A lot of numbers have been floating around on the benefits of renewable energy, particularly given the U.N. climate change talks going on this week in Mexico. The latest set of data comes from the Pew Charitable Trust, which issued a report Wednesday saying $2.3 trillion in clean power project investments could materialize in next 10 years if G-20 countries adopt aggressive policies.
The report, “Global Clean Power: A $2.3 Trillion Opportunity,” noted that the United States alone could draw $342 billion in investments over the next decade, which could lead to 171 gigawatts of renewable energy generation in solar, wind, geothermal, biomass/waste, small hydro and marine energy. Now, that could happen only if the country adopts policies that go beyond what it has agreed to in the U.N. climate haggling in Copenhagen a year ago, the report said.
If the U.S. fulfills its promise in Copenhagen, it could see $259 billion in clean power investments from now until 2020. If its national energy policy remains as is, then the country could attract $245 billion over the same period. During the Copenhagen talk, President Obama pledged to cut the U.S. emissions by 17 percent below the 2005 levels and do it by 2020. But he and the Democrats weren’t able to muster enough support to pass a domestic energy policy in 2010 that would’ve steered the country toward meeting the goal.
The report looks at the policies and pledges of the G-20 countries, which include major industrial countries in the world. Collectively, these countries could attract $2.3 billion in clean power project investments only if they, too, do more than what has been agreed to in Copenhagen. If they simply abide by the Copenhagen agreement, which lacks, among other things, key details of what steps participating countries could do to cut carbon emissions, then the G-20 countries will likely see $212 billion over the next decade. The number will shrink to $189 billion in the “business as usual” scenario, a 46-percent increase above the 2010 levels.
The Pew trust also issued the report at a time when solar and wind energy lobbies are fighting to keep a popular grant program in a tax bill negotiation. The program, born out of the stimulus package in 2009, covers 30 percent of the cost of developing a renewable energy generation project. It’s meant to be a short-term fix in a poor economy in which fewer lenders are willing to make loans for projects that can take hundreds of millions of dollars each.
The grant program is also an alternative to a 30-percent investment tax credit, which could be used to attract lenders, which would get to claim tax benefit in exchange for giving loans. But this scheme is attractive only if lenders make enough money and owe enough taxes to take advantage of the tax break. The U.S. banking industry has recovered slowly since it imploded in late 2008, but it’s still in poor health. The tax credit will remain available until the end of 2016.
A bill by Sen. Max Baucus (D-Mont.) that would extend the grant program didn’t make into the compromise bill that emerged over the last weekend. At a news conference Wednesday, heads of the solar and wind trade associations warned of big job losses if lawmakers don’t renew the program, which will sunset at the end of this month.
“Many people who are currently employed by the renewable energy industry will be standing in line to collect employment checks if this (grant program) isn’t extended,” said Rhone Resch, CEO of the Solar Energy Industries Association, during the press conference. SEIA wants the program renewed for two more years.
The program has benefited 1,179 solar projects, which collectively have attracted over $1.3 billion in investments in 42 states, according to SEIA.
Many developers are rushing to start their projects before the end of the year in order to qualify for the grant program. They could either start construction or spend 5 percent of each project’s cost in order to remain eligible. For example, some companies have opted to order and pay for the mounting systems (for propping up solar panels) now even though the projects won’t start until later next year.
SunPower booked about $100 million worth of projects in December alone, said Julie Blunden, EVP of public policy at the Silicon Valley-based solar panel maker and project developer.
“SunPower and other companies are racing to meet the end-of-year deadline, and we are making decisions that aren’t consistent with the lowest-cost considerations,” she said during the press conference.
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