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62–591 2010

THE GLOBAL CLEAN ENERGY RACE 

HEARING 

BEFORE THE

SELECT COMMITTEE ON 

ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 22, 2010 

Serial No. 111–19 

( 

Printed for the use of the Select Committee on 

Energy Independence and Global Warming 

globalwarming.house.gov 


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SELECT COMMITTEE ON ENERGY INDEPENDENCE 

AND GLOBAL WARMING 

EDWARD J. MARKEY, Massachusetts, Chairman 

EARL BLUMENAUER, Oregon 

JAY INSLEE, Washington 

JOHN B. LARSON, Connecticut 

HILDA L. SOLIS, California 

STEPHANIE HERSETH SANDLIN, 

South Dakota 

EMANUEL CLEAVER, Missouri 

JOHN J. HALL, New York 

JERRY MCNERNEY, California 

F. JAMES SENSENBRENNER, JR., 

Wisconsin, Ranking Member 

JOHN B. SHADEGG, Arizona 

GREG WALDEN, Oregon 

CANDICE S. MILLER, Michigan 

JOHN SULLIVAN, Oklahoma 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

MICHAEL GOO, Staff Director 

SARAH BUTLER, Chief Clerk 

BART FORSYTH, Minority Staff Director 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

Prepared Statement ......................................................................................... 3 

Hon. F. James Sensenbrenner, Jr., a Representative in Congress from the 

State of Wisconsin, opening statement .............................................................. 5 

Hon. Emanuel Cleaver, a Representative in Congress from the State of Missouri, opening statement ..................................................................................... 6 

WITNESSES 

Mr. Michael Liebreich, Chief Executive, Bloomberg New Energy Finance ........ 7 

Prepared Statement ......................................................................................... 10 

Ravi Viswanathan, General Partner, New Energy Associates ............................ 17 

Prepared Statement ......................................................................................... 20 

Tom Carbone, Chief Executive Officer, Nordic Windpower ................................. 25 

Prepared Statement ......................................................................................... 28 

Mark Fulton, Global Head of Climate Change Investment Research, Deutsche 

Bank ...................................................................................................................... 34 

Prepared Statement ......................................................................................... 37 

Answers to Submitted Questions .................................................................... 113 

SUBMITTED MATERIALS 

Hon. Edward J. Markey, letter from Ernst & Young, September 20, 2010 ........ 69 

Hon. Edward J. Markey, copy of report from Ernst & Young, ‘‘Renewable 

Energy Country Attractiveness Indices’’ 2010 ................................................... 72 

Hon. Edward J. Markey, copy of report from Ernst and Young, ‘‘Cleantech 

matters; the electrification of transportation: from vision to reality’’ 2010 

Ignition Sessions summary report ...................................................................... 76 


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THE GLOBAL CLEAN ENERGY RACE 

WEDNESDAY, SEPTEMBER 22, 2010 

HOUSE OF REPRESENTATIVES, 

SELECT COMMITTEE ON ENERGY INDEPENDENCE

AND GLOBAL WARMING, 

Washington, DC. 

The committee met, pursuant to call, at 10:07 a.m., in room 

2325, Rayburn House Office Building, Hon. Edward J. Markey 

(chairman of the committee) presiding. 

Present: Representatives Markey, Cleaver, and Sensenbrenner. 

Staff present: Jonathan Phillips. 

The CHAIRMAN. Welcome to the Select Committee on Energy 

Independence and Global Warming. 

For generations now, America’s universities, national laboratories, and innovative companies have fueled the technology breakthroughs that have put America in the lead and kept Japan, Europe, and other economic competitors in the rearview mirror. America’s ability to combine innovative brains with can-do brawn has 

meant higher standards of living, a huge middle class, and increased economic opportunity for millions of our citizens. This is 

our competitive advantage. This is what makes our country a 

mecca for entrepreneurs and ambitious workers the world over. 

Our technology incubators are still pumping out the innovations, 

but our entrepreneurs and workers are increasingly being blown off 

the road. Governments around the world recognize the opportunity 

of the clean energy economy and are seizing it. The world will need 

to invest $26 trillion—that is trillion with a T—over the next two 

decades in order to meet our energy needs. 

Developing the clean technologies to serve that market is the scientific challenge of the generation. Harnessing the industrial might 

to manufacture those technologies and market them to the world 

is the economic opportunity of the generation. 

Last year, I went to China with Mr. Sensenbrenner and with the 

Speaker, and we viewed the wind turbines spilling out of factories. 

I returned home warning of these economic missiles pointed at the 

heart of the U.S. economy. 

Today, the clean energy investment auditors are here to share 

the dismal scorecard. Twice as much money was invested in clean 

energy in China as was invested in the United States last year. A 

decade ago, China made 1 percent of the world’s solar panels. 

Today, it makes nearly half of them. The $15 billion worth of solar 

panels China exported last year was more valuable than America’s 

corn, beef, and chicken exports combined. 


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China is no longer coming; they are here. They ate our lunch, 

and they are moving on to our dinner. And China is not alone. Germany, Japan, South Korea, and other countries recognize that 

dominating the $1 trillion market of tomorrow requires foresight 

and public investment today. They are throwing the kitchen sink 

of policies at clean energy, renewable energy requirements, financing assistance, tax incentives, government procurements, carbon 

pollution limits. 

Here in the U.S., the longest-term Federal incentive for clean energy expires in 2 years. Senate Republicans have steadfastly stood 

in the way of any and all long-term policies to support the manufacture and deployment of clean energy in this country. It is notable that we have entrepreneurs willing to invest in U.S. clean manufacturing at all in such an unpredictable environment. 

Some of China’s clean energy incentives may be illegal violations 

of international trade agreements. Feeling that the future of America’s clean energy sector is under threat, the United Steelworkers 

Union recently submitted a petition to the U.S. Trade Representative. The case alleges that China has used hundreds of billions of 

dollars in subsidies and other illegal trade practices to undermine 

foreign competitors and dominate the sector. 

I am very concerned about China’s use of unfair trade practices 

to bolster the competitiveness of its industries, and I urge prompt 

action to address violations found through the U.S. Trade Representative’s investigation. 

But we must not move forward recklessly on this trade dispute 

with China. In the end, competition is good. Competition is one of 

the chief reasons that the price of a solar panel has fallen by half 

in the last 2 years. Competition will ultimately make solar energy 

competitive with grid electricity in this decade, but this competition 

must be fair. It must allow American workers to play on the field. 

It must make it possible for us to export these technologies to other 

countries, especially to China. And that is why the U.S. Trade Rep 

must do the job that is necessary in order to protect American 

workers. 

So if we do not act decisively to provide the long-term and shortterm incentives to make America the best place to invest clean energy dollars, someone else will. So let’s get real. We will trade our 

addiction to Middle Eastern oil with an addiction to Asian or European clean energy technologies. 

From the Manhattan Project to the Apollo program to medical research to the Internet, government investments have and will continue to make America the place where the next great technological 

breakthroughs happen. The only question that remains is whether 

American industry and workers will ride this technological wave. 

The stakes could not be higher. 

[The prepared statement of Mr. Markey follows:] 


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Let me now turn and recognize the ranking member of the select 

committee, the gentleman from Wisconsin, Mr. Sensenbrenner. 

Mr. SENSENBRENNER. Thank you very much, Mr. Chairman. 

In today’s hearings, I expect a slew of experts to tell us what we 

already know. If we mandate that electric companies use wind energy, it will drive private investment into the wind sector. Of 

course it will. What investor wouldn’t want a guaranteed market? 

If we mandate that everyone drives cars with square tires, we will 

drive investment there, too. But that doesn’t mean that we should. 

Choosing winners and losers doesn’t work. Europe proved as 

much with regard to clean energy investment. In Europe, government subsidies drove investment toward renewable energy sources. 

That investment and all associated jobs dried up as soon as the 

subsidies lapsed. 

Just a few years ago, President Obama held Spain as the model 

for encouraging investment in solar energy. Today, Spanish unemployment is over 20 percent. Is that really the model we want to 

follow? Europe proved that jobs associated with clean energy investment will last only as long as the government pays for them. 

Democrats couldn’t get cap and tax through Congress, so now 

they are trying to circumvent voters and accomplish the same thing 

through the EPA. Their argument, that if we don’t force investors 

to spend their money here they will spend it abroad, is wrong. 

The reality is that the technologies the Democrats want to mandate will drive the cost of our energy up, which will drive more 

manufacturing jobs overseas. Given the choice between, one, forcing investment toward today’s political darlings or, two, supporting 

sustainable, market-tested businesses, I am going to choose the latter every time. 

During the coming months, the American economy will be at the 

mercy of several environmental regulations from the Obama administration. These regulations will not generate jobs. They will 

generate significant costs for the businesses that create jobs. 

EPA’s endangerment finding, which would allow the EPA to regulate greenhouse gas emissions, is the most widely followed and 

probably the most onerous example. Unless Congress stops it, these 

regulations will put EPA in charge of the U.S. economy. 

The EPA would target more than 1.3 million commercial sources 

which the EPA defines to include office buildings, small businesses, 

schools, churches, prisons, and similar structures. The EPA estimates that an endangerment finding that doesn’t include legally 

suspect tailoring rules would cost small entities more than $55 billion. The Heritage Foundation says that it would lead to $7 trillion—with a T—in lost economic activity between 2010 and 2029 

and would kill almost 3 million manufacturing jobs by 2029. 

One administration official told the Wall Street Journal that, 

under the endangerment finding, the EPA was going to have to 

regulate in a command and control way, which will probably generate even more uncertainty. 

This is not the only economic threat posed by the Obama administration. The President is proposing tax increases on energy as a 

part of his latest $50 billion stimulus plan. One expert estimates 

that these new energy taxes would cost over 154,000 jobs by the 


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end of 2011, more than $341 billion in lost economic output, and 

more than $68 billion in lost wages nationwide. 

EPA has termed another set of onerous regulations boiler MACT. 

These regulations will set emission standards for hazardous air 

pollutants. The Council of Industrial Boiler Owners released a 

study last week that showed exactly how much damage the boiler 

MACT regulations will inflict upon the economy. For every $1 billion spent on upgrade and compliance costs, up to 16,000 jobs and 

$1.2 billion in U.S. GDP will be threatened. 

With regulations like these, the entire American economy is 

threatened. With unemployment hovering around 10 percent, 

America does not need more job-killing regulations. America needs 

Congress to focus on creating jobs and economic growth. 

In our economic system, it is private investors who take risks. Financial success is the potential reward. If investors believe that renewable energy sources are the future, then I encourage them to 

invest in these markets. It is not, however, in America’s interests 

to mitigate investor risk by guaranteeing them a market. 

It makes sense that a Democratic Congress that responded to our 

economic collapse by socializing losses will now seek to shift the 

risk of investing from private businesses to the government. 

In today’s hearing, the majority is effectively arguing that government should bet on winners and losers so investors do not have 

to. The model is backwards and reflects a fundamental disagreement on American capitalism. While I will gladly work with Democrats to lower taxes and other disincentives for investment, I cannot support a model that I believe is at odds with how our economy 

works. 

I thank the Chairman and yield back the balance of my time. 

The CHAIRMAN. I thank the gentleman. 

The chair recognize the gentleman from Missouri, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Mr. Chairman. I will continue to quote 

you about the Chinese eating our lunch and beginning on our dinner. I think that is exactly what is happening. 

Mr. Chairman, in the 1870s, Thomas Edison invented the light 

bulb. It is a unique creation here in the United States, and those 

light bulbs have been a part of the industrial component of the U.S. 

economy since the 1870s. 

General Electric will discontinue manufacturing the light bulbs 

that we know as incandescent bulbs at the end of this month and 

the United States will now purchase the CFLs from abroad, mostly 

from China. The glass tubes that are twisted, which helps in reducing the amount of energy needed, about 75 percent less energy, requires a lot of hand labor, and that hand labor, of course, is infinitely cheaper in China. So a unique American invention is now 

being manufactured almost exclusively in China and all of the people in this hearing room will in the future purchase these new 

CFLs after they have been imported from China. 

I think that should be a wake-up call, if there is one needed, and 

it is my hope that this hearing this morning will allow some additional information to be brought forth that will inspire the great ingenuity that has made America what it is to continue and recapture particularly those things that began on these shores. 

I yield back the balance of my time. 


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The CHAIRMAN. Thank you, Mr. Cleaver. 

Now we will turn to our first witness, who is Michael Liebreich. 

He is the Chief Executive of Bloomberg New Energy Finance. He 

is an experienced venture capitalist and entrepreneur who has 

helped build more than 25 companies. 

We welcome you. When you feel comfortable, please begin. 

STATEMENTS OF MICHAEL LIEBREICH, CHIEF EXECUTIVE, 

BLOOMBERG NEW ENERGY FINANCE; RAVI VISWANATHAN, 

GENERAL PARTNER, NEW ENTERPRISE ASSOCIATES; TOM 

CARBONE, CHIEF EXECUTIVE OFFICER, NORDIC WINDPOWER; AND MARK FULTON, GLOBAL HEAD OF CLIMATE 

CHANGE INVESTMENT RESEARCH, DEUTSCHE BANK 

STATEMENT OF MARK LIEBREICH 

Mr. LIEBREICH. Good morning, Chairman Markey and gentleman 

of the committee, ladies and gentlemen. First, thank you for inviting me here today. 

By way of background, I founded New Energy Finance in 2004 

to help investors and policymakers understand the economics of 

clean energy. I built a team of 140 experts around the world before 

we were bought at the end of last year by Bloomberg, the financial 

information provider. 

I will divide my remarks into two sections. 

The CHAIRMAN. Is the microphone on there? Can you try to turn 

on that microphone? Is it on? 

Great. Thank you. 

Mr. LIEBREICH. It is on. 

If you can pull up the slides. 

