Keeping Up the PACE: Property Assessed Clean Energy Financing

Reprinted from Renewable Energy World.

December 3, 2009

New York allows municipal finance programs for solar and efficiency retrofits on private property.

by Annie Carmichael & Shaun Chapman, Vote Solar

Last month, in what New York legislators called an "extraordinary" session, lawmakers voted to authorize municipal finance programs for clean energy improvements on homes and businesses. Called PACE (Property Assessed Clean Energy) financing, these popular municipal programs allow homeowners to go solar and make efficiency improvements without any upfront cost. Just how popular is PACE? There was not one single "no" vote in either house. New York's PACE legislation passed by a resounding 192 – 0.

And New York is not alone. Fifteen other states have passed laws to allow PACE programs. For those keeping track that’s: California, Colorado, Illinois, Louisiana, Maryland, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia and Wisconsin. Municipalities in Hawaii and Florida can implement PACE programs without any special enabling legislation at the state level. So why is PACE suddenly the most popular flavor of state renewable energy policy?

PACE programs effectively remove the single greatest barrier to energy efficiency and solar adoption — upfront cost. It works like this: Cities set up special clean energy finance districts capable of issuing low-interest bonds. Participating property owners can then opt-in to use the bond money to pay for renewable energy and energy efficiency improvements. They then pay the loan back through a long-term assessment on their property taxes.

This arrangement spreads the cost of a new solar system out across a 20-year payment plan that is easily transferable (along with those energy saving benefits) to the next owner if the property changes hands — a particular benefit to solar that can have longer payback periods. Best of all, the cost of that assessment is typically less than the electricity bill savings generated by the new solar system, so property owners see savings from day one.

Local governments understand the promise of PACE as well. First, and perhaps most importantly in these volatile economic times, the bond-backed PACE model presents little to no impact on the city’s general fund. Or the state’s for that matter (thus why it’s proven such a popular policy for state legislatures this year).

In short, it’s a fiscally-responsible way for government to support local clean energy job growth, make climate change progress, and help lower energy bills in one fell swoop. Plus it’s based on a known and trusted municipal project finance structure, making PACE programs a relatively palatable new program for cities to implement.

Look at Austin, Texas. Earlier this fall, Austin Energy, which had consistently provided one of the strongest rebates in the nation for customer-owned solar, announced that budget constraints were necessitating changes to the popular program. PACE looked to be offering the forward-thinking municipal utility one very viable alternative option. In October, the Austin City Council unanimously passed a resolution to get the ball rolling on a PACE style program for its residents. The plan, called Project Energize, would serve as an exciting supplement to the rebate program.

The White House also recently announced its support for PACE as a job creation and economic development tool. In addition to developing best practice guidelines and consumer protections, the federal government will allow cities to apply for a portion of $454 Million in Recovery Act funds to help launch a PACE program. With the deadline to apply for those PACE dollars coming up on December 14, New York’s late night legislative decision came through for Empire State municipalities in the nick of time.

Economic crisis is forcing leaders at all levels of government to make difficult decisions between very worthy programs: healthcare, education, public safety and the transition to a new energy economy. We can help them make the right choices, by offering easier ones. Through PACE, cities empower homeowners to invest private dollars in building a local clean energy market. At a time when budgets are constrained even beyond their normal parameters, that is music to all of our ears.

Click here for additional resources including a toolkit for helping your city develop a PACE program.

Annie Carmichael is Federal Policy Director with Vote Solar. Annie spearheads the organization’s federal efforts as well as a number of state initiatives. Shaun Chapman is East Coast Campaigns Director at Vote Solar. Based in New York, Shaun leads the organization’s efforts on the east coast.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream. Since 2002 Vote Solar has engaged in state, local and federal advocacy campaigns to remove regulatory barriers and implement the key policies needed to bring solar to scale.

http://www.renewableenergyworld.com/rea/news/article/2009/12/keeping-up-the-pace?cmpid=WNL-Friday-December4-2009

Proposed Indiana (Midwest) Feed-in Tariffs 2009

November 25, 2009

By Paul Gipe

This is a brief explanation of the proposed feed-in tariffs provided to the Indiana Renewable Energy Association and Representative Matt Pierce.

