The United States meets less than 3 percent of its electricity needs with wind, solar, and other forms of alternative energy. In contrast, Denmark meets 20 percent of its electricity needs with wind, while Spain has reached 9 percent and Germany and Portugal, 7 percent. The Philippines have tapped into geothermal for 28 percent of their power. Yet those countries do not have the resources of the United States, with the blustery expanse of the Great Plains, the clear desert skies of the Southwest, and enough heat stored in underground rock that scientists believe it could produce 2,000 times America’s annual power consumption. Alternative energy advocates broadly agree that the federal government never has provided the robust, steady support that renewable energy needs to compete with cheap coal electricity. Subsidies born of the oil shocks of the 1970s were scaled back in the 1980s.
Since 1992, Congress has offered tax credits but only for a year or two at a time; industry has geared up, then fallen into a lull, undermining large-scale renewable energy projects. And the tax breaks did not benefit homeowners or farmers who wanted to install smaller wind power systems. “The French, the Germans, the Spanish, and a few others have made the decision, first of all, that they want renewable energy, and they want to pay for it,” said longtime renewable industry consultant Paul Gipe. “We haven’t made that decision yet.” In countries that do have a successful renewable energy policy, Gipe and others argue, consumers pay the price for alternatives through higher utility rates that also encourage conservation. Washington, instead, has taken the politically easier course of supporting renewable through tax breaks, leaving the programs constantly at risk over federal budgetary concerns.
Although a renewable energy tariff similar to the German system was introduced in Congress for the first time in 2008, the bill signed into law by the president featured the familiar tax breaks that had been set to expire at the end of this year. Solar energy made out best, with an eight-year tax break extension that marks the longest sustained program to support the industry in the past 20 years. Geothermal, biomass (using waste wood products for electricity), and a new category, marine renewables (which includes such promising sources as tidal power) received two-year production tax credits. Wind energy only saw a one-year extension, although it was extended to small wind systems for the first time.