I will divide my remarks into two sections. First, when the slides 

arrive, I will provide an up-to-date picture of investment activity 

around the world. Secondly, I will comment more generally on the 

related issues of jobs, policy, and international competition. 

If we can move to the first slide. 

As you can see from my first slide, global investment in new 

forms of clean energy surged from under $50 billion in 2004 to over 

$170 billion just 4 years later. These figures exclude traditional 

forms of lower carbon energy, large-scale hydro, natural gas, and 

nuclear, though I would be the first to agree that these will play 

a significant role in the energy system of the future. 

In 2009, the volume of investment dropped by 7 percent to $162 

billion as the sector was hit by the financial crisis. At one point, 

valuations of clean energy stocks were down from their peak by 

around 70 percent before recovering some of their losses. It is 

worth noting that they are still double what they were in 2003, a 

compound return over the last 7 years of just under 10 percent per 

annum. 

The impact of the crisis on the industry could have been worse, 

and it will be tempting to think that the green stimulus programs 

around the world were the major factor in staving off disaster. 

However, although we identified a total of $184 billion of such 

funds allocated for clean energy alone, the fact is that in 2009 only 

9 percent of it reached companies and projects in need. 


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In the U.S., investment fell off a cliff in the aftermath of the Lehman collapse. On an annualized basis, it was only this year that 

it started to climb again as the American Recovery and Reinvestment Act funds started to flow. 

The world’s providers of concessionary finance, the IFC, European Investment Bank, Brazil’s BNDS, and so on, were much 

quicker in responding to the crisis, increasing their lending from 

just $7 billion in 2007 to $21 billion in 2009. The role of these multinational institutions and development banks has often been overlooked, and these figures do not include the Chinese banks. Their 

provision of cheap finance to manufacturers and developers has 

been a major factor in driving surging investment there. 

By 2009, China is absorbing nearly three times the level of clean 

energy investment as the U.K., the U.S., or Spain. In just the past 

5 months, the China Development Bank has provided $27 billion 

in concessionary finance to Chinese wind and solar companies. 

China’s leaders have supported the sector not only by providing 

cheap finance but also by creating domestic demand on a grand 

scale, setting local content rules, maintaining tariffs on foreign imports, as well as, of course, maintaining an undervalued currency. 

Before we become too pessimistic about the state of clean energy 

in the U.S., we should recall that it remains by far the world’s 

leading venue for investment. Even in clean energy technologies 

U.S. companies spend more as a percentage of revenue on research, 

and the U.S. stock markets continue to attract public offerings 

from companies around the world. 

However, there is no question that the period 2007 to 2009 saw 

Asia take over from the Americas as the number two region of the 

world for clean energy investment; and when we compile the figures for 2010, we will see that Asia has eclipsed Europe to take a 

global lead. 

Now, if I might turn my attention briefly to the question of U.S. 

policy, those who deride the U.S. for inaction are not correct. Not 

only do 30 States have clean energy portfolio standards, but there 

are also significant national programs, such as the renewable fuel 

standard, increasingly stringent CAFE standards, and substantial 

Federal R&D programs. Our research shows that ARRA, in particular its grants and loan guarantees, played a material role in 

keeping the flow of funding going during 2009 and 2010. 

What is missing is the sort of consistent policy framework that 

has driven the development of clean energy, first in Denmark, Germany, and Spain, then China, and now the other major economies. 

In 2008, the South Korean President, Mr. Lee Myung-Bak, presented a plan to cut the country’s carbon emissions by 30 percent 

from business-as-usual without jeopardizing growth. The Korean 

government will be investing 2 percent of gross domestic product 

over the next 5 years, and leading Korean industrial companies 

have responded by announcing investments of over $80 billion between now and 2020. 

Contrast this with the U.S., where the industry’s production and 

investment tax credits have in the past been allowed to expire 

every 2 years. A highly effective ARRA program may not get extended, and in California proposition 23 is targeting the repeal of 

AB–32. Alone amongst the major economies, U.S. negotiators had 


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to make a commitment under the Copenhagen Accord to cut carbon 

emissions without national legislation in place to deliver it. 

It was Winston Churchill who said the Americans will always do 

the right thing once they have exhausted all the alternatives. I 

have no doubt that the U.S. will at some point wake up to the strategic necessity and growth opportunity offered by a shift to clean 

energy. I only hope other countries will not in the meantime have 

established an unassailable industrial lead. 

Many thanks for your patience in listening to me. 

[The statement of Mr. Liebreich follows:] 


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The CHAIRMAN. Thank you very much. 

Our next witness is Dr. Ravi Viswanathan. He is a general partner at New Enterprise Associates, where he focuses on energy and 

growth equity investments. 

We thank you for being here, Doctor. Whenever you feel comfortable, please begin. 

STATEMENT OF RAVI VISWANATHAN 

Mr. VISWANATHAN. Chairman Markey, Ranking Member Sensenbrenner, members, thank you very much for inviting me here. It 

is truly an honor. 

I appear before you here today as a general partner of New Enterprise Associates, or NEA. NEA is, by assets under management, 

the largest venture capital firm in the country, with $11 billion 

under management. Through our 30 years of history, we have 

funded over 650 companies and have had over 160 of them go public. Our 50 largest companies have created over $65 billion in revenues and have created hundreds of thousands of jobs in this country. Today we have a global footprint, with offices in India and 

China and roughly 20 percent of our committed capital targeted at 

emerging markets. 

In the past, the U.S. VC industry has played a pivotal role in developing industries such as biotechnology, computing, medical devices, semiconductors, telecommunications, and the Internet. We 

deploy our capital in rapidly expanding companies which have the 

highest potential for long-term economic growth and job creation. 

According to the National Venture Capital Association, U.S. VCbacked company revenue has equated to more than 22 percent of 

U.S. GDP; and over the past 3 years alone VC-backed companies 

have accounted for three times more job creation than the private 

sector taken as a whole. 

Today, the energy technology industry represents one of the most 

compelling investment opportunities in the history of venture capital. I serve as the co-head of our energy practice, overseeing more 

than 30 portfolio companies here in the U.S. that have raised a 

total of $2 billion in capital. Our portfolio includes investments in 

sectors such as solar, wind, nuclear, advanced battery, smart grids, 

electric vehicles, and energy efficient building materials. 

Regarding the current U.S. clean tech landscape, the U.S. has 

long been the home of great innovation in clean energy technology, 

which continues to present a compelling opportunity for both entrepreneurs and venture capitalists. 

Though the U.S. continues to be the home of the world’s best 

clean energy innovation, the U.S. has lost its leadership to China, 

Japan, and Germany in clean energy manufacturing deployment 

and is challenged and threatened by emerging economies such as 

India, South Korea, Malaysia, and the Philippines. I can say that 

from firsthand knowledge, as I spend about a third of my time in 

Asia trying to understand how these economies are doing what 

they are doing in clean energy. 

These nations have outpaced the U.S. in recruiting, incenting, 

and developing domestic manufacture of solar, wind, and battery 

technology. We are not the market leader in producing and supplying this high-growth industry and have ceded our historic leadVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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ership in manufacturing of these key technologies to other nations. 

As one example, the U.S. market share for solar manufacturing has 

fallen from 45 percent in the mid-1990s to roughly 5 percent today. 

Prior to the Recovery Act, this paradigm of developing innovative 

technology in the U.S. and exporting manufacturing to poor nations 

has been driven primarily by a significant imbalance between U.S. 

and foreign tax policies and incentives. 

Contrary to popular belief, low labor costs have not been the 

most important variable in this equation. Up-front manufacturers’ 

incentives, long-term tax holidays, and end-market incentives have 

been frequently as important, if not more important, variables influencing U.S. companies as to where they should establish their 

manufacturing facilities. 

Incentives from foreign nations have often totaled as much as 40 

or 50 percent of the costs of a new manufacturing project. In addition, healthy demand side incentives such as national renewable 

energy standards, feed-in tariffs, and direct government loans and 

tax credits for the deployment of clean energy technology have 

made relocating U.S. manufacturing facilities overseas even more 

attractive. 

Without competitive incentives for companies to stay in the U.S., 

this Nation’s best manufacturers have had no choice but to look 

overseas to remain competitive in their industries. The result has 

been a loss of both direct and indirect jobs, a loss of intellectual 

property, and a loss of economic growth here in the U.S. for one 

of the fastest-growing global industries of the 21st century. 

In describing this trend, I must remind the committee that venture capitalists and entrepreneurs are by definition optimists. I believe the U.S. can be a leader in clean energy manufacturing and 

deployment, and I have witnessed this firsthand. We are not giving 

up on the American entrepreneur, and I hope you won’t either. 

I am grateful to this committee and the current administration 

for recognizing the need to level the playing field for U.S. clean energy manufacturers. With the help of the tax policies and incentives put forth in the Recovery Act, this Nation’s best energy technology companies are expanding their domestic capacity, reopening 

and retrofitting closed factories, rehiring and retraining new workers, and rebuilding local economies depressed by the great recession. 

One of the most important policies in restoring American competitiveness in clean energy is the section 48C Advanced Manufacturing Tax Credit, providing a 30 percent tax credit for investments in facilities that manufacture clean energy products such as 

solar panels and wind turbines. 

This program awarded $2.3 billion in tax credits to over 100 companies in 43 States and was oversubscribed with requests of over 

$8 billion in projects. Four of our most promising companies were 

awarded this credit and were able to expand manufacturing here 

in the U.S., creating jobs, thanks to your efforts in the Recovery 

Act. 

One of these companies was Suniva, one of our companies. They 

were able to expand their solar manufacturing from 33 megawatts 

to 170 megawatts in Norcross, Georgia, hiring an additional 60 


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workers and creating more than 100 construction jobs in an economically suppressed suburb of Atlanta. 

This Congress has put forth very important legislation which 

puts a price on carbon. Putting a price on carbon by definition will 

reduce risk for all energy markets, decreasing the cost of capital 

and increasing investment in renewable energy. We believe this is 

an important policy for the U.S. to continue to attract capital to 

fuel the energy needs of our 21st century economy. 

Growing a strong domestic clean energy manufacturing industry 

requires competitive supply and demand side incentives and policies. In order for the U.S. to be truly energy independent in a world 

with clean, cheap, renewable energy, we need to reinvigorate our 

manufacturing base. We can’t substitute our dependence on foreign 

oil with batteries, solar cells, or wind turbines made overseas. 

As I have discussed, one of the most important pieces of the Recovery Act was the section 48C Advanced Manufacturers’ Tax Credit. In addition, demand side incentives such as the 1603 grant program for clean energy deployment have been critical to sustaining 

a healthy clean energy economy for U.S. manufacturers. We need 

to make these tax credits permanent and refundable, as put forth 

by Members of this Congress. 

In addition, we need to focus on scaling up and commercializing 

this country’s best technologies through public-private partnerships. Countries such as Germany, Japan, and China have all dedicated funds to scale up the commercialization of their technologies. 

We also need an effective national renewable electricity standard 

and energy efficiency standard with an incentive system for utilities to move forward without delay. Today, 30 States have already 

adopted Statewide renewable energy standards, but those policies 

are at risk should the Federal Government fail to act with certainty to adopt a national standard. 

In closing, we have never seen a greater opportunity to put capital to work in support of U.S. entrepreneurs. We believe this is the 

greatest economic opportunity for our industry, for our entrepreneurs, and for our country. 

Thank you very much for inviting me today. I look forward to 

your questions. 

[The statement of Mr. Viswanathan follows:] 


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The CHAIRMAN. Thank you, Doctor, very much. 

Our next witness is Tom Carbone. He has had extensive experience in the renewable energy sector. He currently serves as the 

CEO of Nordic Windpower, the largest technology developer and 

manufacturer of two-bladed utility scale wind turbines. He is also 

chairman of the Princeton Energy Group, a California-based developer of global renewable energy projects. 

Welcome, Mr. Carbone. 

STATEMENT OF TOM CARBONE 

Mr. CARBONE. Thank you, Chairman Markey and Congressman 

Cleaver. We share your passion on the topic today of The Global 

Clean Energy Race. 

My name is Tom Carbone. I am chairman of Nordic Windpower, 

an early stage technology developer and manufacturer of very 

unique wind turbines for Community and Wind Energy products. 

This consists of on-site wind power and small-scale wind farms, 

typically less than 20 megawatts, but could be as large as 100 

megawatts, locally connected to the distribution voltage, close to 

the load. 

Our products and people are focused on making Nordic Windpower a leader in this segment. Our proven two-bladed technology 

provides for less weight, higher reliability, ease of installation and 

operation, and, most of all, the lowest cost of energy compared to 

traditional designs. 

Our story is about technology that was born in Sweden, a company that was started in the U.K., and today we are a U.S. corporation focused on a very interesting and growing segment within 

our domestic wind business. 

We formed the company in late 2007 as a U.K. limited corporation. We have headquarters in Berkley, California, an assembly facility in Pocatello, Idaho, and an engineering unit in the U.K. Last 

year, we incorporated Nordic’s parent in the U.S. as a Delaware 

corporation. 

We employ approximately 40 people—that is double what we had 

at the start of this year—and we will double our employment again 

within the next 9–12 months. There are many more people employed within our supply and installation partner chain. Each of 

our one megawatt wind turbines provides enough clean electricity 

for the annual consumption of 250 to 300 American homes and reduces 300 tons of CO2 emissions. 

We acquired the turbine technology in Sweden, which was the result of a long-term R&D prototype program which was sponsored 

by the Swedish government, universities, and private entities at a 

cost of about $75 million. We have invested well over $10 million 

in further improving that technology for local market needs. 

Since late 2007, we have completed three rounds of financing 

from venture capitalists in the U.S., the U.K., and Europe, for a 

total committed capital investment of about $58 million. 