The tariffs suggested are applicable throughout the Midwest and not solely to Indiana.

The tariffs, or prices paid for renewable generation per kilowatt-hour, are based on my professional judgment of current best practice worldwide and best practice specifically in North America.

In large part the tariffs are based on those implemented October 1, 2009 in Ontario, Canada. The Ontario Power Authority derived a system of tariffs for renewable energy following the most rigorous and, equally as important, the most transparent price-setting process yet conducted in North America. The Ontario tariffs were converted to US dollars.

Because of lucrative federal subsidies in the US, there are two tariff tracks: one without federal subsidies, and one with the subsidies.

Two Tracks (with & without Federal Tax Credits)
There are two tracks because not every potential generator can fully use the federal tax credits. If the program is to be equitable, that is, if the program is to provide equal opportunity to all Indiana citizens, it must not be limited to only those with substantial federal taxes. Thus, even those who do not have substantial federal tax liability can take advantage of the program by using the tariffs.

While it would be technically more correct to run a full financial model taking into account the discounted effects of the federal subsidies, this was determined to be unnecessary. Instead, the proposed Indiana tariffs derived from Ontario's current rates were simply reduced 30 percent, representing the equivalent benefit of the federal tax credits.

Wind Energy
Wind energy is a special case and was treated separately and in much more detail. There are four classes of wind energy tariffs: two tariff classes for small wind turbines, an offshore class, and a tariff class for onshore, commercial-scale wind turbines.



Small Turbines
Tariffs for small wind turbines are divided by the area swept by the wind turbine's rotor. This measure allows inclusion of both conventional horizontal-axis wind turbines as well as novel vertical-axis wind turbines.

The smallest class is representative of household-size wind turbines. These are currently more expensive and less productive than commercial-scale turbines and, consequently, the tariff needed is much greater. The tariff proposed for household-size wind turbines is comparable to that in several European countries and to that proposed in Great Britain.

The second small turbine class is for wind turbines considered suitable for small businesses. With the federal tax credit, the tariff proposed is similar to that proposed by Indianapolis Power & Light in its filing with the Indiana Utility Regulatory Commission (IURC) for wind turbines less than 100 kW in capacity.


Commercial-Scale Turbines Onshore
The price necessary for profitable operation of commercial-scale wind turbines is highly dependent upon the wind resource and the resulting productivity of the wind turbine. To spread economic opportunity to a greater percentage of Hoosier farmers, rural landowners, and small businesses it is necessary to offer a range of tariffs to reflect the different wind resources available.

When a single wind energy tariff is used for commercial-scale wind turbines, some generators will be overpaid and others underpaid. Both to avoid overpayment at windier sites and to enable profitable wind development at less windy sites it's necessary to calculate a range of tariffs.

There are two techniques currently in use to accomplish this task: the German system, and the French system. Both systems use a trial period of five to ten years. All turbines are paid the same price during the trial period. After the trial period, the tariff payment changes, reflecting the site's productivity. The German system (it is also used in Switzerland) is more unwieldy than the French system and less adaptable to North America.

The French system bases the post-trial tariff on a measure of the wind turbine's productivity.

The proposed Indiana tariffs are similar to those proposed in Ontario by the Ontario Sustainable Energy Association. They have been specifically adapted to the North American wind resource and costs.

The proposed Indiana tariffs are derived from the Profitability Index Method developed by Bernard Chabot for the French equivalent of the National Renewable Energy Laboratory.

This method incorporates average installed costs, annual expenses, inflation, the cost of capital, and so on. Most importantly, this method enables simple recalculation of the tariff needed as the wind resource and turbine productivity vary.

The two most important parameters are the installed cost relative to the area swept by the wind turbine rotor. In this case, the installed cost is approximately $2,400/kW for a 2 MW wind turbine with a 90 meter diameter rotor.

The base productivity is set at a minimum average annual specific yield of 650 kWh/m2/yr. This yield is equivalent to a wind resource of 5.5 m/s (12.3 mph) at hub height. The calculation results in a tariff of $0.14/kWh without tax credits and $0.098/kWh with the federal tax credits.

