As reported in Huffington Post

WASHINGTON — Congress is putting the short-term future of renewable energy companies in jeopardy even as the presidential candidates and most lawmakers hail windmills, solar panels and biofuels as long-term solutions to high gasoline prices and global warming.

Some $500 million in investment and production tax credits will expire Dec. 31 unless Congress renews them. Without that help, solar and wind power companies say they will reverse planned expansions and, in many cases, cut payrolls and capital investment.

Schott Solar has visions of quadrupling its operation in Albuquerque, N.M., to reach 1,500 jobs and $500 million in investment. But the investment tax credit, company spokesman Brian Lynch said, is what makes solar power cost-competitive. Without it, expansion plans must be reconsidered.

“We don’t want to build a giant factory that the market doesn’t need or want,” Lynch said.

The Solar Energy Industries Association says some 20 utility-scale solar power plants, many in California and together capable of producing power for a million homes, are at risk because of the uncertainty in Congress.

Proponents of wind power, a nascent industry that relies on skittish investors, are in a similar predicament. Greg Wetstone of the American Wind Energy Association says his group is predicting a loss of 76,000 jobs and $11.4 billion in investment if Congress allows its production tax credit to expire.

“Investors like to know what tax policies apply when they are putting millions of dollars down on a project. There’s a pretty clear history that these projects are less likely to go forward without a credit,” he said.

Congress let the credit expire in 2000, 2002 and 2004. In those three years, wind capacity installation dropped 93 percent, 73 percent and 77 percent, respectively, from the previous year.

Navigant Consulting, which advises on renewable energy technology, estimated that investments in wind and solar power in 2009 would amount to $26.6 billion with the credits; that would fall to $7 billion without them.

The credits are expected to total $334 million, according to congressional estimates.

“These companies are shutting down projects, firing people and it’s Congress’s fault,” said Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee.

Investment tax credits, available to homeowners and businesses that invest in solar power equipment, and the production tax credit, based on kilowatt hours of energy produced by wind, geothermal, biomass and other renewables, are only two of dozens of temporary tax breaks that die out after a year or two if Congress does not revive them.

This year Congress is considering tax-extenders worth more than $50 billion over the next decade. The production tax credit would cost $7 billion and two solar investment credits would cost $2.7 billion over 10 years.

In addition to breaks for renewable energy and energy conservation, several dozen other tax breaks are targeted to businesses and individuals. They include people paying state and local sales taxes; parents with higher education tuition costs; and teachers with out-of-pocket expenses.

Almost all the provisions are popular. But Senate Republicans have blocked consideration of tax-extender plans by Senate Finance Committee Chairman Max Baucus, D-Mont. GOP lawmakers are protesting efforts to offset the costs with other taxes or other items attached to the proposals. In the House, conservative Democrats promise to block any extension that adds to the deficit.

That’s nothing new.

In 2006, Congress did not come together on a tax-extender deal until December, forcing the Internal Revenue Service to delay processing returns claiming several of the tax breaks. In 2007 Congress never agreed on extenders and again waited until December, causing more IRS disruption, to settle another annual tax crisis, the alternative minimum tax.

That tax was, enacted 40 years ago, was supposed to keep a tiny number of very rich people from avoiding taxes. But it never was adjusted for inflation and now reaches into the pockets of 4 million people, mainly upper middle-income. Millions more are threatened every year until Congress steps in, usually at the last possible moment. The Baucus bill has provisions to keep those affected by the tax from growing to 25 million, at a cost of $61 billion over the next decade.

“A big part of the problem is uncertainty,” said Marie Lee, a tax analyst with the American Electronics Association. “Our companies are getting tired of this game.”

The biggest concern for high-tech companies and manufacturers is the research and development credit, which expired at the end of last year. Some 17,700 corporations claimed $6.6 billion in credits in 2005, according to a recent study by Ernst & Young LLP. About 70 percent of that went to pay wages of scientists and engineers.

The credit has been allowed to expire 13 times since it was adopted in 1981. One repercussion, said Monica McGuire, executive secretary of the R&D Credit Coalition, is that more companies are taking their research dollars overseas.

“It’s a global race for R&D dollars,” she said, and the odds are not good when at least 20 developed nations offer tax incentives and the United States currently has nothing.