We are the beneficiaries of two Recovery Act provisions. In July, 

2009, the company secured a $16 million DOE loan guarantee 

which was part of a $25 million project to manufacture and commercialize this one megawatt wind turbine in the U.S. 


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The loan guarantee is a critical form of financing for Nordic 

Windpower and for our future development; and it gives us the 

wherewithal to create jobs, invest in the supply chain, invest in 

tooling to become more efficient and to offset some of our technology development costs. It is a loan. We have to pay it back. To 

date, we have not closed on this loan, but we are working diligently 

with the DOE to expedite the closing of the loan, which, as I said, 

is critical to our development. 

It is our view that this program could be improved by adopting 

some of the existing application due diligence and closing processes 

that already exist within our government, within other agencies 

such as U.S. OPIC and USDA, particularly to address the needs of 

small business enterprises like ourselves. We are also the recipient of $3 million in Advanced Energy Manufacturing Tax Credits, the 48C program that Dr. Viswanathan 

mentioned. This money will be used to expand and re-equip our 

manufacturing facility. This incentive will have a positive impact 

on our cash flow in the future when we have a tax liability. 

My point is to date we have not deployed one dollar of the Recovery Act provisions, but we intend to and are grateful for the awards 

that we have. 

Regarding our location decisions, when we started in 2007 we determined that there were three principal markets, the U.S., Europe, and China. It is our view that China was saturated with 

nearly 100 domestic suppliers and JVs that are competing predominantly on low cost and low margin and secondarily on quality and 

reliability. This market could be especially challenging for an entry 

foreign company like ourselves. 

We saw limited opportunities for new entrants into the slowergrowing European on-shore wind markets. 

Thus, the strength of the U.S. market’s growth and potential for 

success was an obvious entry point for Nordic Windpower and in 

particular the community wind sector, which was relatively 

unaddressed by the major wind turbine manufacturers. 

The company is in the process of establishing and relocating to 

a new center of U.S. operations in the Midwest wind belt. We expect that employment at that new location will increase to 250 over 

the next 5 years and will require at least $18 million in investment. 

To say the least, wind turbine manufacturing is capital intensive, 

where significant amounts of cash can be tied up in the supply 

chain for working capital and in equipment to manufacture these 

units. As such, at an early stage company like ours, a large emphasis is on near-term effective cash value of incentives being offered 

at the local, State, and Federal level. 

We started to deliver and install wind turbines this year, and we 

expect to deliver and service over 100 wind turbines over the next 

2 years, totaling nearly $120 million in sales revenue. Our 5-year 

plan includes new product introductions and shipments of more 

than 750 units. 

We will deliver and install our sixth N–1000 wind turbine this 

year at Fort Wachuka in Arizona. This is the first utility scale 

wind turbine on a U.S. Army base. We have two wind turbines supplying power, one to a school in Indiana and another to a municiVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00030 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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pality; and I would like to mention that three of our wind turbines 

were exported and installed in a project in Latin America with the 

‘‘made-in-America’’ stamp of quality on them. 

In closing, I would like to provide some recommendations, if I 

may. My recommendations are based on three programs that exist 

today or are contemplated that have already benefited from a considerable amount of time and bipartisan cooperation. My recommendations are intended to make the programs more effective 

for innovative U.S. energy companies like ours so that we can compete more effectively. 

Number one—and you have heard it from Dr. Viswanathan— 

pass the Federal Renewable Electricity Standard, the RES. The 

American Wind Energy Association estimates that a quarter of a 

million jobs will be created by this. 

The CHAIRMAN. If you could, Mr. Carbone, try to summarize 

quickly. You will get a chance to expand in the question and answer period. 

Mr. CARBONE. Two more recommendations: Extend the Recovery 

Act 1603 program and allow for the 48C manufacturing tax credit 

to be refundable so that early stage companies like ours could use 

them today, as opposed to in the future when we have a tax liability. 

Thank you. 

[The statement of Mr. Carbone follows:] 


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The CHAIRMAN. Our final witness is Mr. Mark Fulton. He is the 

manufacturing director and global head of climate change investment research and strategy at Deutsche Bank. He has nearly 30 

years of experience as an economist and a strategist. 

We welcome you, sir. 

STATEMENT OF MARK FULTON 

Mr. FULTON. Chairman Markey, Ranking Member Sensenbrenner, and members of the Select Committee on Energy Independence and Global Warming, thank you for the opportunity to 

provide testimony on the global clean energy race. 

In my role in the assessment management division of Deutsche 

Bank, I coordinate a research team that looks at the investment 

opportunities that climate change and associated clean energy technologies offer around the world. Since we in asset management 

started issuing educational white papers on these themes in 2007, 

the basis of our investment thesis has been demographic pressures 

on resources and environmental externalities as identified from scientific sources, combined with energy security and economic opportunity, which has led to government policy response at all levels, 

creating new technologies and industries as companies respond. 

As we sit here today, the U.S. Federal and indeed State governments are at a crucial crossroad in their policy stance on clean energy, whether to take action to deepen and extend policies or will 

they fall behind other countries around the world. The stakes are 

high in terms of energy security, new jobs and industries and the 

climate. Certainly in a U.S. context, policy at Federal, State, and 

local levels are all important. 

This year in the United States has been a challenging one for 

those looking to invest in these new clean energy industries on a 

longer-term basis. Uncertainty abounds. At the Federal level, given 

political complexities, there has been no energy or climate bill 

passed out of the Senate to complement the comprehensive approach taken by the House of Representatives in passing the American Clean Energy and Security Act that directly tackled climate 

issues and provided significant funding to clean energy and energy 

efficiency. At the same time, the most comprehensive climate and 

clean energy provisions of any State are under threat from California’s Proposition 23, which seeks to suspend the State’s Global 

Warming Solutions Act and would have a significant impact. 

Working for investors as an asset manager, these uncertainties 

are discouraging to capital deployment in the U.S. in the long term. 

We have formulated a simple but fundamental framework for assessing regulatory environments around the world which we call 

TLC—transparency, longevity, and certainty. Investors need transparency in policies to create understanding and a level playing 

field. Longevity means policy has to match the time frame of the 

investment and stay the course. Certainty refers to knowing that 

incentives are financeable. In tech terms, TLC should result in a 

lower cost of capital for projects while still delivering a fair and 

market-related return to capital. 

For instance, I believe that U.S. renewable policies could include 

more elements of TLC. State-level renewable portfolio standards 

set targets for near deployment. However, in most cases, these do 


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not have enforcement measures nor penalties to ensure they are financed. Renewable energy projects have therefore relied much in 

the short term on the complementary Investment Tax Credit and 

Production Tax Credit equity programs to get financed. Due to lack 

of longevity, this has produced an on-off pattern in renewable deployment. 

Since the financial crisis, the tax equity market has not been 

strong and so the American Recovery and Reinvestment Act of 

2009 introduced the Section 1603 Treasury cash grant. This indeed 

has been successful in generating projects in the past year, especially when combined with the Advanced Energy Manufacturing 

Tax Credit to encourage domestic production. But these programs 

sunset in 2011, and the renewable project pipeline is already under 

pressure as the tax equity market still struggles. As outlined in a 

paper released on September 16th by U.S. PREF, this puts over 

100,000 jobs at risk. The Department of Energy’s sections 1703 and 

1705 loan guarantee programs for early and later stage clean energy projects also sunsets in 2011. 

Looking around the world, we see many countries embodying 

TLC in their climate and energy policies and achieving capital deployment. As a German bank, we have knowledge of the German 

experience in particular. 

In a recent paper, we looked at the major elements of a strong 

policy regime. In the passage of the EEG in 2000, which was updated in 2009, Germany established a feed-in tariff regime that 

supports the EU-mandated goal of 20 percent renewable energy as 

a share of electricity by 2020. This embodies TLC for investors. The 

results have been 300,000 jobs, renewable energy as a 13 percent 

share of electricity and rising, a rapid fall in solar PV costs in particular leading to lower tariffs on the digression schedule with a 

forecast of grid parity by 2013. 

In summary, to build a secure, vibrant, 21st century clean and 

green energy sector, U.S. policy has to engage in TLC in some policy package. The fully comprehensive approach, such as embodied 

in the American Clean Energy and Security Act, is certainly a fundamental framework with strong elements of TLC. However, that 

is clearly open to a great deal of debate. 

In the Senate, a number of bills have been proposed. Indeed, 

even without a carbon market, a comprehensive and strong national renewable electricity standard complementing State RPS, 

combined with long-term financial incentive programs that have 

longevity and a clean energy bank looking at loan guarantees, as 

well as continued focus on energy efficiency, would be very encouraging. I happen to believe that State-level feed-in tariffs, if they 

spread, would be positive. 

We would also like to note Congressman Inslee’s national feedin tariff proposal in the Renewable Energy Jobs and Security Act. 

In closing, I thank the Select Committee on Energy Independence and Global Warming for this opportunity to testify and share 

our perspective. I applaud the committee’s commitment to addressing these important energy and climate issues. This is not just a 

matter of good policy for the United States, but it is a global movement happening that is creating economic activity in a race to 


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scale, an so there is a question of urgency in whether U.S. citizens 

will share in the new wealth being created. 

Right now, by extending what is already working in the Section 

1603 Treasury cash grant and the Advanced Energy Manufacturing 

Tax Credit, Congress can help to underpin a growing industry and 

create or preserve valuable jobs. 

Thank you. 

[The statement of Mr. Fulton follows:] 


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The CHAIRMAN. Thank you, Mr. Fulton, very much. 

Now I am going to turn and recognize the gentleman from Missouri, Mr. Cleaver, for as much time as he may consume in his 

question and answer period. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

Let me apologize to the panel. I have two other committee hearings that started at 10 o’clock, Homeland Security and Financial 

Services. One is here, and one is in another building. So I apologize. This is, to me, extremely important. 

Mr. Carbone, thank you for being here. Thank you for the great 

work your company is doing. 

This is a somewhat convoluted question, but large Chinese windmills are selling for about $685 per megawatt of capacity. In the 

United States, it is about $825 per megawatt of capacity. So the 

Chinese are able to sell it infinitely cheaper. That is probably because of—and they probably violate some WTO rules. But, in addition to that, they are getting government-backed loans to do the 

work. And when you combine that—and they are doing land deals. 

There is a chance that China could suffer the same fate that hit 

us in December of 2007 at the beginning of the recession, which is 

the collapse of the real estate market. So their plants are connected 

to land deals and the government is backing the loans. 

Do we have to wait on a potential collapse, do you think, in the 

Chinese economy before we have a chance to catch up, or is there 

something that we can do to not only catch up but to supersede the 

Chinese? 

Mr. CARBONE. Thank you for the question, Congressman Cleaver. 

In our view, and in particular my view, in our analysis it was 

difficult for us to export to China from the United States with our 

wind turbine. Although a large amount, the majority, of our parts 

are sourced here in the United States, a fair amount of the value 

is today imported. That was the result of a very constrained local 

market here in terms of the supply chain in 2008 and 2009 when 

we had a large booming business. It caused us to go offshore. We 

are currently domesticating a big part of our supply. 

Since we have gone global with our supply chain, we are finding 

very competitive domestic supply for wind turbine components. 

There is capacity. I am sure that has driven down the supply. 

My figures are a bit different than yours in terms of what is the 

wind turbine package to a wind farm here in the U.S. Our pricing 

and the pricing of our competitors are in excess of 1.2 to 1.5 million. We have seen Chinese supply coming at about 1 million a 

megawatt installed. However, we have also seen that it is more 

than just the product, it is the process and the people behind that 

products and how these products are serviced over the 20 years 

that they are expected to operate. 

So I think today there is competitiveness within the U.S. supply 

chain. It is actually improving, these incentives we are talking 

about today, particularly the ones that Nordic is trying to employ. 

It will increase our productivity and, therefore, our competitiveness. 

It will be a fight for sure with Chinese wind turbines and Korean 

wind turbines coming to the U.S., to our shores, but I think it is 


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a good fight. It is the one that we really, I think, have the opportunity to combat. 

Mr. CLEAVER. Let me ask any or all of one question: If you were 

sitting here and necessarily engaging in a debate with some good 

people who think differently, who would say that we can’t expend 

large amounts of taxpayer dollars at this time because we need to 

concentrate on reducing or eliminating the deficit, so every discussion that surfaces is going to have that as a background, do we 

spend money to make sure that we are a 21st century nation, or 

do we forget that and deal with the deficit? 

I am just curious about what any of you would say that in that 

hypothetical—no, it is not a hypothetical. It is a very real debate. 

Mr. CARBONE. Maybe I could jump in on that first. 

Yes, I think, given the choice, reducing the deficit has to be a priority. 

Mr. CLEAVER. Even if we fall further behind? 

Mr. CARBONE. No. Let me finish my statement. 

Mr. CLEAVER. Go ahead. 

Mr. CARBONE. I think what we need, though, is the market signals. We need a Renewable Electricity Standard to actually provide 

a standard market signal and let the markets—let the supply base, 

let the turbine manufacturers, let the solar companies respond to 

it competitively. In my mind, that would be a much stronger signal, 

particularly a long-term policy signal. 

Mr. LIEBREICH. I think, first of all, it is very difficult to have that 

discussion with somebody if they haven’t first agreed that there is 

a benefit to this shift towards cleaner energy and towards, in a 

sense, energy that comes out of technology rather than energy that 

comes out of the ground. So that is first. So that is my caveat before I start. 

Mr. CLEAVER. Well, that ends it, pretty much. 

Mr. LIEBREICH. Well, it certainly hinders the discussion with 

some folks. But there are a lot of people who actually are in the 

middle camp, where they see the need, they see China forging 

ahead, Korea is about to start, Europe, and actually do see the 

need to take action. 