The base tariff is paid for the first five years to all turbines installed under the program. Turbines with a productivity of 650 kWh/m2/yr or less will be paid the base tariff for the full 20 years.

At the end of the first five years, the yield for each year is determined. The year with highest yield and the year with the lowest yield are discarded. The productivity of the turbine is calculated from the yield of the remaining three years.

The profitability index is limited to 0.55 at an annual yield of 1,200 kWh/m2/yr. This eliminates overpayment for development at windy sites where the wind resource is equivalent to 7.4 m/s (16.6 mph) at hub height. The calculation results in a tariff for years 6 through 20 of $0.084/kWh without tax credit, and $0.059/kWh with federal tax credits.

Note that because there are two tariffs (for years 1-5, and for years 6-20), the average or equivalent tariff is somewhat more than the second period tariff. Thus, at a site with an average yield of 1,200 kWh/m2/yr, the average or equivalent 20-year tariff is $0.104/kWh without tax credits and $0.073/kWh with federal tax credits. The latter equivalent tariff is nearly identical with that proposed by Indianapolis Power & Light to the IURC for wind turbines larger than 1 MW of $0.075/kWh.

This article brought to you by the Indiana Renewable Energy Association. For more information, please visit www.indianarenew.org.

Hoosier Interviewed on Ed Schultz Radio Show on Obstacles to Creating Green Jobs in the U.S.

Noel Davis, the founder of Vela Gear Systems, will be interviewed on the Ed Schultz radio show (http://www.bigeddieradio.com/ ) today at 1:05pm Eastern USA time.


The subject mater of the interview is the following...



Obstacles to Creating Green Jobs in the U.S.

Efforts to build an Indiana plant that would manufacture high-value wind turbine components have been slowed by difficulties accessing Recovery Act funding intended to spur the development of green energy projects. Mr. Noel Davis is seeking a loan guarantee from the Department of Energy. Each day that his application sits unanswered and overdue, Chinese, European, and other foreign companies continue to capture more of our market for clean energy manufactured goods. Currently, 86% of wind turbine high value gearbox components are imported.

Vela Gear Systems (VGS) plans to construct and operate a manufacturing facility dedicated to the high volume production of critically needed gear components for utility grade wind turbine (greater than 1.0 megawatt) gearboxes. This will be the only American owned company starting up to manufacture large wind turbine gears. The project is supported by local and federal elected officials, including U.S. Senator Richard Lugar, U.S. Senator Evan Bayh, and Kokomo Mayor Greg Goodnight.

The plant would be potentially be located in Central Indiana, an area that has been hemorrhaging jobs with massive layoffs at auto manufacturers and auto parts suppliers (see story by USA TODAY). The GM plant, formerly Delphi, once had 15,000 workers, but today employs just 800. Area Chrysler operations once had 14,000 workers, but today employ just 2,700. These losses have helped Kokomo earn the #3 spot on a list of America’s Fastest-Dying Towns.

Davis’s team holds more than 100 years of combined experience in working with wind turbine customers and steel suppliers. His state-of-the-art manufacturing facility would employ over 200 skilled machinists at wages approximating $24 per hour. Doing so would have tremendous benefits to U.S. suppliers, including the domestic steel industry, with Vela intending to procure a large amount of U.S.-made steel in its manufacturing process.

Meanwhile, China and other overseas investors are taking advantage of the increased demand for renewable energy manufactured goods. According to a study by Russ Choma, 84 percent of Recovery Act funds earmarked to support the wind industry have gone to foreign companies. Efforts to rejuvenate the U.S. manufacturing base are at risk of being unseated by subsidized imports from countries seeking to capitalize on new demand for clean energy products in the U.S., such as wind turbines and solar panels. Recent media attention has focused on a massive Texas wind development project that will source all of its wind turbines from China and seek U.S. taxpayer support to finance the project. According to the Wall Street Journal, “the project should create 2,800 jobs – of which 15% would be in the U.S. The rest would flow to China, where Shenyang employs 800 people.”

In the case of Noel Davis and Vela Gear Systems, the opportunity exists to create green manufacturing jobs in the U.S. that will depend on a domestic supply chain.

