Cooler Planet

Glad to see that Congress’ slower-than-molasses pace in passing legislation to extend and expand renewable energy tax incentives made it into the news this week. 

Yesterday – May 15 – on the radio program Marketplace, Danielle Karson reported on the consequences within the renewable energy industry from Congressional inaction.  Essentially Karson points out that the Federal Government’s failure to establish long-term policy objectives for renewable energy is hindering the industry’s growth.  And although demand for renewable energy sources is high, investors are skittish about committing to large projects without fully knowing whether production incentives and tax credits will be extended.

Not too surprising.  Of course, there are many large-scale projects in the works and moving forward.  For those on the fence, however, Congressional indecisiveness takes a toll.  We hope the Marketplace story spurs their listeners to encourage their representatives to find a way to make renewable energy a legislative priority.

Here’s the link to the story: http://marketplace.publicradio.org/display/web/2008/05/15/clean_energy/

Senator John McCain is making environmental news headlines again for taking a stance on climate change and distancing himself from the Bush Administration.  In recent days, the presumptive Republican presidential candidate has campaigned in the Pacific Northwest touting his pro-environment commitment and agenda.  McCain’s commitment to fight global warming differs from current Administration policy and from many other standard-bearing Republican Party agendas.

For McCain, the cornerstone of his environmental plan mandates a “cap and trade” system.  McCain argues that establishing a cap on carbon emissions and setting a national goal to reduce overall carbon emissions to 60 percent below 1990 levels by 2050 is a realistic, and effective way to tackle climate change.  (In contrast, both Barak Obama and Hillary Clinton have said they would set a goal to reduce overall carbon emissions to 80 percent of 1990 levels by mid-century.)

In McCain’s analysis, establishing a national standard for tradable carbon emission permits will allow the so called “good carbon emitters” to offset the “bad” ones.  Furthermore, a nationwide cap and trade system would provide the necessary incentives to promote growth of solar, wind, and other renewable energy industries.  McCain does not offer specific policy or market tools for solar or wind technologies because he is confident that a cap and trade system would sufficiently bolster those and other similar renewable energy markets.  Nor has McCain outlined a more detailed plan on how his cap and trade system would work or what industries and activities would be targeted.

For McCain, alternative energy means energy independence.  As we’ve mentioned in previous posts, of the three current presidential frontrunners, John McCain most vocally favors reinvesting in nuclear power.  He views nuclear energy as the most viable technology to meet the nation’s electricity demands.  In his speech he made in Oregon (and posted on his website), McCain views the nexus among energy, the environment, and national security as one of the most important issues facing our nation.   

McCain’s voting record, however, leaves critics dubious about his intentions and commitment toward the environment.  The League of Conservation Voters who created a National Environmental Scorecard gives McCain a lifetime rating of 24 percent for his previous voting record regarding the environment.  For this year’s legislative session, McCain gets a Zero; thus far he’s been absent for any of the environmentally related bills that have come up for a vote.  

Critics point to inconsistencies in McCain’s voting record.  As an article in Monday’s Washington Post points out, McCain has embraced some environmental provisions, yet shunted others not so seemingly different from the ones he supports.  

Supporters contend that McCain, as a political maverick, has consistently distinguished himself from conventional Republicans.  They cite that McCain was one of the first in Congress to acknowledge climate change and introduce legislation addressing the issue.   

He’s certainly savvy when it comes to renewable energy photo-ops.  In February McCain stood in front of a solar photovoltaic manufacturer when Governor Arnold Schwarzenegger announced his endorsement for the Senator.  On Monday, McCain restated his environmental policy at a wind power company in Oregon. Time may reveal whether these press events truly signify McCain’s intentions toward renewable energy.

It’s great to see that our neighborhood pub uses solar energy to light its sign.  At Cooler Planet we’re starting to notice more devices harnessing solar power around town.  Have a beer for solar power . . . 

Though the State of Washington did not make Home Power magazine’s top ten list, we at Cooler Planet believe our home state deserves an honorable mention.  Washington has a history of adopting innovative legislation.  While Washington laws are not perfect, many of its mandates have inspired other states to adapt and customize similar types of laws for themselves.
 
For example, in 2005, Washington was the first state in the nation to pass a green building mandate.  The legislation requires all major renovation projects and new construction funded with state monies to meet the US Green Building Council’s LEED Silver rating system or higher.  That same year, Washington State passed two laws to advance solar electric use and nurture the solar industry’s development throughout the state.

The State’s two renewable energy bills specifically try to bolster solar photovoltaic manufacturing and wide spread use of solar electric systems.   One law provides tax breaks to the manufacturers of solar photovoltaic modules and components that locate in economically depressed and low population counties within the state. 

The other law, based on a successful program in Germany, provides a tax credit to residents and businesses that have renewable energy systems (which includes solar photovoltaic, wind, and anaerobic digesters).  However, unlike other states that set aside funds to pay property owners an upfront rebate for installing a renewable energy system, Washington law rewards property owners for their system’s production of electricity.

The Washington legislation establishes a $0.15 per kilowatt hour minimum credit for all the energy generated from a resident’s or business’s renewable, on-site power system (with a cap of $2,000 annually for households).  If the solar electric system components (modules, inverters, rack, etc.) come from Washington State manufacturers, then the property owner is awarded additional funds per kilowatt hour (which can amount to roughly $0.54 per kilowatt hour).  The property owner can also take advantage of the state’s net metering laws, thus make additional cents from its system.

Yet because these two solar bills provide complementary approaches to help jump start the nascent solar photovoltaic industry in Washington State, the $0.54 credit is not yet a reality.  Several companies do manufacture inverters in Washington, but no module photovoltaic manufactures currently exist. 

Perhaps the most innovative part of the Washington solar legislation is how the state structured its funding.  All utilities – regardless of this legislation – must pay a “utility use tax.”  The solar legislation enacted in 2005 promises the utilities an equal dollar match for every dollar the utility pays its customers for their own electricity production via renewable energy.  In essence, the tax becomes a closed-loop system:  the state does not set aside additional funds for the program instead it returns potential revenues to the utilities.  The utilities, in turn, get “a wash,” the portion of the utility use tax used for renewable energy is handed back to them.  The utility does incur the adminstration cost to track the funding; the state tried to minimize that cost by requiring utilities to report only once per year.  

Unfortunately, it’s still too early to determine what state’s approach and funding strategy works best to advance renewable energy.  

Washington State continues to move forward and enact legislation aimed at tackling climate change, and to a lesser extent renewable energy.  In March 2008, Washington made headline news again when Governor Christine Gregoire signed a measure that requires both State government and private industries to reduce their carbon emissions to 1990 levels by 2020 and meet further reductions by 2035 and 2050.