And then the issue that you raised specifically around the deficit 

is one that I think one can deal with, because I think there are 

ways of designing policy that don’t just require checks to be written 

by either Federal or State governments. So renewable portfolio 

standards, if they had the appropriate teeth, would actually 

achieve a lot of that. 

It is not necessary just to incentivize, just to pay money for the 

good energy. You can actually mandate a volume and then let the 

market decide how to fulfill that. But if you go that route, then it 

does have to have teeth. There is no point in having a renewable 

portfolio standard that can be bought out at such a low price that 

it is essentially ineffective. 

There are other areas where there are barriers to switching to 

clean energy. There are other areas where some of the externality 

costs of the alternatives ought to be priced in. 

So I think that the important thing is to go through the policy 

and look at ways of doing it that don’t hit the budget. If you believe 

it is important, then that is the challenge ahead. 


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Mr. VISWANATHAN. Congressman Cleaver, I think it is a very fair 

discussion on wanting to reduce the deficit. What I would say if I 

were in your shoes and discussing it with these other folks is that 

it comes down to a few things. It comes down to job creation, global 

competitiveness, and energy independence. If we have these incentives, jobs will be created here. If you don’t have these incentives, 

for sure they are going to be created elsewhere. 

Here is what the frightening scenario is, and I can say this from 

traveling in Asia: These economies, they have speed and capital 

and scale and they are exercising that in the manufacturing side. 

Now that they are getting leadership positions on the downstream 

part of these clean energy technologies, they are doing something 

that we hadn’t anticipated them doing, and they are going upstream and they are starting to innovate. Once they start innovating, then our bulwark, our strength, our fortress which we have 

had for hundreds of years, which is innovation, starts getting compromised. 

So I think with while the short term is obviously to focus on the 

deficit, I would encourage everyone to start thinking about intermediate and longer term, because that trend, empirical data suggests it is happening. It is happening in solar, it is happening in 

wind, it is happening in batteries, it is happening in electric vehicles. So that is the fear that my partners in our industry face when 

we look at these global factors. 

Mr. FULTON. I would echo what I have heard. One obvious point 

about the budget, it has got a lot of numbers in it. Tax spending, 

it is a huge animal. And it is really up to the United States to decide where it wants to spend and tax within that balance as it 

brings the deficit down and how important it feels that being on 

the front end of the clean energy race really, in terms of its longterm competitiveness. So it is a question of priorities. And we believe that this is a strong priority. 

I think the second point, bringing up what Michael said, was 

that there are different ways to construct incentive programs. Some 

run through the budget, some run directly into the rate pay base. 

And essentially a lot of the European do not run through the budget. So then there is a question of, do you think that is the best 

thing, an electricity base. 

So there are ways of constructing these incentives. You can do 

it, as long as you do it with TLC is our point, fine, tends to get 

it done. And if you don’t get longevity that is run through the 

budget, then of course that is an issue. 

Mr. MARKEY. Does the gentleman need more time? He can continue. 

Mr. CLEAVER. Well, of course there is no TLC up here on the 

Hill. I agree, we have got to make some choices if we are going to 

do this. But my fear is, while we are struggling with the choices, 

we fall further behind. And nothing moves swiftly here. And I 

guess, I am not looking for you to solve this dilemma, but you have 

helped craft, I think for me at least, an argument. 

What do you say, though—I mean, Mr. Sensenbrenner my friend 

left. He had another commitment. But if this is always presented 

as some kind of new way to tax the public, you poison the public 

to the need to move and move swiftly to create. 


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Mr. Fulton. 

Mr. FULTON. Well, I think it is interesting, actually, we talk a 

lot about costs, but there is still a big debate about how to measure 

those costs. So at a very narrow level we look at the so-called cash 

costs of deploying, say, solar against coal. But of course what we— 

the wider debate is what are the externalities? What are the real 

costs of those technologies, of those fuel sources? And that is when, 

of course, it gets more difficult because we are talking about economist externalities. But when you start loading in the externalities, 

if you happen to believe in the environmental impacts, health impacts and so on, then you get very different numbers as to what 

is yielding. 

I think the second point I would like to say is that we hear a 

lot about how this is just a lot of subsidies and keeping the market 

going when it should just be doing it itself. I think the point is that 

we particularly see these, as I would like to call them, incentives 

to scale. Essentially, these are new industries scaling up. Every 

new industry, really big industry, you go look at history, gets some 

help from government when it is scaling, generally. And so we 

know fossil fuel industries around the world, by the way, have between 3- and 500 billion in subsidies, which is calculated by the 

IEA. So it is not a level playing field anyway. 

And secondly, what I would say to you is, if you think about it, 

what we are trying to do is incentivize the scaled deployment of 

these new industries. And as we do that and their learning curve, 

their costs come down. And we are hearing that. The Germans believe that as they incentivize the reply side response of solar PV— 

and we have seen the crash in prices, which they are now reflecting—then we are going to see grid parity against the fossil fuels 

within 3 to 5 years maximum. 

So we keep talking about, oh, always subsidized. No. These are 

incentives to scale, to develop industries to make the clean economy work. And you are right, at the end of the day, the next 5 

years, I think the next 5 years are very crucial because grid parity 

is sort of coming as these industries build. And during that process 

have you incentivized your own manufacturing base and own 

economies to participate in that? 

Mr. CLEAVER. Mr. Liebreich. 

Mr. LIEBREICH. I have had a minute or 2 to reflect on how we 

can perhaps help you to persuade Mr. Sensenbrenner to approve 

some of the measures that you might want to. And I think that I 

would probably start by talking about the risk to the U.S. economy 

is not going to be defined by the odd program here or there and 

a few billion more or less of this or that grant program or loan 

guarantee. The issue that really is at stake here is whether the 

U.S. is going to be a price taker on energy in its economy for the 

next 2 decades, 50 years, 100 years. 

If you go back in history, while the U.S. was a net exporter, was 

producing enough energy domestically for its own demands, that 

was not an issue. And what has happened, as U.S. oil has depleted 

and imports have gone up and up, the U.S. is a price taker on energy. And this has been at the root of a number of different episodes of economic instability which have actually destroyed enorVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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mous numbers of jobs along the way, and it is because the U.S. is 

a price taker on energy fundamentally. 

Now, you move to these technologies, and I think—and the analysis that we do and my fellow panel members will confirm—that 

these energy technologies will become cheaper in the long term 

than fossil fuels. And so the U.S. has an opportunity—so the world 

will shift to these technologies. It won’t be fast. We are talking decades, sometimes perhaps many decades, but this is the shift that 

will happen. 

And then the question is, is the U.S. going to be a price taker 

on those technologies? You used the example of compact fluorescent 

light bulbs, LEDs. We are going to be buying those from Taiwan. 

Are we going to be a price taker on our own electricity power and 

on our main fuel sources because we have not developed these here 

in the U.S.? 

And I think there is an opportunity. I think this is the real debate. And so if you can win that debate about whether the U.S. has 

to lead in these technologies, then the discussion with Mr. Sensenbrenner and his colleagues perhaps is about how to do that, rather 

than about the desirability of doing that. And the evidence that 

perhaps could contribute to that is evidence around the economics 

of this stuff. 

The last 5 years has been very unusual because, first of all, the 

amount of demand that suddenly arrived in the industry overwhelmed the supply chain. From 2004 through to 2008, the price 

of clean energy went up, not down. The long-term history is it 

comes down. There is an experience curve. This stuff is driven by 

developing technology, developing logistics, developing supply 

chain, developing skills, developing financing mechanisms, and so 

on, and the price comes down. 

And the last 2 years we have seen that really, we have seen the 

costs come down in a way that has caught up with those trends. 

And I think that when you start to delve into the fact that you 

have fossil fuels getting more expensive and you have fossil fuels 

causing accidents like what we have seen, the tragedy in the Gulf 

Coast that we just all lived through, and then you contrast that 

with the costs coming down, and you can provide data on that, this 

is something that yields to analysis. 

Then I think that maybe the debate moves on from whether we 

have this program or that, and is this just tax and spend, or is this 

just a subsidy and will it just stop? And the fact that Spain’s solar 

program blew up because it was poorly constructed, Spain’s wind 

program certainly didn’t and Germany’s solar program didn’t and 

China’s solar and wind program certainly didn’t and Brazilian ethanol programs certainly didn’t. There are plenty of examples one 

can bring to bear that back up this thesis that this is the future 

of the energy industry. And America really needs to get into the 

price giving and not the price taking position. 

Mr. CLEAVER. Thank you very kindly. 

Mr. MARKEY. We thank the gentleman very much. And I think 

that the gentleman from Missouri in his questions has laid out and 

your answers have helped to lay out the challenge for America. 

And a couple of you mentioned this challenge to AB 32 in California. You mentioned that there is now an attempt to repeal the 


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clean energy laws of California. And therein lies our challenge, because that attempt to repeal the clean energy laws in California is 

being financed by the Koch brothers, Tesoro, and by Valero, three 

companies with oil refineries in Texas. So Texas is financing— 

Texas refineries are financing an effort to repeal California clean 

energy laws. And so what is at stake there? Who are the winners 

if the Koch brothers, Tesoro, and Valero win? The winners are 

those three companies and China. Those are your two big winners 

up on the scoreboard. 

The losers, of course, are anyone who was interested in creating 

a domestic renewable energy industry here in the United States 

with the potential to create hundreds of thousands of millions of 

jobs. 

Mr. Fulton, can you talk about what is at stake in California in 

terms of this battle over AB 32 and what it represents if that law 

is actually repealed by these oil refineries in the United States financing that effort? 

Mr. FULTON. Yeah. It is a suspension, as you know, until California reaches 5.5 percent unemployment for a number of quarters, 

which we haven’t seen for a long, long time. But technically it is 

a suspension, but people would suspect it would last for quite a 

while. 

And we actually quote the U.C.-Berkeley paper that has looked 

at this. The U.C.-Berkeley paper that has looked at this very comprehensively I think is very instructive. But essentially I think one 

of the points, apart from the fact that it would have a very significant on what is going on in California itself—and of course there 

is a lot of talk about how AB 32 then spills over into all of California’s other green laws—but, essentially, everyone would assume 

that that would put a very major stop on the clean and green development in California. And I think, as was pointed out, the signal 

effect within the United States, and you could even say globally, 

might be quite significant because California has always been seen 

as a leader, a global leader to some extent, in this whole—— 

Mr. MARKEY. And why would three oil refiners in Texas want to 

stop that law in California? 

Mr. FULTON. Well, I am not an oil expert, but I assume they feel 

that that is something that would be good for them. I don’t know. 

Mr. MARKEY. I guess you don’t have to be Dick Tracy to figure 

out why they would be opposed to it. The oil refining industry 

clearly has a stake in putting an end to this clean energy revolution. Not all of them. There are some that are willing to make the 

transition. But these three companies are clearly intending on 

keeping us dependent upon imported oil on the one hand, and not 

putting in place a domestic policy that challenges China in terms 

of the manufacturing of the new technologies that inevitably are 

going to be deployed here in the United States, if for no other reason than States have put on the books their own laws that are 

going to require renewable energy to be deployed, and local governments increasingly as well. 

Mr. Viswanathan, you mentioned AB 32 as well I think in your 

statement? 

Mr. VISWANATHAN. I didn’t. But I think my comment is I would 

echo everything you have said. I think it would be disastrous. If 


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you look at what has happened in innovation, and my colleagues 

have eloquently pointed out about how costs would come down. So 

the whole field of material science, which is the underpinnings of 

a lot of these technologies, has grown up. It used to be science 

projects in universities. We spun them out of universities, we 

helped scale them. And guess what happened? That happened 3 to 

5 years ago. In that period of time, you had an economic meltdown, 

you had capital that fled the system, you had China with their 

commitment and resolve take over. And so you keep getting body 

blows, and this is yet another one. 

So this really doesn’t help us at all in what we are trying to do, 

which is take these technologies which have actually come of age. 

And this is when you want to press fast-forward and get into that 

next level. You know, these negative incentives can be disastrous. 

Mr. MARKEY. Do any of the rest of you wish to comment on how 

disastrous a repeal of the California clean energy laws would be? 

Mr. Liebreich. 

Mr. LIEBREICH. I could comment on how disastrous it would be. 

I think, again, we don’t need to be Dick Tracy to know it would be 

disastrous, because California is seen not just as a U.S. leader in 

essentially capping its energy use per capita, but it is also actually 

a global leader. 

But I want to comment on I think one aspect of this, which is 

that even with money from oil companies, it wouldn’t be threatening. There would be no chance of success if they were not tapping into a strain of concern and skepticism amongst a proportion 

of the population. And so I think having—except that it would be 

catastrophic, it is something that definitely will set the industry 

back considerably. Perhaps some thoughts on what could be done 

to create a protection against that, because I think that the debate 

has become too much about subsidies or not. 

Mr. MARKEY. Just so I can say this. You know, the Koch brothers 

also finance Tea Party activities. And it does tap into something 

that is quite deep, because 70 percent of Tea Party members do not 

believe in evolution. So to the extent to which they don’t believe in 

evolution and they don’t believe in clean energy, I guess they are 

tapping into something. The question is, are they tapping into anything that is valid scientifically? And if they pour millions of dollars into that effort, do they drive an ultimate result that is completely at odds with everything that we know scientifically and 

technologically that we should be advancing as a strategy in our 

country? 

So I understand what you are saying, that you are tapping into 

something. But I just want to define that they are also creating the 

thing that they are tapping into, which is this defiance of 150 years 

of scientific breakthroughs in our society. 

Mr. LIEBREICH. I agree. I have speculated privately as to whether 

there is a correlation between those who deny evolution to those 

who don’t believe in climate change to those who don’t believe we 

can ever change to new energy sources. 