Noel Davis is a retired U.S. Navy Commander with significant private sector experience in engineering projects, including power transmission products and drive systems. His contact info: Vela Gear Systems, http://www.velagear.com/ P.O. Box 432 Indianapolis, IN 46038, noel.davis@velagear.com Mobile: +1 (317) 224-7831

This news update brought to you by the Indiana Renewable Energy Association (InREA). Visit www.indianarenew.org.

Renewable Energy in Indiana: Past, Present and Future

The 1st Annual Meeting of the Indiana Renewable Energy Association will be as follows:

Saturday, November 14th, 2009
2:00 to 6:00 pm
Library Auditorium
Marian University
3200 Coldspring Rd.
Indianapolis, IN 46222

$15 InREA members
$25 non-members
(includes dinner buffet)
Bring a check payable to: Indiana Renewable Energy Association

The theme for our first annual meeting will be to review the past history, present status and future proposals for renewable energy development in Indiana.

We will present an overview of the activities of our association over the past year including our recent participation in the ASES National Solar Tour. Amie McCarty with Mann Plumbing in Bloomington will present an overview of these solar tours and our plans for 2010 solar tours and related activities.

We will describe the current status of renewable energy development in our state and how we compare to other states in our region and the nation as a whole.

The current status of renewable energy in Indiana will also include a panel discussion of InREA members about professional accreditation. Training and education remains a "hot topic" in this current economic climate.

Panelists include:



David Hippensteel, Riverbridge Electric, North Manchester

David Mann, Mann Plumbing, Bloomington

Mac Williams, Inverde, Fishers

Gary Washington, Solar Usage Now, Ft. Wayne


Lastly, we will conduct a discussion of our plans for the future.

A presentation by InREA member Chris Stribeck with Integrated Development Services (IDS) of Indianapolis is planned on 1) proposed changes to our current dues structure and 2) formation of a sister organization with an IRS tax status that will allow for unrestricted lobbying activities.

Earlier this year, the InREA Board of Directors decided to pursue status with the IRS as a 501(c)(3) organization that would be both tax exempt and tax deductible allowing both membership dues and contributions to be tax deductible. Pursuing such a tax status will also allow InREA to apply for grants from foundations as well as charitable contributions from individuals.

In response to feedback from various prospective members including electric utilities as well as current members, it was felt that it would be better for direct lobbying activitiess such as advocacy on various energy issues at the Indiana General Assembly be done through a separate organization.

Final steps are underway to complete InREA's application to the IRS as a 501(c)(3) non-profit and it is anticipated it will be filed before the end of the calendar year.

Our meeting will conclude with an informal networking session and a dinner buffet.

We hope you will make plans now to join us and to celebrate our first year as the Indiana Renewable Energy Association as the Indiana state chapter of the American Solar Energy Society.

For more information visit the website of the Indiana Renewable Energy Association at www.indianarenew.org.

Bill McKibben: Pursuing Prosperity and Local Sustainability

Bill McKibben spoke on the campus of Indiana University Purdue University at Indianapolis (IUPUI) Monday afternoon (11/09/09). McKibben was one of the organizers of a recent global day of action on October 24th called 350.org. Several members of the Indiana Renewable Energy Association participated in these 350.org activities throughtout the state of Indiana.

McKibben, author of Deep Economy, challenges us to find ways to create more sustainable communities, both locally and globally, and frames a fresh perspective on where we should lead our economy, environment, and society for a more durable future. An IUPUI 40th anniversary event presented by the Common Theme Project, IUPUI; Christian Theological Seminary; Earth Charter Indiana; Hoosier Environmental Council; Improving Kids' Environment; Indiana State Museum; Indianapolis Winter Farmers Market; and Unitarian Universalist Church of Indianapolis.

The thesis of Bill McKibben’s most recent book, Deep Economy, is twofold: On the one hand, the growth economy described in Adam Smith’s The Wealth of Nations has produced unprecedented gains in many people’s standards of living, aiding the development of liberal democracies and human rights. On the other hand, there are signs that the growth economy is reaching and exceeding the planet’s environmental limits, and economic wealth is not producing equivalent gains in human happiness. The subtitle of McKibben’s book, The Wealth of Communities and the Durable Future, asks us to consider, what other forms of wealth in our communities are worth investing in, both locally and globally, to create more sustainable, satisfying, and inspiring places to live?

