Green Options

Whether the global credit crunch will actually help or hurt the search for solutions to climate change is becoming a debatable issue.

Currently, the issue of climate change appears to be on the back burner as governments are focused on the financial problems that have shaken the global economy. It could be several months before politicians return to focusing their attention on long term problems like global warming.

The green economy shows signs of rebounding faster than others shaken by the global financial turmoil. There are several indicators pointing to the fact.

Given the hue and cry that has been unleashed in America with regard to the bailout, there is finally good news for the renewable energy industry. The Emergency Economic Stabilization Act of 2008, passed by the House of Representatives and signed into law by President George Bush immediately afterwards, extends investment and production tax credits for the wind and solar industries. The extensions will be partly paid for by a change in the tax code for the oil and gas [...]

After failing to pass the extensions 8 times so far this year, the bill was approved by an overwhelming 93 to 2 majority.

For the second time this week, the Senate has voted to block progress on a bill designed to extend Renewable Energy Tax Credits. Although the Bill, that enjoys broad cross-party support, gained a majority of 52-44, Republican opposition meant that it fell just short of the 60 votes needed to proceed.

News that progress on the $17.7 billion package of tax breaks could now be delayed until after the presidential elections in November has been greeted with dismay by the renewables industry. Rhone Resch, President of the Solar Energy Industries Association warned that if the tax credits were allowed to expire at the end of this year it will “result in the loss of billions of dollars in new investments in solar.”

In a blistering attack, Nevada’s Republican senator John Ensign has launched an offensive against solar energy lobbyists, ahead of a crucial vote on renewable energy tax credits.

Breaking ranks with the the state’s increasingly important solar industry, Ensign said that efforts by the Solar Energy Industry Association to force his hand on tax breaks had in fact had the opposite effect of “personally alienating” him and other senators.

In a scathing letter, later released to the press, Ensign accused the lobby group of squandering goodwill by accusing him of favouring “billionaire hedge fund managers” over job creation in Nevada. Indicating the depth of his feelings on the issue, he went on to say “It is rare to have such overwhelming bipartisan support in today’s political climate but the solar industry had it and your association’s leadership squandered it.”

Nevada solar executives had privately become increasingly unhappy with the Senator’s record of voting against bills containing the tax credits. Ensign said that he opposed the bills because the funds for tax breaks would have been raised by increasing the burden on the oil and gas industry. Earlier this spring, he co-sponsored an alternative approach, calling for tax credits without the corresponding offsets. It made it through the Senate by a vote of 88-8, but has become bogged down in the House.

[UPDATE 1: The Consumer First Energy Act which would impose a 'windfall profits tax' on big oil companies, and the Renewable Energy and Job Creation Act both failed to move on. The second of those two contained a one year extension of the Production Tax Credit. The votes were largely along party lines. Kate Shepard at Grist provides a good review of the two bills in this report.]

The PTC has been the single biggest policy driver of renewable energy development in the U.S., and the short one and two year extensions (as well as the absence of those extensions) have produced a ‘feast-or-famine‘ cycle of renewable energy growth in the United States, where all new development is virtually frozen in place, awaiting a tax incentive. As it currently stands, the PTC will expire at the end of 2008.

According to the American Wind Energy Association (AWEA), studies show that 116,000 jobs and more than $19 billion in clean energy investment are at risk from a failure to extend the PTC and other renewable energy tax credits.

Thus far, the biggest hangup for extending the renewable energy tax credits has been the question of funding. Ironically, the Democrats have become the party of fiscal responsibility in Congress, and do not want to pass the bill without a way to pay for it.

Last week at WINDPOWER 2008, I had the opportunity to sit down with Greg Wetstone, Senior Director of Government and Public Affairs for AWEA, and Tom Gray, the Deputy Executive Director. The pair told me that the tax credit issue was really one of fiscal ideology. And that unfortunately, many in Congress had been using the renewable energy tax credits as a “political football.”

Photo credit: NREL

A new study by the American Wind Energy Association (AWEA) found that U.S. manufacturers dominate the world’s market share of small wind turbine sales. Comparatively, global sales of larger, utility-scale turbines are led by companies like Denmark’s Vestas, Spain’s Gamesa and India’s Suzlon, who are also hungrily eying the U.S. market.

The 2007 Small Wind Turbine Global Market Study reports that about

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