Regional News
Federal support for renewables in question
The
federal government has supported every type of power that would eventually
dominate the energy market in the US since the 19th century.
That’s according to a 2011 report by the venture capital company DBL Investors.
They looked at the federal subsidies injected into new industries like land
grants to timber companies and laying railroad lines to transport coal.
It all adds up to a considerable amount of subsidies in the early days of each
carbon-based energy source.
The availability of those subsidies is enviable to Joe Sliker, who runs a solar
installation company called Renovus.
He says a residential installation will take about four months. But only one
week is spent on the physical installation, the rest is lining up the
incentives and working out the grid connection.
“I would love to be able to just sell systems, design them and install them,
the same way that a contractor would install a deck or an addition or anything
else.”
The reality is Sliker and others like him rely on subsidies to give them a
competitive edge against industries that have been around for a long time.
“It’s been 30 years that this has been really needing to happen and if you take
away the federal support it”s going to be bad for the industry.”
But the transition to renewables is under fire. The high-profile failure of the
solar power startup Solyndra has fueled a pushback against continued support.
In a September hearing of the House Oversight Committee, California Republican
Darrell Issa portrayed federal support for renewable power as a waste of money.
“Looking back on the Obama green energy record three years and billions of
taxpayer dollars later, the American taxpayers have received very little return
on the president’s signature investment.”
According to the Congressional Research Service, in 2009 for every $1 in tax
breaks for fossil fuels, $7 went to renewables.
So the government has already taken a risk on renewable energy and now has to
decide whether it wants to continue.
Two major incentives may be the first to go.
A 30% upfront tax reduction that was included in the stimulus act for
commercial solar projects ended last year. Another 30% break for new wind
projects will expire at the end of the year unless renewed by Congress.
That fosters uncertainty in the marketplace, according to Carol Murphy of the
Alliance for Clean Energy New York.
“We’ve seen projects put on hold, we’ve also seen a number of companies that
are member companies of ours laying a large number of people off.”
The renewable power company Iberdrola announced 50 layoffs this month. New York
City based Everpower is also putting on hold a new windfarm in Allegany.
That windfarm is facing a lawsuit but what’s really stymied the project, says
company’s CEO, Jim Spencer, is the uncertain future of federal tax breaks.
“These are multi-million dollar projects, you need to know that that tax credit
is going to be available well into the future.”
Despite those obstacles Spencer is optimistic that the wind power industry will
be competitive with traditional fuels by 2020.
But Maureen Reno, of the Union of Concerned Scientists, says that it is still
far too early to expect parity between fossil fuels and renewables.
“Ideally, if you want to say place a limit on how long you want to subsidize
renewable energy, you”d want to subsidize it until what’s called market
transformation is complete.”


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