Bill McKibben has a wealth of anecdotes about how people are living more sustainably in local communities, both in the U.S. and around the world. He has proposals for downsizing the scale of farms, energy production, and living spaces, and supporting radio stations, community theaters, and civic organizations in order to enrich the places where people live. At the same time, he appreciates the benefits of markets, and he argues that securing property rights for the world’s poor is vital to global equity. His twin goals of deepening economic ties locally and building up the wealth of communities globally provide an effective framework for conversations about Inspiring Places.

In the Spirit & Place event, McKibben gave a 35-40 minute talk that focused on his insights and proposals, including his work on global movement 350.org’s “International Day of Climate Action.” The lecture was followed by a Q&A session, a book signing , and a public reception.

Audience members have several ways to follow up on this lecture. The Indiana State Museum will sponsor a panel with McKibben on November 10 on the question: Can local food feed Indiana and the world? On November 11, will host a community panel, with audience participation, to discuss the connections and disconnections between market prosperity and vital places today. There will also be lists of the events in IUPUI’s 2009-2010 Common Theme Project, and the audience will be directed to the project’s web resources, which will include bibliographies of books and films with links to community organizations working in relevant issue areas.

McKibben explains that he has solar panels on his home in Vermont.

This tidbit brought to you by the Indiana Renewable Energy Association.

The Federal Energy Subsidy Scorecard: How Renewables Stack Up

Reprinted from Renewable Energy World, November 3, 2009

by Matthew Slavin, PhD

In a speech at the United Nations and afterward at the G-20 summit meeting in September, President Obama called for elimination of government subsidies for greenhouse gas (GHG) emitting fossil fuels. Said the President "I will work with my colleagues at the G20 to phase out fossil fuel subsidies so that we can better address our climate challenge."

The President’s pronouncement, the essential role solar and wind energy have to play in the fight against global warming, the critique that renewables are overly reliant upon government assistance and congressional debate over a national cap and trade energy and climate bill make this a good time to take stock of how renewables stack up in terms of federal energy subsidies. A short primer on the different types of federal energy subsidies at work provides a useful point of departure.

Types of Federal Energy Subsidies

Federal energy subsidies come in many different shapes and sizes. However they can be broadly divided into three main categories.

Tax credits constitute the largest source of federal assistance to the energy sector. According to a prepared by Washington D.C. consulting group Management Information Services Inc. (MISI), tax credits accounted for an estimated 45 percent of all federal energy support between 1950 and 2003. An analysis by the Texas Comptroller of Public Accounts put this number at 65 percent for 2006. Tax treatment also comprises one of the earliest ways by which the federal government subsidized energy development and production, dating to 1917, when income tax credits were established to encourage oil drilling.

Investment and production tax credits for solar, wind, and geothermal energy fall into this category as do tax incentives for ethanol and other biofuels. So does the oil depletion allowance, established by the Revenue Act of 1926 that allows downstream fossil fuel producers to make deductions from their gross income and the Foreign Tax Credit, the largest single energy subsidy, which allows U.S. oil and gas companies to claim a credit against revenues derived from overseas production that would be taxed at a higher rate if produced domestically.

Another type of subsidy encompasses direct cash grants, loan guarantees and similar targeted disbursements. These accounted for about 20 percent of federal energy support from 1950 through 2003 and 29 percent in 2006. The renewable energy cash grants authorized under the American Recovery and Reinvestment Act (ARRA) fall into this category.

Also included is federal spending that began in the 1930s to construct the Columbia-Snake River and Tennessee Valley hydroelectric systems and the $1 billion authorized under ARRA for FutureGen, the coal-carbon sequestration pilot project slated for construction in Illinois with uncertain prospects for success.

A third subsidy platform revolves around regulation: creating a regulatory climate that encourages energy investment. Regulatory subsidies are as old as tax incentives, dating to 1917 when the U.S. Fuel Administration moved to ensure sufficient oil to fuel America’s entry into World War I by creating a petroleum quasi-cartel that boosted oil prices and profits only six years after the breakup of Standard Oil. Shortly thereafter the oil industry formed the American Petroleum Institute to lobby for additional federal largess.

