Rising to Meet the Energy Challenge

As Americans we don’t shrink from challenges, we embrace them. In the 19th century, we united the nation’s economy with the first transcontinental railroad. In the 20th century, we powered the Southwest with the largest hydroelectric power station in the world. We recognized that these challenges were not merely about laying track or building a dam, but about securing the future of our nation.

The question of how we will create, store and use energy is the great challenge of the 21st century. It threatens our economy, our security and our planet. By rising to meet this challenge, we’ll help preserve our planet, reduce our dependence on finite, foreign sources of energy and create hundreds of thousands of American jobs. Like the challenges of the past, the solution will depend on government, industry and citizens working together.

As the world’s largest supplier of solar photovoltaic manufacturing equipment, Applied Materials is working towards solutions. Our strategy is to bring significant change to the industry by enabling lower cost-per-watt solutions for solar cell manufacturing-with the goal of making solar a more meaningful contributor to the global energy supply.

Make no mistake: Confronting our energy challenge requires innovative solutions and bold policy, just as the Pacific Railway Act of 1862 and Boulder Canyon Project Act in 1928 laid the foundations for the transcontinental railroad and Hoover Dam.

President Barack Obama proposed such policy on the campaign trail, calling for a renewable electricity standard that would require 25% of our nation’s electricity to be obtained from renewable energy, such as solar and wind, by 2025. While ambitious, this practical goal can be met with today’s technology and labor force.

Earlier this summer, the House of Representatives passed the American Clean Energy and Security Act. The bill takes some important steps in the right direction. It recognizes the need to generate energy close to where it is used—so-called distributed generation—and provides incentives that would increase large-scale deployment. But by allowing companies to meet targets through energy efficiency rather than renewable generation, the bill significantly reduces the 25% renewable requirement. The Senate is considering a bill that reduces the renewable energy requirement even more.

We owe it to American consumers and workers to do better.

Critics of renewable energy claim that a strong renewable electricity standard will mean higher prices and less reliable electricity. But those allegations simply are not true.

Requiring energy companies to produce 25% of their electricity from renewable sources will lower, not raise, electricity prices–nearly 8% on average according to a March study by the Union of Concerned Scientists. Solar energy is most cost-effective in the peak afternoon period, when the sun is shining, air conditioners are blasting and demand is highest. This peak period of demand is the most difficult for utility companies to service and the most expensive. Solar is cost-competitive with fossil fuels for peak demand in such places as Hawaii, California and New York. Also, renewables can help meet the rising demand for peak energy with inexpensive solutions, making renewable energy more, not less, reliable.

Experience shows that increasing scale also reduces costs. For each doubling of solar installations worldwide, the cost of solar energy has declined by nearly 20%. Because there is no fuel cost associated with renewables like solar and wind, they help reduce price volatility. Fossil fuels are inherently volatile as supply and demand ebbs and flows. Natural gas prices, for example, may be at record lows today, but just last year they were at record highs.

Finally, a significant renewable energy requirement of 25% also will create billions of dollars in economic investment and almost 300,000 new American jobs in manufacturing, construction, operations and maintenance by 2025, according to the Union of Concerned Scientists. That study also estimated a $263 billion boost to the American economy through new capital investment for renewable energy technology.

We can meet our goal of 25% renewables by 2025 with a practical, gradual approach that sets interim targets along the way, starting with 6% by 2012 and then building up to 25% by 2025. Meeting such short-term goals will help us achieve our long-term goal by helping fuel growth, investment and innovation in this sector and ensuring a smooth transition for utilities, businesses and consumers.

It wasn’t easy completing the transcontinental railroad or constructing the Hoover Dam. Both took foresight, political will and confidence in the American people. But we persevered, and both efforts pay dividends to this day. What will our generation do that will be remembered in 50 years? How will we use this moment, this recession, and this inflection point to change the future? Adopting a meaningful energy bill requires the same vision and confidence, and like past initiatives, would pay both immediate and long-term dividends to American workers and consumers. What better time than now, as the world prepares for the United Nations climate change conference in Copenhagen, for the United States to once again lead the way in confronting the pressing challenges of our time? As we know from our history, it’s the American way.

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