Wind, solar projects race to finish before tax credit expires


USA Today – August 25, 2008

Regardless of your thoughts on global warming, government waste and inefficiencies are something that most of us can agree on. To have alternative energy programs that are on or off, year after year, is simply a waste. I understand the need to have finite limits to programs (except Social Security never seems to end) but they shouldn’t just stop.

Instead the programs should be weaned off of government assisted life support so that the economy can adjust. Having these alternative forms of energy production suddenly cut off forces other programs to never start since the investors can’t be assured of a long and viable future.

A congressional stand-off that has blocked extension of federal tax credits for renewable energy projects is setting off a boom in the wind and solar industries. Developers and customers are racing to install systems by year’s end to qualify for the credits, which can cut the cost of a large commercial system by 30%.

Randall Swisher, head of the American Wind Energy Association, says 8,000 megawatts of wind energy the equivalent of 16 average coal-fired plants are under construction, with developers scrambling to finish most by year’s end.

Extension of the tax credits has wide support in Congress, but the issue has bogged down in partisan battles. Senate Democrats insist the subsidies costing the Treasury at least $1.7 billion a year be offset with new revenue, while Republicans insist on an energy package that includes offshore oil drilling. Energy consultant Stow Walker expects the credits to be extended, but Congress plans to adjourn in early October, leaving just weeks to decide.

The boom could be short-lived. Uncertainty about renewal of the credits is causing projects scheduled for 2009 and beyond to be delayed or scrapped.

Abengoa Solar can’t get financing for a $1 billion solar thermal plant in Arizona without the credit, says company senior adviser Fred Morse. National Wind says four Midwest projects are in limbo. EnXco’s Grimbert has rerouted turbines intended for the Midwest to the United Kingdom. “This is a classic boom-bust cycle, and it’s not at all good for the industry,” Sherwood says.

You can read the rest of this excellent article here.

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