Written and posted by Representative Jerry McNerney

I spent more than 20 years of my professional career researching and developing renewable energy sources. I can say definitively that we haven’t yet begun to realize the benefits that new energy technology development can offer to this country.

Doing so will mean good jobs in the United States. It will also mean an increasingly diversified economy developing energy efficient and environmentally friendly technologies, producing products and ideas for the rest of the world.

Estimates are that launching down this path will mean the creation of hundreds of thousands of new, stable, clean energy jobs in our country — at all levels of the economic ladder.

In my former field, wind energy, 9,000 new jobs have been created in the past 17 months alone. Think about it: that’s engineers who decide where to locate new turbines, technicians who erect them, mechanics who maintain them, steelworkers who manufacture them and drivers who transport them from place to place.

And that’s just for wind energy. Don’t forget about solar, geothermal, tidal, biomass — and a whole host of other types of new, clean energy that may not have even been discovered yet.

That’s why it is so critically important that we continue a series of tax credits to help spur investment in all these new forms of energy. These investment and production tax credits are set to expire at the end of the year, along with more than 100,000 renewable energy sector jobs.

Each day that passes without legislative action means greater potential for job loss, decreased investment and ultimately less domestic production of renewable energy.

The pending expiration and the uncertainty surrounding the extension of the tax credits means that investors will soon walk away from clean energy projects. Due to the significant time between conception and implementation of renewable energy projects, financing for many projects is on hold pending extension of the renewable energy tax credits. What’s more, financing for projects currently under construction could also dry up in the coming weeks if it becomes clear that they cannot be completed before the end of the year.

Now, as we face a mounting energy crisis and an uncertain energy future, is not the time to play games with renewing these important tax credits. In fact, if we are serious about addressing the energy crisis we face here in America, I can think of no better investment than to support wind, solar, biomass, geothermal and other new energy forms that continue to become more affordable and available.

After all, renewable energy means not only economic security as we create good jobs while producing increasingly less expensive, clean, domestic power, but environmental and national security, as well.

I was proud to vote for legislation in the House last week that extends these valuable renewable energy tax credits. I encourage all of my colleagues to join me immediately so that, as a nation, we can truly become energy independent.

 

Meanwhile, the industry holds its breath to see if a deal can be worked out to avoid a big setback

Posted July 28, 2008

Over the past few years, wind energy has experienced a tremendous, if precariously fragile, boom.

Last year alone, wind-power capacity jumped 21 percent in the United States. Wind is now one of the country’s fastest-growing electricity sources, buoyed by strong consumer demand, mounting concerns about fossil fuels, and—perhaps most notable—vital government support.

Wind turbines churn at Invenergy's Buffalo Mountain windfarm near Oak Ridge, TN.

Wind turbines churn at Invenergy’s Buffalo Mountain windfarm near Oak Ridge, TN.
(Charlie Archambault for USN&WR)

Nearly every American-bred source of energy, from coal to nuclear power, gets some sort of federal push, and wind and solar companies receive theirs in the form of tax credits, which enable them to line up investors and overcome enormous start-up costs. (Hundred-foot blades don’t come cheap.)

The credits, which are set to expire at the end of the year, enjoy almost universal support on Capitol Hill. Politicians of both parties routinely champion them.

And yet because of continued bickering, Congress this year has failed to renew them—with potentially drastic consequences.

The mere prospect of these credits expiring, in fact, has already begun to rattle the renewable-energy industries. Some wind developers are putting projects on hold and, in more extreme cases, laying off workers. “We have four projects right now that are what we call construction ready—we could install them and get them up and running by spring 2009,” says Leon Steinberg, CEO of National Wind, one of the nation’s leading wind-energy developers. “But none of our financial institutions will finance these projects with just the hope that the tax credit will be renewed.”

As a result, Steinberg says, construction on these projects has yet to start. The rationale for waiting is simple: The wind-energy tax credit is good for 10 years and pays developers about 2 cents for every kilowatt-hour of electricity they produce, but it must be available on the date that a project comes online. If a new wind farm starts pumping out electricity in January 2009 but the credits haven’t been renewed yet, it loses out.

The solar industry, which gets a 30 percent credit on new investments, is in the midst of a similar shake-up. Some large-scale developers have tabled projects as they await Congress’s decision, while smaller operations are scrambling to get solar installations up and running by December. “With solar, we can put things in place a little more quickly, so you are seeing a tremendous jump in solar installations right now,” says Gilbert Metcalf, a professor of economics at Tufts University and noted tax policy expert. “It is driving up the cost of solar panels and installations.”

If the credits are not renewed, he warns, the solar market could collapse, and solar-technology firms may have to lay off workers. “It will retard the progress we are making,” he says.

