Between innovative technologies and years of subsidies, the cost of wind and solar power has dropped dramatically–almost to the point where these industries are close to delivering cleaner electricity at prices competitive to fossil fuel generated power.
It’s important to note, though the renewable energy industry is close to offering competitive rates, they’re not there yet and wind and solar companies are telling congress they can’t be truly competitive without a few more years of government support. With Obama giving their efforts a boost by proposing a package of tax credits for renewable power and manufacturers, you would think we’d be well on our way to aiding these industries.
Unfortunately, there is little enthusiasm for renewable energy subsidies in Washington. Concerns about the overall deficit and tax payer’s losses on the Solyndra debacle have marred images of pouring billions into the renewable energy industry.
The wind and solar industries argue that there is less risk with the tax breaks they are seeking–tax credits wouldn’t be handed out willy nilly, but taken only by businesses that are already up and running–leaving taxpayers less likely being stuck subsidizing a drowning company. These tax breaks would create jobs while increasing domestically produced, clean energy. The renewable energy industry isn’t hiding the fact without new breaks, they will be forced to scale back production and eliminate jobs in an already starved economy.
Federal incentives have helped renewable energy use to almost double, said Obama while at Buckley Air Force Base in Colorado in an effort to support clean energy projects as a way to help foster energy independence and employment. A one year extension of the 1603 tax grant (a program which allows renewable energy companies to get 30% of the cost of a new project back as a cash grant once completed), would create 37,000 solar jobs in 2012, according to EuPD Research.
Lobbyists for both the wind and solar industry are pushing for tax breaks to be passed quickly, and are trying to tack on an extension of the payroll tax cut as well (taxes paid by employees and self employed lowered from 6.2% to 4.2%), as it is coming to an end in February.
Of course it’s all up in the air what Congress will actually decide. It may end up that Republicans will use the recently postponed Keystone XL oil pipeline as a bargaining chip to approve the renewable energy credits. Which would be crafty, and most likely not appreciated by the renewable energy sector and environmentalists alike, but that’s a different story.
As it is, oil’s been subsidized for almost a century, getting $41 billion annually, with renewables ranging about $6 billion–and trust me that has not been going on for a century. It’s time to stop sinking money into a fuel supply that’s diminishing, and focus on tax breaks to increase renewable energy that will lessen our foreign fuel dependence, bring manufacturing back to the states, create jobs, and focus on getting energy from a source that’s not environmentally destructive.
Though support for subsidies is dwindling, it’s important that energy tax breaks be granted to wind and solar companies to even the playing field between renewable energy and fossil fuels. Until it is, renewable energy won’t make any headway.