Some critics argue that regulation should not be characterized as a subsidy. However, a key feature of government subsidies is that they influence investment behavior by lowering risk or by raising demand, and in this, regulatory provisions play a substantial role. The $10 billion cap federal law imposes upon corporate liability for a commercial nuclear generating accident is an example of a regulatory subsidy. This cap insulates the nuclear energy industry from the financial risk of a catastrophic accident. Absent this, sufficient capital could not be attracted to build nuclear plant. Ethanol additive requirements likewise constitute a regulatory subsidy, as will a federal renewable energy standard (RPS) when one comes into effect.

Cap and trade would place a steadily declining ceiling on GHG emissions, allowing power plants, refineries, and other large industrial emitters to trade allowances that give them flexibility in meeting GHG reduction targets and provide capital to fund development of new low carbon technologies. It seeks to price fossil fuels at a level that reflects the externalized cost of their GHG emissions upon the environment. This approach combines a regulatory and a market-based mechanism to promote climate friendly technologies and create increased demand for clean renewable energy.

How Do Subsidies for Renewables Rank?

Evaluating federal energy subsidies is something akin to alchemy. The myriad of ways in which they are funded, managed, and monitored, and year-to-year changes in legislation and budgets make an exact accounting difficult. This said, the Environmental Law Institute (ELI) recently completed a study for the period 2002 through 2008 in conjunction with the Woodrow Wilson International Center for Scholars which, coupled with the MISI study, illuminates how federal energy subsidies affect renewables and other competing fuels.

These studies confirm conventional wisdom that fossil fuels have been the primary beneficiary of federal energy subsidies. Oil and gas garnered 60 percent of an estimated total of $725 billion in federal assistance between 1950 and 2003, with oil alone taking 46% of the total. Coal took 13 percent. Next was hydroelectric at 11 percent and nuclear at 9 percent, not counting the liability cap subsidy which is an implicit avoided cost and impossible to quantify. At the back of the pack are wind, solar, geothermal, and bio-fuels, recipients of only 6 percent of total energy sector spending during this period.

Given the recent vintage of renewable technologies, use of a 1950 baseline for breaking down how federal energy subsidies have been parceled out may not paint a fair picture. However, the more recent 2002 – 2008 period continues to show fossil fuels as dominant. According to ELI, subsidies to fossil fuels totaled $72 billion, with most going to oil and then gas.

Support for coal-carbon capture and storage received $2.3 billion of this total. Fossil fuels took almost two-and-a-half times more in subsidies than renewables, which received $29 billion. Furthermore of this $29 billion, $16.8 billion went to corn-based ethanol whose climate friendly credentials are increasingly open to question.

Only $12.2 billion, or 16.6 percent of what fossil fuels received went for wind, solar, geothermal, hydropower, and non-corn based biofuels and biomass. This is better than in preceding years but much less than what is needed in the face of global warming, a point understated by ELI Senior Attorney John Pendergrass when he introduced the ELI study’s results by saying “These figures raise the pressing question of whether scarce government funds might be better allocated to move the United States towards a low-carbon economy.”

Rejoinder to the Rap Against Subsidies for Renewables

Critics argue that renewable energy technologies cannot compete on price with fossil fuels without public subsidies. It’s true to date that renewables’ return per dollar of federal assistance remains higher than for fossil fuels. According to the U.S. Energy Information Administration (EIA), federal subsidies for conventional coal generated electricity production in 2007 equaled $0.44/MWh (megawatt-hour). The equivalent figure for wind was $23.37 and for solar, $24.34 per MWh.

But these critics miss the mark. Commercial scale federal subsidies for renewables are less than twenty years old, dating to production tax credits enacted under the Energy Policy Act of 1992 to bolster national energy security in the aftermath of the first Gulf War. Furthermore, production tax credits for renewable energy have been subject to on again, off again congressional approval. This contrasts with fossil fuel subsidies, recipients of largely continuous and predictable subsidies since 1917.

