It's Clean, It's Green, It's...Going Away?

Subsidies for renewable energy may be going away...again.

America's stormy love affair with renewable energy began in the 1970's, when President Jimmy Carter introduced subsidies for what were then termed 'alternative' energy resources. But the burgeoning wind and solar industries that grew under Carter were not fated to last long. Nurturing an infant renewable energy industry was not part of Ronald Reagan's presidential image, nor his platform. Beyond the Light Switch looks at this pivotal time in our nation's history as a means to understand the current state of our energy policy and energy politics.

Currently, the hopes of many long-suffering renewable energy supporters (and industry players) have been pinned on the Obama administration. And Obama did make good--by ushering in subsidies for renewables, known as the "1603 grants" (so-called for the section of the stimulus bill that created them). And just in case you were wondering what those grants actually do, today The LA Times was kind enough to lay it out for us--the 1603 grants "paid up to 30% of the cost of projects breaking ground by the end of this year. Renewable facilities generating a combined 4,250 megawatts (the equivalent of roughly four large nuclear plants) were supported by the program as of March, according to a report by Lawrence Berkeley National Laboratory; that output is doubtless far higher now. The grants have created thousands of jobs, and helped clean the air and wean the country off fossil fuels. But all that may be about to stop".

Sounds scary, doesn't it? Well, what's happening is...

The grants for wind and solar developers were approved as part of the 2009 stimulus package, but the subsidy program is due to expire at the end of this month. The Times piece goes on to worry that the lame-duck Congress may not act fast enough to save them. So should we be worried? Well, solar and wind industry officials sure are.

Denise Bode, CEO of the American Wind Energy Association, and Rhone Resch, CEO of the Solar Energy Industries Association, have both expressed concern over the projected impacts of allowing the 1603 grants to expire. They caution that investors are already scarce, adding that while a production tax credit still exists for wind and solar, without the 30% discount provided by the grants, potential renewable energy investors will divert their dollars to other, more incentive-laden sectors.