Democratic Leaders Poised to Sabotage Hope for Renewable Energy

Last Thursday, Democratic leaders Nancy Pelosi and Harry Reid said that they would jettison the renewable energy provisions in both the House and Senate versions of the 2007 energy bill in the interest of passing a bill before the Thanksgiving recess begins on November 17.

Republicans have been holding up action on the bill for months now, refusing to participate in conference committee meetings to reconcile the House and Senate versions. The big sticking points for Republicans have been support for renewable energy and ending billions of dollars in subsidies for oil companies. Democrats would like to use the oil subsidy money to support solar and wind power.

Representatives of the renewable energy industry were dismayed by the Democrats' abandonment. "This is basically Congress delivering an early Christmas present to the American public -- and it's a lump of coal," said Rhone Resch, president of the Solar Energy Industries Association (SEIA). "We are feeling disgusted because this energy bill goes right back to maintaining the status quo."

The renewable energy provisions in the bill come in two forms: a Renewable Electricity Standard that requires utilities to supply 15 percent of their electricity from renewable sources like solar and wind, and tax provisions, including a production tax credit for wind power and a tax credit to encourage investment in solar power equipment.

While the Renewable Electricity Standard would be a new federal program (31 states already have some kind of renewable mandate), the tax incentives for solar and wind would continue programs already in place. Losing these tax breaks would be devastating to the renewable energy industry, said solar lobbyist Scott Sklar of the Stella Group: "It will cause sales and investment to implode."

By giving up on renewable energy, lawmakers are losing an opportunity to increase energy security and strengthen the economy. Last week the American Solar Energy Society released a report on the economic benefits of investment in renewable energy, finding that major investments in renewables and energy efficiency retrofits could produce 40 million jobs and generate $4.5 trillion in US revenue by 2030.

The latest turn in the energy bill would actually force the country a few steps backward. Scott Sklar said that unlike in past years, there is little chance that the renewable tax incentives will be attached to another bill for passage this year.

If those tax incentives are lost, Americans will feel the pain quickly. Randall Swisher, head of the American Wind Energy Association said that the rapid growth of the American wind industry would go into a stall. "Getting into 2008, we will start to see uncertainty creep in in terms of getting projects financed and, even more importantly, attracting manufacturers to this country, bringing with them the jobs that are a critical part of what this industry can deliver for the future of this country," said Swisher.

The Renewable Electricity Standard (RES) was one of the provisions that passed only in the House version of the energy bill. Some Republicans, along with President Bush, have strongly opposed the mandate. Senator Domenici, ranking member of the Senate energy committee, cited complaints from utilities in the Southeast that they lacked renewable resources required to meet a 15 percent standard, but renewable energy experts say it won't be that challenging.

Domenici and some other Republicans want to keep the current state-by-state approach. They say it makes the most of regional differences in renewable resources. Scott Sklar warns that a strictly regional approach would shrink the potential of renewable energy.

"If the goal is to build a national, sustainable set of clean energy industries, the entire US market needs to be included," Sklar said. "Blending tax credits, an RES and national interconnection standards is the core government tool box to accelerate and enhance these technologies and build these industries. With energy imports increasing, prices increasing, climate change emissions increasing, our electric infrastructure aging, now is not the time to balkanize energy efficiency and production, but [to] set goals and nurture new technologies and new markets."