that.

Ed Doody, one of those farmers, says:

My wife says it's like change in your pocket. When it's running, you make a little money.

Small-scale biogas systems offer farmers and ranchers opportunities to save money on energy and reduce methane emissions. Over 250 farms in the United States have made this investment, and the economics work for many more.

One dairy farm in California has installed a system that uses manure to create and capture gas to run a 700-kilowatt generator. The farm saves $800,000 per year in electricity and propane expenses and will earn back the money from its initial investment in just 4 years.

As you know, I am passionate about climate change, but you don't have to care about climate change to be excited about distributed generation. This is going to save people money, and that is the exciting thing about it.

There are many factors that are adding to the dramatic growth of distributed energy, including evolving State-level incentives and interconnection standards. But the most important reason has been the reduction in cost, especially when it comes to solar. It is simply getting cheaper for a homeowner or a farmer to see real savings by investing in clean energy.

A major reason for these cost reductions has been consistent, predictable, Federal and State support. From about 2005 until recently, Congress has done a fairly good job of providing consistent support for clean energy and distributed generation. We provided long-term tax credits that helped industries scale up and appropriated funds for the DOE necessary to spur real innovation and bring down the costs.

But that consistent support has tapered off in recent years with the expiration of a number of important credits. The clean energy industry will suffer further when the business and homeowner tax credits for renewable energy expire at the end of next year. That is why I plan to introduce, in the coming weeks, a bill that would extend the homeowner tax credit for solar, wind, and geothermal. This credit allows Americans to take control of their own energy futures, and Congress should extend it.

The explosion in DG does pose real challenges. Electric utilities must adjust to a world where power flows in all directions, and the lines between ratepayers and generators become blurred. This challenges the traditional utility business model, and there is nowhere that is facing this challenge more seriously than the State of Hawaii, where we have a series of island grids and we have unprecedented penetration of renewable energy into the grid.

The old standard used to be a maximum of 15 percent of intermittent energy onto the grid, but we have parts of our grid that are in the 25 to 35 percent intermittent energy. So there are real challenges in upgrading our grid system, upgrading our electricity system, and creating a smart grid that can accommodate all of this distributed generation.

But it also provides opportunities for innovation and the development of new American markets. This is not in the distant future, this is happening now. Each home, each business, each farm is now within reach of controlling its own energy future, often with carbon-free clean energy.

Distributed energy is a real solution to climate change, both in the United States and around the world. It has created a revolution in energy production that we must harness and accelerate for the challenge of climate change, but it is a challenge we meet.

What excites me so much about distributed generation is that as much as we were fighting about Keystone several months ago, as much as we are likely to have a fight over the Congressional Review Act, having to do with the President's Clean Power Plan, as much as I am, with Senator Whitehouse's leadership, going to introduce a carbon fee, there are lots of things where we are, frankly, not going to be able to find agreement any time soon, there are spaces where we can work together. Allowing individuals to generate their own electricity and reduce their power bills seems to be a good place to start in terms of bipartisan energy legislation.

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