No matter where your political affiliation lies, I think you would have to agree with this statement: The solar and wind power generation sectors should both benefit from the results of this election. The re-election of President Obama, along with a large percentage of congressional members of both parties that have been champions of tax credits and incentives of this technology, sparked renewed optimism within the renewable community. Both the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA) seemed pretty pleased with the outcome of the election.
The AWEA believes the results from this election will probably lead to a renewal of the renewable energy tax credit before it expires at the end of the year. According to a recent AWEA press release, “Overall, AWEA sees continued bipartisan support in Congress for extending the Production Tax Credit (PTC) to incentivize $15 billion a year in private investment in U.S. wind farms, with support steady in the Senate and a net increase in announced supporters in the U.S. House.” If the PTC is renewed this year, the industry would probably start to see a lot of new projects secure financing in the second half of 2013. This would also help offset the huge drop off in wind turbine installations that’s projected if the PTC isn’t extended.
A recent statement from Rhone Resch, president and CEO of SEIA, was also pretty upbeat. “To date, the Obama Administration has created and supported pro-solar policies that have been vital to the success of the industry. Policy certainty is crucial to continue the growing role of solar in America’s energy mix. Stable policy frameworks at the federal and state level, including maintaining and expanding commitments to renewable energy initiatives, spur and leverage private sector investments in the solar industry to meet our nation’s future energy needs.”
Like it or not, there’s no denying the fact that the Obama Administration has been a strong supporter of these renewable energy markets since he first took office. And many indicators still point toward continued government support on the technological development and tax credit/incentive fronts. This is obviously good news for the manufacturers of wind and solar power equipment. It’s also good news for anyone who designs, installs, and maintains these systems.
But even with continued government support, the installation of these subsidized systems — especially solar — still relies heavily on the potential investment component of this financial equation. As noted in our cover story this month (“Solar Coaster” by Tom Zind, starting on page 10), the players on the consumer side of the market continue to put new twists on leases, third-party ownership, and power purchase agreements. On the developer side, they’ve turned to project bonds, asset securitization, and master limited partnership arrangements. Creative and cutting-edge financing have continued to hold investor attention up to this point in time, but the question in my mind is for how long?
Let’s all hope these newly elected members of government can quickly compromise on a budget plan to keep the country from falling off this so-called fiscal cliff. If they don’t, you can bet this newfound enthusiasm by those in the renewable sector will quickly wane.