U.S. Congress Bedevils Renewable Energy–Even When It’s Trying to Help
Someone asked me the other day if the on-again/off-again tax treatment that the solar and wind industries receive from Congress is hurting the forward progress of this sector. She was referring to reports like this one from Energy Matters, a free publication from the American Energy Society (which is definitely worth a daily read):
In December, Congress extended a tax credit that included solar panels. Yet instead of energizing the industry, the extension has hurt growth, as solar companies no longer rush to meet a deadline. After jumping more than 1,000 percent since 2010, panel installations are projected to grow by only 0.3 percent in 2017.
It was hard not to be sarcastic in response; I was heavily tempted to say, “Oh, hell no. Haven’t you heard? Investors really love uncertainty.” Of course, I was much kinder in my response, but let’s look at this for a second. Take the solar industry with its 6.5 million (and growing) jobs it provides, and consider that the entire engine by which it operates depends on investor confidence that revenues from PPAs and preferential taxation will remain stable.
The obvious reason for this disincentive, of course, is that renewable energy is being fought every step of the way by the fossil fuel industry. And where some of this effort may be hidden from public view, most of it is glaringly clear. Witness the constant stream of stories like this one, where big money is working its hardest to overturn the renewable portfolio standards in the states that have adopted them, by suing them in federal court.
The fundamental problem underlying all our woes in government is money in politics. As long as cash buys favorable legislation, we can count on slow growth (at best) for the things we like. Yes, this includes renewable energy, but it also extends to essentially anything that We The People want: universal healthcare, strong gun control, better public education, a reduction in wealth inequality, etc.
The only good thing to report here, is that laws like “Citizens United” will soon be overturned. People of all political stripes, from progressives to the Tea Party, are incensed by this overt attack on American democracy, and are getting on board with groups like MoveToAmend.org. It can’t happen soon enough.
Here’s another tidbit for those who may think all this is exaggerated. The U.S. is blocking a bill, supported by industry, that would form a treaty with Canada to ban the super-pollutants called HFCs. More here. Ask yourself how that’s possible in an environment free from corruption.
Congress is also NOT renewing the 30% tax credit for geothermal heat pumps. It expires at the end of this year.
They probably didn’t have millions of dollars to counter the millions of dollars given to the politicians by the electric companies.
Not the fair way to run our country.
I totally agree.
When looking at the geothermal industry in an Eastern state I found that installers were not willing to install systems at less then about $70,000. When calculating the energy savings that a home owner might garner by switching from oil to geothermal in about 15 -20 years the number came out again to about $70000. If you hired an engineer to plan and permit the system, the retail cost for the sub contracts could be expected to be no more than $25,000 to $35,000. In short, installers had managed to lock in a state wide price that increased the profit on individual systems and the only economic incentive left to home owners would be the federal credits. Overall a lower price would likely drive the industry leading to more profits, but it would be more work for the installers. It is typical of an industry without sufficient competition that is likely to be overwhelmed by solar panel installation simply because of poor management. (A recent installer of both reasoned it would be cheaper to install more solar PV and use resistance heating [which would need a back up source of energy.)
Like this everyone involved in a renewable industry is not necessarily adverse to making as much money as possible. They may or may not care about renewable energy per se but won’t shy away from advertising their business as “renewable.” The renewable industry is in this way not immune to a short sighted profit motivation.
In this kind of environment it is difficult to offer subsidies. If the goal is to increase the number of systems installed rather than simply profit taking by installers.
Overly generous financial tax payer incentives for localised geo thermal technology science research and development has run its road globally and should cease.
That is not to say that privately financed geo thermal developments should not continue globally – they should of course and under normal private sector arrangments.
Lawrence Coomber