Stalled energy policy slows business
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KAI RYSSDAL: Legendary oilman T. Boone Pickens made a big bet on energy today. Interestingly enough, one that has nothing to do with hydrocarbons. Pickens is going to spend $8 billion on wind. He announced plans to build the world’s biggest wind farm in a place called Pampa, Texas. He did it without knowing whether he’s going to get some help from the tax man.
Congress is considering an extension of clean energy tax credits. They give homeowners and businesses a break in return for installing more expensive renewable energy systems. But those credits expire at the end of the year, which is leaving clean energy companies in the dark.
From the Marketplace Sustainabilty Desk, Danielle Karson reports.
DANIELLE KARSON: Workers at Standard Solar are loading residential solar panels into the company truck.
The D.C.-area firm is making more of them than ever. A big reason why is federal tax credits that go to buyers of the panels. But company President Tony Clifford says Congress’ lack of a long-term policy is short-circuiting potential business.
TONY Clifford: For larger commercial installations, which might take several months or a year or more of planning, how can you expect them to get the lending guarantees that they need to make the project work if there’s no guarantee long-term that the tax credit is going to be there. So, they’ll never start the project.
Right now, hundreds of projects across the country are hanging by a thread, according to Michael Eckhart with the American Council on Renewable Energy. He says they represent the equivalent of what 40 nuclear power plants generate.
MICHAEL ECKHART: All the projects that are lining up for financing to be developed or put into place in 2009 have to wait until we really know: Do we have a production tax credit for wind power and geothermal and biomass? Do we have an investment tax credit for solar energy and fuel cells or not?
Now some of those projects may disappear altogether. Overseas investors would love to bankroll green technology projects here because the U.S. market has been white hot. But Eckhart says investors aren’t willing to wait forever.
Eckhart: They’re building their factories elsewhere, where the markets are more stable. They’ll build the factory twice as big so they can export from Spain, from Australia, from China, to the U.S. market when it does get turned on.
In Europe and Asia, renewable energy is already a major part of the electricity mix. Germany’s cornered solar energy. China is taking the lead in wind turbines.
All this makes Jeanine Sargent wince. The CEO of Oerlikon Corporation, a global maker of solar systems, says the U.S. has pioneered many technologies only to lose out to foreign producers because of erratic federal policies.
Jeanine Sargent: Flat-panel displays and large-screen TV’s was a technology that was innovated in the United States. And the manufacturing, and the operation and sales of that is outside of the United States. I do not want to see solar suffer that same edge.
Rhone Resch with the Solar Energy Industry Association says sales are already dropping off.
Rhone Resch: If we’re going to get serious about reducing our greenhouse gas emissions, these technologies have to make up a major portion of our electricity mix going forward.
Even if Congress approves the tax credit extensions, Resch says the delay is already derailing large-scale solar projects. He says Congress’ glacial pace could cost $19 billion in economic investment in wind, geothermal and solar technologies. And nearly 120,000 green jobs could dry up between now and next year.
In Washington, I’m Danielle Karson for Markteplace.
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