Will the stimulus help wind and solar?
New York Times|Kate Galbraith|Feb 19, 2009
The stimulus package, while welcome, may not be a quick fix for the struggling wind and solar industries, experts say. The package is loaded with tax credit provisions that both industries have long sought ...and an option of converting tax credits from both industries into direct cash. In theory, that means the federal government could end up footing the bill for 30 percent of the cost of a wind farm or solar array.
The stimulus package, while welcome, may not be a quick fix for the struggling wind and solar industries, experts say. The package is loaded with tax credit provisions that both industries have long sought ...and an option of converting tax credits from both industries into direct cash. In theory, that means the federal government could end up footing the bill for 30 percent of the cost of a wind farm or solar array.
The stimulus package, while welcome, may not be a quick fix for the struggling wind and solar industries, experts say.
The package is loaded with tax credit provisions that both industries have long sought - including a three-year extension of the production tax credit for wind, and an option of converting tax credits from both industries into direct cash. In theory, that means the federal government could end up footing the bill for 30 percent of the cost of a wind farm or solar array.
Despite the boost from the government, experts say that the financing markets are still so frozen that the stimulus provisions may not immediately restart the industries, which grew rapidly in the last few years but were forced to lay off workers and …
... more [truncated due to possible copyright]The stimulus package, while welcome, may not be a quick fix for the struggling wind and solar industries, experts say.
The package is loaded with tax credit provisions that both industries have long sought - including a three-year extension of the production tax credit for wind, and an option of converting tax credits from both industries into direct cash. In theory, that means the federal government could end up footing the bill for 30 percent of the cost of a wind farm or solar array.
Despite the boost from the government, experts say that the financing markets are still so frozen that the stimulus provisions may not immediately restart the industries, which grew rapidly in the last few years but were forced to lay off workers and cut back projects after the banking crisis hit.
"Unfortunately, the tight debt markets will still keep many projects from moving forward immediately," said Craig Mataczynski, president of Renewable Energy Systems Americas, a wind developer, in an e-mail message. "When the debt market thaws a little we could see a number of new projects move forward."
Keith Martin, a lawyer with Chadbourne & Parke, said in an e-mail message that while the stimulus "can only help," there are a few unknowns, such as how rapidly the Department of Energy can gear up a crucial loan guarantee program that would aid renewable energy projects - a matter on which the Department's history is not promising.
In 2005, the Department was given the authority to issue loan guarantees, but more than a year passed before it was even ready to accept applications, "and it has still not issued a single guarantee more than three and half years later," Mr. Martin said.
Steven Chu, the Secretary of Energy, said in a conference call on Wednesday that he was looking at ways to streamline the loan-guarantee process.
"Another unknown," Mr. Martin added, "is whether developers who receive cash for 30 percent of the project cost from the Treasury will be able to raise the other 70 percent they need to build their projects in the current market."