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Earlier this week we talked about SunPower packing their bags should the investment tax credit (ITC) fail to pass the Senate for renewal. We were hopeful about HR 6049, the Energy and Job Creation Act of 2008, passing. But if SunPower holds to their word, start waving good-bye now because...the bad news happened. The Senate didn’t manage to overcome a filibuster to pass good ol’ HR 6049, which would have renewed solar tax credits for another six years.
Congress did more than just drop the ball on this credit. It’s basically equal to giving the finger to the entire solar industry, green power, global warming, renewable energy, new jobs, our future. Yes, disappointment often sends me straight to doom-and-gloom thinking, but am over reacting? Pause for a moment and consider the snowball effect on alternative power should one of the leading companies of one of the leading components of alternative power ditch our country, especially when our economy is shady at best (pun not intended but I'll take credit), with investors getting jumpy and everyone with less expendable income in their pockets. It is expected that we’ll see about $19 billion of lost investment and about 16,000 lost employment opportunities, with California - a significant economy that is already significantly suffering - being one of the hardest hit. That’s a lot of doom and gloom, in my book.
Everyone has their opinions about the ITC and if it is or isn’t a good thing for business. Reality is it’s not around any more, so some of those opinions are about to go for a test run. For your researching pleasure, you can find out more with:
Economic Impacts of the Tax Credit Expiration Study
Photo via DBking
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written by EV, June 11, 2008
The reason it failed is because it also added a 'windfall profits tax' on the oil companies. (which has done nothing but increase dependence on foreign oil) Remove that and it would probably pass.
Ken Roberts,
First you say
then you say
How are the two not the same? You are distorting the market one way or the other.
Ken Roberts,
First you say
A lack of subsidies will encourage investment in alternatives that are more cost-effective, rather than relying on alternatives that require subsidies to survive.
then you say
If you're going to do anything, a more appropriate response would be to add a small tax to fossil-fuel based energy sources, to make alternatives more competitive.
How are the two not the same? You are distorting the market one way or the other.
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written by Ken Roberts, June 11, 2008
To EV,
The reason that they are not the same is that by including a tax (or carbon credit) in the price of a polluting source of energy, you are essentially requiring the consumers of that energy to pay for the pollution. The essentially corrects the 'externality' effect of pollution on the market. Ideally that tax money should be used to actually clean up the pollution (or used to reduce other tax rates)... but of course realistically it'll be spent on a bridge or highway to nowhere.
With subsidies, you are requiring the tax payers at large to pay the cost of pollution, and remove the power of the market place to decide the least-polluting alternative. The government arbitrarily decides which alternative will be cheapest, using the people's money of course. This gives us products like corn ethanol and "clean coal".
The only problem is that it is difficult to tax pollution. There is not even agreement on what exactly is polluting, and then you have a lot of special interests like the coal and oil industries.
The reason that they are not the same is that by including a tax (or carbon credit) in the price of a polluting source of energy, you are essentially requiring the consumers of that energy to pay for the pollution. The essentially corrects the 'externality' effect of pollution on the market. Ideally that tax money should be used to actually clean up the pollution (or used to reduce other tax rates)... but of course realistically it'll be spent on a bridge or highway to nowhere.
With subsidies, you are requiring the tax payers at large to pay the cost of pollution, and remove the power of the market place to decide the least-polluting alternative. The government arbitrarily decides which alternative will be cheapest, using the people's money of course. This gives us products like corn ethanol and "clean coal".
The only problem is that it is difficult to tax pollution. There is not even agreement on what exactly is polluting, and then you have a lot of special interests like the coal and oil industries.
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written by Ken Roberts, June 11, 2008
On a side note, if we didn't have any corporate tax in the United States and in the states respectively, then that itself would be a great incentive for green companies to move here.
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written by Kitty, June 11, 2008
SunPower can't get their way so instead of competing like a normal company they throw a fit and leave.
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written by EV, June 12, 2008
Ken Roberts, Thanks for the well thought out reply.
This I will agree with as I am not exactly of the belief that CO2 is a pollutant as every animal and a number of plants produce it, unlike mercury and other things.
I do like this idea. It would also have the effect of reducing government interference in businesses and businesses from needing lobbyists in the government.
There is not even agreement on what exactly is polluting, and then you have a lot of special interests like the coal and oil industries.
This I will agree with as I am not exactly of the belief that CO2 is a pollutant as every animal and a number of plants produce it, unlike mercury and other things.
On a side note, if we didn't have any corporate tax in the United States and in the states respectively, then that itself would be a great incentive for green companies to move here.
I do like this idea. It would also have the effect of reducing government interference in businesses and businesses from needing lobbyists in the government.