Putting expiration dates on tax breaks is a useful budget gimmick for lawmakers seeking to mask the growing federal budget deficit.

Because they are set to expire at a certain date by law, they do not count as revenue losses after that date even though most people assume Congress eventually will act to extend them. The Bush tax cuts of 2001 and 2003 are the biggest extenders of all in this respect. Trillions of dollars will be added to the federal debt if Congress chooses to make them permanent after they are set to expire in 2010.

Our perspective:

How Congress addresses this issue will tell the American people how they really feel about our energy future. As shown, they have been toying with this issue for the last 5-6 years.  Congress must commit to lead the the energy evolution. Several states are now taking the lead but we need a unified message. Passing this bill will send the message loud and clear.

Let us know your thoughts? email george@hbsadvantage.com

Most reasonable people agree that the Earth is warming, and that humans are the main cause. But even reasonable people disagree on what we should do about it. At one end are the true believers, like physicist James Hansen, who recently argued that oil executives should be put on trial for crimes against humanity. At the other are the truly doubtful — like Republican Senator Mitch McConnell, who helped block a Live Earth concert from being held on the Capitol’s grounds last year — who are convinced that the environmental cost of climate change will prove less disastrous than the expense of curbing it. In between there’s plenty of room for rational disagreement.

But here’s something all Americans — except maybe Exxon shareholders — should be able to agree on, regardless of where they fall on the green spectrum: more renewable power would be a good thing. Greens support alternative energy, like wind or solar, because it helps de-carbonize our energy supply and reduce pollution. Skeptics support it because with rocketing fossil fuel prices — and the U.S.’s increasing dependence on oil imported from less-than-friendly regimes — renewables can offer homegrown, politically safe price relief. It’s a win-win in a world that seems ever more zero-sum.

So, why isn’t the government doing more to scale up renewable power? Blame our political system, which Al Gore recently described as “sclerotic at a time when these crises require boldness.” Case in point: the federal tax credits for renewable energy, which are set to expire at the end of the year. Passed as part of the 2005 energy bill, the credits encourage businesses to invest in alternative energy. Utilities that produce wind power earn 2 cents for every kilowatt generated over the first 10 years of a project’s operation. For solar energy, tax credits can be worth up to 30% of the cost of a project. These credits are modest — especially compared to the billions of dollars in subsidies lavished on the fossil fuel industry — but they’ve helped renewable power explode over the last several years, with wind energy growing at 45% last year and solar just slightly less.

If the renewable credits do expire (Congress, jammed in a partisan gridlock, refuses to renew them), they’ll save taxpayers a little money — maybe $1 billion, or less than half a week of the Iraq war. But the cost to the economy — not to mention the fight against climate change — will be far greater. Navigant Consulting, an international firm that studies the energy industry, estimates that the expiration of the renewable tax credit would result in approximately $19 billion in lost investment, and 119,000 lost job opportunities in the U.S. That’s because renewables, while getting cheaper all the time, still cost more than fossil fuels. Subsidies can help bridge the gap as renewable technology improves — but that will happen only if businesses can produce solar or wind power at scale, which will happen only if investors can be assured that the tax credits won’t suddenly disappear, says Rhone Resch, president of the Solar Energy Industries Association. (Hear Resch talk about the renewable tax credits on this week’s Greencast.)

This year, Congress has repeatedly found itself stalemated over the renewal of renewable credits. Supporters of the credits haven’t been able to overcome opposition by Republican senators, the White House and a handful of fiscally conservative Democrats, who won’t vote for the credits unless they’re paid for as they go. Supporters have tried paying for the credits by rescinding tax breaks for oil companies; they’ve also tried raising the funds by eliminating tax loopholes that benefit hedge fund managers. Even though oil executives and hedge fund managers are perhaps the most widely hated two groups in America, neither plan has worked.

The potential loss of these credits has already impacted development. Acciona, a large Spanish renewable company that launched a major concentrated solar power plant outside Vegas this year, says similar projects will be impossible in the future without an extension of the tax credit. Abengoa, another Spanish company (European companies have dominated this space, largely because their governments provide significantly more generous subsidies to renewables), is planning to build the world’s largest solar plant in Arizona, but the CEO of its solar arm told me recently that the project could fall apart if the credit doesn’t come through.

