$19B at Stake With Renewable Energy Tax Credits

When it comes to renewable energy, it seems we have a new Do-Nothing Congress up on Capitol Hill. The Senate yesterday failed once again to renew the investment and production tax credits that facilitate millions of dollars of private funding into solar and wind energy projects. Set to expire at the end of this year, investors are already pulling back from financing solar and wind projects for fear that Congress won’t provide the coveted long-term extension.

At stake are the country’s burgeoning solar and wind energy industries. A report from Navigant Consulting on behalf of the American Wind Energy Association (AWEA) estimates that the expiration of the tax credits will cost the solar and wind industries a combined $19 billion and roughly 116,000 jobs in just one year. All of this comes as the Department of Labor is expected to issue a report putting the total number of jobs lost so far this year at over 500,000.

On the positive side, the AWEA is expected to announce in its second-quarter market report that the U.S. has surpassed Germany in wind energy generation to become the world’s leader. An AWEA spokeswoman tells Earth2Tech that while Germany still has more installed capacity than the U.S., an estimated 22,000 megawatts to our 17,000 megawatts as of 2007, the U.S. is windier and is producing more actual power. Add to this estimates that the U.S. will add another 6,000 megawatts of capacity this year to Germany’s 1,600, and the U.S. should be able to solidify its spot as the global wind leader by the end of 2008.

But all of that explosive growth could come to a screeching halt if Congress doesn’t provide the industry with some regulatory certainty. And this means extending the tax credits far longer than one year, which was the length of the proposal voted down yesterday. With Congress heading into a long August recess on Friday, it doesn’t look like we’ll see a definite extension any time soon.

Graph courtesy of AWEA.