Washington (Platts)--7Oct2009/620 am EDT/1020 GMT

Southeastern distributed solar developers warned Tuesday that blocking a US cap-and-trade bill in the Senate would create hurdles for renewable generation in their region.

"This sector is taking a leap forward," said Michael Shore, president of FLS Energy, a start-up solar developer based in Asheville, North Carolina. "And there is still the possibility that...this carbon legislation that everybody envisions will happen doesn't happen, and then the investors and the sector as a whole lose confidence."

Shore and other renewable developers told congressional staff and environmental groups at a briefing that a national cap on carbon emissions as well as a renewable portfolio standard is necessary to steer utilities in the southeastern US towards investing in renewable resources.

"Right now the capital markets are poised to invest in renewable energy, I think we should recognize that, and create a national carbon standard that can help support them," Shore said on the sidelines of the briefing.

Dell Jones, vice president of renewable project development at Regenesis Power, a California-based company that operates solar projects in Florida, said that a carbon cap will open up opportunities for private investments that can drive down costs of solar development, and enable different technologies to compete for larger marketshare.

Uncertainties with whether any renewable mandates can get through Congress would hamper the search for private capital by distributed solar technologies, which have the potential for becoming more cost-effective, the developers said.

Utilities are "in partnerships with us to the extent that the North Carolina Renewable Portfolio Standard requires them to be, and for them to go beyond that level of requirement is difficult," said Shore.

--Mu Li, mu_li@platts.com