The slow walk: Interview with Nathan Serota of BNEF on Trump’s executive order


pv magazine: Can you summarize for our readers what the re-write of the Clean Power Plan is expected to do?

Nathan Serota: We know very little. What we do know is that the Trump Administration and EPA Administrator Scott Pruitt in particular have very little interest in implementing the Clean Power Plan in its current form.

bnef_nathan_serota_headshot_wordpressArriving at the existing proposed version of the Clean Power Plan took years not months, including extensive industry outreach across a variety of stakeholders such as utilities. The plan was not drafted overnight and there is no reason that it will take any less time to come up with a new one.

It’s likely that the EPA is simply going to slow-walk the existing plan, rather than actually come up with any new substantive regulations. The fact of the matter is that at the end of the day, the EPA is required to regulate CO2 due to the Endangerment Finding. They are required to regulate CO2 under the Clean Air Act. The CPP was the EPA’s way of doing that.


pv magazine: What happens in the mean time?

Serota: It is worth pointing out again is that what the CPP was doing is sending a long-term signal, primarily to utilities, that the direction of travel was to lower-carbon sources of energy. That long-term federal signal is no longer there.

The CPP is, let’s just call it, in limbo. In the meantime the industry – developers and installers – are going to continue what they were going to do anyway, which is for solar, rebuild a pipeline of solar projects and build them over the next 4-5 years due to continued cost declines for PV and the fact that as of now, the primary policy support for PV in the U.S. remains in place: the federal tax credits.

In addition, it is worth noting that a lot of the rhetoric around the administration and the EPA’s policy stance from the clean energy and environmental advocacy community has been that states may pick up the slack. I would just point out that as of now, that many of the states with strong renewable portfolio standards are already at close or to fulfilling the renewable targets under those programs. In order for states to pick up the slack and provide an additional policy boost to clean energy, there will need to be new state policy supports put into place.


pv magazine: Regarding the rescinding of EPA and Interior Department rules for fossil fuels, do you expect these to have any influence on solar markets?

Serota: It’s hard to tell, but to be quite honest from the perspective of a market research analyst looking at the big picture the short answer is no. For the solar industry, there are three things to be on the lookout for: taxes, trade and FERC.


pv magazine: I will note that despite Trump’s rhetoric on the campaign trail regarding renewable energy, the Interior Department just opened up leases for offshore wind. Does this signal that actions on renewable energy will be different than rhetoric?

Serota: No, based  on my understanding of the executive order, it mentioned figuring out ways to make leasing of public lands more available, and it specifically referred to several kinds of energy sources to focus on. Left out of there are three resources: solar, wind and hydro.

The most important thing for putting the executive order in perspective is to keep in mind two things: What was the CPP going to do for solar, if it had gone through, and besides that, what actually matters for the current wave of solar development – what could materially affect the momentum in the U.S. market. And that is taxes and trade.

It is true that in general we did not expect the CPP to have much of an effect on renewable energy economics, but what the CPP did do is to help utilities in their planning processes to justify renewable energy investments on the basis of federal regulations. That is no longer a possibility, at least for now.

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