Mr. MARKEY. Well, if the same source of funding is providing the 

public debate on those issues, then while you are looking at the 

people who are reflecting what they are reading, what they are 

hearing, the questions that are raised, you have to understand that 


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it all goes back to these oil refiners that are financing these efforts—and not necessarily to advance the goals of denial of evolution—but, rather, to use those people as a way of then killing 

things that they believe might interfere with their own economic 

objectives, which is the continuation of massive importation of oil 

into the United States from the Middle East that they have the opportunity to refine. So I don’t think—again, that is a complex formula. I think every American, every thinking American actually 

supports that. 

Mr. LIEBREICH. But one could get into a discussion—I actually 

trust that people are smart about—not entirely smart, but they will 

figure out who is doing the talking. But I want to move—— 

Mr. MARKEY. See, here is the problem. As you know, there are 

new Supreme Court decisions that actually allow for a masking of 

who is financing much of what is going to be going on in America. 

So you have almost the worst-case scenario, you know, where the 

people who have an agenda are also increasingly able to mask their 

agenda under the guise of raising other issues that don’t go to their 

own economic interests here, which would be oil being imported 

which they have the opportunity to refine and to spew it out into 

the atmosphere. 

So I just want to make it clear that the political terrain is not 

such that it makes it transparently easy for the voter to understand, in fact, what is at stake as these issues are being publicly 

debated. So, please continue. 

Mr. LIEBREICH. So what I wanted to suggest is that there is, 

however, a powerful constituency that one could try to—that one 

could try to develop to oppose that, the money that is being spent 

on the repeal campaign, and that is California’s technology community and also those who—people need to understand that this is the 

way to create jobs and wealth and prosperity, so to counter this 

idea that all it is is about increasing taxes and giving away money 

to technologies that don’t work. 

And the particular constituency that I think has not been 

brought into this whole discussion is around the telecoms, the IT 

industry, the industry of innovation around the electrical system 

more broadly. Because if we are going to integrate these large 

quantities of clean energy, then there are all sorts of other industries, particularly around telecoms and information technology, 

who are going to benefit enormously. And, to a certain extent, they 

are sitting on the sidelines and not getting involved in the discussion. And I think that the people in California and elsewhere don’t 

necessarily understand just how many jobs are required if we start 

building out the grid and we start integrating these technologies 

very broadly into our lives. 

We saw what happened with the Internet which, again, it was 

funded originally through government spending, the development 

of it. It then went viral in the economy, and it created hundreds 

of thousands and then millions of jobs in very unpredictable ways, 

ways that could not have been predicted when the first grant appropriations were made to experiment with or to build out the first 

implementations. 


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So I think there is a constituency that needs to be educated as 

a counterweight to those who suggest that we should do nothing 

and simply cut taxes and walk away from this problem. 

Mr. MARKEY. I think you point out—and I thank you for doing 

so—yes, the Internet was funded by the federal government, it was 

called DARPANET originally, but a strategy had to be developed 

in order to deploy it into the society as a whole. And I was the 

chairman of the Telecommunications Subcommittee. So that was a 

three-bill strategy. 

Bill number one was to create an 18-inch satellite dish industry, 

which the cable industry opposed because they didn’t want the 

competition. But that put pressure on the cable industry to deploy 

even greater capacity. 

Second, was moving over 200 megahertz of spectrum in 1993 

that created the third, fourth, fifth, and sixth cellphone license in 

the United States. They all went digital and went to under 10 

cents a minute. The two incumbents, who for this purpose would 

be the oil refineries in a telecommunications setting, they went 

both analogue and 50 cents a minute with a phone the size of a 

brick in 1993. 

And the third bill became the Telecommunications Act of 1996, 

which moved us from dial-up to broadband, which moved us from 

black rotary phones to BlackBerries. 

By 1998 there is a new company called Google that can be started and HULU and YouTube and EBay, all highly anticipatable, not 

in terms of what they actually do, but with this incredible additional broadband, yeah, we are going to create a couple of million 

new jobs. 

That was my strategy back in the 1990s. I knew what I wanted 

to accomplish, but you needed new public policies because the incumbent two companies weren’t going to move rapidly in that direction. It is always good to have a monopoly or duopoly in any 

marketplace; you can divvy it up 50 percent apiece, which is a good 

business if you can get it. 

So we need to do the same thing here, and we need to do the 

public education that explains how these new jobs are going to be 

created for a new economy. And, of course, they are going to be created, but they will in China. They are going to be created, but they 

will in Germany. They are going to be created, but they will be in 

other parts of the world, and we will inevitably wind up importing 

them into our country. That is our challenge. 

So I have a chart here that I would like you each to comment 

upon, because I think it gets to the point that each of you have 

been making. This is a chart put together by 1366 Technologies, 

which is a photovoltaic company up in Lexington, Massachusetts. 

And what it does is it charts the price of photovoltaics, the installed cost of electricity per kilowatt hour in 1978 at $5 a kilowatt 

hour, down to about 22, 23 cents a kilowatt hour today. And it assumes annual production growth of 35 percent and an 18 percent 

learning-curve for photovoltaics, cost based on an 18 percent capacity factor and a 7 percent discount rate. So you can see that it is 

almost like a Moore’s law of photovoltaics, and it keeps moving inexorably lower in terms of its costs. And they project that by the 

year 2020, it will be at the cost of coal, if not sooner. Mr. Fulton 


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and others have pointed that out. It could be sooner. And, that once 

you hit the cost of coal, it could almost, by 2020, because of the developing world and their need to install new energy technologies, 

could become 7 percent of all electricity generation in the planet. 

Now, again, you have to have a little bit of vision here on this 

subject, because when we were basically moving over the spectrum 

for the third, fourth, fifth, and sixth cellphone license, our goal was 

of course not just to lower the price here in America, but to create 

a new global industry. Who would think that in 2010 there would 

be cellphones in villages of Africa and Asia and South America that 

would be the markets? 

Well, you first have to have a policy that develops the products 

that can then open up these markets, and these countries could 

jump the wire-line revolution and go right to cellphones, which is 

what happened. 

Well, the same thing can happen here with photovoltaics. You 

don’t have to build out that entire electricity grid. So that is kind 

of the vision. 

Do any of you want to comment on—this is Professor Emanuel 

Sachs at MIT. He is the guy who developed the technology that 

was used by Evergreen Solar Company. And now this new technology, he believes, is 40 percent more efficient than previous technology, dramatically more efficient than even is Evergreen photovoltaic technology. 

Does anyone want to comment on this vision and where we can 

go and how we can have a domestic production capacity rather 

than inevitably importing it from China? 

Mr. Fulton. 

Mr. FULTON. It might sound technical, but I think you can even 

make it look more aggressive than that, because—— 

Mr. MARKEY. He is too conservative in terms of this revolution. 

Mr. FULTON. There is in particular something that the German 

Environment Ministry, when they were looking at how much the 

entire cost, they did something called the ‘‘effect of the merit-order 

run of a load curve of electricity.’’ So what they talked about was 

the fact that solar PV comes in at the peak load when gas peak 

is usually running, and gas peak is the most expensive form of 

electricity on the grid. Normally we look at average cost. But if you 

look at the gas peakers, if you replace the gas peakers, then you 

have a very big effect. 

Now, the German Environment Ministry estimated that the 

whole of the feed-in tariff was entirely paid for by the cost of replacing the gas peak—— 

Mr. MARKEY. What is a feed? 

Mr. FULTON. In simple terms it says—it is a standard offer document, about two pages long. 

Mr. MARKEY. It is a stand off document? I just asked you to 

please explain it in English and you said stand off. 

Mr. FULTON. A standard offer. So what it means is that everyone 

gets the same bit of paper in front of them; whether you are a utility or an independent power producer or whoever you are, you get 

a two-page document. You know what you are getting, what tariff 

you are getting. So essentially the tariffs are set by the governVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00053 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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ment, but in consultation with the market in terms of costs. They 

are reviewed. 

And in the German system, there is a digression over time, and 

the digression is actually targeted at what they believe will be grid 

parity. Therefore, the signal that is given to the industry: You had 

better be off that curve, because we are not paying you to get off 

the curve; we are paying you to get on the curve. And that is why 

I call them incentives of scale. 

There is a strong signal, this is a temporary incentive to get to 

scale, get your costs down, and they try to influence the direction 

of the digression of the cost curve. 

Mr. MARKEY. Does this tell us, Mr. Fulton, that we had better 

have a strategy? 

Mr. FULTON. That is what I think I said. 

Mr. MARKEY. To reduce these technologies here? Because once 

something hits 7 percent of global energy electricity, once something reaches 7 percent of global electricity production, that is a 

great economic opportunity. And it will only grow as each year goes 

by. 

And right now, in your opinion, you know, do we have a program 

in place that will keep these companies here in the United States, 

given the fact—here is the interesting thing: that last year 45 percent of the solar technology in the world was produced in China 

and they exported 95 percent of it. They did not deploy it in China. 

They exported 95 percent of it. So this gets to the U.S. Trade Representative, this gets to what the steelworkers are talking about. 

This gets to whether or not we have an aggressive enough acrossthe-board strategy to make sure that we are protecting our own potential domestic production capacity here so that it winds up with 

Americans with these jobs. Could you expand on that? 

Mr. FULTON. Very briefly. I think I said the next 5 years I think 

are very important for the grid parities on solar and wind. And essentially this is when industries are being built right now. And you 

know, as I said, we feel that U.S. policy lacks TLC at the moment 

and therefore we could see more done. 

Mr. MARKEY. TLC, again, stands for? 

Mr. FULTON. Transparency, Longevity, and Certainty. 

Mr. MARKEY. Dr. Viswanathan. 

Mr. VISWANATHAN. This is one of our favorite charts. You are exactly right, it is Moore’s law for photovoltaics. It is the fundamental 

thesis on which we invest in solar, which is a significant portion 

of our portfolio. 

The point I would make is, you are exactly right. Basically, we 

are very close to grid parity, ‘‘very close’’ being the next few years. 

If we have the right incentives, we will get there in the U.S. And 

we are at that stage when this is where the incentives kick in. It 

is in the labs, it is going into deployment. If we don’t have those 

incentives, what will happen is you will have lines coming from all 

of those points, and they are going to go to different countries— 

China, Taiwan, Korea. And that is what is scary. 

Having said that, this chart—if you show it to our competitors 

globally—scares them, because they cannot come down that curve. 

They can only come down in certain ways because they fundamentally—that, from 1978 to today, is innovation. 


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Mr. MARKEY. And that is America. 

Mr. VISWANATHAN. And that is America. 

Mr. MARKEY. This is our innovation. 

Mr. VISWANATHAN. Exactly. 

Mr. MARKEY. These are the breakthroughs made largely in the 

United States. So here we are, the innovators, creating these huge 

technological breakthrough historical moments, and the other countries are taking note of it, putting in place policies, some of them 

protectionist, so that they can capture the opportunity that we created out of our universities. 

Mr. VISWANATHAN. And to build on what Mr. Fulton said and 

also a response to Mr. Cleaver’s question, the incentives we are not 

saying is permanent. It is a few years until we get into that large 

orange-red band, and then grid parity takes off and you don’t need 

the incentives. So I think that is the fundamental tenet that needs 

to be reinforced over and over. 

Mr. MARKEY. And by the way, let me just say this. There were 

huge subsidies that had to be built into the system in order to 

build an electricity grid in the United States, especially out to rural 

America. It was subsidized. It was largely subsidized by urban 

Americans taking care of suburban and rural Americans. In telecommunications there was a huge subsidy program so we could 

have a telecommunications program in the United States, and it 

was largely subsidized by urban Americans who subsidized suburban and rural Americans so they could have the same phone service that those in the cities had. But it was a huge multi-multibillion-dollar subsidy—that still continues to this day, by the way, 

still continues the subsidy, of rural America for telecommunications, for example. 

So I think people are kidding themselves if they think there 

hasn’t been an ongoing industrial policy in the United States to ensure that the electricity, the solar I mean, and the telecommunications revolution was available. It still exists. It is multibillions 

per year. 

So then when we turn to this new technology revolution, the 

crocodile tears come down from, in many instances, the very companies that got subsidized to be created, in the way that the telecommunications companies didn’t want a third, fourth, fifth, and 

six license to be put out there, in the same way that the existing 

companies are saying, ‘‘Why would we want broadband? We already have a monopoly. We already have all the customers that 

exist in America. Why would we want other independent companies?’’ And hundreds of them moved into this space once we had 

this broadband revolution. Why would we want those people in as 

well? 

So we have to work it through in order to explain to the American people that there are millions of jobs here that we can create 

in the United States, because technology always triumphs. Technology always triumphs. This is going to happen. It is only a question of whether we as a country are going to start out where we 

are going to be forced to wind up anyway, in terms of the importation of these technologies into our country, or the development, the 

creation of the jobs here in the United States that will then export 


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them to other countries in the world. That is the only question. Not 

whether or not there is a Moore’s law in solar. There is. 

Are we going to have a plan to capture it here for our country? 

Mr. Carbone. 

Mr. CARBONE. Yes. I was just going to say that similar laws were 

applied in the wind business as well. If you wind the clocks back 

30 years, you see a similar curve. We took advantage, at least in 

the early part of this past decade, of the scale that was produced 

in Europe here in the U.S. in terms of bringing that price of wind 

power through the price of wind turbines, which was the main 

driver in the cost models. 

Mr. MARKEY. By the way, if you have that chart, I would like to 

use that as well. If you have a similar chart to that in wind, I 

would like to use that as well, just so that people can see the inexorable inevitability of the triumph of technology, and whether or 

not we—rather than being in denial of whether or not this is going 

to happen. And we understand why the Koch brothers and Tesoro 

and Valero are. Okay? 

But whether or not—Adlai Stevenson, someone said to him, 

‘‘Every thinking voter is with you.’’ And he said, ‘‘Yeah, but I need 

a majority.’’ And the way you need to get a majority is we have 

hearings like this. We have a big public debate. So to a certain extent this California referendum is a great opportunity for us as 

well. Let’s have this debate. Let’s see where California wants to be. 

