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Will 2012 mean obstacles for sustainable energy?

Will 2012 mean obstacles for sustainable energy?

This past week, Forbes environment writer, Todd Woody, produced a series of articles about the sunset of tax subsidies to renewable energy. A tax credit that helps solar projects and a production credit that is used to support the wind-power industry are both set to expire at the end of the year. In addition to limiting the options for expanding our renewable sources of energy, they also mean a loss of jobs in a still-fragile economy. On the subject of the cash grant program for the solar industry, Woody wrote:

The cash grant program “is a very effective tool and helped more deals get done in 2011, and the loss of 1603 would slow the pace  of growth in the renewable energy space,” Jonathan Plowe, Bank of America’s Merrill Lynch’s head of new energy and infrastructure solutions, said in an e-mail. Plowe has worked with SolarCity to finance the Silicon Valley’s company’s initiative to install 120,000 solar arrays on military housing in 28 states.

The Solar Energy Industries Association commissioned a study that found that some 37,000 jobs would not be created in 2012 if the cash grant program expires at the stroke of midnight on New Year’s Eve.

The beauty of the 1603 program cited above is that the money isn’t for research, or speculative development, but an award for a completed project actually producing energy. This sort of government subsidy is appropriate for developing energy sources that may have higher kilowatt production or construction costs, but have lower down-stream costs, such as the expenses created by pollution and climate change caused by traditional carbon-based energy supplies. A lot of environmental and industry groups would like to see this program extended:

On Wednesday, leaders of the Sierra Club, National Audubon Society, Natural Resources Defense Council, Defenders of Wildlife, The Wilderness Society and World Wildlife Fund joined SunPower, BrightSource Energy, NRG Energy and other solar companies in signing a letter to Obama urging him to get involved in efforts to extend the cash grant option, known by the distinctly usound-bite unfriendly name of the 1603 Treasury Program.


There is no doubt that the initial cost of a kilowatt of energy from coal is, for the time being, going to be less than a kilowatt of solar generated electricity — that is simply the reality of the progress of energy technology. Just as the government supplemented the costs of ethanol and allows oil producers to write-off exploration costs and well depreciation, we owe it to our nation and our succeeding generations to support the development of an energy source that does less damage to the environment. While this should not (like it has become for the oil industry) be an unending financial crutch, with proper targets in place and sufficient support from the outset, public support for sustainable energy sources.


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