The United States is investing in the Next Generation of Energy Technology. The question is no longer “if” renewable energy will replace fossil fuels in our lifetime, but rather “how soon can we make it happen?” We currently make up less than 5% of the world population, yet hold a quarter of the world oil demand. But that fact will soon change: “We can remain the world’s biggest importer of oil, or become the world’s leading exporter of clean energy.” ~ President Barack Obama
Dynamically titled “Renewable Energy Provisions: American Recovery and Reinvestment Act of 2009,” this new energy bill narrowly passed the House of Representatives with 219 votes against 212. This unprecedented $800 billion energy bill promises to reduce greenhouse gas emissions 17 percent nationwide by 2020, and 83 percent by 2o5o! It Introduces America to a sustainable future, through a cap-and-trade program, tax incentives, grants, loans, job creation, power grid development, and recurring increases in regulation.
The biggest controversy about this bill has been in the cap-and-trade program. Cap-and-trade sets a limit on the amount of environmental pollutants that can be emitted during any production or operation. Companies will then be issued permits and will be required to hold to an “equivalent number of allowances,” which represent the right to emit a specified amount of pollution. Those who exceed their environmental allotment will be forced to “buy credits” from less-hazardous companies. The hope is that it will no longer be “cost effective” to be indifferent towards pollution.
Tax Incentives
Three-Year Extension of PTC: The bill provides a three-year extension of the Production Tax Credit (PTC) for electricity derived from wind facilities placed in service by December 31, 2012, as well as for geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities placed in service by December 31, 2013
Investment Tax Credit (ITC) Accessible to All Renewable Energy: The bill provides project developers of wind, geothermal, biomass and other technologies eligible for the PTC, the option of instead utilizing the 30% ITC that previously only applied to solar and other clean technology projects
Repeals Subsidized Energy Financing Limitation on ITC: The bill would allow businesses and individuals to qualify for the full amount of the ITC, even if their property is financed with industrial development bonds or other subsidized energy financing
Through a Renewable Energy Loan Guarantee Program, $6 billion will be available in temporary loans for renewable energy power generation and transmission projects that begin construction by September 30, 2011. $1.6 billion is also becoming available as bonds to finance wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, marine renewable, and trash combustion facilities. We can expect to see $11 billion to modernize the nation’s electricity grid with “smart grid technology.” In addition, $6.5 billion is being provided for two federal power marketing administrations to assist with financing the construction, acquisition, and replacement of their transmission systems. The bill also increases federal matching grants for the Smart Grid Investment Program from 20% to 50%.
The passing of this bill has marked the end to debate, and set the pace for action. In the face of “economic heartache,” I see this as a powerful symbol of how overwhelmingly resolute our current administration is in providing a viable pathway to energy independence. The clean energy industry will be a profitable one, and many Americans can expect to find well-paying jobs being created by the Renewable Energy Revolution.