And let’s also, though, show who is on the other side of the debate, 

because they are clearly looking at history in a rear-view mirror. 

Mr. Carbone, please continue. 

Mr. CARBONE. Just to finish. I think we fully agree, it is technology that will continue to drive us down that curve. Unfortunately, the wind business, a lot of the innovations were not born 

here. But today they are. And my company in particular is taking 

a different approach with the technology in order to defer the 

drive-down of the cost of energy. It is just—and it is all technology. 

Mr. MARKEY. But America is now catching up in innovation in 

wind. 

Mr. CARBONE. Absolutely. 

Mr. MARKEY. Mr. Liebreich. 

Mr. LIEBREICH. First of all, a couple examples just to confirm 

this is not an academic exercise, this is real. Italy is pretty much 

where at the moment, this year or next, the cost of solar in the 

sunnier parts in the south of Italy will be parity with the retail 

price of electricity. So in Italy you get to the point where if you 

want to put an air-conditioning unit in, you should generate the 

electricity from photovoltaic on your own roof. California, perhaps 

a few years—this is without subsidy—California, perhaps a few 

years behind, but not far. 

Mr. MARKEY. And what is the difference between retail and 

wholesale price for solar? 

Mr. LIEBREICH. Well, the price at the moment is absolutely accurate on that chart. It is about 22 cents per kilowatt hour. It depends how sunny and so on. Italy has very high daytime electricity 

costs and good sun; therefore, it will get that amongst the first locations. Obviously, wholesale is different. If you are generating 

electricity and then putting it into the grid, then you are competing 


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with the coal-fired power station or the gas-fired power station, and 

then you have to get to a lower price, which is shown on the chart. 

Mr. MARKEY. So if you are a Texas oil refiner, it is very sunny 

in Texas; it is very sunny at Fort Huachuca, Arizona; it is very 

sunny in Florida. Or those ads are going to start to run again, 

where a bad day in Florida in winter is when one cloud goes by. 

So they advertise all the sun there, and there is a lot more sun 

there than in Italy or Germany. So—— 

Mr. LIEBREICH. There are lower electricity prices though. 

Mr. MARKEY. Excuse me? 

Mr. LIEBREICH. Italy is going to get there first because of slightly 

higher daytime electricity prices, which also matter. 

Mr. MARKEY. But if you are an oil refiner in Texas that really 

wants to just continue to bring in oil from OPEC to refine, all that 

sun in Texas, it is going to be scary every day you go out and you 

have to put on sun protection. And you are an oil refiner in Texas? 

It has got to be a little bit—you have to be a little bit apprehensive, 

not only about your own personal health but the health of your future in terms of these competitive industries that—you have to go 

to California to slow it down or kill it first, before this epidemic of 

new energy technologies reaches Texas in its full-blown, marketbased form that no longer needs subsidies in 5 or 10 years because 

you have now created a complete market for it. Do you agree with 

that? 

Mr. LIEBREICH. Well, it should be scary, because the combination 

of solar with electric vehicles or plug-in hybrids is a real large-scale 

threat to the current way of doing business, and so it should be. 

I do want to raise one other—— 

Mr. MARKEY. You are saying that because 70 percent of all of the 

oil which we consume in America goes into gasoline tanks, that 

these oil refiners have a stake in making sure we don’t have a 

plug-in hybrid and an all-electric vehicle revolution, because they 

could be using solar- and wind-generated electricity to power these 

vehicles and tell OPEC we don’t need their oil any more than we 

need their sand. 

But that wouldn’t require oil to be imported from these countries 

into refiners in America and reduce our dependence upon imported 

oil, change our national security status in terms of where we import this oil from, and the funding that we give to these countries 

and other countries. 

So there is a huge national security element that goes to the creation of a domestic renewable energy industry that then is providing the lower cost electricity for the plug-in hybrids and all-electric vehicles that we are using. 

Mr. LIEBREICH. Indeed. I saw an interview with the Saudi Oil 

Minister who was asked about alternative energy and whether he 

considers the drive towards clean energy as a threat. And his response was to say, ‘‘No, we are absolutely happy for it to happen, 

because it will never in any way threaten anything we do essentially.’’ And I just thought, well, that is spoken like somebody who 

hasn’t seen the chart and the trends. 

Mr. MARKEY. You would think that a country that is sunny 99 

percent of the time—Saudi Arabia—of the times that it is not the 

middle of the night. 


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Did you ever see Lawrence of Arabia and poor Lawrence is out 

there in the middle of the desert? It is very windy in the middle 

of the night, apparently, over there in Saudi Arabia in the desert. 

So you would think it would be a country that would have some 

insight into the power of solar and wind, but they continue to finance, in fact, questions about climate change and questions about 

the need to move in this direction as well. Although they could be 

the leaders, in fact, in the development of that technology. But they 

are not unlike their oil refining brethren here in Texas that is 

going to try to slow down this domestic revolution. 

Mr. LIEBREICH. Could I, if I may, comment on one other aspect 

of this global race which this raises? And that is, there is a caveat 

around how we go for those manufacturing jobs. And if you go back 

to the analogy of the telecoms industry, which was an enormously 

successful industry and created jobs through your efforts and the 

efforts of others in creating the frameworks, we do import almost 

all of our mobile phones. The manufacturing is not generally domestic U.S., but the license, the technology, the value add, very 

much is. And we have an analogous situation where those innovations, many of which were here in the U.S., are embedded in a lot 

of the technology that is coming out of China and other parts of 

the world. 

So I would just urge caution about seeing success as whether we 

manufacture cells in the U.S., yes or no, because our research 

shows just how integrated the supply chain, the technology licensing, the financing, the search for talent, managerial talent and so 

on, it is very, very integrated. And the number one challenge for 

the shift to clean energy is to keep going down that curve, which 

requires all countries to be progressing and playing to their 

strengths. 

And so I think, particularly given the drum beat of concern about 

China, about its exchange rate, about its potentially illegal support 

of its industry, what we mustn’t allow to happen is for that to turn 

into a tit-for-tat trade war in this sector. 

Mr. MARKEY. I agree with that. 

Mr. LIEBREICH. And so that is my caveat, because it is important 

that we use their cheap manufacturing where that is appropriate. 

Mr. MARKEY. But you also agree that we shouldn’t be Uncle 

Sucker; that we shouldn’t allow them to say—which I think they 

are trying to say to us—Why don’t we do this? Why don’t we take 

all of these brilliant innovations that you have in solar, and then 

allow us, with our very low-cost workforce, to manufacture it, and 

together we will save the world, you coming up with the ideas, we 

with making the products. And, by the way, in order to ensure that 

that is the case, engage in protectionist activity and subsidies that 

are questionable under World Trade Organization rules in order to 

create that beachhead of manufacturing capacity in our country 

that then makes it very difficult for you to compete. 

So we clearly don’t want to be left as Uncle Sucker here, investing in all the research, and then not seeing the jobs in America in 

its fair proportion to what it should represent given the investment 

that we made as a Nation. 

You agree with that, Mr. Liebreich? 

Mr. LIEBREICH. I would not disagree with that. 


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Mr. MARKEY. Thank you. Mr. Fulton. 

Mr. FULTON. I just think it is interesting that the Lawrence 

Livermore Laboratory and the DOE did some research on the percentage of the domestic share of turbine costs, and it has risen 

from 15 percent in 2006 to 60 percent in 2009. So as we have seen 

the U.S. wind industry scale, that has brought manufacturing on 

shore. 

Now, I think there is no doubt that these incentive programs 

have played a strong role there, so I don’t think it is like America 

has to lose out here. The data suggests that America has the 

wherewithal, it has the companies, it has got some of the biggest 

multinational companies in the world, capable of producing the 

best technology, and it looks like they are prepared to look at manufacturing it. 

Mr. MARKEY. Do you agree with that, Mr. Carbone? 

Mr. CARBONE. That is what I said earlier. It is the race, it is the 

fight, it is the good fight. 

Mr. MARKEY. Mr. Viswanathan, is there any reason the U.S. 

should lose their fight? 

Mr. VISWANATHAN. There is no reason. And to just build on what 

you said earlier, just take a page out of the semiconductor industry. 

The innovation was done here. Intel, some of the greatest companies are here. They have outsourced manufacturing to the fabs in 

China and Taiwan. We have ceded nothing in terms of innovation. 

All of what is going on in cellphones, videos, et cetera, a lot of that 

is emerging. Some of that is coming from Asia, but a lot of that, 

the core innovation is coming from here, and that is resulting in 

a lot of jobs. 

Mr. MARKEY. Mr. Fulton, you contributed to a report published 

earlier this month that looked at the claims made by global warming skeptics regarding the fundamental science of climate change. 

First of all, why did Deutsche Bank decide to put out that report? 

Mr. FULTON. Well, that report actually came out of my research 

unit so I take responsibility. Deutsche Bank’s name is on our research, but it is. Since I work in an asset management division 

that has climate change investment, it would be a means of fiduciary not to check, which is that there is climate change. So to me 

it is an absolute necessity to be aware of the science and then 

aware of the facts. 

And if you have an investment thesis and you are wrong, you 

have to change that investment thesis. So we went to Columbia 

University, to the climate center there, and we said: We are not 

scientists, but we know you well. But could you conduct for us a 

very fair and balanced look at these skeptics’ arguments, because 

we want to know what is going on in those arguments? 

So they were set out in some detail in a 55-page document. And 

we asked, Could you give us, as best you could, peer-reviewed answers to that? And that is what they did. And at the end of that, 

our conclusion as—we are not scientists, but our conclusion as investors is we felt comfortable with our investment thesis. There is 

still a serious threat from emissions in climate change. 

Mr. MARKEY. And how has that approach to the issue, and investment in climate and clean energy technology as a result, 

evolved over the last several years at Deutsche Bank? 


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Mr. FULTON. Well, we have at the moment $5 billion under management related to climate change themes, and that has gone up 

and down with the markets. And there is no doubt, since the financial market crisis hit and since the volatility—and I would say the 

volatility in policy, because these are policy-related markets. And 

it has been more on hold in terms of not what we are doing, but 

in terms of investor perception. 

So I think we now are again at a very important crossroad. Because at the end of the day, as you are pointing out, unless investors get behind it, where is that trillions of dollars coming from? 

So we are looking—the markets are doing their best at innovating. We have a private equity group as well. So we are trying 

to do our best. Everyone is. But at the end of the day, unless we 

have—I am afraid to go back to this TLC structure—then while we 

are in that scaled deployment phase, which we are in for the 

next—— 

Mr. MARKEY. TLC stands for, again? 

Mr. FULTON. Transparency, Longevity, and Certainty. Unless we 

have that as investors, the cost of capital is going to remain high 

and the uncertainty is going to remain there, and you won’t see the 

adequate flows that you are going to need to really get there. So 

I think at the moment a lot of us are saying, okay, let’s see how 

policy goes in America in particular in the next few months. I think 

it is a very important signal. 

Mr. MARKEY. Thank you. 

Now, Mr. Liebreich, I have a slide that I would like to put up 

for a moment. I don’t believe that you used this one during your 

presentation, but I think it is a very interesting one, if we can get 

it up on the screen here. 

Could you explain briefly what we are looking at? I think this is 

the one that says that U.S. wind manufacturing supply is projected 

to ramp up to 14,000 to 15,000 megawatts per year over the next 

couple of years but projected demand falls way short of that. 

Could you put that up on the screen, please? 

Please, could you talk about that a little bit? 

Mr. LIEBREICH. Yes. Certainly. Thank you very much. So this is 

output from our wind team. The years up until 2009 are historic; 

2010 is our estimated out-turn for this year. 

Mr. MARKEY. There is a downturn this year in wind? 

Mr. LIEBREICH. There is a downturn. Financing activity, which 

I showed in the data that I presented in my prepared statement, 

slowed down quite dramatically at the end of 2008 here in the U.S. 

and into 2009. And, of course, the build rate drops away sometime 

after the financing activity. 

What we are seeing in the U.S. is that over the longer period, 

from 2005 through till 2008, 2009, was that demand outstripped 

supply. 

There are a number of reasons for this. There are only two domestic manufacturers, GE and a smaller company called Clipper, 

before Nordic Winds’ arrival on the scene, a very welcomed development. And the demand that built up through the incentives, 

through the programs that were in place, outstripped that supply, 

and the supply was partly held back by the lack of what my colleague Mark Fulton would call TLC. 


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The fact that the production tax credit for wind expired every 2 

years meant that companies were reluctant to—the European companies, principally, were reluctant to invest here in the U.S. in 

order to meet that demand, because there was so much uncertainty 

about the use of those assets. 

What is happening now is that there is substantial new investment, and you can see on this chart who is doing the investing. 

Now, you can see GE in dark blue and Clipper at the top in light 

blue. But the expansion in capacity is coming from Vestas of Denmark, Siemens of Germany, Gamesa of Spain, and Nordex of Germany. And they are coming to the U.S. and they are building manufacturing or assembly plants. This is all measured at the end assembly stage. 

The issue is, though, that now there is insufficient demand to fill 

those plants. So we are moving from a situation of undercapacity, 

supply constraint, to overcapacity, which is very good news for the 

cost of turbines, which are coming down. We produced the wind 

turbine price index, and we are seeing turbine prices coming down 

already by around 20 percent from their peaks in 2009. So we are 

going into a period where there is going to be a lower level of installations because of the difficulty of financing in the post-crisis 

environment at the same time as—— 

Mr. MARKEY. You are saying that the derivatives-driven financial 

meltdown has now had an impact. The fact that we didn’t regulate 

derivatives accurately, wisely, inside of the financial system now 

has a collateral consequence in terms of now receiving financing for 

something that obviously has seen a reduction in the overall cost 

of producing this new technology. 

