Capitol Hill eclipse for solar power?
Frustrated with political deadlock, solar energy companies fear a big setback if Congress fails to renew a key federal tax credit set to expire at the end of the year.
The provision would extend a 30 percent break of up to $2,000 to homeowners. Businesses would qualify for the same percentage, without a cap.
Barry Cinnamon, CEO, Akeena Solar
(Credit: Akeena Solar)While the U.S. House of Representatives has passed a bill to extend the tax credit, the effort so far has failed eight times in the Senate--the latest defeat occurring on July 30.
"The delay in the ITC (investment tax credit) renewal has meant that large commercial jobs are being postponed" because of the risk that they can't be installed by December 31, said Barry Cinnamon, chief executive of Akeena Solar.
Registering concern for the future of their nascent industry, executives like Cinnamon note that the uncertainty over the tax credit's renewal has already contributed to the loss of small and medium commercial jobs. If the current logjam continues, they say the impact will likely hurt the commercial sector more than the residential sector as the residential credit is capped at $2,000--which is rarely a critical factor in a homeowner's decision-making process.
The irony is that industry lobbyists report bipartisan support for the provision in the Senate, where the vote fell nine votes short of the three-fifths supermajority needed. Six members did not vote, including Sens. John McCain and Barack Obama. (The national governor's association has also come out in support of granting a long-term extension of the solar tax credits.)
Josh Green, Mohr Davidow Ventures
(Credit: Mohr Davidow Ventures)One source tied to the solar industry said that many Republicans were loath to support the extension "because they don't want to give the Democratic Congress any credit" before the election. Previous attempts also were stymied by oil lobbyists, who fought efforts to close a tax loophole on oil companies to pay for the tax credit extension.
As the calendar turns to the fall, the odds increase that the solar tax extension could become hostage to the presidential contest. Several executives involved with the solar industry said that tens of thousands of jobs will be put in jeopardy and more jobs won't be added next year if Congress fails to act.
"Many of these commercial projects are in important planning stages right now, and the overall industry is at the tipping point that will lead to widespread adoption," said venture capitalist Josh Green of Mohr Davidow Ventures, who predicted that the failure to renew the ITC will result in the delay or cancellation of important commercial projects in the United States. "The absence of the ITC will kill most, if not all, of this growing momentum. We need only look to the interruption of tax credits for the wind industry for an example of something that we do not want to repeat. This would be a real shame."
Lyndon Rive, CEO, SolarCity
(Credit: SolarCity)At the same time, however, he suggested that the absence of an investment tax credit may have relatively little impact on businesses in the short to medium term. That's because the rapidly expanding solar markets in Europe, Asia, and the Middle East will not be affected by the controversy over the ITC and will still create plenty of customers for solar manufacturers.
"Over the longer term, however, the United States commercial market is far too important to be ignored," Green said. "A consistent ITC policy extending over several years that allows industry to grow and flourish is critical to the industry."
Despite the tough slog, though, industry players remain convinced that the U.S. government understands the investment tax credit's role and will press the case for continuing solar's domestic momentum.
Lyndon Rive, the CEO of SolarCity, a residential solar installer in California, said he remains "very optimistic" that the ITC will be renewed by the end of the year.
"The ITC has become a very politicized issue, however, and it's possible that approval could extend into 2009," he added. If the ITC is allowed to lapse, Rive predicted it would cost thousands of solar jobs and severely limit the growth of the solar industry in the U.S.
"The jobs lost in the U.S. would move overseas to more favorable solar markets," he said. "Solar power will eventually reach cost parity with other energy sources, but that will not occur in the next few years without incentives."
The worst-case scenario is painted by industry executives who envision a tremendously down year in 2009 for the solar industry with commercial installations grinding to a halt. To be sure, residential installations will continue to grow--especially in states where there are good rebates, such as in California, New York, and Connecticut. But companies that are most exposed are those that have built the bulk of their business on commercial installations. These companies will have to find some other way to pay their bills if the ITC doesn't win an extension.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie. 
This is a matter of national security. If most of our power comes from a single source that is supplied by foreign countries that are hostile to us, we are at risk. We need to move away from importing power and start exporting solar generators and wind turbines. Energy can and should be a tool to reduce our trade debt.
If you want to fight terror, find out who has the best energy policy where you live, then vote for them. In Oklahoma it is Andrew Rice.
Renewable energy can also create more jobs than oil. Big Oil does not like the jobs that will be created because they will be small company jobs with a low barrier to entry.
Small decentralized renewable power is better for the consumer. It is better for the economy and it is better for the environment.
If we want to find a real alternative to oil then we have to cut the boogeyman crap. Whenever someone talks about "Big Oil" being evil it's a scare tactic and nothing more. You have to get realistic and stop propping up your arguments with fictitious super villains. This isn't a comic book and we don't have evil corporate controlled shadow governments secretly running things in massive conspiracies.
You shot down your own argument and you probably don't even realize it. You say that when more people use solar and wind it will be more efficient. However you go on to say that it should be small and decentralized. The only way efficiency can be increased by mass consumption is through mass production and you can't do that in a small and decentralized manner. To make solar and wind viable as you would like to imagine it then it has to be efficient on a small scale. It's not right now and flooding the market with subsidized bad products doesn't help that cause any because it just means more stuff we have to pay to replace later when a real solution comes along.
