Buried in the massive “stimulus bill” working its way through Congress this week are details that could significantly alter the markets for solar and wind energy. And the details matter.
After a decade of remarkable growth, both the solar and wind industries have been significantly impacted by the recession and credit crash in financial markets. So 2009 is starting out as a more challenging year for renewable energy industries. There are fewer parties with appropriate tax appetite to invest equity in large projects under current tax laws. And renewable projects have not been immune to the problems in credit markets.
Whatever your views may be on the stimulus bill, it passed. Energy sections in the bill will have important implications for renewables. The Senate and House versions are very different though.
Probably of most significance, the House version has provisions to monetize the value of renewable energy tax credits through DOE grants in lieu of the current tax advantages. That provision is not included in the Senate version that still relies exclusively on manipulations of the tax code.
It’s past time to have transparency in the way governments intervene in energy markets. Incumbent energy sources benefit from decades of huge and continuing complex subsidies that skew markets in their favor. But the vast majority of citizens favor renewables. So lets encourage renewable energy development in a direct and sensible way as proposed by the House. Reliance on crazy manipulations of the tax code ends up providing hidden subsidies to financial institutions while complicating the development of clean energy projects. If the government is going to intervene in energy markets as much as it does, let’s make those interventions transparent and effective.
This week, the Conference Committee is going to hash out the details of the massive “stimulus package”. For anyone who cares about renewable energy, there has rarely been a better time to call your Senators and Congressional Representatives. Encourage them to support the House provision for a simple direct solution for reviving the remarkable growth and job creation of renewable energy industries. Its clearly better than the Senate alternative.