Solar-Friendly Electric Grid Debate Heats Up

With a worsening economy and talks about using more federal dollars to prop up the financial markets, how likely will legislators be able to support measures that will cost businesses and consumers money to implement?

The growth of renewable energy will require expensive transmission lines because many solar and wind farms are located in sparsely populated areas. To support these new energy sources and the growing demand for electricity, $900 billion will be needed for building the transmission and distribution networks by 2030, according to the Brattle Group.

Cantwell already made it clear that creating a program to trade carbon emissions credits will be difficult. Such a program would require businesses -- operators of power plants, refineries and other heavy industries - to buy credits to help them meet emissions requirements.

"Instability of the capital market will be front and center. It will be hard to take up this legislation," Cantwell said.

Convincing utilities and states to go along with a national grid policy will be tough. Cantwell acknowledged that she will have to deal with "touchy and controversial issues."

Getting Republicans to support her efforts also won't be easy. Howard Berke, executive chairman and co-founder of solar-panel maker Konarka Technologies, represented McCain at a debate with Google's (GOOG Quote) Dan Reicher at Solar Power. Berke made it clear that the Republican presidential candidate prefers not to set federal requirements for renewable energy production and use.

"It's difficult to accept a national mandate that will be the right solution for all 50 states," Berke said. "You will find that it will set the lowest bar."

Editor's note: The Claymore/MAC Global Solar Energy Index ETF (TAN Quote) is an exchange-traded fund that tracks the performance of many of the biggest solar companies in the world. Since Congress passed the renewable-energy tax credits earlier this month, shares of this ETF have dropped more than 20%.

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