Congress Clean Energy Champions Introduce Key Clean Energy Legislation

Two important pieces of legislation have been introduced in the House and Senate that would provide long-term certainty to the clean energy industry by extending tax credits for wind, geothermal, hydro and biomass facilities.

Yesterday in the House, Washington Republican Dave Reichert and Oregon Democrat Earl Blumenauer introduced a piece of legislation that would extend the production tax credit (PTC) for a suite of renewable energy technologies through 2016. The PTC provides a credit of 2.2 cents for every kilowatt-hour of electricity generated by a qualifying facility. The PTC for wind is set to expire at the end of 2012, and the PTC for geothermal, hydro and bioenergy would expire the following year.

Because projects take years to plan and develop, the prospect of an expiration frequently causes a “boom-bust” cycle. In the lead-up to the expiration date, there’s a frenzy of activity to take advantage of the credit. Then project levels fall drastically the following year. This is happening today in the wind industry as companies anticipate the end of the Treasury Grant Program this year, and the potential lapsing of the PTC next year.

In a statement after the bill was introduced, Karl Gawell, executive director of the Geothermal Energy Association, explained that companies in the geothermal sector are seeing a similar problem.

“Extending federal tax incentives through 2016 is vital for the future of the US geothermal industry. We are already seeing a slow-down in projects unable or unlikely to meet the current deadline. This legislation would stem this downturn and sustain growth in the US geothermal industry.”

The PTC primarily benefits large-scale facilities. A bill introduced in the Senate would also extend incentives to community-scale wind facilities, potentially spreading the financial benefit of project development to a broader range of people.

Minnesota Democratic Senator Al Franken and Montana Democratic Senator Jon Tester introduced the Community Wind Act, which would expand a small wind Investment Tax Credit to projects up to 20 MW. Currently, that that tax credit is only available for facilities up to 100 kW. The ITC offers investors a 30% credit based upon capital costs.

Because of the complexities of the PTC, it can be difficult for smaller community projects to arrange project financing. This piece of legislation is designed to make financing models simpler and bring in more capital to the sector.

These are two promising developments. If Congress is serious about creating conditions for businesses in the U.S. to grow, these simple pieces of support would help leverage thousands of new clean energy projects and billions in private financing.

Take Action: Tell Congress to Continue Critical Clean Energy Policies

Solar power, wind power, and even geothermal power have boomed in recent years in the U.S., making the country a leader in these fields. They’ve partly boomed due to dropping costs, more efficient technologies, and more energy-conscious people and businesses. However, a huge part of their growth has been due to a couple of government policies — the federal Production Tax Credit (PTC) and the federal Investment Tax Credit (ITC).

These are set to expire, unfortunately, but a couple of Congressmen, Representative Reichert (R-WA-08) and Representative Blumenauer (D-OR-03), introduced a bill to extend the renewable energy production tax credit on November 2. You can encourage your Representative to support this bill in seconds on this wind power action page. Please do so now!

Now, if you try to make the argument that clean energy shouldn’t be living on subsidies, fine, but that would mean that fossil fuels and nuclear power shouldn’t be living on subsidies either (they get trillions of dollars in subsidies every decade and don’t have to worry about those subsidies expiring like the clean energy industry does). Also, I think it’s important to note that subsidies are often used to get a new or young industry that provides important societal benefits going, and fossil fuel and nuclear industries received a ton more subsidies in their early development than wind and solar. Who’s is getting the short end of the stick when it comes to government subsidies?

A coalition of 24 governors from both the Republican and Democratic party and from each region of the country have gotten behind an extension of the PTC and ITC. I’m sure that number will grow. But Congress has to hear your voice, as well. (The governors are actually calling for much more than this, if you’re interested in reading more about their call to action.)

Now, if you think these subsidies aren’t doing anything, don’t worry, I’ve got an answer for that, too.

Compared to the previous year, when the PTC has expired and not been immediately renewed, wind energy installations have fallen up to 93% compared to the previous year! The PTC lowers the cost of wind by 90%. Wind power has grown a ton in the U.S. in the last few years and we now have the second-most installed wind power in the world (only behind China — note the image above). Last year, we also had the second-most newly installed wind power (only behind China). We have enough wind power installed to power approximately 10 million homes now! And we have 400 U.S. manufacturing facilities for wind across the U.S. creating thousands of jobs. I could go on and on, but I hope you get the point.

The solar energy situation is similar:

The U.S. solar industry now employs over 100,000 people (more than the coal industry).The U.S. solar industry is the fastest-growing industry in the country (creating jobs 10 times faster than the rest of the U.S. economy).There are over 5,000 solar companies across the U.S., some in every state.Solar PV installations have grown 69% over the last year (40 times faster than the U.S. economy as a whole).The U.S. solar energy industry is a net exporter, by $2 billion (and is even a net exporter to China).

I could go on and on, but the important point today is that these federal policies are important to solar continued rapid growth. Solar Energy Industry Association president Rhone Resch said last month: “an extension of the 1603 program even for just one year will support 37,000 additional jobs and deploy 2,000 additional megawatts of solar capacity. Let me repeat that – 37,000 new jobs next year.”

Clean energy is widely supported by the public, but without pressure on our Congress people, I think you and I both now that most of them will pay more attention to the lobbyists and their political donors (largely the big, rich fossil fuel industry).

So, take action today!