If we’re serious about reducing carbon emissions, we’ll need a much larger renewable energy sector than the one we have — and that will mean bipartisan government action, in the form of carbon caps and subsidies that dwarf the miniscule tax credits now available. Our government’s inability to cooperate and fund an invaluable energy program that costs less than a $1 billion a year is simply unreasonable — no matter what you think about global warming.

For more information about solar opportunities in Nj and PA contact HBS Solar 856-857-1230 or email george@hbsadvantage.com

Does the Senate get it?

June 10, 2008

Reported excerpts from Huffington Post

WASHINGTON — Senate Republicans blocked a proposal Tuesday to tax the windfall profits of the largest oil companies, despite pleas by Democratic leaders to use the measure to address America’s anger over $4 a gallon gasoline.

The Democratic energy package would have imposed a tax on any “unreasonable” profits of the five largest U.S. oil companies and given the federal government more power to address oil market speculation that the bill’s supporters argue has added to the crude oil price surge.

“Americans are furious about what’s going on,” declared Sen. Byron Dorgan, D-N.D., and want Congress to do something about oil company profits and “an orgy of speculation” on oil markets.

But Republicans argued the Democratic proposal focusing on new oil industry taxes is not the answer to the country’s energy problems.

“The American people are clamoring for relief at the pump,” said Sen. Pete Domenici, R-N.M., but if taxes are increased on the oil companies “they will get exactly what they don’t want. The bill will raise taxes, increase imports.”

The Democrats failed, 51-43, to get the 60 votes needed to overcome a GOP filibuster and bring the energy package up for consideration.

Separately, Democrats also failed to get Republican support for a proposal to extend tax breaks for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. The tax breaks have either expired or are scheduled to end this year.

Our Perspective:

The republican guard held firm and would not levy a tax on the excessive profits the oil companies have recently made. Greed rules.

The senate is making a big mistake not extending the frederal tax credit for alternate energy developement. It proves that they just don’t get it.

Electric demand continues to rise at a rate of 1.5% a year. The existing facilities are already straining to meet the increase demand. In fact, rolling brown outs are in our near distant future. That’s not the answer.

New Jersey has taken great strides to incentize business and homeowner to look at alternative energy development. PSEG are paying SRECs for every 1000kwh of elecrtric you produce. These SRECs are gaurenteed for 15 years.

The Federal Government now has a 30% federal tax credit that is due to expire 12/31/08. This must be extended. The Senate and IRS must also determine the effects of this credit as it pertains to the Alternative Minimum Tax.  The Federal Tax Credit must stand alone and not be effected by the AMT; otherwise, the Federal Tax Credit is all bark and no bite. The incentive is lost and it makes the investment less desirable.

Let us know your thoughts? You may email george@hbsadvantage.com

Contact us to learn more about solar opportunities for your company.

New exciting energy saving opportunity for New Jersey!

As electric cost continueto rise, you will find that New jersey has taken a very aggressive step in promoting clean solutions to reduce electric demand.

Federal aand State credits and incentives provide a perfect opportunity and takes a significant step in controlling future electric costs as well as providing a ROI that finally makes sense.

Currently New jersey recieves 1.6% of their energy from clean energy sources. With the demand for electric increasing at a rate of 1.5% a year, New Jersey has committed to increasing renewable energy sources to 22.5% by the year 2020.

Why, you may ask?

With the growing demand for electric, New Jersey faces the issue of brown outs in their future.

How do you think the public would react to that?

The Solution……

Harness the Sun’s Energy….

Going Solar!

. Below is an outline of the steps recently taken that makes this investment desirable.

  • Federal Government provides 30% tax credit.
  • PSEG will be paying SREC’s (Solar Renewable Energy Certificate) each time a solar electric system generates 1000kwh of electricity. 
  • Your electric bill will be decreased by the value of the electric you are generating.
  • Full 7% State Sales Tax Exemption
  • Federal Guidelines allow for 5 year accelerated Depreciation of basis.
  • Low interest loans available thru PSEG

Hutchinson Business Solutions has formed a strategic partnership with BP Solar, a world leader in providing solar solutions. They are the only company that has been making solar panels longer than their warranty (30 years).

 

They offer a full 25-year warranty on the equipment and a full 10-year warranty on the installation.

 

Solar …..The New Sexy

 

To learn more about the new solar incentives in New Jersey contact george@hbsadvantage.com

 

The Future of Energy is Now!