The uncertain future, in turn, is sending ripples through the economy, affecting, in particular, the nation’s nascent “green” manufacturing industry, which has quietly emerged in the tow of the renewable-energy market. In the Midwest and other industrial regions, factories that manufacture turbine parts or solar panels are seeing a slowdown in new orders.

New York officials recently warned that the state could lose 7,000 jobs if the tax credits are allowed to expire, and national estimates put the potential losses above 110,000. In the past, green manufacturing in the United States has been somewhat stifled by volatile levels of government support, and industry observers warn that the trend could worsen—with more green jobs and companies going overseas—if Congress refuses to act.

History hints at the possible long-term damage if the credits expire in December—because it has happened before. In 1999, 2001, and 2003, Congress didn’t renew the tax credits, and in each of the following years, wind-power installations fell dramatically, according to the Department of Energy.

In 2000, there was a 93 percent drop in new wind projects; in 2004, a 74 percent drop. “This is not rocket science,” says Greg Wetstone of the American Wind Energy Association. “When the credit is in place, wind energy and renewable energy has grown dramatically. When the credit has lapsed, the level of wind development has fallen dramatically.”

The solar industry suffered a similarly dramatic bust in the early 1980s, when Congress, looking to cut spending, eliminated the solar tax credits and effectively cut the industry in half.

Today, ironically, there is overwhelming bipartisan support for the incentives—even Sen. James Inhofe of Oklahoma, a conservative Republican and vocal global warming skeptic, is a strong proponent. Few consider the tax credits’ estimated price tag of about $8.2 billion a significant drain on the federal budget, especially in light of the measurably larger incentives awarded to oil and coal. In fact, a recent study by General Electric found that the tax credits more than pay for themselves, because they create jobs and profits, resulting in 2007 in a net gain of $250 million for the federal treasury. Also, the American public is behind them: About 94 percent of Americans support government development of solar energy.

It is tempting to think that all this goodwill would have presaged easy passage. But Congress, despite its pledges of support, has lately ground into something of a stalemate, and on multiple occasions in the past few months it has defeated or blocked bills that would have salvaged the credits.

At the moment, the main obstacle to progress seems to be a philosophical one. House Democrats, led by the so-called Blue Dog Democrats, a group of fiscally minded moderates, have insisted that the cost of the credits be offset by savings elsewhere. Their solution, which would raise taxes on offshore companies, has rankled Senate Republicans, who insist that no offsets are needed in the first place. And so a parliamentary standoff has unfolded. Twice the Senate attempted to attach an amendment to the now recently passed housing relief bill that would have renewed the credits; twice it was stripped out by the House. Meanwhile, a House bill with similar aims was defeated last week by a Senate Republican filibuster.

At a breakfast meeting with reporters on Monday, Sen. Jeff Bingaman, chairman of the Senate energy committee, said that passing the tax credits this week is one of the Senate’s top priorities before it adjourns for its August recess.

It remains uncertain how he and his Democratic colleagues intend to reconcile the squabbling over offshore drilling and oil speculation that has tied up most energy legislation this summer.

Industry observers remain optimistic that the credits will get renewed, but they somberly note that each day Congress waits, the greater the financial loss becomes. They add that if Congress were really serious about supporting renewable energy, it would make the credits permanent, just like its support for fossil fuels, which they argue would spur green-collar jobs across the rust belt. But they’ll take what they can get, preferably sooner than later.

Our Perspective:

If Congress really believes there is an energy crisis in the making, they will extend the credit. The states are jumping in and passing provisions to make alternative energy affordable. This along with the Federal tax credits has spurred the growth of the alternative energy market.

If Congress drops the ball or continues to drag its’ heels, we will be right back where we began. We can all look forward to paying higher prices for electricity and face the possibility of rolling brownouts, for our local providers will be unable to meet the growing demand for electricity.

Let us know how you feel? Should you want to know more about solar opportunities email george@hbsadvantage.com

 

Less than seven months from now the current Federal tax incentives to encourage the use of renewable energy are set to expire.

Your help is urgently needed in this final push to obtain an extension of the renewable energy investment tax credits before they expire.

Within the next day or two the U.S. Senate is set to discuss HR 6049, the Energy Tax

Extenders bill. This House bill provides for the most important attributes for renewable energy tax credits to be extended. It extends credits for solar installations, wind farms, energy efficiency buildings, and other technologies.

