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Public Radio's Environmental News Magazine (follow us on Google News)

Clean Energy Crunch Time

Air Date: Week of

Some say the sun will stop shining on the solar industry if Congress doesn’t renew clean energy tax credits. (Photo: Jackie Beck)

Solar, wind and other renewable energy companies are getting anxious as the clock runs out on important tax credits. The credits expire at the end of the year but Congress can't reach an agreement to extend them. Living on Earth's Jeff Young tells us what's holding them up and what's at stake for clean energy.


GELLERMAN: Renewable energy is hot – the market for solar and wind power has soared in recent years – with record-breaking growth. But people in the renewable energy business warn that the industry could come to a screeching halt if Congress doesn’t renew renewable energy tax credits. So far, lawmakers have come up short. Living on Earth’s Jeff Young tells us why and what’s at stake.

YOUNG: Look at the solar industry’s phenomenal 45 percent growth last year and you’d think this is its moment in the sun. But Solar Energy Industries Association President Rhone Resch says the outlook for next year is cloudy.

RESCH: We’ve already started to see significant sales drop-off for the photovoltaic industry and in fact we see no new concentrating solar power projects going forward. So we run a risk of very quickly going from an economic engine in this country to being another industry on the unemployment line here in the US.

YOUNG: Resch says project developers are nervous because they still don’t know if Congress will extend a critical investment tax credit for solar power, which expires at the end of the year. It’s the same story with wind power. The wind industry just had a record-breaking first quarter, installing enough turbines to power some 400 thousand homes. But with the production tax credit for wind power up in the air, the mood among wind energy companies is, in a word:

WETSTONE: Desperate.

YOUNG: That’s Greg Wetstone with the American Wind Energy Association. He says bills to extend the renewable energy tax credit have now failed four times in less than a year.

WETSTONE: I think you see an industry that is really mystified and, you know, they look to us here at American Wind Energy Association and say, “You know, what’s going on? Why can’t we get Congress to do this? I thought this was popular, and we had broad support.” And, it’s a very frustrating situation right now.

YOUNG: Renewable energy does enjoy broad support. But a conflict over tax policy mixed with election year politics makes it tough for congress to reach agreement. Congressional Democrats are sensitive to charges that they spend too much. So they want to pay for the tax credits. Montana Senator Max Baucus and New York’s Charles Schumer say that means ending some tax benefits that other businesses enjoy.

Republican Senate leader Mitch McConnell opposes using subsidies for oil companies to fund clean energy credits. (Courtesy of Mitch McConnell)

BAUCUS: And we don’t want to have to borrow money to do this. Rather, we think we should be self disciplined. That, that is the right way for us to begin. Republicans say no.

SCHUMER: And make no mistake about it, who’s the party of fiscal responsibility?

YOUNG: Republican Senate leader Mitch McConnell of Kentucky objected to Democratic proposals to pay for clean energy credits by either ending subsidies to oil companies or closing a tax loophole for hedge fund managers.

MCCONNELL: We don’t believe philosophically that in order to extend existing tax policy you should use that as an excuse to raise taxes on others.

YOUNG: On top of that, the solar industry’s Rhone Resch detects some good old partisan wrangling. As the election draws near, neither side wants to let the other claim credit on clean energy.

RESCH: Because we’re a popular issue we do get held hostage to partisan politics, which is certainly something that happens during an election year. And so both parties are looking at renewable energy in general as a political football that they can use to their advantage in the fall elections. Unfortunately, hundreds of thousands of jobs are at stake.

YOUNG: Resch fears if the partisan showdown continues congress might not act until after the November election. By then, the wind industry’s Greg Wetstone says a lot of the damage will already be done by disrupting investment and project planning.

WETSTONE: If it doesn’t happen by August we have some really serious negative impacts on our ability to continue to grow this industry, there’s no question.

Some say the sun will stop shining on the solar industry if Congress doesn’t renew clean energy tax credits. (Photo: Jackie Beck)

YOUNG: Congressional leaders say they’ll try again to extend the tax credits later this month. An economic analysis commissioned by the renewable energy industry claims 116,000 new jobs hang in the balance.

For Living on Earth, I’m Jeff Young in Washington.

[MUSIC: Jah Wobble “Car Ad Music 7” from ‘Car Ad Music’ (30 Hertz Records—2005)]

GELLERMAN: Coming up: fighting global warming – with a baa baa here and an oink oink there - That’s just ahead on Living on Earth.



Solar Energy Industries Association

Analysis of the economic impact of tax credits

American Wind Energy Association on tax credits

Senators’ voting records on clean energy tax credits


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