A "Sunset" On Solar Power?

Hi everyone! Here's my post for the week!  - Bri

The good news? Solar power companies are rushing at record speeds to complete the many business projects they have lined up for the remainder of 2008. The bad news? Their speediness is prompted by the fact that on December 31, the solar power tax credits that have been subsidizing the industry will expire.

Solar power has long been viewed as a potential alternative energy source to oil – and a renewable, environmentally-friendly one at that. Yet unlike the oil industry, which yields high monetary profits, the business of solar power is less lucrative and has therefore created less incentive for people to invest in it. In 2005, the federal government passed the Energy Policy Act, which promised 30% tax credits for systems “placed in service” between January 1, 2006 and December 31, 2008.

According to this article, a debate on how to fund the tax credits has prevented the eight-year extension of the subsidy. Smaller businesses will likely be hit hardest by the tax credit cutoff, but even large businesses will face challenges in staying financially afloat. Solar power installation companies of all shapes and sizes are cutting back on expenses, laying off employees and are turning their attentions abroad for future business.

Naturally, increasing solar power use will benefit nations and the environment regardless of whether the energy is harnessed in the United States or not, but the U.S. possesses so much potential for solar energy development that creating disincentives for investing domestically makes absolutely no sense. Many areas in the south and southwest, especially large desert states like Arizona, Nevada and New Mexico, receive immense amounts of sunlight each day, and as the American Independence Energy website explains, it would also be extremely easy to attach solar panels to the flat roofs of various homes and commercial buildings to catch the sun’s rays.

If the federal government fails to take further action to support solar power tax credits, individual states can take the lead and enact their own incentives to encourage solar energy usage. Even state counties and cities have begun tos how leadership in light of federal inaction. To see if your state or any othe municipality has created incentives for renewable energy and energy efficiency, visit http://www.dsireusa.org.

Comments

[Bev Samia]

Good article Bri. It coincides with an article I just read in the UCLA Magazine, July issue on seven patents by Yang Yang, a professor in the Dept of Materials Science and Engineering that makes solar cells out of polymers that are lightweight and cheaper than the crystalline silicon. Within five years this technology could be used to make panels that would attach to windows and walls and it would make it possible for an average home to have its own power. Pretty cool isn't it. The government needs to continue to support solar power invention some way to make it affordable for the average person.

[L Astin]

Good information, Bri. We bought our house in the early eighties and it had some solar panels for supplementing power. The previous homeowner had received govt money. I'm sure he never would have attempted solar power if not for the encouragement to try something new from the govt. Unfortunately the panels were not very effective, I'm sure solar power has made great advances since then. People need incentives to try new things, it would be a pity to see the govt withdraw its support now that alternative energy has become so critical to our future.

[sdbq]

As with many things, people will change their habits when it becomes financially feasible to do so. While it's unfortunate that the government is stuck "debating" how to fund the tax credit, it's evident that even with the subsidy, solar is still too expensive for the average person. It often takes years before a solar unit pays for itself. Unfortunately solar installations run thousands and thousands of dollars - basically a home equity loan or other type of significant debt is required to finance it. For many people, it's just not worth it. When solar power can be installed for about the price of a central air/heating unit, I think you'll see more people willing to make the change, tax credit or not.

However, despite that, I agree with you that the subsidy should be renewed. Anything to encourage our independence from oil is a worthwhile endeaver. In addition, I'd suggest that Government (feds, state, and local) should provide incentive for companies and/or individuals to develop truly affordable solar power, i.e, one that doesn't doesn't take years to recoup on the investment (and while they're at it, they could make the panels less obtrusive and more aesthetically pleasing!). These types of incentives were employed more frequently in the early part of the last century, and led to the development of useful technologies, such as the Marconi wireless. Large amounts of money is a great incentive to stimulate the imagination of corporations and individuals alike!

[L Cotterman]

I think that it was a newspaper or other private entity that put up the award money...

I ageee with SDBQ regarding the reinstatement fo the tax credit and the effects of market forces. But I'd got a step further. Instead of offering a 30% tax credit, I think the government should increase the tax credit to 100% for individual homeowners. When you consider that we spend $17B a MONTH on Iraq, I think they could pony up the money for a "rebate" on solar installations.

Based on the article cited by the Bev, it sounds like solar technology is moving to a more consumer friendly format - here's hoping the price is friendly too. It reminds me of the early days of computer development. Once upon a time a single computer took up entire rooms and now you have laptop computers with more capacity that weigh just a few pounds. Amazing.