Earlier this week, I was skeptical about the prospects of federal investment and production tax credits for solar and wind. These incentives which have been crucial to the white-hot growth of renewables looked set to expire at the end of the year. But Senators decided to inject the controversial bailout bill with their renewal. And this afternoon, the House approved and the President signed the bill into law.
So, renewable energy has passed the federal policy hurdle. Wind received a 1-year extension of the ~2 cent per kWh tax credit through 2009. And solar received an 8-year (through 2016) extension of their 30% of system cost investment tax credit. The federal government has done its part. Now, the question remains whether the frozen financial markets will loan the capital necessary to continue rapid manufacture and installation growth of 30+% per year.
But the bailout package raises the federal deficit and national debt to unprecedented heights, which will be a huge challenge for the next President to mitigate. All eyes turn to the economy to see if this bill will keep our financial system afloat…
In more news related to wind, New Jersey just approved a 350 MW offshore wind farm off its coast! Slated to begin producing power in 2013, this is one of the first offshore projects in the US (while a number of farms are already operational in Europe), and is a great opportunity to generate electricity for power-hungry coastal cities in a climate-friendly way.
The project fits the recent Google.org Clean Energy 2030 Plan, which outlines how wind and solar combined with efficiency can replace coal in the US electricity grid over the next 22 years. I find their plan much more practical than Gore’s aim to have fossil-free electricity by 2018 (Aside: I’m not trying to discredit Gore’s awesome work for this planet. He’s the man. I just don’t think his plan may not be actionable). While I think Gore’s plan would incur huge costs in abandoning current coal and natural gas infrastructure prematurely, Google.org’s Greenblatt outlines a smoother transition based on aggressive renewable energy growth that actually saves our country over $1 trillion. I was glad to see their report integrate an awareness of the persistence of a tight oil market in the years ahead – projecting a pump price ~$8 per gallon by 2030. At the same time, their plan’s savings are largely dependent on this high oil price while their huge reduction in oil demand through a transition to plug-in hybrid electric vehicles may prevent such a large increase in oil’s price (it’s difficult to tell — that’s why I’m publishing a oil price forecast report later this month). Oil prices are just one of the many difficulties in projecting the cost of such programs long into the future. But the plan does a great job of simplifying our choices ahead and laying out a realistic but visionary path that our country can take to get energy prices under control and reduce greenhouse gas emissions. Well done Google!
Let’s keep moving this discussion forward, and make the US a global leader in wind, solar and efficiency to get our economy back on track-
Tags: bailout passes, Google.org, Oil, renewable tax credits, Solar, Wind