Most of the tax preferences for energy efficiency and renewable energy, which were expanded with the stimulus bill, expired at the end of last year. The wind industry is fighting to keep a production tax credit that will expire at the end of this year unless Congress extends it.
The industry’s trade group, the American Wind Energy Association, says wind-manufacturing jobs in the U.S. increased from 2,500 in 2004 to 30,000 today. Overall, the wind industry employs 78,000 people. The association argues that the tax credit is essential for the growth of wind, and that without it nearly half the jobs would be lost.
To some, taxpayer support means the market isn’t really ready for renewable energy.
David Kreutzer, a research fellow in energy economics at the conservative Heritage Foundation’s Center for Data Analysis, argued that wind and solar industries don’t stimulate growth because they depend on subsidies.
“To the extent you put resources to electricity that make it more expensive than it would be if produced conventionally, that would retard economic growth,” Kreutzer said.
Congress considered a plan in 2009 to attack climate change by making fossil fuels more expensive. When it died in the Senate, the Obama administration turned to clean-energy support instead.
The idea was to help these industries get started so that they could grow and eventually compete with fossil fuels. Part of that strategy was the Department of Energy’s loan-guarantee program.
Besides Solyndra, two other solar companies, out of 33 companies in the loan-guarantee program, filed for bankruptcy.
Abound Solar borrowed about $70 million for solar manufacturing plants in Colorado and Indiana, and taxpayers will be out about $40 million to $60 million after the company is liquidated, the Department of Energy estimated.
Beacon Power Corp. qualified for a $43 million loan guarantee for an energy storage plant in New York. The company had assets that attracted a buyer, and taxpayers received 75 percent of the loan amount back.
Others moved ahead, including a large solar thermal plant in the Mojave Desert where 2,100 workers are building the $2.2 billion facility with parts made in 17 states. A wind farm in Oregon has employed 1,000 construction workers and has purchased components from 15 suppliers in nine states. Half of the planned 338 turbines are built and operating.
Another major way the government is pushing clean energy is with the military.
For example, the Defense Department is working on a plan to find private contractors to build and operate solar, wind, biomass or geothermal plants at military installations.
No additional dollars from Congress would be needed, Katherine Hammack, the assistant secretary of the Army for installations, energy and environment, said last week.
Hammack said the renewable energy plants would save money. The plant operators would sell some energy to the military bases, and any extra energy could be sold off base. The bases would get reduced energy costs in exchange for the use of their land.
The Navy has been pushing the development of biofuels from plants other than food crops as a way of reducing dependence on Middle East oil and the volatile world market price.
In July, in the largest international maritime exercise in the world, a Navy carrier strike group was powered on a blend of petroleum and biofuels made from animal fats and algae.
The government made its biggest biofuel purchase ever for this test: 450,000 gallons for $12 million, or $27 per gallon.
“We’re in a unique position, relative to commercial aviation or shipping, to play a leading catalyst role in the early establishment of the market,” said Thomas Hicks, the deputy assistant secretary of the Navy for energy.
The Navy played the same part when it shifted from sails to coal, and from oil to nuclear power, Hicks said. But alternative fuels will have to become cost-competitive before the military uses them, he said.
The federal government plans to spend $510 million in a partnership with private companies to get a few refineries built to produce biofuels that can be blended with petroleum and used in the same vehicles and military equipment that use oil today.
Sens. John McCain, R-Ariz., and James Inhofe, R-Okla., have led efforts in Congress to block the military from pursuing biofuels, arguing that they’re a waste of money.
Sharon Burke, the assistant secretary of defense for operational energy, acknowledged that it’s impossible to say when the military will have a ready supply of competitively priced biofuels.
But the military thinks decades ahead, she said, when the U.S. could be faced with unfriendly oil suppliers, an end of easy oil or increasing climate problems.
“There will come a day when there won’t be enough petroleum in the global market to meet global demand,” Burke said.