Mr. LIEBREICH. Well, I don’t think I mentioned derivatives. 

Mr. MARKEY. I just want everyone—when you say the ‘‘catastrophe’’, we know the catastrophe is that unfortunately, around the 

world, people were buying derivatives packed with all kinds of very 

poorly structured investment vehicles that were not well understood by the global investment community that unfortunately has 

come back to haunt all other industries as well. 

And I am not sure Tea Party activists fully understand that 

counterparties actually don’t have a stake in policing the derivatives global marketplace, since the CEOs of most of these companies who produced the derivatives don’t even understand what a 

derivative is, except that it was a center of economic profit for 

them. 

But ultimately the bubble bust, and it is having an impact in 

other economic areas as well. I only say that just to point out—I 

was the chairman over Wall Street for 14 years as well, so I bring 

that knowledge in, as well as telecom from the 1990s, just to add 

it in as an extra factor of what the consequences are of turning a 

blind eye to things that were completely knowable in terms of the 

impact that derivatives and subprime mortgages would have upon 

not only ours, but the global economy. So I just throw that in as 

an editorial comment. 

Mr. Liebreich. 

Mr. LIEBREICH. So there was a crisis. 

Mr. MARKEY. There was a crisis. 


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Mr. LIEBREICH. And it did have a substantial impact on this sector, and the sector is still suffering from that. If you step away 

from the various support mechanisms, the availability of capital is 

much reduced, and the cost of capital in the private markets, the 

debt markets, the equity markets, remains stubbornly high even 

now, 2 years after. 

And so that is why there is such a focus on programs like the 

cash grants, because it is impossible otherwise to get the same 

level of projects financed. Some projects will get financed, but there 

is a chunk that will not happen without the continuance of some 

of these programs here in the U.S. 

And what we are seeing here in terms of the dotted line that you 

see on the chart, which is the line of demand, that is on the assumption that the cash grants continue in place, the Recovery Act 

cash grants continue in place. We will see a bad year this year, a 

drop to 6 gigawatts of installation, and then bouncing back somewhat. But that bounce-back is in jeopardy if those grants are not 

continued. 

Mr. MARKEY. So you want a continuation of the grant programs, 

the loan programs, the tax programs that are on the books. And 

would you also want a national renewable electricity standard to 

be put on the books, so that you have a belt-and-suspenders program where there is a policy that is established, combined within 

the financing programs that are put in place that help to facilitate 

the installation of the renewable energy sources that create a much 

more—TLC stands for what again? 

Mr. FULTON. Transparency, Longevity, and Certainty. 

Mr. MARKEY. Longevity and certainty for the investment community, right? So that is really what we are trying to do here. 

I have to keep repeating that in English, because we are going 

to have a big public debate in the United States, and TLC means 

something completely different than what you mean it to mean. It 

means more the way Aretha Franklin used it in the song Respect. 

So TLC means something else. 

Mr. FULTON. We sort of hope people might relate to it. 

Mr. MARKEY. Right. They should. But it is the TLC for the renewable industry, but it includes the grants, the loans, plus the 

policy that is put in place that creates an environment where they 

get a lot of TLC, right? But it has to be continuous, there has to 

be some longevity, and there has to be some predictability to it. 

Mr. Liebreich. 

Mr. LIEBREICH. So when you say ‘‘we,’’ we, one, we are an information provider so we don’t—that have used that approach. But 

certainly the industry and our clients would be 100 percent behind 

the push for transparency and longevity. 

Mr. MARKEY. Mr. Viswanathan, you are a financer. 

Mr. VISWANATHAN. Yes. 

Mr. MARKEY. You provide the money. 

Mr. VISWANATHAN. Yes. 

The CHAIRMAN. So, lay out for us what you need to see put in 

place so that we have this more predictable investment climate 

that leads to the reduction in cost and ultimately withdrawal of the 

need to have the public financing programs be put in place. 


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Mr. VISWANATHAN. Certainly. I think exactly what you had said, 

Mr. Markey. We would like a continuation of these programs, 48(c), 

1603. We would like the 48(c) also to be refundable, as Mr. Carbone 

said, especially given a lot of these innovations are happening in 

startups that are starved for cash and we need to incentivize them. 

I think the loan guarantee program has been very successful and 

there is a lot of good coming out of it. We need to have that in 

place. 

We need to have a national electricity standard and energy efficiency standard. If you look at some of our peers across the globe, 

in China they have multiple of these incentives. They have a stimulus for clean energy, they have a renewable energy standard, they 

have a feed-in tariff, they have an energy development fund. All of 

these things are going to be very, very helpful as we build that 

clean-tech economy. 

The CHAIRMAN. But your firm is still putting up billions of dollars in the clean energy sector. Why is that, if you see all these pessimistic signs on the road as well? Why are you still investing so 

many new billions of dollars into the clean energy sector? 

Mr. VISWANATHAN. Well, that is a very good question. There are 

two ways to answer it. Because we fundamentally believe in all of 

the things you said in terms of your chart. Having said that, if all 

of these stop, you will see investment dry up from our community, 

because we cannot do it ourselves. 

The scale that is needed is so massive that you will see innovation dollars dry up, and then that will have a spiraling effect on 

the actual innovation that is trying to get to market. 

The CHAIRMAN. Okay. Now, could we pull up Mr. Liebreich’s 

slide number 9, please, so that we could have a little bit of discussion about that. 

So this is Venture Capital new investment in clean energy by 

sector, the top 15 countries. The United States is in the lead, looking over at its shoulder at number 2, 3, 4, 5 and 6 in the world. 

That is a reason to be optimistic. 

Mr. Carbone, can you take a look at that chart and tell us why 

that is happening, and are you optimistic that it can continue? 

Mr. CARBONE. Well, while Michael provides information and Ravi 

provides the money, we initially consume the money but we hope 

to make the money as well. 

The CHAIRMAN. Great. 

Mr. CARBONE. Yes, I would have to say, and we showed in our 

chart as well, that this money is for the most part financing innovation and technology development, and a lot of those early stage 

startup companies are actually starting here in the U.S. And actually our company is one of them, and Mr. Viswanathan is actually 

one of the investors in our company as well. 

We initially were invested in by U.K. and European-based investors, and just recently in the rounds of financing we did late last 

year, we were able to attract investment from the U.S. community 

and actually establish ourselves here in the U.S. So we are part of 

that, somewhere, a small part, but part of that top bar on this 

chart. 

The CHAIRMAN. Thank you. 


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So, Mr. Liebreich, thank you so much for providing these great 

graphs. It is very, very important for us to understand it. 

Mr. Fulton, last month your colleague at Deutsche Bank, Kevin 

Parker, was quoted in a Reuters article. Here is what he said. 

‘‘They are asleep at the wheel on climate change, asleep at the 

wheel on job growth, asleep at the wheel on this industrial revolution taking place in the industry. You just throw up your hands 

and say, we are going to take our money elsewhere. 

Now, this is your company’s global head of asset management. 

Can you give us some context here, what Mr. Parker was talking 

about? This is testimony ultimately before the United States Senate as they were trying to pass a climate and clean energy bill that 

ultimately was stopped by, I hate to say it, but it is basically the 

oil Senators from Oklahoma and the coal Senators from Kentucky, 

the Republicans that basically just stop it over there. So, again, we 

continue to have this tension that exists. 

Can you talk a little bit about what Mr. Parker was making reference to? 

Mr. FULTON. Well, I can’t talk for him directly, but I think as I 

understand it, what we are saying, what he is saying and what I 

believe is that it is very simple. The U.S. Congress has not passed 

anything this year and it has been an important year. So that is 

just a fact. We don’t have a climate or energy bill coming out into 

law, so, as I say, that is just fact. 

In terms of capital deployment, again, I think the point is that 

particularly in the longer term, where is capital going to go in the 

next 5 to 10 years? And unless the United States has this policy 

package and structure that is going to encourage that flow, it is not 

going to take place. 

The CHAIRMAN. It is not going to take place. Now, I understand 

that none of you are international trade lawyers, but I would like 

to get your views on the United Steelworkers petition to the U.S. 

Trade Representative regarding China’s violations of trade rules in 

the clean energy sector. 

As I mentioned in my testimony, I believe that we very much 

need a climate of intense Darwinian paranoia inducing competition 

in the renewable energy sector so that we can drive down the cost 

of each of these technologies as quickly as possible. But if China 

is violating international trade laws, our domestic workers and domestic industry as a whole are put at an obvious disadvantage. 

I would like to ask each of you how important this issue is in 

terms of leveling the playing field so that all countries feel that 

they have a stake in this competition to create a manufacturing 

sector that induces the paranoia that lowers the cost for production 

as quickly as possible. 

Mr. Fulton, and right across, you can each disclaim any knowledge of international trade law. 

Mr. FULTON. Yes, indeed I do disclaim any knowledge of international trade law and obviously would make the point that we 

have to wait and see what is determined in that situation. 

I would make one comment about China’s policy. It is very comprehensive. We have heard from other participants. They are tackling this issue at many, many levels. We even note that they will 


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have been talking about looking at carbon markets domestically in 

China. 

So one thing I would say is I think sometimes people say the 

Chinese may not be doing anything. Well, the Chinese are certainly 

taking action here. The question is if it happens to be contravening 

WTO, which I don’t know, then that is up to the WTO. 

The CHAIRMAN. Mr. Carbone. 

Mr. CARBONE. Yes, my knowledge on the situation isn’t entirely 

what it should be, what you would like to have. But I think there 

is a relationship, we discussed some of it here earlier, between 

technology development, manufacturing, the financing of it and the 

deployment of it. 

I am not sure, because I haven’t educated myself enough to really understand what the U.S. steelworkers are trying to accomplish 

and what in particular technologies are they really trying to tackle 

here. 

The CHAIRMAN. Thank you. 

Mr. Viswanathan. 

Mr. VISWANATHAN. Yes, I would build on what you said about 

leveling the playing field, and that is what this whole discussion 

has been. A lot of it has been around incentives and spurring that 

innovation. But the flip side of that is making sure we have policies 

where if there are trade violations, we figure out what it is and 

make sure we have policies so globally no country can arbitrage the 

system to get away with it. 

The CHAIRMAN. Mr. Liebreich. 

Mr. LIEBREICH. Again, I will make the caveat that I am not an 

international trade lawyer. But on the economics of it, I think that 

first of all, the big opportunity for U.S. wind turbine manufacturers 

is not exporting to China. Likewise, I suspect that Chinese manufacturers are going to find it easier to export to some of the other 

markets where their technology might be more appropriate. So 

their technology is not as productive, the yields are not as high and 

so on. 

I was recently in Brazil and came across a number of representatives of Chinese wind turbine manufacturers. So the battle between 

U.S. wind technology and Chinese wind technology might well be 

happening elsewhere in the world. 

I think in terms of the case, if you look at some of those elements, it will be very difficult, without knowing, without claiming 

to be a lawyer, very difficult to prevail in terms of cheap loans and 

so on. It is hard to distinguish some of those programs from some 

of the programs here. 

One element of what China is doing gives me great cause for economic concern, and that is anything to do with restricting the export of rare Earth minerals has to achieve a different status of attention, I believe, from all of the normal trade law and trade—the 

tit-for-tat and the to-and-fro around trade. We can deal with that 

through WTO. 

Rare Earth minerals are different because there are no other 

substantial sources on this planet that have been developed, that 

have been found. 

The CHAIRMAN. Outside of China. Which minerals are you referring to? 


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Mr. LIEBREICH. We are talking about some of the exotic dysprosium and some of the doping minerals that you need to make permanent magnets in some of the solar technologies, and the permanent magnets that go into the most advanced sorts of wind turbines to reduce their weight and increase their power outputs. 

These are essential technologies also around the smart grid. We 

are not going to have a smart grid without rare Earth minerals. 

So I think that we should be prioritizing, ensuring that there is a 

global and open market for these minerals, perhaps over some of 

the more eye-catching issues around cheap loans where one can get 

into an argument about who is doing what to whom and take our 

eye off the ball. 

The CHAIRMAN. So you are saying that we need to ensure the 

raw materials are there so that other countries have the capacity 

to participate in this global competition, because the denial of access to the rare materials makes it impossible, really, for a level 

playing field to be created. 

Mr. LIEBREICH. Indeed. If the manufacturers in the rest of the 

world can’t have access to the rare Earth minerals or the products 

that they go into, the magnets and so on, then it is going to put 

those countries at a very, very substantial disadvantage. 

The CHAIRMAN. Yet the Department of Energy is actually considering loan guarantees for U.S. rare Earth production, which is 

something that I also think is very important; that we begin to recognize that as something that should be specially focused upon in 

terms of rare Earth minerals here in the United States and the extent to which we are also financing that development as well. 

Mr. Liebreich, could you put the Recovery Act in context for us 

a little bit? How important was that legislation last February of 

2009 in making sure that we did not see a precipitous drop-off, almost catastrophic in terms of the deployment of wind and solar and 

geothermal and biomass technologies in the United States? 

Mr. LIEBREICH. Well, there are two parts to that answer. The big 

part to the answer is that it played a very substantial role, and had 

that act not been passed, we would not see the level of installations 

and also the level of factory openings and job creation that we are 

seeing now. 

The caveat, the small part of the answer is that there was actually a period where the industry was actually waiting, because they 

were waiting for that act to be first passed and then for it to be 

clarified and so on. So the stimulus for a period acted as an antistimulus. And I say that only because we are through that period 

and I say it only for the record that it was actually a difficult period. We saw the end of 2008, the beginning of 2009, a drop that 

is perhaps more precipitous as companies waited to see whether 

they would qualify, what the detailed rules would be. 

The CHAIRMAN. What did it mean for you, Mr. Carbone, that the 

stimulus bill passed? 