Nor are the costs of subsidies for renewables out of line with other emerging and evolving clean energy technologies. For example, federal subsidies for refined coal technology that removes moisture and certain pollutants from sub-bituminous and lignite in 2007 equaled $29.81/MWh. If refined coal and FutureGen are any indication, yet untested clean-coal carbon sequestration will require vast federal expenditures on a scale probably surpassing what has been directed to wind and solar.

Renewables do not export environmental externalities such as drinking water contamination stemming from coal mining in West Virginia and other states, as recently reported in the New York Times. There is no need for a liability cap with wind and solar of the sort needed to fuel investment in commercial nuclear generation.

The reality is that federal subsidies for renewables have played an important role in generating economies of scale and investment capital for improved technology that have driven down the cost of photovoltaic solar energy by 50 percent to about $3 per watt in the past decade and dropped the cost of wind generated electricity to as low as 4 cents/kWh per in some areas today. These costs will only decline further as the market for renewables grows and technology improves.

Former longtime Saudi oil minister Sheik Zaki Yamani once famously said "the Stone Age did not end for lack of stone, and the oil age will end long before the world runs out of oil". Now would be a good time for critics of renewable energy subsidies to get the rocks out and for the U.S. to put in place long term federal subsidies that will provide the stable and predictable investment climate needed to accelerate America’s transition to a modern and clean renewable energy economy.

This article brought to you by the Indiana Renewable Energy Association.

Republicans move to delay climate bill progress

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/31/AR2009103101048.html

By Richard Cowan
Reuters
Saturday, October 31, 2009 2:10 PM

WASHINGTON (Reuters) - All seven Republicans on the U.S. Senate Environment and Public Works Committee plan to boycott next week's work session on a climate-change bill, an aide said on Saturday, in a move aimed at thwarting Democratic efforts to advance the controversial legislation quickly.

"Republicans will be forced not to show up" at Tuesday's work session, said Matt Dempsey, a spokesman for Republican senators on the environment panel.

Under committee rules, at least two Republicans are needed for Chairwoman Barbara Boxer to hold the work sessions that would give senators an opportunity to amend the controversial legislation and then vote to approve it in the panel, which is controlled by President Barack Obama's fellow Democrats.

But Republicans are demanding more detailed economic analysis of the bill by the U.S. Environmental Protection Agency -- a task that could take more than a month -- before agreeing to participate in the work sessions that are called "mark ups."

The seven Republicans have not indicated they ultimately would vote for the bill, which Boxer wants to move through her committee before December's international climate-change summit in Copenhagen.

Even with committee approval of the bill, the full Senate is not expected to vote on it this year. The legislation, as currently written, would have a hard time gaining the support of the 60 senators needed to pass major bills.

Nevertheless, the Obama administration is hoping for more progress by Congress before the Copenhagen summit. In June, the House of Representatives narrowly passed a bill to reduce U.S. emissions of carbon dioxide and other greenhouse gases blamed for global warming.

CARBON POLLUTION

Boxer's bill, which she wrote with Democratic Senator John Kerry, would require U.S. manufacturers, utilities and refineries to reduce their carbon pollution output 20 percent by 2020, from 2005 levels. That is slightly more ambitious than the House-passed bill.

Most Republicans and some moderate Democrats in the Senate have criticized the emissions-reduction target of the Kerry-Boxer bill.

Kerry already has begun talking to other senators about significant changes to his bill, including expanding U.S. nuclear power generation.

Republicans on the environment committee say the climate-change bill would cause significant job losses by encouraging manufacturers to relocate more of their plants in countries that do not have as strict carbon controls.

They also say it would significantly boost consumer prices as companies are forced to use more expensive alternative fuels -- a claim that has not been backed up by some independent analysis or by a preliminary EPA analysis.

"Republicans are insisting on a full EPA analysis before a mark up. We are not opposed to a mark up, only on holding one this rushed," said a statement by committee Republicans. Full details of the Democratic bill were unveiled only a week ago.

The senior Republican on the committee, Senator James Inhofe, has been an outspoken opponent of legislation to reduce greenhouse gas emissions, saying there is no sound scientific evidence that the world is suffering due to carbon emissions resulting from human activities.

(Editing by Will Dunham)

This article brought to you by the Indiana Renewable Energy Association.