They’re at it again. The folks in Congress are doing the opposite of what good common sense would dictate on energy issues. Senate Majority Leader Harry Reid (D-Nevada) and his House counterpart Nancy Pelosi (D-California) have dropped important mandates and incentives for renewables from 2008 energy policy. According to renewableenergyaccess.com, this major concession to friends of the old energy establishment is part of the horsetrading necessary to deliver a bill to voters before the Thanksgiving recess.
What’s getting the ax?
1. The RPS, or Renewable Portfolio Standard, would have set a goal of acquiring 20-25% of the nation’s electctricity from renewable sources by 2025. This is a very modest target to begin with. The European Union, for example, is on track to meet a 21% target by 2010. While 29 individual states in the U.S. have instituted their own RPS targets, we need an aggressive national policy to stimulate U.S. innovation and investment in alternative energy. We ought to be pursuing a global leadership position in renewables. As things stand, we aren’t even doing a very good job at following.
2. Tax incentives such as the PTC (Production Tax Credit) and ITC (Investment Tax Credit). The solar space doesn’t exactly seem to lack for investment these days, so the ITC may indeed be an unnecessary boondoggle. But the PTC, currently set to expire in December, 2008, is critical for bringing consumer costs for solar in line with other energy sources in the near-term and attracting producers and jobs to the U.S. market. America, when it comes to our ability to compete in a new, sustainable economy, we may get caught with our pants down.
Pelosi and Reid may be gambling that a stronger energy bill will pass in the wake of the Presidential election. Meanwhile, the current bill seems to throw a bone to all the old dogs - oil, coal, natural gas, while appeasing heartland legislators through biofuel subsidies to farmers in Midwestern states. Those of us who care about climate change and a green energy future will want to get on the horn to our senators and representatives!
We’ve recently written about explosive growth in the solar energy space. Encouraged by government subsidies, companies like China’s SunTech Power and Arizona’s First Solar have have been bullish regarding growth prospects in the U.S. solar market. Let’s hope that tax incentive programs on the state level will be sufficient to drive this growth, and that this latest foolishness from Washington will only present a bump in the road, rather than a long-term setback for U.S. solar producers.
One Comment
As a follow-up, solar stocks have taken a bit of a dive on this news as of this afternoon. From the Houston Chronicle Online - chron.com -
Yingli Green Energy Holding Co. shares fell hardest, posting a decline of $3.94, or 11 percent, to $31.85 in morning trading. SunPower Corp. fell $11.56, or 9 percent, to $117.14 as First Solar Inc. dropped $16.69, or 8.1 percent, to $190.16.
Banc of America Securities analyst Eric Brown said JA Solar Holdings Co.’s “conservative” earnings guidance last week opened up an attractive buying opportunity.
“We would use the pullback in the stock to build positions,” Brown said in a note Monday.”
3 Trackbacks
[...] in Congress, Democrats, Environment, Global warming at 11:36 am by LeisureGuy I hate this sort of thing, don’t you? They’re at it again. The folks in Congress are doing the opposite of what good [...]
[...] need to be struck to gain some ground — for a case in point, check out Dan Gurvich’s Key Renewable Provisions Dropped from Energy Bill) — is now turning to the point that there is no going back to business-as-usual for the [...]
[...] Daily life, Democrats, Environment, Global warming tagged corruption at 11:00 am by LeisureGuy Congress doesn’t get it. They’re at it again. The folks in Congress are doing the opposite of what good common sense [...]