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Exit Interview: SEIA chief united rivals to create a lobbying force

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Exit Interview: SEIA chief united rivals to create a lobbying force

RhoneResch thought about retiring from the world of trade associations years ago.

Thechief executive of the Solar Energy Industries Association, who will at the end of May,considered retiring in 2008, after Congress extended the investment tax credit for eight years byattaching it to the bill that created the Troubled Asset Relief Program to dealwith the credit and subprime mortgage crisis.

Butin an interview Resch said he stayed on, in part, because of unfinished workSEIA was doing to expand state markets and being in the middle of afast-changing industry was exciting. Still, he worried that he "may havemissed the window" to get out when things were good.

Hegot another chance last December, when a Republican push to lift a ban on crudeoil exports helped set up a deal to extend the ITC for another five years.

"Thatreally became the turning point for me to step back and start thinking aboutwhat's next," Resch said. "To be honest, I didn't think we could get[the extension] … done as quickly as we did. I thought it would play outthrough this year and possibly even into 2017. But when we got it passed… it becameclear that it was time to start thinking about leaving SEIA and getting outinto the private sector."

Becauseof that success, Resch is leaving at a time when the solar industry is poisedfor massive growth.

Solarinstallations are expected to more than double this year to around 16,000 MW,according to GTMResearch, as developers work through huge project pipelines they amassed inanticipation of the tax break expiring. Robust development of around 9,000 MWto 10,800 MW annually is expected through the end of the decade, according toBloomberg New Energy Finance.

Buttensions are growing between the business models of distributed solardevelopers and utility-scale developers, both of which SEIA counts as members.Some companies have complained about the group's policy focus and theallocation of resources. However, utility-scale developers have startedexpanding into the commercial and residential markets, which could help createcommon ground.

The early days

WhenResch joined SEIA from the Natural Gas Supply Association in 2004, he took overan indebted trade group for a backwater industry that had lost its businesslicense. He had been passed over for the job two years earlier, and his wifewas skeptical — the job of turning around a dysfunctional organization camewith a big pay cut.

Reschsaid he knew what he was doing.

"Iwanted to be a CEO of a trade association in an industry that I believed in andthat was going to grow and be exciting, and there was no doubt that solar hadthat potential," he said. "There was… an expectation that costs wouldcome down, but there was a clear understanding that policy played a criticalrole in creating markets for solar at that time."

Outsideof California, however, "there really wasn't a vision" for industry,he said.

Reschbrought discipline to the organization, focusing the board's efforts onprioritizing policy objectives annually. "That was an importantinstitutional change, that we really had very clear direction andguidance," Resch said. "The frustrating piece was that the list wasalways so damn long. There were so many issues we had to deal with in order tocreate these markets. … And so the biggest challenge really became, how do youallocate resources to be successful across so many different priorities andremain effective."

Thefocus paid off, and SEIA started looking like a real trade group. It set up apolitical action committee, started flying CEOs to Capitol Hill, invitedlawmakers to ribbon cuttings and hired researchers to produce data thatsupported its policy positions. In the years since Resch took over, SEIA'sbudget has grown to $12 million from $350,000 and membership expanded to 1,000companies from 65 in 2004.

Solarpower still generates a small fraction of the country's electricity. But costsare falling, installations outpaced new capacity from natural gas last year and aworkforce of more than 200,000 gives the industry political clout that wasunimaginable a decade ago.

Reschmanaged to lead the industry through a massive expansion by holding togetherwarring factions that at times seemed to threaten SEIA's role as the voice of adiverse industry.

"Inthe early days, I think all of the different technologies were striving forrelevance. Everybody was too expensive, but we knew that if we were able toscale up that the costs would come down," Resch said. "So there wasreal competition between concentrating solar power and [photovoltaics], forexample. And there were times in the past where the CSP folks wanted to createa separate organization or get more of a profile within SEIA. So we structuredthe committees and working groups to be able to address their concerns."

Resch herds cats

Tensionsflared again in 2014, with some members talking privately about the possibilityof SEIA fracturing due to tensions between utility-scale developers andcompanies that build smaller distributed projects, yet the group hung together.

"Wedid exercise a huge amount of discipline in order to speak with one voice, andI think that's in large part why we've been so successful," Resch said."[It] wasn't easy … because different companies and different sectors ofthe industry may have different opinions or need different attention from theassociation, and we had to be very cognizant of that and manage that carefully,and I think that's still the case today."

In arecent Greentech Media podcast, Generate Capital Inc. President Jigar Shahpraised Resch for holding the coalition together.

"Thething that Rhone did more than anything in the world … is he [herds] cats likethe best of them," Shah said. "To keep that coalition together and toshow unity in front of Congress and all these other places, that is just not aneasy job, and Rhone did it with grace and style and professionalism inspades."

ButShah said SEIA's members may again be readying for an internal battle. SEIA'sability to influence state policy has been "atrocious," he said,adding that his "sense is there [are] a lot of folks vying to figure out away to fix that."

SEIAhas taken positions supporting policies that reimburse distributed solargenerators based on retail rates, a position contrary to some of its moreutility-focused members.

"Thereis no one size fits all net-metering policy that can be applied to thestates," Resch said. "I think historically it was full uncapped netmetering, that's always been our position as an organization. But what we'refinding is that states want their policies to be more dynamic."

Thesolar industry looks to be in a strong position, thanks to the continuedfinancial support afforded by the ITC extension. But "victory laps areshort in this business," Nat Kreamer, President and CEO of the financingcompany Spruce and chairman of SEIA's board of directors, said at an industryconference in San Francisco in April, according to a copy of his speechprovided to S&P Global Market Intelligence.

Pointingto the U.S. EPA's Clean Power Plan, state renewable portfolio standards,net-energy metering policies, transmission access and utility rate design,Kreamer said that, unlike the ITC, "today's policy opportunities andthreats are diffuse, in multiple venues and multiples levels of state andnational government, and have many decision makers and processes."

Tobe effective, Resch said the solar industry needs to continue using SEIA tolobby with "one voice" on both state and federal policy.

"We'rejust too small, still today, as an industry to be split apart or to becompeting against each other in the public forum," he said. "We'veseen this time and again where if we don't have our act together at the federaland the state level and we have two or three different groups asking fordifferent things in a bill, we'll be sent home. They'll say, 'Hey, you guyswork this out, figure out what you want and then come back to us next year orwhenever we're doing another energy bill.'"

"Ithink what I've been very good at over my tenure at SEIA is to listen,"Resch added. "To listen to its members, to listen to the markets, tolisten to politics that are happening across the country and to guide theassociation to areas where we have the greatest opportunity to be successful. …In any association there's the squeaky wheel, people trying to elevate theirpriorities over others, but it's important to listen to the entire industry andprovide that type of leadership that collectively advances all of the marketsand all of the technologies."