On Wednesday, the U.S. House of Representatives passed bill H.R. 5351 to renew a standing investment tax credit for solar, as well as wind, biofuels and other renewable sources. But as in the past, the bill faces stiff resistance in the Senate and a veto from President Bush.
Most media sources have reported on the bill as if its future is still uncertain, but the general feeling among analysts, entrepreneurs and VCs that I’ve talked to is fairly gloomy. Most expect that the credits will run out, leaving the industry in the lurch until the changing of the guard in 2009.
This same bill has been knocked down two times before without even making it to President Bush, so the persistence of House Democrats in continuing to push looks more like political in-fighting than any effort at progress.
The problem for the cleantech industry is the lack of certainty. The current set of credits runs out at the end of this year, but will probably be restored — and possibly reinforced — in 2009, especially if the Democrats win the presidential election. However, that leaves an interim period of an unknown length in which ongoing projects would be unprotected. And without absolute certainty that there will be a credit at some point, many investors could be dissuaded from projects they would otherwise have poured millions into.
Curiously, many solar cell manufacturers located in the United States stand to lose less than the country as a whole does. The CEO of Nanosolar, Martin Rosencheisen, told me that there’s strong enough worldwide demand for his products that losing the ITC would have only a marginal impact on his business. But while international buyers snap up cells, the nascent industry at home will continue to languish. It is, Rosencheisen says, “really embarrassing”, in light of the steps other countries have taken to encourage investment.
For Bush, and the Senate, to turn around and accept a bill this year, House leaders would in turn need to accept a change in the funding source. At the moment, the bill is designed to rescind tax breaks to oil producers in the US in order to provide the funds for cleantech. “As soon as the bill is disconnected from the oil industry, it will pass,” opines Alain Harrus, a principal at Crosslink Capital. However, taking the money from Big Oil is a symbolic move the Dems aren’t likely to let go of.
In essence, they’re angling for political capital. After all, if the ITC dies in the Senate or beneath the veto pen, the Dems will be able to point at the corporatized greed of the Republican party — saying that they’re immorally supporting an industry that is already making record profits. The upshot: Don’t count on seeing the ITC renewed this year.
6 Comments
-
Geoff said:
I guess when gas is 5 dollars a gallon and the oil companies are killing the small town residents on fuel costs they are all trying to help Hillary or Obama become President. Renewable eneregy is not a partisan issue its an economic issue. Get rid of oil subsidies and send them to solar companies. Lets create jobs instead of crushing the American people under the weight of high gas prices. I am a Life Time member of the Republican party, lets get our heads back on our shoulders and start getting smarter with renewable energy.
-
TOM said:
I agree with Geoff. I thought Republicans were supposed to be great capitalists. They definitely are out of touch on the economic development benefits of solar energy. It’s time to be pragmatic and do the right thing instead of being an ideologue and battling against it just because the Democrats initiated and support it. This issue should transcend politics. Hopefully there are enough Republicans with the courage to stand up to the oil industry. According to a recent UC Berkeley study, each Megawatt of solar energy generated produces 33 jobs due to the installation required — 10 times any of the other energy sources. When 85% of Americans want to see more investment by the Federal government in renewable energy sources, it’s time to listen to the people and spend our tax dollars wisely instead of the oil and gas lobbyists that are wining and dining you. By the way, I’m a Republican too and very ashamed of my party on this one. It’s embarrassing.
-
David Scott Lewis (Zytech Solar, a Going Green 100 Winner) said:
I couldn’t agree more with Geoff and Tom… but I’m the biased SVP of a solar power company focused on utility-scale CSP and CPV systems, Zytech Solar (a GoingGreen 100 winner, along with Nanosolar).
What drives solar power in the U.S.? Optimally, 7 cents per kilowatt-hour. It’s not about Al Gore, greenhouse emissions or anything else; it’s about economics.
Both Nanosolar and Zytech understand this and our type of solutions (albeit VERY different) can help make the economics work.
-
Geoff said:
I usually don’t like to post more than one entry on a blog, but my grammer and spelling were pretty bad on my first posting.
Imagine every home in the United States running of solar power. When it becomes cost effective you will have FREE electricity running your castle. I think the sun is good for about another 5 billion years but as for fossil fuels, well I can guess that they are running out and are non renewable.
I don’t think the earth has suffered terribly from burning fossil fuels as Al Gore would have us believe while he preaches gloom and doom as he burns jet fuel and pumps carbon into the air on his private jet rides around the USA. When Mount Etna erupts in Sicily, millions of tons of “bad stuff” is pumped into air. More than any car ever driven in one eruption. So its a good assumption to say the Earth is able to recover from our fossil fuel consumption.
