10/6/10 "Community Wind" tears up community AND What happens to Big Wind when federal subsidies are taken away?
VIDEO: SOURCE: NEW YORK TIMES What happened to a community after turbines started turning? Some saved $60.00 on their electric bill. Some had their lives ruined. Those who saved $60.00 say, "Worth it"
US Renewable Energy Market Likely To Fall Without Incentives
VIDEO: SOURCE: NEW YORK TIMES
What happened to a community after turbines started turning? Some saved $60.00 on their electric bill. Some had their lives ruined. Those who saved $60.00 say, "Worth it"
October 6, 2010
By Cassandra Sweet, Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- Solar and wind-farm developers are increasingly anxious about a key federal incentive that could prompt a slowdown in the U.S. renewable energy market if it is allowed to expire at the end of the year.
Government incentives included in the Recovery Act Congress passed last year helped the industry survive the brutal recession and the aftermath of the worst financial crisis in decades. The magic serum has been a government program that provides a 30% investment tax credit to developers in the form of a cash grant for building new solar and wind farms. The cash gives developers access to more capital.
The program is slated to expire Dec. 31, casting a cloud over the nascent clean energy industry and rallying supporters. Both federal and state governments have looked to green technology as a potential engine of economic growth and job creation. On Saturday, President Barack Obama used his weekly address to make that case.
"There is perhaps no industry with more potential to create jobs now--and growth in the coming years--than clean energy," Obama said.
Government incentives and regulations have long spurred the U.S. renewable- energy industry. Environmental requirements established in California and other states helped the industry establish itself. Later, federal incentives allowed it to grow, reduce costs and better compete against rivals in Europe and China, where governments have provided more lavish incentives and financial support.
Some U.S. lawmakers are trying to preserve support for the nation's renewable energy industry.
Later this year, U.S. Sen. Maria Cantwell, a Democrat from Washington State, plans to introduce an amendment that would extend the cash-grant program. A similar attempt failed in June.
Sens. Jeff Bingaman, a Democrat from New Mexico and Sam Brownback, a Republican from Kansas have introduced legislation that would require U.S. utilities to use renewable sources for 15% of the electricity they sell by 2021. But the senators don't plan to include an extension of the cash-grant program, or other incentives in the bill, said Bill Wicker, a spokesman for the Senate Energy & Natural Resources Committee.
Bingaman, who chairs that committee, and Sen. Olympia Snow, a Republican from Maine, introduced a bill last week that would make $2.5 billion in tax credits available to clean-technology manufacturers. However, the bill would not extend the cash-grant program, or extend renewable energy investment tax credits past their current 2012 expiration date--another key provision developers are pressing for.
Without an extension of the tax credits, many developers say they won't invest in new projects beyond those they're currently planning to build.
The U.S. wind-power market, which has struggled this year amid low power demand and depressed prices for fossil-fueled power generation, will continue to slide if the cash-grant program is not extended, said Michael Garland, chief executive of San Francisco-based wind-power developer Pattern Energy.
"We are 50% down this year and we'll be 50% down next year without the cash- grant extension," Garland said. "You can't expect the wind industry to live through a setback like that."
The U.S. solar-power market, which grew nearly 40% in 2009 and is on track to nearly double this year, is also likely to slow down if the cash-grant program ends in December, said Arno Harris, chief executive of solar-power developer Recurrent Energy.
"At the scale this industry is at now, it doesn't make sense" to remove the federal incentive, Harris said.
Banks that arrange financing for U.S. solar and wind farms also have expressed doubts about the pace of U.S. renewable energy development if the cash-grant program is allowed to expire.
"It has spurred a lot of the growth we've seen this year," Gisela Kroess, a director at UniCredit SpA (UCG.MI), said at a renewable-energy finance conference Thursday. Kroess added that "the outlook is uncertain" for the cash grant program's extension and with it, growth of U.S. renewable-energy financing deals.
UniCredit is one of six lenders that agreed last month to provide financing for a 45-megawatt California solar farm being developed by Eurus Energy--a Tokyo Electric Power Co. (9501.TO) and Toyota Tsusho Corp. (8015.TO) joint venture -- and U.S. independent power producer NRG Energy Inc. (NRG).
While Cantwell and other Western state senators aim to extend the cash-grant program, as part of a strategy to create jobs and support the growing U.S. clean-energy industry, they are likely to face resistance from other lawmakers.
On Saturday, Obama warned Republican lawmakers want to reverse incentives for clean energy projects, which would threaten jobs, increase U.S. reliance on foreign oil and put the U.S. at a competitive disadvantage to China and other nations.