Three solar items of note are that the:

 

  • Commercial Solar Investment Tax Credit (Section 48) would be extended to 8 years (more than the 6 years previously suggested)

 

·         Groups are working now to eliminate the $2000 cap on residential tax credits

 

  • A final ruling must be made on the relationship of the 30% Federal Energy Tax credit and how it affects the Alternative Minimum Tax. Does the tax override any liability as a result of the Alternative Minimum Tax or is the credit lost once it goes down to the personal tax level.

WHAT YOU CAN DO TO HELP:

 We ask that you take a moment to contact your Senators today to urge

them to bring H.R. 6049 to the floor of the Senate for a vote — and to

        support this legislation.

Our friends at SEIA inform us that this is likely to be the last opportunity for an extension this year so the time to act is now. Please call your Senators today. Click here to find their phone numbers.

 

Key messages:

Not extending solar credits is an enormous tax increase that will cost  American jobs.

ASES reports that we can create up to 40 million green-collar jobs by 2030, but Congress must lead for this to happen.

The 8-year extension of the Investment Tax Credit is critical for utilities to get the financing necessary to keep pace with rising demand for energy.

The cap on the residential investment tax credit needs to be removed to provide the incentives needed to properly stimulate the market.

Thanks for your action and your ongoing support — and for letting your Senators know that solar energy, energy efficiency, and other sustainable technologies are

important to you.

 

For more information about solar opportunities in NJ and PA email george@hbsadvantage.com

2008 Commercial Business Incentives:

  • 30% Investment Tax Credit 

  • IRS Modified Accelerated Cost Recovery System (MACRS)

  • New Jersey Solar Renewable Energy Certificates (SRECS)

 

The Basics of Solar Electricity

The Economics of Solar Power

  • Sunshine is an unlimited resource that comes to you free of charge, delivered to your home with no monthly bills
  • The federal investment tax credit allows for 30% of a system’s cost to be deducted from any federal taxes due and has no cap  for commercial installations.  $2000 cap applies to residential.
  • Solar panels convert sunlight to DC power; inverters convert DC power into AC electricity
  • Electric rates continue to rise – 2008 increases are +12.2%
  • Causes no pollution, uses no fossil fuels and is very cool
  • MARCS or 5 Year Accelerated Depreciation on solar equipment for commercial installations
  • Solar energy is  simple and silent with no moving parts
  • Electric production value > $0.15 per Kwh avoided cost
  • Reduces or eliminates your electric bill. Your system continues to produce electricity for many years to come
  • BONUS!  Solar Renewable Energy Credits (SRECs) earn you additional money every year – for 15 years through 2020
  • No need for batteries – simply use the utility company’s grid for electric power storage
  • An investment in a solar electric system is not only economically sound, but also environmentally friendly.  Green is good for buisness.
  • Panels warranted for 25 years, DC to AC inverter warranted for 10 years
  • To produce electricity power companies generate thousands of pounds of pollution
   

 

The Rising Cost of Electricity

June 1, 2008 – PSE&G Rate Increase 12.1%

June 1, 2008 – JCP&L  Rate Increase 13%
 
 

With the rising cost of fuel oil and natural gas, the power companies have announced these increases to cover their costs to produce electricity for resale.  A solar system on your roof, generating all or part of the electricity you use, would greatly reduce the impact of these increases on your monthly budget.

 

Stop Depending on the Utility Companies – Produce Your Own Electricity

 

A solar electric system will not reduce the amount of fuel oil or natural gas you use to heat your home, but it will reduce the amount used by your electric company to generate electricity for resale.  By generating your own electricity, you will reduce the amount you purchase from the utility company, thereby reducing what they need to generate.  It’s truly a win-win for everyone!

 


 

Financing a System

 
Rebates and credits for solar systems and renewable energy are currently available from both the State of New Jersey and the Federal Government.
 
Residential Rebates:
State of New Jersey                        Closed in December 2007, pending Clean Energy Bill 
Federal Tax Credit                          Up to $2,000
 
Commercial Rebates:
State of New Jersey                       Closed in December 2007, pending Clean Energy Bill 
Federal Tax Credit                         30% of System
Equipment Depreciation                 5 Years Accelerated
USDA Grants and Loans               Available for specified rural areas
With available rebates and tax credits, your out-of-pocket costs are approximately one-third the cost of your system.  However, the return on your investment can be 15% or more.  Return on your investment comes in two forms.  First is the reduction in your electric bill.  A solar system can reduce your bill by 50% or more, depending on its’ size and your usage.  Second is the sale of SRECs (Solar Renewable Energy Credits) back to the utility companies.  This value varies depending on supply and demand.

For more information about NJ commercial incentive program you may email george@hbsadvantage.com.

Hutchinson Business Solutions…..Creating Opportunities Today…….Providing Savings for Tomorrow.

 Visit us on the web www.hutchinsonbusinesssolutions.com