The issue is economic not environmental. As a good capitalist Republican I look at the issue a little differently from your average tree hugger. So lets say you are running your home on free power from the sun, what say you ?
Well, imagine driving your electric car home and plugging it into your electrical outlet in your garage, which is getting power for free from the sun from your solar panels (Minus any yearly maintenance costs) The demand for oil will be driven down and the price of gas will drop significantly.
With world demand rising for oil based products and fossil fuels lets get smart and try to find a way to reduce our consumption.
About 19% of all our oil we use comes from the Middle East. Liberals crying about blood for oil are a little misguided. We get most of our oil from Canada, South America and North Africa. We get about 2% from Iraq and ZERO from Iran. Saudia Arabia is our # 2 supplier but they are our friends and allies.
The sun creates enough energy in one hour to run the planet and meet all its energy needs. Digging for coal and oil is antiquated and old school thinking. We have the technology now, it just needs to become affordable to the public. For every megawatt of power generated from the sun into a solar grid about 75 jobs are created. These include installers, engineers, technicians, management, etc. There is no need to climb down a hole in the ground 2 miles below the earth to dig up coal when the sun will more than meet our energy needs for billions of years.
Al Gore has his heart set on Global warming and I think he is doing what he believes is best for the country, but his science is wrong and I do not support his liberal stance on anything. But to his credit, he did bring renewable energy to the forfront of our nation’s mindset. Global warming may be a science fiction story to help Al raise money for the Democratic Party but we are running out of fossil fuels and the price of gas is going to continue to increase and hurt our econonomy.
Lets roll up our sleeves and start getting SOLAR energy on the front burner for an energy source. Keep politics out of it. As a LIFETIME MEMBER of the Republican Party I do hope my party takes a hold of this issue and runs with it as a capitalistic idea rather a TREE HUGGER issue for the sake of our country and our children. I am going to set the example and put solar panels on my south side of my house in Florida and kiss my electric bill goodbye. Gulf Power yearly rate increases be damned.
Good job to President Bush for continuing the advance of solar power at the White House. May the Republican Party get a grip on this issue and wrestle it away from the Democrats who are on the right track with this issue (except for Global Warming) but hey, they even blamed Bush for the ice age 10,000 years ago (:
-
Deep Patel said:
Wake up people, Ron Paul is a co-sponsor of legislation designed to encourage the development of alternative and sustainable energy. H.R. 550 extends the investment tax credit to solar energy property and qualified fuel cell property, and H.R. 1772 provides tax credits for the installation of wind energy property. Hes a Republican!!! But the one you don’t hear about. Compared to all presidental canidates (demo/repub) hes the only one who has a voting records favoring Renewable Energy!!!
-
Geoff said:
Ron Paul is a LIBERTARIAN fiscal conservative (Republican imposter), but he does have good ideas with renewable energy. We are all awake, we just don’t want a guy in office that supports isolationism from the rest of the world. We know all about Ron Paul. He won’t hunt down the Islamic Jihadist’s on their own turf; he will build a big wall around the USA and lie in wait for the next 9/11. He will shut down NAFTA and does not support free trade. He will allow Communism to flourish in South America and won’t fight Islamic Jihadist’s. It costs too much money he said.
4 Trackbacks
1:20 pm
.: GAFNO.com - Hot World News Blog :. » Blog Archive » Renewable energy pros plead President, Congress for tax credit said:
[...] an interview with VentureBeat, Nanosolar CEO Martin Rosencheisen called the policy uncertainty “really [...]
1:14 pm
Solar to hit speedbumps: Falling prices, rising supply and red tape » VentureBeat said:
[...] United States. The long-standing investment tax credit is set to disappear this year, which will leave utility-scale developers in the lurch until a new president is elected. Michael Holman, a senior analyst at Lux, told me that states like [...]
2:32 pm
Solar moving south? Rebate plan falters in San Francisco as southern California gains massive project » VentureBeat said:
[...] cheap.” It’s reminiscent of the much larger Federal renewable tax credit, which is also looking endangered. When political wrangling gets involved in credits that businesses have counted on to make their [...]
9:36 pm
Roundup: No more tech bubble, Dell layoffs and more » VentureBeat said:
[...] it requires taking $18 billion of tax breaks from the oil industry. It appeared that the ITC would die in political deadlock this year. However, two senators now propose reviving the credit, without taking the money from [...]