By:
Ann-Marie Fleming
July 2005
On
June 28th, 2005
the Senate approved the energy bill with an overwhelming 85-12 vote in favor
of the legislation. The energy plan omitted two controversial issues that
were present in the bill passed by the House, which dealt with drilling in
the National Wildlife Refuge in
Alaska and leniency
towards those firms that make a water polluting fuel additive. The
legislation does include measures aimed at increasing ethanol use and
contained approximately $18 billion in energy tax breaks.
The
Senate passed plan has many in the renewable energy industry cheering for
the inclusion of a provision that requires that 10% of electricity sold by
utilities to consumers must come from clean energy resources, such power
produced by wind, geothermal and solar technologies. “The passage of U.S.
Senate Bill H.R. 6 is a tipping point in U.S. energy policy trends aimed at
establishing energy security and independence for the balance of this
century.” stated Tom Djokovich, CEO of XsunX. “Some of the key aspects to
the bill are its support for the adoption of solar energy production
technologies in the form of residential and commercial tax credits not seen
since 1982, and the adoption of the first-ever national renewable energy
requirement, which stipulates that investor-owned electric utilities must
generate 10% of their power out-put from renewable sources by the year
2020.These types of incentives should prove to be a watershed for growth
opportunities for manufacturers, developers, and distributors of renewable
energy technologies.”
The
potential impact of the energy bill on the renewable energy industry has
become a focal point for this sector, which hopes that this legislation will
help to validate and grow alternative energy technologies as the industry
works towards mainstream acceptance.
Brad Frazee,
Vice President, Biofuels at Intrepid Technology and Resources (ITR),
believes that “fundamentally the renewable energy portion of the bill is
going to help take the entire renewable energy industry from something that
has really been viewed as a novelty, into something that now becomes an
economically significant portion of our energy production and transmission
within the United
States. We need to get away from very small insignificant sources of
renewable energy, and move into a network that truly helps the bottom line
across the country.” ITR believes that overcoming America’s mindset is a
significant industry challenge that the energy bill has the potential to
achieve, convincing consumers and power producers that renewable energy
needs to become a permanent set of resources within our energy
infrastructure.
Fuel cell developers
such as FuelCell Energy and Ballard Power Systems see key benefits from the
bill. According to Steven Eschbach, FuelCell Energy’s Director of Investor
Relations and Communications, “The Senate bill has two provisions that are
truly helpful for our technology. There are two financial tax incentives,
one is called the Investment Tax Credit which is a 30% investment tax credit
up to $1000 per kilowatt and the second is a production tax credit which is
a 1 ½ cent per kilowatt benefit for fuel cells, which are ideal for our
scope of technology.” The energy bill has the potential for industry
acceleration across the renewable energy landscape. As Michelle Cormack,
Ballard Power Systems explains, "Should the energy bill be enacted and
funded, Ballard and its industry and government partners will be able to
accelerate the arrival of the hydrogen economy and the commercialization of
fuel cell technology, quickening the pace of necessary research and
development, putting more vehicles on the road through demonstrations, and
beginning an earlier and more robust transition to market."
For
technologies such as geothermal, the bill is believed to have a significant
impact. According to Daniel Kunz, CEO of US Geothermal, “Geothermal energy
is really poised for significant expansion and this legislation could almost
double geothermal’s power contribution over the next few years from its
current base, which would have very major impact on what we are trying to do
in this area.”
Adding to the overall benefits of the bill are its extensive tax based
incentives to developers, owners, and operators of commercial buildings. As
Tom Djokovich explains, “This bill adds the important ingredient of
government sponsored incentives of up to as much as a 100% tax deduction for
the cost of increasing energy efficiencies in buildings by 50%, and a 30%
tax credit for the purchase of solar equipment. These types of economic
incentives for adopting solar technologies into building designs may soon
spur an increase in the growth of building integrated photovoltaics or “BIPV”."
Ann-Marie Fleming
Ann-Marie
Fleming
completed her MBA in the
United States,
where she attended
Webster
University.
She also holds an Honors B.A from the
University
of
Toronto. She has
over fifteen years of experience spanning the brokerage, banking, and
mortgage industries within the United States
and Canada.
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