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written by GoSolarNow, June 12, 2008
$17 billion in taxpayer money goes to the big 5 Oil companies. WHY? Try to remove that pork and the Republicans cry foul. Try to shift incentives to industries which represent the future of American energy independence and they cry that these new industries "must stand on their own feet."
WHAT HYPOCRACY!
Those oil apologists would rather ship $$ to mid-east terrorist supporters than help America become Energy Independent.
Incentives are used to encourage industries that will benefit Americans and that could use a boost. The OIL industry doesn't need taxpayer handouts! Level the playing field by treating RE the same way as fossil fuels!
WHAT HYPOCRACY!
Those oil apologists would rather ship $$ to mid-east terrorist supporters than help America become Energy Independent.
Incentives are used to encourage industries that will benefit Americans and that could use a boost. The OIL industry doesn't need taxpayer handouts! Level the playing field by treating RE the same way as fossil fuels!
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written by David, June 12, 2008
gosolarnow:
First of all the last three votes on extending the Tax Credits failed becasue of the crap tacked on to the bill. Threatening the removal of the $$ Billions in tax credits to the 5 major U.S. oil companies would never have flown, it had veto written all over it by the lame duck president.
And, for your info the U.S. only imports 6% of our oil from the Middle East. Canada and Mexico are at the top.
First of all the last three votes on extending the Tax Credits failed becasue of the crap tacked on to the bill. Threatening the removal of the $$ Billions in tax credits to the 5 major U.S. oil companies would never have flown, it had veto written all over it by the lame duck president.
And, for your info the U.S. only imports 6% of our oil from the Middle East. Canada and Mexico are at the top.
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written by Jack, June 12, 2008
We import 23% from the Middle East.
http://www.afa.org/magazine/June2002/0602chart.pdf
http://www.afa.org/magazine/June2002/0602chart.pdf
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written by Ken Roberts, June 12, 2008
There is an important distinction to make here. Tax credits merely let companies keep more of their own earnings, and are only market distorting when similar companies are denied tax credits. So if the oil and coal industries paid less taxes than solar or wind, that would of course be a problem.
I'm against all corporate taxes, personally. I think that they're the worst kind of hidden tax. Corporations are not people, they are owned by people, that have to pay taxes on income received from the corporation. Actually taxing the corporation itself just increases the cost of goods, and provides a huge disincentive for corporations to be based in America. It is politically popular because it fools voters into thinking that they are paying less taxes than they really are. Not only are the voters still actually paying the taxes, but the voters also bear the burden of fewer domestic jobs.
It is little wonder why the United States has one of the highest corporate taxes in the world.
I'm against all corporate taxes, personally. I think that they're the worst kind of hidden tax. Corporations are not people, they are owned by people, that have to pay taxes on income received from the corporation. Actually taxing the corporation itself just increases the cost of goods, and provides a huge disincentive for corporations to be based in America. It is politically popular because it fools voters into thinking that they are paying less taxes than they really are. Not only are the voters still actually paying the taxes, but the voters also bear the burden of fewer domestic jobs.
It is little wonder why the United States has one of the highest corporate taxes in the world.
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written by Big Bustard, June 12, 2008
Corporations pay NO TAXES. They pass the taxes through to their customers. Imagine the incredible BOOMING economy if all dividends, interest, and corporate earnings were tax free.
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written by Big Bustard, June 12, 2008
Government (inhibition, control, retardation, slowing, GOVERNING) subsidizes tobacco, avocadoes, corn, sterilized needles, solar power, wind power, ethanol, oil companies, and my Aunt Alice. Maybe they should just get the hell out of the way and let people go to work!
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written by Centrist, July 22, 2008
This is really degenerating into the standard nonproductive political philosophy debate, rather than the alternate power issue. May I suggest that those readers who are U.S. citizens (I'm sure there are global readers of this blog) need to get familiar with http://www.OpenCongress.org which is the best interface to American lawmakers I've found. You can get in and see what's in bills, never mind what the spinmasters tell you is in there. You can track the bills, comment on the bills, and keep an eye on your supposed representatives and how they voted (or didn't vote). Then it will help you contact your congress and tell them what to do. It's a really impressive site, lots to explore in there.
Non-USA readers, I hope you'll look around for a similar site for your nation, assuming you have some form of democracy. Remember that if government isn't OF the people and BY the people, it sure won't be FOR the people. Do your duty, help steer the ship of state. That's the only political talk that matters.
We now return you to our regular eco programming, in progress.
Non-USA readers, I hope you'll look around for a similar site for your nation, assuming you have some form of democracy. Remember that if government isn't OF the people and BY the people, it sure won't be FOR the people. Do your duty, help steer the ship of state. That's the only political talk that matters.
We now return you to our regular eco programming, in progress.
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If you're going to do anything, a more appropriate response would be to add a small tax to fossil-fuel based energy sources, to make alternatives more competitive. But of course, that's politically risking.