Wind, Solar Industry Leaders Urge Refundable Tax Incentives

AWEA chief Denise Bode and SEIA head Rhone Resch both cited the need to make the investment tax credit and the production tax credit refundable to preserve their effectiveness in the current economic climate and maintain the strong growth of both industries.

President-elect Barack Obama Thursday announced his plan to double renewable energy production across the United States over the next three years. The wind and solar industry leaders said the tax incentives must be made refundable to turn that target into a reality.

"We applaud President-elect Obama's aggressive goal of doubling the production of alternative energy in the next three years. Wind energy is ready to do its part, but we face a major obstacle in this economic downturn," said Bode, an energy policy expert and former Oklahoma Corporate Commissioner.

The world's largest solar power facility, in the Mohave Desert near Kramer Junction, California, covers 1,000 acres. It generates 150 megawatts of power, enough to supply electricity to 150,000 homes. (Photo courtesy Kramer Junction Company)

But Bode and Resch say that current economic conditions reduce the effectiveness of the tax credits since most companies and individual tax filers expect lower tax liabilities.

Making renewable tax credits refundable, like those for biodiesel and other alternative transportation fuels, is essential to ensuring continued wind and solar industry growth in 2009 and 2010, they said.

"We can continue to grow through this difficult period only if the new administration and the 111th Congress act immediately to make renewable tax incentives refundable so they can work as they are intended to - even in the current financial context. This is a critical first step to building the new, clean energy economy," said Bode, who came to the AWEA leadership post this month from the American Clean Skies Foundation, a nonprofit educational foundation and think tank.

"Congress must use the stimulus bill to move us away from our backwards-looking, recession-burdened economy and toward a new era of recovery and prosperity with solar and wind leading the way," said Resch, a registered lobbyist for clean energy development and climate change issues.

"Our industries have become powerful economic engines in the U.S., each year creating tens of thousands of new jobs and billions of dollars in economic investment. And we have the potential to put many thousands more Americans back to work," he said. "But due to the recession, projects are now being put on hold, factories are closing and workers face potential layoffs unless Congress refines the tax credits now so they work as originally intended."

In 2007 and 2008, more than 50 wind energy manufacturing facilities were opened, expanded or announced in the United States, adding 14,000 employees. More than half of those jobs were added in 2008, even as the overall U.S. economy was faltering.

The solar energy industry employs more than 80,000 people in the U.S. and created more than 15,000 jobs in the last two years.

According to a report last year by Navigant Consulting, the solar energy sector alone will create 440,000 permanent jobs and spur $325 billion in private investment by 2016 with the investment tax credit in place.

"By working together to repair this critical policy, we can put Americans back to work, help achieve national energy security and start down a path that will make America a leader in renewable energy manufacturing and development," said Bode.

"The American public overwhelmingly supports renewable energy and these policies. Our elected leaders have an opportunity to support renewable energy in the stimulus bill that will keep these vitally important industries growing in the U.S.," said Resch.

AWEA estimates that last year the wind industry installed a record 7,500 megawatts of capacity in the U.S., bringing total wind capacity in the U.S. to about 24,000 megawatts. For the first time, the United States now leads the world in installed wind power generating capacity.

The solar industry is estimated to have nearly doubled growth of solar photovoltaic installations in 2008. The California Solar Initiative reported the growth of photovoltaic installations doubled in 2008 from 2007.

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