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For the last two years, the renewable energy sector has been fighting to renew the "investment tax credit (ITC)." This little bit of legislation lets companies write-off a portion of money spent on building renewable energy projects. It's been fairly successful, spurring growth in solar and wind in America.
But now a huge number of renewable energy projects are on hold, because no one knows whether these tax credits are going to be extended. Bills containing the ITC have gone through the House and Senate almost a dozen times in the last few years and every time it's been denied. SunPower has said that it might leave the American market completely if the ITC is not renewed.
Almost everyone supports the ITC, of course, but no one can figure out how, in our ailing economy, to pay for it. Democrats tried to take subsidies away from oil and gas companies, but the Bush administration threatened to veto any such legislation. And so we're at a standstill, with gigawatts of new power generation just waiting on the news.
General Electric has entered the game, with their political savvy, and has decided that the ITC, in fact, pays for itself. It's no surprise that GE wants this passed. They're the US's largest producer of wind turbines, and they've got some exciting solar technology as well. They say that the taxable revenues generated by these projects, once they go online, more than offset the ITC. And since, without the ITC, they won't be built, they are in fact revenue positive for the treasury.
A financial stickler might note that the revenues would be generated by coal power plants that would be built (without subsidies) in place of the renewable plants. And that would be significantly more revenue positive than renewable energy. But, really, is that the road we want to stay on?
Hopefully, GE's foray into this mess will mark a change in the wind, and we won't have to deal with a lapse in the only big steps the U.S. government has yet made to promote renewable energy.
Via CleanTech Media
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written by Green Gadgets, June 20, 2008
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written by Craig, June 20, 2008
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written by me, June 20, 2008
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written by Salamndstron, June 20, 2008
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written by John thomas, June 20, 2008
JT
http://www.FireMe.to/udi
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written by anon, June 21, 2008
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written by Juggernaut, June 22, 2008
Taking away the money of the ITC won't create the "level playing field" you suggest. In order to best benefit the consumer - and the energy producers - over the long run, there needs to a clear, long-term plan of subsidies and supports for alternative fuel sources. Currently, the infrastructure (including vehicle factories and the like) supports the production of oil. If there's no incentive for change, then companies will avoid making that change...and as oil runs out, the price increases will drive all related businesses (directly, shipping; indirectly, everyone who ships goods to market)under.
A solid plan that promotes the alternative power infrastructure will stabilize the whole system, and give all sectors enough time to implement plans to cope with coming changes.
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An interesting take on ITC. Regardless of whether it will be paid for via the use of the renewable energy, we have to find some way to pay for it. Can't we just take some of the war funding away?