Expectations for grandeur have certainly surrounded the recent renewable energy boom in the United States, with thousands of companies entering the market in the hopes to glean no more than a sliver of the profits this energy revolution could provide. However, just as the great recession has impacted the manufacturing and financial industries, the wind and solar industries have hit stumbling blocks as well. The root of the shortcomings – uncertainty in the future of the market.
It’s generally accepted that the wind industry, at this infancy stage of development, would not be economically feasible without the help of tax credits such as the Investment Tax Credit (ITC) and the Production Tax Credit (PTC). Both of which heavily incentivise renewable energy project developers and owners for their “green” contributions to national energy portfolios. Though even with the subsidizing tax credits which the federal government distributes, some states still aren’t living up to their renewable energy potential.
Take Wyoming for example. Wyoming has a tremendous capacity for wind power generation, however it is lagging behind many other states which cannot begin to compare with Wyoming on a resource level. States like Washington, Minnesota, and Oregon all have lesser resources, yet all have more installed MW of wind power capacity. Why? Well, Wyoming almost seems to have a vendetta against wind power generation. Which I guess could be understandable since a large number of Wyoming residents have made their livings/fortunes from the oil and gas industry. But still, shouldn’t there be some mechanism in place to ensure that the nation is still able to receive clean energy, regardless of an oil baron’s lobbying abilities?
Enter the need for a national Renewable Portfolio Standard. A national Renewable Portfolio Standard (RPS) would essentially set an energy portfolio percentage standard for each state to meet by a given deadline (20% by 2030 has been proposed by both the U.S. Department of Energy and the American Wind Energy Association). Standards such as this have been implemented throughout a number of states ranging from 2% in Iowa to 40% in Maine, however there have been some hangups when it comes to actually implementing these standards on a national level. We’ll go in to more detail on these issues in future posts, but to outline some of the topics… not all states have the same ability to produce green energy, therefore some feel they should not be held to the same standards. Also, if we do engage in interstate energy transmission (which we do), tracking the implementation of green energy versus the production of clean energy would be nearly impossible since once an electron hits the grid it cannot be tracked. Another hot topic is that of Renewable Energy Credits (or REC’s). This idea is an off shoot of the Waxman-Markey bill, a.k.a. the Cap and Trade bill, which will be the topic of the next post.
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