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5 Renewable Energy Issues at Stake in the Midterm Elections

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Two weeks from now, voters will decide which federal and state politicians to keep and which to send packing. Polls, including the one from Wall Street Journal/NBC News released Wednesday (s nws) (s ge), have shown that some voters are disenchanted with the Democrats and many voters remain undecided. Speaking at the Solar Power International (SPI) conference in Los Angeles last week, Democratic political strategist James Carville summed it up this way: “There is a hurricane coming, and it’s not changing course. It’ll be hitting the Democrats.”

The anticipated power shift could affect some of the policy decisions for which renewable energy industries have been lobbying in recent months, while other questions will go directly to voters in state elections. Here’s a list of hot issues and challenges facing cleantech advocates going into the midterm elections:

1. Carbon cap-and-trade. For many renewable energy proponents, putting a price on carbon emissions is key to making solar and other renewable electricity more attractive to power plant producers and their customers (utilities, businesses and consumers). Lawmakers couldn’t agree on a cap-and-trade program in 2009, during the honeymoon period of President Obama’s administration. Democrats in the House forced one through, but those in the Senate couldn’t cobble together enough votes.

If Republicans win more seats in Congress next month, the chances of passing cap-and-trade legislation will grow slimmer, said Mary Matalin, a Republican political strategist who also spoke at SPI. She said many Republicans are willing to work with Democrats, “short of cap-and-trade, to incentivize solar and other clean technologies and produce megawatts for fewer dollars.”

2. Premium for renewables. Setting solar electricity rates for long-term contracts, or feed-in tariffs, has been portrayed by many advocates as a must-have incentive to usher in a new era for renewable energy. The policy has worked to spur gigawatts of new solar energy projects per year in countries such as Germany.

Regardless of which party comes out on top after the November elections, it’s unlikely the next Congress will pass a national feed-in tariff, since the subsidy could raise utility bills for consumers and businesses in the near term. The fight for this type of incentive will remain concentrated at the state level. Hawaii, for example, just passed a feed-in tariff for installations up to 500 kilowatts in size. California is working on a program that is dubbed a feed-in tariff by some, even though it’s nothing like the policy that has made such a big impact in Europe. In any case, the state’s goal is to prompt its utilities to buy more renewable electricity through auctions.

3. State vs federal. Renewable energy advocates have lobbied at both federal and state levels, with varying degrees of successes. Should they devote more resources to state-level fights, in the event that Congress becomes less friendly to key issues such as carbon cap-and-trade and feed-in tariffs after the midterm elections?

States have already played a bigger role than the federal government in passing some policies promoting cleantech growth. Rand Rosenberg, senior VP of corporate strategy and development at utility Pacific Gas & Electric (s PCG), commented at SPI last week, “It’d be terrific to have a national energy policy, but given the political environ in Washington, I don’t have a high level of confidence.” As a result, he said, he would advise advocates to focus “absolutely in the state level.” On the other hand, Matt Baker, a member of the Colorado Public Utilities Commission, warned, “We can’t grow an industry just in a handful of states.”

4. California’s landmark climate law. State policies play an important role in the health of the cleantech industry — perhaps nowhere more than California, where a proposition to suspend the state’s landmark climate legislation is on the ballot. Proposition 23, which counts oil companies among its major backers, would suspend AB 32, a 2006 law to reduce the state’s greenhouse emissions to 1990 levels by 2020. If it remains in effect, AB 32 will create sweeping changes in everything from the amount of renewable energy generated to types of transportation fuels that will be used by consumers in order to achieve the 2020 goal.

The fight over Prop. 23 has drawn big money and celebrities (both in Hollywood and Silicon Valley). Proponents of Prop. 23 have raised a little over $9 million while opponents have accumulated nearly $26 million, reported Grist.

5. Extending stimulus programs. At the federal level, renewable energy lobbying groups are busy working on extending an incentive program that is set to sunset at the end of this year. The program, created under the American Recovery and Reinvestment Act, gives owners of solar, wind and other clean power projects the cash equivalent of the 30-percent investment tax credit. California energy regulators and federal officials have accelerated the approval process for several large solar power plants so project developers can qualify for this incentive program.

Both the Solar Energy Industries Association and the American Wind Energy Association have been lobbying hard for prolonging this program. They are hoping Congress will extend it for at least two more years. Cash programs are popular particularly in economic downturn (i.e. Cash for Clunkers), but a spending program for businesses may not be as popular as one for consumers when it comes to winning voters’ hearts. Matalin, for one, has advised solar energy advocates to avoid using the term “recovery” or “stimulus” because Republicans are eager to change what Democrats and Obama have put in place in the last two years.

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Image courtesy of LaMenta3