Calls for extension of renewable energy incentives grow
Krenecki’s boss, GE Chairman and CEO Jeff Immelt said something similar earlier this year, describing U.S. Energy "Policy as a certain kind of hell, and threatened to sell his products elsewhere such as in Turkey.
GE is a world leader in renewable energy. The Company reports revenues from its portfolio of energy efficient and environmentally advantageous products and services crossed $14 billion in 2007, up more than 15% from the previous year. GE’s "cleantech" fund for investment in cleaner technology research and development exceeds $1 billion.
Other U.S. executives that have taken up the call are heavyweights Rick Waggoner, CEO of General Motors; Marvin Odum, the president of Shell Oil; Gary Cohn, co-president of Goldman Sachs; Dan Yergin of Cambridge Energy Research Associates; and Dan Reicher, Google’s clean-energy leader.
Their message was reinforced this week by the release of a new economic study by international consulting firm Navigant Consulting, Inc. suggesting that more than 1.2 million employment opportunities, including 440,000 permanent jobs, and $232 billion in investment would be supported in the U.S. by the solar energy sector alone through 2016 if Congress extends the solar investment tax credit (ITC) for 8 years.
"By extending the solar investment tax credits, Congress can provide an immediate boost to the floundering U.S. economy by creating hundreds of thousands of jobs and injecting billions of dollars of new investment capital into the economy, while at the same time driving down energy costs for consumers," said Rhone Resch, president of the Solar Energy Industries Association (SEIA), based in Washington, D.C.
The impact of not extending the tax credits is depicted in this chart by the World Resources Institute showing U.S. renewable energy investment - in this case installed wind capacity - when tax incentives expired in the past.
Legislators have heard the message, but the battle is still not over. The U.S. House of Representatives passed a bill this week that included a one year extension for wind, and a three year extension for other renewable energy projects The draft legislation also included a proposed federal renewable portfolio standard that would require 15 percent of the nation’s electricity to be generated from renewable sources.
But the bill is far from becoming law. The Senate has yet to vote on its own energy package and U.S, President George Bush has threatened to veto the bill. And time is running out. Congress is set to adjourn on September 26th and after that the political attention in the United States will be focused on the Presidential Election, the results of which will certainly put a whole new spin on the issue of extending tax credits.
In July legislation extending renewable energy tax credits failed a key procedural vote and the bill which provided an eight-year extension of solar energy investment credits, and a one-year extension of tax credits for biodiesel, renewable diesel and wind power, was set aside.
The issue is far from settled and the extension of tax incentives for renewable energy is only one facet of the proposed U.S. energy policy framework that likely will be overhauled extensively when a new administration takes office in January 2009. Offshore drilling, energy independence, revival of the nuclear energy industry, reducing greenhouse gas emissions, expanding Arctic oil and gas development and extending subsidies for biofuels are other pressing energy-related issues that will need to be dealt with.
But as GE Chairman Immelt notes "renewable energy isn’t just a subsidy baby, subject to the whims of Congress. It’s a multi-billion dollar business for GE around the world. Clean energy is one of the best export stories the U.S. has today he adds, "and a major economic opportunity that could be lost unless the U.S. deals with its "hellish energy policy".