All I am saying is let's continue to fund research to increase the efficiency of solar and wind to the point that it does become viable. Let's make it a working product before deploying it.
We have a balance of payments problem, and the tax payer is expected to pay a 30% subsidy for rich corporations to buy solar panels made in Japan and elsewhere? If there were a way to restrict this to only 100% domestically produced solar panels so that we subsidize manufacturing only in the USA, then we can talk.
We see corporations who are in the solar equipment arena putting up solar panels on their own buildings only when they can get big subsidies. There is something wrong here.
I have a watering system that is completely solar photovoltaic powered, but I did not receive any government subsidy for it. There are applications where photovoltaics are cost effective without subsidies and we should concentrate in these areas. The price of electricity is high, so the solar photovoltaic industry has market forces working in its favor.
Remember, please do not tax me and send my money to other countries. When you buy a solar collector, instead of paying a little every year for power, you pre-pay all at once for 25 years worth of power.
Hopefully, Congress will not subsidize foreign manufacturers to make them stronger. Let's focus on domestic energy and domestic manufacturing providing good manufacturing jobs for Americans.
What about all the American car companies that scream BUY AMERICAN, yet none of the cars are even 80% American and a high percentage are made in Canada and Mexico.
Tax subsidies are for Americans to buy solar panels that have the financial envolvement of many Americans. Don't confuse the other side of the equation.
When Congress proved incapable of passing federal legislation opening up cable TV franchise monopolies to competition years ago, the battle shifted to the state level. State legislatures picked up the slack and passed legislation requiring local competition among potential cable TV franchisees. The resulting competition lead to considerable cost savings to subscribers and increased the pressure on cable TV companies to improve their abysmal service quality.
Many states have struck out on their own to enact incentives to stimulate the expansion of renewable energy. Some, like Colorado and several others, have succeeded. Environmental and other consumer groups may need to team up with renewable energy companies to replicate such experiences across the rest of the country on a state-by-state basis as well. If Congress also acts, whether it be sooner or later, that would be great. A combination of federal and state incentives to move to clean energy would certainly help accelerate the process.
Faced with the uncertainty of federal action, it makes sense to redouble the efforts at the state level.
Bruce Hahn
American Homeowners Grassroots Alliance
Put the next three trillion dollars into R&D on alternatives instead of into trying to be the last man standing in the oil fields as they run out, and we'll find out what we can really do.
Not if we all vote for Libertarian candidate Bob Barr!!!!!
http://www.bobbarr2008.com/splash/video/?s0618
So, tens of thousands of people already rely on government largess for their livelihood, and if Congress /does/ act, even more will? Why would any small-government conservative vote for this?
More to the point, my pet peeve is that ITC is more beneficial to commercial than residential and they have deeper pockets and other methods for offsetting the cost than residential. If it gets extended, then extend it for residential only.
The 2008 Fossil To Fuel Renewables Energy Independence Plan
Congress will raise the lease royalties on currently banned federal lands from 12.5% to 25% and take that money with oil and gas could ammount to 500 billion depending on market prices. This is estimated based on drilling on the continetal shelf, drilling in ANWR or developing Shale extraction could push that number well north of 1 Trillion dollars over time that could be used to reduce our dependence on foriegn oil by investing heavily in renewables.
Use these monies to extend and enhance current incentives and establish a program that will allow homeowners and businesses to borrow money to implement solar and other alternative energy and efficiency projects with low interest and terms that extend slightly beyond the payback period of the technology. So if solar takes 10 years to pay back, still offer tax incentives but then also offer financing for a 10 year loan.
Providing financing takes away one of the major reasons that people don't do energy or efficiency projects that might otherwise pay for themselves in the long term, not having that up front money. When more people can act, more people will take action, and real change will occur.
Loans will be transferrable from property owner to property owner if agreed upon between the buyer and seller in the event of a sale of the property.
Of course the devil is in the details but this is the direction I would like to see America take, using home grown resources to create the solution. 25% for our own resources is not too much to ask from Oil Companies. Drilling for oil inside the US will create jobs, installing alternative energy will create jobs.
We should be a model for the rest of the world and not just a bunch of congressman fighting the good fight for their cause and failing to compromise for the good of the Country.
The legislative proposal all discriminate against homeowners. Why should homeowners have to subsidize big business and the Utilities. The subsidy should be reversed with all of the subsidy going to the homeowners and none to business.
Distributed power is the way to go. The old fashioned centralized power generators is an expensive solution. If the building codes were changed and every building had to furnish their own power we could eliminate 40% of the GHGs. Support the new ZEH (Zero Energy Housing) building standard. Already our EU friends have a new standard in Germany that required after 2010 that every Germany home be nearly 100% energy self sufficient. If we adopted the German standard in the USA then homeowners would have lower energy costs and the environmental damage by using GHG would be ended.
- by Snoopy2222 August 18, 2008 6:01 PM PDT
- That means Oil will not be able to subsidize the current inefficiency of solar solutions. We look beyond this for real solutions. ( http://www.highspeedsat.com/geostationary-satellites.php ) If tax incentives bolster science and solar efficiencies they should exist. If they are simply used by large corporations to show off their greenness at the expense of federal and state funds the incentives should die.
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- by Manhattan2 August 18, 2008 6:42 PM PDT
- I don't get it. This was our comment. How did it get accredited to you and how did the link get in the comment? We agree with what you say because we said it first?
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