Mr. CARBONE. Actually little this year, but a lot next year, if we 

get it passed. 

The CHAIRMAN. A lot next year. So it is giving you an investment 

climate. 

Mr. CARBONE. Absolutely. We have customers lined up, actually 

TLC, who are looking for that certainty. 


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The CHAIRMAN. TLC stands for? 

Mr. CARBONE. Transparency, Longevity and Certainty. 

The CHAIRMAN. Got it. Thank you. 

Let me finally move to this question of the renewable electricity 

standard. We have to live here in Congress in an acronym-free 

world because we are trying to talk to all of these people that Mr. 

Liebreich says if they get all the information, you know, in a digestible form, they will make the right decision. But part of our responsibility is to be the translators out of the world of experts. 

There is no such thing as a congressional expert compared to real 

experts. It is an oxymoron, like jumbo shrimp or Salt Lake City 

nightlife. There is no such thing as a congressional expert, except 

to the extent we help to translate it into English and other languages spoken in the United States that help to ensure that voters 

understand what exactly is at stake. 

So, in terms of a renewable electricity standard, how important 

do each of you believe that is for a long-term TLC for all of these 

technologies that you are talking about? 

We will go with you first, Mr. Liebreich. 

Mr. LIEBREICH. Sir, I think an aggressive renewable industry 

standard in terms of its ambition and also in terms of its penalties 

for non-achievement could be the single most important long-term 

factor in the development of the market here in the U.S. 

But I do say that it has to be ambitious, not something that is 

easily achieved. The good things in life tend to be hard to achieve. 

And if it doesn’t spur changes in investment practices and so on, 

then it is not going to be substantial. So, ambitious in scale, and 

with penalties that are meaningful. 

In other words, of the various companies, utilities can’t simply 

pay the penalty and go on with business as usual. That, in place 

over a long period, setting a long-term target, would be very important. 

The single critical thing that has to happen, whether it is 

through a feed-in tariff, whether it is through a portfolio standard, 

whether it is through any other mechanism, is that it has to create 

demand. 

We are not going to win this simply by working on the supply 

side. We have got to have demand so that the companies that are 

being financed and that are producing the technologies know that 

they will be able to sell and get revenues here in the U.S., not just 

that it will be cheap just to open a factory, but there is somebody 

to sell the products from. 

So I think it is critically important. The States have shown great 

leadership in moving ahead with their own renewable energy 

standards. As I mentioned, 30 States have got some sort of standard. And a national standard which builds on that, which goes beyond that, would be very, very helpful. 

The CHAIRMAN. As you know, maybe I am going to inform you 

of this, but on June 26, 2009, inside of the Waxman-Markey bill, 

was language, my language actually, that created a 15 percent renewable electricity standard by the year 2020 in the United States 

for all 50 States, not for 30 States, and another 5 percent that 

would have to be extracted by the utilities in new energy effiVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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ciencies, in the way in which they generate electricity. So it would 

be 20 percent by 2020. 

Would that meet your standard for challenging the system? 

Mr. LIEBREICH. It would most certainly help, there is no question. My own view is if you look at those cost curves, one should 

err on the side of being aggressive and ambitious. 

The CHAIRMAN. What I am saying to you is if they are all right 

and that curve is just going to continue, adding in 20 more States, 

setting that goal, we will probably beat that anyway just because 

of the market that we open up? So while you are right, AT&T testified before Congress in 1981 that 1 million people would have cell 

phones in the United States in the year 2000. One million. A big 

goal for AT&T, as a monopoly. 

But as I was moving over the third, fourth, fifth and sixth spectrum license, I wasn’t going to predict that everyone would have 

two devices in their pocket by 2010, and children would have their 

own little devices as well that they could be walking around with. 

But I kind of have confidence that technology ultimately triumphs, 

and once you set this larger goal, actually it will probably be exceeded; as long as you set something that was reasonable, that people will go over it. 

Anyway, that is just the way I view it, given my experience in 

the cable, satellite, and telecom sector, and I think that is what 

will happen if we can get something passed. 

Do you agree with that, Dr. Viswanathan? 

Mr. VISWANATHAN. I agree very much with that. As Mr. Fulton 

said, 30 States have it now, but those policies are in danger unless 

the Federal Government adopts a national standard. So I am very 

much in favor of that. 

The CHAIRMAN. Yes. They are in danger, of course, because oil 

refiners in Texas, if they win in California, they are going to go 

State by State. 

Mr. VISWANATHAN. Exactly. 

The CHAIRMAN. And they will be on a path of destruction for a 

renewable energy policy being in place in those States. There is no 

question about it. So we have to win in California. 

Mr. Carbone. 

Mr. CARBONE. Number one on my list, Congressman, I am not 

sure I would argue whether it should be 15 percent or 17 percent 

or 18 percent, I think it should be now. It really should be now. 

And then we can get ourselves out of production tax credits, investment tax credits and other things as we get the incentive to scale. 

It is more important that we do it now. 

The CHAIRMAN. Thank you. I am with you. 

Mr. Fulton. 

Mr. FULTON. Yes. Yes, well, particularly I echo Michael’s point 

that it should be ambitious, and if it is going to stand alone it has 

to have enforcement and penalty on it or else, again, you need this 

whole structure underneath it of incentives. So you can do it in different formats. 

The other point I would make is that at a technical level, a national REC market, renewable energy credit market, is probably 

more efficient than a pure State-based one. So it has actually a 


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technical side to it. When you go and talk to the guys that are actually trading these RECs, they actually like a national standard. 

The CHAIRMAN. Thank you. And here is the perverse position 

that we are in; the Edison Electrical Institute signed off on that 

standard in that bill on June 26th, 2009. So that is where American public policy is right now, trapped over in the Senate, with a 

minority of Senators coming from and representing the perspective 

of oil and coal from Kentucky and Oklahoma, kind of denying the 

rest of this country this revolution, while we were still funding in 

this bill, by the way, $60 billion for carbon capture and sequestration, research development and deployment. 

Sixty billion dollars in the bill, so that the older industries could 

move along as well as part of this clean energy revolution. So it 

wasn’t as though it was just all one side, it was going to be a comprehensive all-of-the-above strategy. 

So we are going to wrap up the hearing right here, and we are 

going to ask each of you to give us the 1 minute you want the 

American public to remember from your presentation as we go forward on this clean energy debate here in the United States. 

We are going to go in reverse order of the original testimony so 

that you can each give us your summary. 

So we will begin with you, Mr. Fulton. Again, if you could move 

over to that microphone, we would very much appreciate it. 

Mr. FULTON. Again, we would say that creating transparency, 

longevity, and certainty in policy structures is crucial to creating 

a new clean and green energy sector which will stand the United 

States in great stead in the long run. And in doing that, at the moment there is a lot of discussion about national renewable electricity standards, about extending the incentives coming out of the 

stimulus package. And all of these should be looked at very carefully at the moment, because this is a critical moment. 

The United States needs to get on the job in the next 5 years. 

This is when the cost curves are falling. This is when the manufacturing and the industries are being created. 

The CHAIRMAN. Thank you. Mr. Carbone. 

Mr. CARBONE. Yes, thank you. Look, we are an early-stage company and we will require some support. We have very supportive 

customers and investors. But support in the way of real, near-term, 

cash-based incentives like a refundable 48(c) manufacturer’s tax 

credit or cash grant in lieu of taxes for our customers or near-term 

benefits that will support an early-stage company. 

Long-term, renewable electricity standards is really something. It 

is a market signal that will absolutely benefit us. We encourage 

your bill, the Senate to get on and the President to get on with that 

this year. 

The CHAIRMAN. Thank you, Mr. Carbone. 

Dr. Viswanathan. 

Mr. VISWANATHAN. So my firm invests in innovation, and that 

has been the hallmark of the United States for decades and it has 

led to the creation of massive industries resulting in millions of 

jobs. That spilled over into clean tech, which we are very excited 

about. 

Having said that, we risk losing that competitiveness based on 

the commitment and resolve of a lot of the global players, particuVerDate Mar 15 2010 23:54 Dec 13, 2010 Jkt 062591 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 E:\HR\OC\A591.XXX A591

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larly in Asia. To stem that tide, we absolutely need to have some 

of the policies we discussed. And, in your words, Mr. Markey, I 

would use ‘‘all of the above.’’ 

The CHAIRMAN. Thank you. 

Mr. Liebreich. 

Mr. LIEBREICH. Sir, I would like to highlight, the world is undertaking this shift to a lower carbon energy future. This is not something that is debatable, this is something that is happening, maybe 

in the earlier stages, but it is happening. 

That shift will be enormously profound. It will echo not just 

through the energy industry, but through the sorts of housing, the 

sorts of transportation. All industries will be impacted by the shift 

to lower carbon energy. And in so doing, it will create an enormous 

wealth of new technologies, a wealth of new jobs, and a wealth of 

new wealth. 

And I think that the U.S. is at a pivotal point where it has to 

decide whether it is going to be a price taker for the next century 

on energy, or whether it is going to be a price giver, whether it is 

going to be leading that revolution or accepting the technologies 

from other players. That is what is at stake. 

Then finally, I would also like to highlight the importance of 

what is happening for investors. By ‘‘investors’’ I don’t just mean 

investment banks or asset management companies. I mean every 

American who has a 401(k) or who is saving. And that is, that if 

you see what is happening in the world in terms of the trends in 

clean energy, then inevitably you conclude that it is riskier to invest in fossil fuels than it is to invest in clean energy. The perception still is the other way around, but the perception is incorrect. 

The CHAIRMAN. Thank you, Mr. Liebreich. 

Thank each of you for your very important testimony, because we 

are at a critical juncture in this clean energy debate. For the last 

several years, the opponents of dealing with climate change have 

said, ‘‘Well, what is China going to do? We shouldn’t do anything 

until China moves.’’ Well, China is moving. China has targeted this 

sector. China has a plan. 

The United States needs a plan. When the United States has a 

plan, the United States wins. If the United States does not have 

a plan, we are going to lose. That chart will have China, Germany, 

India, country after country, ahead of us in terms of capturing the 

full economic benefits of this clean energy revolution. So we really 

don’t have a choice. 

To use this analogy, that is, the telecommunications sector, the 

United States Government had to invest in DARPANET. We had 

to put up the money initially. When Al Gore was talking about the 

Internet, we actually had to pass a bill here in Congress in 1991 

to take DARPANET and to turn it into the Internet. That is what 

he was talking about. 

It was privatized, but it was a public sector investment to create 

it, not only here but globally. It was a plan which the United 

States had. And because we had a plan, and because we then 

privatized it in 1991, we were able to capture the lion’s share of 

the benefits, as long as we then in 1992, 1993, and 1996 passed the 

accompanying legislation to make sure it was deployed here in the 

United States more rapidly, more quickly, than in other parts of 


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the world, because then the development of the ancillary ideas 

would be here as well. 

We need a similar plan here in the energy sector. The rest of the 

world is moving. If America put a plan in place, which is what the 

Waxman-Markey bill was, a green energy bank, a renewable electricity standard, a 50 percent improvement in the efficiency of all 

new buildings by 2016, a dramatic increase in the appliance efficiency standards in our country, it would incentivize our own country to make the breakthroughs. Sixty billion dollars in carbon capture and sequestration for research, development and deployment. 

We would be the leader. We would be exporting. We would be the 

price maker, not the price taker. We would be telling the rest of 

the world, here it is. If you want it, let’s have a negotiation over 

how we share it with you. Instead, we are now confronted with real 

plans, some of them borderline legal, that have been put in place 

in other countries, so that they are able to get the lion’s share. 

So I agree with all of you. We need a national renewable electricity standard. We have to put on the books, on a permanent 

basis, these incentives—the tax, the loans, the other programs—so 

that over a period of time we create the industries. Then we can 

pull away the incentives because they have reached grid parity. 

Then they don’t need the government anymore. They are off and 

running and our private sector has been the winner. 

So, in the same way that we deployed telephone service across 

America, we deployed electricity service across the country, we invested in the Internet in the early years with government money, 

you can then pull away. You don’t have to do it any longer. Because those people who want to be millionaires and billionaires 

move in, and they are going to move a lot faster than the government would ever move. 

Whoever makes that breakthrough in photovoltaic will become 

the wealthiest person on the planet. They will dwarf Bill Gates. 

They will dwarf other billionaires. That is a lot of electricity for a 

lot of people around the planet. It is a race to be the wealthiest 

person on the planet. 

We have to have a strategy so the names come from the United 

States. That is our goal. Some of them are sitting at this table. And 

that is who they want to be, the people who ultimately, from the 

planning, from the financing, then make this stuff and get rich. 

That is what it should be all about. 

Right now, my goal, Henry Waxman’s goal, Nancy Pelosi’s goal, 

is to create a whole new generation of millionaires and billionaires 

in our country. And what we are going to need is the venture capital, the banking industry, the technology sector, to get into this 

fight. They have to get on the playing field. We cannot have Texas 

oil refineries defining the fight. We need these other industries 

that are the beneficiaries. 

We need the future billionaires to get into this, the people who 

believe in the technology sector, so that we have a level playing 

field politically, because we are quite confident that our vision is 

correct. 

Let me just say again, it is not that we leave behind coal, that 

we leave behind oil, because we make the investment in them as 

well to ensure that they become a cleaner set of technologies as 


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well. We need all of the above. That is what our plan has to be, 

and then America will win, looking over its shoulder at number 

two and three in the world. Thank you all so much for your participation today. 

I have a report and a letter on clean energy investment prepared 

by the accounting firm of Ernst & Young that I would like to put 

into the record, without objection. And hearing no objection, it will 

be in the record. 

[The information follows:] 


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The CHAIRMAN. This hearing is adjourned. Thank you all so 

much. 

[Whereupon, at 12:30 p.m., the committee was adjourned.] 


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